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Ocean Wilsons Holdings Limited Restatement of 2004 Results under International Financial Reporting Standards

Hamilton, Bermuda: 12th October 2005 - For 2004 and previous years, Ocean Wilsons Holdings Limited has prepared its Group financial statements under UK Generally Accepted Accounting Principles (UK GAAP). In accordance with EU regulations, the Group is required to adopt International Financial Reporting Standards (IFRS) from 1 January 2005 and prepare its Group financial statements on an IFRS basis.

 

Ocean Wilsons Holdings Limited will report under IFRS, for the first time, in its interim results for the six months to 30 June 2005 (due for release on 25 October 2005). The first full year results to be reported under IFRS will be for the year ended 31 December 2005. The IFRS results for the 2005 half year and the 2005 full year will include comparative IFRS information for the relevant corresponding periods in 2004.

 

The principal adjustments to profit for the year and equity are as follows:

 

 

                                                                                                2004 Full year

Profit for  

the year Equity

 

UK GAAP                                                                      25.6                           147.7

 

Unrealised gains taken to the income statement           6.4                                     -

Adjustments to finance leases capitalised                      1.8                               2.6

Change in functional currency                                     0.8                                 (5.9)

Reversal of proposed dividend                                         -                                      6.4

Borrowing costs previously capitalised                     (0.1)                             (5.0)

Other                                                                             (0.2)                              1.6

 

IFRS                                                                              34.3                           147.4

 

 

The principal adjustments to the Group's reported financial information from the adoption of IFRS are:

 

 

 

 

 

 

 

 

Unrealised gains taken to the income statement

 

Under IFRS there is no distinction between unrealised and realised gains for financial reporting. As such, all unrealised gains except exchange differences on translation of foreign operations and gains on available-for-sale investments will be recorded through the income statement rather than through the UK GAAP statement of total recognised gains and losses. The major impact is that all unrealised gains on the investment portfolio are now recorded through the income statement.

 

Adjustments to finance leases capitalised

 

Under UK GAAP assets held under finance leases were depreciated over the lives of the respective leases which were generally shorter than the equivalent depreciable lives of owned assets under the Group's normal depreciation policy. IAS 17 requires the depreciation policy for the Group's depreciable leased assets to be consistent with that for equivalent owned depreciable assets. The accounting change has reduced the Group's depreciation charge.

 

Change in functional  currency

 

As part of the IFRS restatement, the Group's functional currency was re-examined in accordance with the requirements of IAS 21. IFRS is more prescriptive in its definition of functional currency than UK GAAP. From 1 January 2004 the functional currencies of the Group's operations are the local currency with the exception of the following businesses, all of which are located in Brazil: the towage division, the ship agency division and Tecon Rio Grande whose functional currency has changed to US Dollars.

 

The major impact of the change is that exchange gains or losses on US Dollar borrowings in US Dollar functional currency businesses no longer arise.  Exchange gains or losses on $Real denominated bank accounts held by businesses with a US Dollar functional currency will be recorded through the income statement. Additionally property, plant and equipment, retained earnings and inventories in US Dollar functional currency businesses are fixed in US Dollars at historical exchange rates.

 

Reversal of proposed dividend

 

Dividends proposed are recognised in the period in which they are formally approved for payment. Under UK GAAP dividends were recognised in the financial statements as a liability and an expense if declared before the financial statements were signed. The change in timing of proposed dividends increases net assets.

 

Borrowing costs previously capitalised

 

As permitted by IAS 23, the Group has chosen not to capitalise directly attributable finance costs and foreign exchange movements which were previously capitalised under UK GAAP. The impact of this accounting change decreases the value of property, plant and equipment and the associated depreciation charge while increasing finance costs in the income statement.

 

Other adjustments

 

Explanations of other adjustments are given in the detailed IFRS Restatement below.

 

 

 

Enquiries

 

Mr Keith Middleton

Ocean Wilsons Holdings Limited

Tel + 55 21 2126 4160

 

Mr Peter Gardner

Hansa Capital Partners

Tel + 44 20 7647 5750