Final Results

Anpario plc (AIM: ANP)

Anpario plc (formerly Kiotech International plc), the international supplier of natural high performance feed additives to enhance growth, health and sustainability in agriculture and aquaculture, is pleased to announce its results for the year ended 31 December 2011.

Financial Highlights

• 10% increase in underlying profit before tax and exceptional items¹ to £2.1m (2010: £1.9m)
• 23% increase in underlying earnings per share² to 8.94p (2010: 7.27p)
• 2 percentage point increase in gross margin to 30% (2010: 28%)
• Cash balance of £4.4m at 31 December 2011 (2010: £3.5m)
• 20% increase in the proposed final dividend to 2.4 pence per share (2010: 2.0 pence)

Operational highlights

• Re-structured higher margin strategic focus for UK Agriculture increases profitability
• Optivite integration completed with benefits coming through
• Third production line at Manton Wood completed mid-year, more than doubling production capacity of specialty feed additives
• Efficiency improvements reducing operational costs
• Chinese subsidiary begins to make profit enabling future growth opportunities to be self-financing
• Acquisition of Meriden Animal Health Limited completed post year end in March 2012

¹ Underlying profit before tax and exceptional items comprises profit before tax of £1.8m (2010: £1.5m) adjusted for closure and restructuring costs of £0.1m (2010: £0.3m) and share-based payment expense of £0.2m (2010: £0.1m).

² Underlying earnings per share represents profit for the year before exceptional items and prior year tax adjustments divided by the weighted average number of shares in issue.

Chairman’s statement

I am pleased to report another successful and most encouraging year for the Group, which has delivered an excellent set of results for the year ended 31 December 2011. This performance is driven by two key factors: firstly the success of our strategy to reposition the UK business to focus on higher margin products; and secondly achieving the synergy benefits from the Optivite acquisition.

The results have demonstrated the strength of the Group’s broad geographic spread, which has enabled it to offset local issues in Middle Eastern and Southern European markets with strong performances in other territories. In addition we work closely with our national distributors, to minimise credit risk in those countries where there is financial or political concern.

In November 2011 the Group changed its name to Anpario plc from Kiotech International plc. This reflects the significant changes undergone by the Group following the acquisition of Agil in 2006 and Optivite in 2009. The new name will give greater clarity to our corporate structure while allowing each of our trading businesses to maintain its individual identity.

Financial Review

Total underlying profit before tax and exceptional items¹ increased to £2.1m (2010: £1.9m) from total revenues of £19.2m (2010: £21.6m).

Whilst overall gross profit was slightly lower at £5.8m (2010: £5.9m) gross margin percentage was significantly higher, rising from 28% to 30%. Administrative expenses have fallen by 8%, benefiting from acquisition synergies and initiatives.

Profit before tax of £1.8m (2010: £1.5m) includes exceptional costs relating to the write down of our Aldermaston property of £0.1m and in 2010 costs of £0.3m were included in respect of the closure of this and other sites.

Underlying earnings per share ² increased 23% to 8.94 pence per share (2010: 7.27 pence per share) and diluted underlying earnings per share rose 23% to 8.87 pence per share (2010: 7.20 pence per share).

The balance sheet remains strong and debt free with a year-end cash balance of £4.4m (2010: £3.5m). It is expected that some of these funds will be applied to invest in the expansion of the business through acquisitions. £3m was utilised in March 2012 to fund the acquisition of Meriden Animal Health Limited.

The Board is pleased to declare a final dividend of 2.4 pence per share, an increase of 20% over the previous year of 2.0 pence. Shareholder approval will be sought at the Annual General Meeting, to be held on 26 June 2012, to pay the final dividend on 27 July 2012 to shareholders on the register on 6 July 2012.

Acquisition after year end

On 29 March 2012 the Company acquired 100% of the share capital of Meriden Animal Health Limited for a total consideration of up to £4.1m before costs.

Meriden, based in Bedfordshire in the United Kingdom, supplies the global agriculture and aquaculture markets with natural animal feed additive products. Meriden’s Orego-Stim range of products, using essential oils, is the leading brand in its field and is marketed across 60 countries worldwide, with the majority of sales being outside the United Kingdom.

Meriden’s sales for the 12 months to December 2011 were £5.3m and adjusted profit before interest and tax was £0.7m. Net assets acquired will be at least £1.6m, the majority being working capital, including cash in excess of £0.4m. The acquisition is expected to be immediately earnings enhancing to the Group as a whole.

Meriden has a close and important partnership in China with sales accounting for 26% of Meriden’s total sales during 2011. The Chinese business has been growing well and Anpario intends to give further support to this relationship to capitalise on the vast potential of China’s agriculture and aquaculture markets.

Production and administration

We have made further investment in our feed additive manufacturing plant at Manton Wood, which has resulted in improved efficiency. The installation of valve sack packing equipment and new conveyor belts has increased throughput volume significantly and eliminated wastage with a positive impact on our cost base.

These advances have enabled management to re-structure shift patterns. This has resulted in a more economical plant and enables us to increase production capacity without significantly higher incremental costs.

During the year the Agil export and administrative functions were transferred to Manton Wood from Aldermaston. The integration went very smoothly and was a credit to the teams at both locations. The Aldermaston office, which we own, has now closed and is being marketed for sale or rent.

Operations – UK Agriculture

As expected, the re-structuring of the division with its strategic focus on higher margin products and markets has led to lower sales, continuing the trend of the first half, however gross margins and overall profitability have risen. With this transition now complete, certain strategic alliances have been formed with some significant UK agribusinesses providing the Group with the opportunity to accelerate market penetration of its specialty feed additive range. Our partners have substantial sales resources and the benefit to them is that Anpario’s broad range of technical products will add value to their product offering.

Vitrition, our organic feed brand, had another solid year delivering growth in profits. This performance is particularly commendable as the challenges of the economic climate increased during the year as consumers switched to purchasing lower priced meat and traditional meat protein products. This trend led to a decline in the overall size of the organic market.

The EU legislation to raise the proportion of organic raw materials in finished feed from 95% to 100% has not yet been implemented and we are now well beyond the target date of January 2012. This delay is creating considerable uncertainty in the industry. Vitrition is one of only two dedicated organic feed plants in the UK and the implementation of this legislation should be positive for our business, as competitors will question their commitment to being solely organic.

As previously reported, the re-positioning of the UK agriculture business continued to shift away from the high volume, low margin commodity products towards the differentiated, added value products within our portfolio, where we have a commanding competitive advantage. The change in volume movements as a result of this has enabled the Group to outsource its haulage function, thereby converting this fixed cost to a variable cost which more aptly meets the needs of the business and reduces costs.

On a wider scale, the continued fragility of the global economy also led to an escalation in the volatility of raw material markets, requiring strong purchasing and price management in order to successfully protect gross margins.

Operations – International Agriculture

The division continues to trade through its two complementary brands, Kiotechagil and Optivite, covering in excess of 60 countries. This linked approach helps smooth out some of the trading peaks and troughs which are inevitable in a global business. 2011 was particularly volatile as we faced a number of local and regional issues including:

• political unrest in the Middle East;
• the application of sanctions, which disrupted our status quo in some countries, such as Iran;
• the financial instability of certain Southern European countries where we have significant sales volumes.

Our reaction to these challenges has been to take a cautious view when offering credit and we have worked closely with our distributors, to mitigate the exposure to vulnerable companies along the supply chain. In addition, we have comprehensive credit insurance for most of our customers. We did experience a drop in volumes during the autumn months, but volumes recovered with a strong performance at the end of 2011.

The regional performances within the two trading brands of the division reflect both the challenges and the opportunities in 2011 as well as what lies ahead in 2012, with Latin America leading the way in growth followed by Asia Pacific. The strong performance in these regions highlights a wider trend in both meat consumption and production, which we anticipate will continue as the world population grows and average GDP per capita increases at faster rates in developing countries. Anpario is well positioned to capitalise on these trends and we are investing in additional resource to focus on these regions.

Whilst we are cautious in relation to Europe and the Middle East owing to the continuing turmoil, the division is confident and focused on capturing opportunities in the higher growth regions, especially China and Brazil where the agricultural markets are vast. We are also endeavouring to launch a number of new products to our distributors, which we believe have strong differentiation compared to the competition. By pooling the resources of Optivite and Kiotechagil we have strengthened and centralised the technical team which has accelerated our R&D efforts.

Significant progress was achieved in China with our wholly owned subsidiary beginning to generate profit within eighteen months of being established, enabling future growth initiatives to be self-financing. The subsidiary continued to successfully gain national registration approvals for key products such as Neutox, a high performance, broad spectrum toxin binder for animal feed and Prefect, a gut conditioner and microbial optimiser for young pigs, particularly in high stress environments. These have received a positive reception in the market and will be key drivers of future growth for the subsidiary.

Operations – Aquaculture

We continue to take positive steps in developing the Aquatice® product from our research base in Thailand and are encouraged by progress in the Philippines, where trial results have been good and a significant aquaculture business has recognised Aquatice®’s effect in stimulating fish which are reluctant to feed whether due to stress, cold weather, or medication. Immediate visual feedback in stimulating feeding convinces farmers of the merits of Aquatice® more readily than an extended trial measuring feed conversion.

We are also working with a number of other multi-national and local companies in the Asia Pacific region to agree distribution arrangements. Innovative technology like Aquatice® takes time to become established in conservative industries such as aquaculture and we believe we are making good progress in developing the product as a useful tool in fish farming for the future.

People

Over the last two years we have implemented many changes affecting individual roles and working practices. Our management and staff have responded very positively and have worked extremely hard to address the challenges presented. Their support is very much appreciated and, on behalf of the Board, I would like to thank each and every one of them for their contribution to the business.

Outlook

The Group has a made a good start to the current year. Management focus is to drive organic growth by aggressively pursuing market share now that we have a scalable production plant. Despite some significant loss of business due to the on-going turbulence in the Middle East and Europe we continue to generate opportunities to grow sales of our speciality feed additive range both in the UK and overseas as well as the launch of a number of new products. Latin America and Asia Pacific will continue to be targeted as priorities, capitalising on the burgeoning development within both regions.

Our strong balance sheet and cash flow allow management to continue to seek acquisition opportunities that offer strategic and commercial benefits to the Group through the broadening of our product portfolio and geographic spread. The acquisition of Meriden brings another strong trading brand to the Anpario Group and increases Anpario’s global market share in the feed additive sector.

Notes to the financial statements

For the year ended 31 December 2011

1 General information

Anpario plc (“the Company”) and its subsidiaries (together “the Group”) manufacture and supply products to enhance health, growth and sustainability in agriculture and aquaculture.

The Company is traded on the London Stock Exchange AIM market and is incorporated and domiciled in the UK. The address of its registered office is Manton Wood Enterprise Park, Worksop, Nottinghamshire, S80 2RS.

2 Summary of significant accounting policies

2.1 Basis of preparation

The Group has presented its financial statements in accordance with International Financial Reporting Standards (IFRS), as endorsed by the European Union, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements are prepared on a going concern basis under the historical cost convention.

The financial information set out below does not constitute the Group’s statutory accounts for the year ending 31 December 2011 or 31 December 2010. Statutory accounts for 2010 have been delivered to the Registrar of Companies and those for 2011 will be delivered following the annual general meeting. The auditors have reported on those accounts. Their reports were (i) unqualified, (ii) did not include references to any matters to which the auditors drew attention by way of emphasis and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts.

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in a period of the revision and future periods if the revision affects both current and future periods.

The principal accounting policies of the Group are set out below, and have been applied consistently in dealing with items which are considered material in relation to the Group’s financial statements.

2.2 Basis of consolidation

The consolidated financial statements comprise the accounts of the Company and its subsidiaries drawn up to 31 December 2011.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured, as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value the difference is recognised directly in the income statement.

Acquisition costs are accounted for as an expense as incurred in the income statement.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation.

2.3 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Group’s activities. Revenue is shown net of value added tax, returns, rebates and discounts and after eliminating sales within the Group.

The Group recognises revenue on despatch of goods to the customer.

2.4 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting to the chief operating decision-maker. The chief operating decision-maker who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board.

2.5 Foreign currency translation

Monetary assets and liabilities denominated in foreign currencies are translated into Pounds Sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are included in the profit or loss for the period.

(a) Functional and presentational currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘functional currency’). The consolidated financial statements are presented in Pounds Sterling, which is the Company’s functional and presentational currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

Translation differences on non-monetary financial assets and liabilities are reported as part of the fair value gain or loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised as part of the fair value gain or loss.

(c) Group companies

The results and financial position of all Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

– assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of the balance sheet;

– income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case the income and expenses are translated at the rate on the dates of the transaction); and

– all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity. When a foreign operation is partially disposed of or sold, exchange differences that were recognised in equity are recognised in the income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rate.

2.6 Intangible assets

(a) Patents, trademarks and registrations

Separately acquired patents, trademarks and registrations are shown at historical cost. Patents, trademarks and registrations have finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of patents, trademarks and registrations over their estimated useful lives of 5 to 20 years.

(b) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the identifiable net assets acquired. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Goodwill is allocated to the appropriate cash-generating unit for the purpose of impairment testing. Any impairment is recognised immediately through the income statement and is not subsequently reversed.

(c) Development costs

Development costs are recognised if it is probable that there will be future economic benefits attributable to the asset, the cost of the asset can be measured reliably, the asset is separately identifiable and there is control over the use of the asset. The assets are amortised when available for use on a straight-line basis over the period over which the Group expects to benefit from these assets. Research expenditure is written off to the Income statement in the year in which it is incurred.

(d) Brands

Brand names acquired in a business combination are recognised at fair value based on an expected royalty value at the acquisition date. Brand names are deemed to have an indefinite useful life and are not amortised. However, they are allocated to appropriate cash-generating units and subject to impairment testing on an annual basis. Any impairment is recognised immediately through the income statement and is not subsequently reversed.

(e) Customer relationships

Customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Customer relationships are deemed to have a finite useful life and are carried at fair value less amortisation. Amortisation is calculated using the straight-line method over the expected useful life of 10 years.

2.7 Impairment of non-financial assets

The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. The recoverable amount is the higher of its fair value less costs to sell and its value in use. For intangible assets that are not yet available for use, goodwill or other intangible assets with an indefinite useful life, an impairment test is performed at each balance sheet date.

In assessing value in use, the expected future cash flows from the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognised in the income statement whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.

A previously recognised impairment loss is reversed if the recoverable amount increases as a result of a change in the estimates used to determine the recoverable amount, but not to an amount higher than the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised in prior years. For goodwill, a recognised impairment loss is not reversed.

2.8 Investments

Investments in subsidiaries are stated at cost less provision for diminution in value.

2.9 Property, plant and equipment

Property, plant and equipment are stated at cost less depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Land is not depreciated. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment and an impairment loss is recognised in the income statement where appropriate.

2.10 Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined using the first-in, first-out method. The cost of finished goods comprises raw materials, direct labour, other direct costs and related production overheads. Net realisable value is the estimated selling price in the ordinary course of business.

2.11 Trade receivables

Trade receivables are recognised and carried at original invoice amounts less an allowance for any amount estimated to be uncollectable.

2.12 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held on call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts.

2.13 Derivative financial instruments

The group uses derivative financial instruments to manage certain exposures to fluctuations in foreign currency exchange rates. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value and gains or losses recognised in the income statement.

2.14 Leasing and hire purchase

The Group has entered into hire purchase contracts and leases certain property, plant and equipment.

Assets obtained under finance leases and hire purchase contracts, where the Group has substantially all the risks and rewards of ownership are capitalised as property, plant and equipment and depreciated over the shorter of the lease term and their useful lives. Obligations under such agreements are included in borrowings net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the income statement so as to produce constant periodic rates of charge on the net obligations outstanding in each period.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease.

2.15 Taxation

Current tax, including UK corporation tax and foreign tax is provided at amounts expected to be paid or recovered using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date.

Deferred income tax is recognised, using the full liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the consolidated financial statements. Deferred income tax is determined using tax rates and laws that have been enacted, or substantially enacted, by the balance sheet date and are expected to apply when the related deferred tax asset is realised or deferred tax liability is settled. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

2.16 Employee benefits

(a) Share-based payments

The group issues equity-settled share-based payments and shares under the Joint Share Ownership Plan (“JSOP”) to certain employees. These are measured at fair value and along with associated expenses are recognised as an expense in the income statement with a corresponding increase in equity. The fair values of these payments are measured at the dates of grant using appropriate option pricing models, taking into account the terms and conditions upon which the awards are granted. The fair value is recognised over the period during which employees become unconditionally entitled to the awards subject to the Group’s estimate of the number of awards which will lapse, either due to employees leaving the Group prior to vesting or due to non-market based performance conditions not being met. Proceeds received on the exercise of share options are credited to share capital and share premium.

(b) Pension obligations

The Group operates a defined contribution pension scheme and contributes a percentage of salary to individual employee schemes. The pension expense represents contributions payable in the year.

2.17 Equity

Share capital is determined using the nominal value of ordinary shares that have been issued.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

The share premium account includes any premiums received on the initial issuing of the share capital. Any transaction costs associated with the issue of shares are deducted from the share premium account, net of any related income tax benefits.

The premium arising on the issue of consideration shares to acquire a business is credited to the merger reserve.

Amounts arising on the restructuring of equity and reserves to protect creditor interests are credited to the special reserve.

Exchange differences arising on the consolidation of foreign operations are taken to the Translation reserve.

Share based payment reserve are credited with amounts charged to the income statement in respect of the movements in the fair value of equity-settled share-based payments and shares issued under the JSOP.

The JSOP shares reserve arises when the Company issues equity share capital under its Joint Share Ownership Plan, which is held in trust by The Kiotech International plc Employees’ Share Trust. The interests of the Trust are consolidated into the Group’s financial statements and the relevant amount treated as a reduction in equity.

2.18 Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders.

2.19 Financial risk management

The Group is exposed to a number of financial risks, including credit risk, liquidity risk, exchange rate risk and capital risk.

(a) Credit Risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and deposits with financial institutions. The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group has an established credit policy under which each new customer is analysed for creditworthiness before the Group’s payment and delivery terms and conditions are offered. Where possible, risk is minimised through settlement via letters of credit and purchase of credit insurance. The Group’s investment policy restricts the investment of surplus cash to interest bearing deposits with banks and building societies with high credit ratings.

(b) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or damage to the Group’s reputation.

(d) Exchange rate risk

The Group’s principal functional currency is Pounds Sterling. However, during the year the Group had exposure to Euros and US Dollars. The Group’s policy is to maintain natural hedges, where possible, by matching revenue and receipts with expenditure and put in place forward contracts as considered appropriate.

(e) Capital risk

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends payable to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

2.20 Critical accounting estimates and judgements

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are:

(a) Estimated impairment value of intangible assets

The Group tests annually whether intangible assets have suffered any impairment. Impairment provisions are recorded as applicable based on directors’ estimates of recoverable values.

(b) Income taxes

The Group is subject to income taxes predominately in the United Kingdom but also in other jurisdictions. Significant estimates are required in determining the provision for income taxes. There are some transactions and calculations for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated queries by the tax authorities based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different for the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

2.21 Impact of accounting standards and interpretations

At the date of authorisation of these financial statements, the following standards and interpretations to existing standards are mandatory for the first time for the accounting period ended 31 December 2011:

The adoption of these standards and interpretations has not had a significant impact on the Group.

At the date of the authorisation of these financial statements, the following standards and interpretations were in issue but not yet effective:

A review of the impact of these standards, amendments and interpretations continues. At this stage the directors do not believe that they will give rise to any significant financial impact.

In 2011, the Group did not early adopt any new or amended standards and does not plan to early adopt any of the standards issued but not yet effective.