2004 2003 2002
£’000 £’000 £’000
Turnover 157,797 156,808 129,347
1111 1111 1111
Operating profit before exceptional items 5,044 5,007 8,577
Operating exceptional items - - 2,337
1111 1111 1111
Operating profit 5,044 5,007 10,914
Amounts written off investments - - (254)
Net interest payable (69) (436) 12
Other finance income 28 25 16
1111 1111 1111
Profit on ordinary activities before taxation 5,003 4,596 10,688 Tax (charge) / credit on profit on ordinary activities (2,188) 19 (5,470)
1111 1111 1111
Profit for the year 2,815 4,615 5,218
3333 3333 3333
5. SUMMARY BALANCE SHEETS AS AT 31 DECEMBER
2004 2003 2002
Debtors due after one year 8,341 1,436
-Debtors due within one year 39,555 43,401 41,558
Cash at bank and in hand 783 4,262 1,665
Pension (liability)/asset (8) 131 126
Creditors due within one year (31,482) (35,527) (25,371)
Creditors due after one year (622) (162) (7,761)
Provisions for liabilities and charges (7,597) (6,753) (6,760)
1111 1111 1111
25,022 22,362 17,787
3333 3333 3333
SHAREHOLDERS FUNDS
Called up share capital 10,000 10,000 10,000
Revaluation reserve 79 79 79
Profit and loss account 14,943 12,283 7,708
1111 1111 1111
25,022 22,362 17,787
3333 3333 3333
Provision for industrial disease liabilities 2004 2003 2002
£’000 £’000 £’000 Provision for compensation for industrial disease
(included in provision for liabilities and charges above) 7,597 6,753 6,760
3333 3333 3333
SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL.
APPENDIX III
Provision is made for compensation for industrial disease claims where it is possible to estimate the liability with sufficient reliability. This is only currently possible in respect of claims lodged and outstanding at the year end.
Where this is not possible, a contingent liability is noted. Benefit is recognised for insurance and other recoveries for claims provided when they are anticipated with virtual certainty.
The provision is therefore gross of any insurance recovery which if appropriate has been recorded within debtors.
6. SCHEME CLAIMS
There is a history of industrial disease claims being lodged for a number of years in the United Kingdom from a number of sources.
On 21 December 1997 CISL entered into an agreement (the “Agreement”) with Predart Limited, a fellow subsidiary of Cape, under which CISL agreed to discharge Predart Limited’s liability in respect of industrial disease claims. The Agreement can be terminated at CISL’s sole discretion, such that it will have no liability (of whatever nature) to Predart Limited. Until the Agreement is terminated, any claims made against Predart Limited represent a potential liability for CISL under the Agreement. Notwithstanding the foregoing, CISL has confirmed that provided it is legally able to do so it intends to discharge such liabilities for the foreseeable future and for so long as it remains solvent.
CISL has purchased businesses or won contracts pursuant to which the employees engaged in the business or contract have transferred to it by the operation of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (“TUPE”). Certain of such employees may have been exposed to asbestos in the course of their previous employment. As a result of the operation of TUPE, CISL will be liable for any claim made by such employees in connection with their employment prior to the relevant transfer as if it had been their employer at the time. Following a review of the employment records held by CISL in respect of its current and former employees, it has proven possible to rule out the possibility of asbestos exposure in respect of some, but not all, employees and former employees.
Where CISL has determined that it is appropriate to do so, in the past, claims in relation to asbestos exposure have been settled. Based on this experience, CISL believes that it is likely that similar claims will continue to be received for the foreseeable future. These could arise over a period of more than twenty years. However, there is significant uncertainty over the number, nature, timing and validity of such future claims. This is a result of, inter alia, uncertainties concerning the population that may have been exposed to asbestos and that may develop asbestos-related diseases, the nature and timing of the diseases that may develop, the impact of other factors which might have contributed to the claimant’s condition and changes in the legal environment and the typical cost of settlement. Experience to date is that some of these claims will be at least partially covered by insurance policies. As a result of these uncertainties, the amount of CISL’s obligation cannot be measured with sufficient reliability. Accordingly, CISL provides in its profit and loss account each year for the estimated liability in respect of claims lodged and not settled.
As set out on page 26, an independent actuary has assessed that a best estimate of the aggregate projected discounted value, net of insurance recoveries of all of the Group’s (including the Dissolved Group Companies’) unpaid UK asbestos-related claims is £119.4 million. This represents the best estimate within the range of the lowest and highest estimates contained in the actuarial review of 70.2 million and £240.3 million respectively.
For the purpose of the Scheme for CISL, the Directors have estimated that CISL’s share of the Group’s liability is up to £29.6 million. Given the wide range of the estimates and the significant degree of uncertainty surrounding the estimate, the Directors are unable to conclude with any certainty that the total cost of claims will fall within this range. In light of the foregoing, the Directors continue to believe that such levels of uncertainty remain and that the estimates are insufficiently reliable such that provisions in respect of future claims, including Scheme Claims, cannot be made in the company’s audited accounts other than when claims have been notified.
Based on the recent history of settlements, the Directors anticipate that future settlements can be made from the future cash flows generated by the trading operations of the Group. However, should the future pattern as regards the timing and quantum of claims prove to be materially and adversely different from the historic trend, there could be a material adverse effect on the Group’s, and therefore CISL’s, financial position.
Consquently the Directors consider that the proposed Scheme is in the best interests of the current and future creditors of CISL.
SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A
3: Predart Limited
Company Registration Number: 457763 1. OVERVIEW1.1 Former Names Date of incorporation or name change
Hubert H P Trist & Company Limited 10/08/1948
Trist Draper Limited 13/03/1962
Trist Draper Holdings Limited 23/10/1979
Predart (Holdings) Limited 12/06/1985
Cape Contracts Overseas Limited 02/09/1991
Cape Industrial Services Limited 06/05/1993
Cape Industrial Services Group Limited 10/10/1997
Cape Industrial Services Limited 03/12/1997
Predart Limited 01/01/1998
1.2 Activities
Predart Limited originally manufactured friction and hydraulic materials for automotive and industrial use. The company subsequently became the main operating company for Cape’s industrial services contracting business.
1.3 UK Factories Approximate years
Brislington, Bristol 1948 to 1985
1.4 Locations
From 1993, Predart Limited also operated at client sites across the United Kingdom.
For list of regional offices see:
Somewatch Limited† (page 99), Cape Specialist Coatings Limited (page 137), Somewin Limited (page 145) and Cape East Limited (page 120).
1.5 Intra-Group Arrangements
During the periods set out below there may have been arrangements between Predart Limited and the following companies as a result of which Predart Limited may be liable in relation to a claim against the company concerned.
Company Date of arrangements Page
Cape Darlington Limited 01/04/93 to 31/12/97 157
Cape East Limited 01/01/94 to 31/12/97 120
Cape Hire Limited 28/03/94 to 31/12/97 163
Cape Industrial Services (Scotland) Limited 01/04/93 to Present 165
Cape Offshore Services Limited 01/04/93 to Present 168
Cape Specialist Coatings Limited 01/04/93 to Present 137
Investable Limited 01/04/93 to Present 141
Somesystem Limited 01/04/93 to 31/12/97 181
Somewin Limited 01/04/93 to Present 145
Somewatch Limited 01/04/93 to Present 99
Teubfin Limited 01/01/71 to 31/12/78 183
Winfield Insulation Services Limited 01/04/93 to Present 150
2. CORPORATE HISTORY
Predart Limited was acquired in September 1969 as part of Cape’s acquisition of the Trist Draper automotive business, together with several of its subsidiaries including Boltex Limited† (287121) (see page 153), Torpex Limited† (533902) (see page 184) and possibly Teubfin Limited† (927681) (see page 183).
SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A CREDITOR AND INTO WHICH CLASS OF SCHEME CREDITOR THEY FALL.
APPENDIX III
On 1 June 1977 Predart Limited acquired Minett Fluid Power Limited† (550700) and a number of its subsidiaries including HPC Coatings Limited (then called WT Minett (Hydraulics) Limited) (975757) (see page 139) as part of Cape’s purchase of the Minett Hydraulics business. This business was subsequently transferred to Predart Limited. Predart Limited disposed of this business in May 1982.
The friction materials business of Predart Limited and its subsidiaries was sold on 15 April 1985 following which Predart Limited ceased to trade.
On 1 April 1993 Predart Limited recommenced trading and the business and assets of all the companies in the Group’s industrial services division were transferred to Predart Limited (which at the time was called Cape Industrial Services Limited). Since that date there may have been arrangements of the nature described above between a number of these companies and Predart Limited as shown in the table above.
The businesses transferred to Predart Limited included the business and assets of Somewatch Limited (269257) (see page 99); Cape Specialist Coatings Limited (394232) (see page 137); Somewin Limited (previously called Cape Scaffolding Limited) (1279372) (see page 145); and Cape Mechanical Insulation Limited (1467357) (see page 133).
On 6 April 1993 Predart Limited acquired the contracting business and assets of Joseph Nadin Holdings Limited.
On 30 September 1993 Predart Limited acquired the refractory business and assets of Cerabrick Refractory Limited.
On 1 April 1994 the business and assets of Cape East Limited, except for its investment in the share capital of certain overseas companies, were transferred to Predart Limited.
Predart Limited operated the Group’s UK industrial services business until December 1997 when, through a series of transactions, the business and assets of Predart Limited were transferred to Cape Industrial Services Limited (3337119) (see page 92).
Since 31 December 1997 there may have been arrangements of the nature described above between Predart Limited and Cape Industrial Services Limited.
3. INSURANCE
An overview of the employers’ liability insurance for Predart Limited is as follows:
Date1 Class of Scheme Creditor
1948 to 31/01/1970 Insurance Both
01/02/1970 to 30/06/1981 No insurance General only
01/07/1981 to 1997 Insurance Both
1Cover commences on 1 January and ceases on 31 December unless otherwise indicated.
Whether or not there was insurance in place for the period of your employment will determine to which meeting or meetings of Scheme Creditor you will be admitted for the purpose of voting on the Scheme proposals and your attention in this respect is drawn to paragraph 10 of Part 1 of Section A of this document.
If your Scheme Claim is not a claim capable of being covered by employers’ liability insurance you will be admitted solely to the meeting of General Scheme Creditors, unless as a commercial creditor you have contracted with a Scheme Company for asbestos stripping activity in the UK since 2003 in which case you are likely to be admitted to the meetings of both the General Scheme Creditors and Recourse Scheme Creditors.
SCHEME CREDITORS ARE URGED TO READ THE GUIDANCE IN PART 7 OF SECTION A OF THIS DOCUMENT IN DETERMINING OF WHICH SCHEME COMPANY THEY MAY BE A
4. SUMMARY PROFIT AND LOSS ACCOUNTS TO 31 DECEMBER
2004 2003 2002
£’000 £’000 £’000
Interest receivable 91 78 52
1111 1111 1111
Profit on ordinary activities before taxation 91 78 52
Tax on profit on ordinary activities (27) (23) (16)
1111 1111 1111
Profit for the year 64 55 36
3333 3333 3333