PETROGAS GROUP LIMITED AnnUAL REPORT AnD FInAncIAL …/media/... · energy Rating of B2, and 20% of the energy demand being provided by renewables. Active energy reduction techniques

2010PETROGAS GROUP LIMITED AnnUAL REPORT AnD FInAncIAL STATEMEnTS

Petrogas Group LimitedBlock 17Joyce WayParkwestDublin 12

Tel: +353 1 512 4800 Fax: +353 1 512 4801 www.applegreen.ie

PE

TR

OG

AS

GR

OU

P L

IMIT

ED

An

nU

AL R

EP

OR

T An

D F

InA

nc

IAL S

TAT

EM

En

TS

2010

WELcOME

At Petrogas we continuously strive to improve our retail offer by creating simple solutions for our customers, every day.

We grow through the acquisition and redevelopment of forecourt sites under the Applegreen brand.

Petrogas Limited has been trading since 1992 and in 2010 accounted for 11% of the retail fuel market in Ireland.

Certain information included in this Annual Report and Accounts is forward-looking and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward-looking statements. Forward-looking statements cover all matters which are not historical facts and include, without limitation, projections relating to results of operations and financial conditions and the Company’s plans and objectives for future operations. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this report.

Overview | Petrogas Annual report 2010 | 01

2010 highlightsturnOver

€399m2009

€309m

service stAtiOns

692009

64

emPlOyees irelAnd And uK

5152009

387

trAnsActiOns weeKly

493,0002009

445,000

cOffees sOld mOnthly

173,0002009

167,000

Overview

02 Petrogas at a Glance04 Chairman’s Review 07 Operating Review14 Board of Directors 15 Some of Our People

finAnciAl stAtements

16 Directors’ Report 18 Statement of Directors’ Responsibilities 19 Independent Auditors’

Report to the Shareholders 20 Statement of Accounting Policies 22 Consolidated Profit and Loss Account 23 Consolidated Statement of Total

Recognised Gains and Losses 23 Reconciliation of Movements

in Shareholders’ Funds24 Consolidated Balance Sheet 25 Company Balance Sheet 26 Consolidated Cash Flow Statement 27 Notes to the Financial Statements39 Directors and Other Information

cOntents

02 | Petrogas Annual report 2010 | Overview

Petrogas group limited has been trading since 1992 and has a motor fuel market share of 11% in ireland. Petrogas has become known as one of the innovators in the forecourt retailing market under the brand name of Applegreen. the first Applegreen opened in 2005 and since then has become synonymous with “low fuel prices, always”, the best coffee on the road, clean shops and forecourts and excellent customer service.

Applegreen is known as a pioneer within the industry, being first to market with new initiatives such as green technology on its sites. in 2010 Applegreen mount merrion opened with the first acafé, bringing a new level of food offering to this sector.

PetrOgAs At A glAnceAbOut us

UK & IReLAND

irelAndArklow•Ashbourne•Athlone•Balbriggan•Baldoyle•Ballincollig•Ballinteer•Ballybrack•Birr•Blackquarry•Carragh• Castlebellingham •MSA M1 NorthboundCastlebellingham •

MSA M1 SouthboundCelbridge•Cherry Orchard•Clondalkin •Clones•Clonmel•Clonsilla•Clonskeagh•Cobh •Corbally•Cranley Centre•Crumlin•Drinagh •Drogheda• enfield •MSA M4 eastbound enfield •MSA M4 Westboundenfield Co. Meath•ennis•Ferns•Glanmire •

Goldenbridge•Gore•Gormanston•Hillsborough•Hollyhill•Jobstown•Julianstown•Kimmage •Kinsalebeg•Kinsealy•Knocklyon• Lusk •MSA M1 Northbound Lusk •MSA M1 SouthboundMonkstown•Monkstown Abbey•Mount Merrion•Mountrath •Naas•Nenagh •Newcastlewest•Palmerstown •Passage Cross •Portlaoise•Rathcoole•Rathnew•Roundtower •Sarsfield •Shankill •The Scalp •Tycor•Urlingford•Waterfront •Wexford•

uKBicester•Biggleswade•Chelmsford•Chesham•Corby •Crawley•enfield•Norton Heath•Peterborough•Small Heath •Tamebridge •Trowbridge •Wolverhampton •

Our lOcAtiOns


turnOver fOr grOuP +29%

€399m2009

€309m

fuelslOw fuel Prices, AlwAys

All of our petrol is e5, with a mix of 5% ethanol to 95% petrol. The use of e5 in place of standard petrol decreases carbon emissions by 3.4%, and the product can be used in all current petrol engines and doesn’t affect the engine warranty. All of our diesel contains a mix of 5% FAMe (Fatty Acid Methyl ester) to 95% standard diesel. This B5 blend of standard fuel and biomass helps reduce carbon emissions and is suitable for use in all diesel engines.

Petrogas continually strives to give all its customers the best coffee on the road and high quality food products at a value price. This philosophy is demonstrated in the own label food product range. For example, Applegreen milk is sourced in Ireland and retails at a very competitive price. Across the store, Applegreen has implemented its “Better Value Always” long-term promotional campaign that ensures better value to the customer when they purchase more than one product.

fOOdnOw thAt’s better

“ Our stable and consistent cash flows and our position in a secure sector provide a high degree of reassurance to our lenders.” robert c etchingham, Chairman

During the period covered by these accounts the Irish retail market continued its decline, albeit at a much more modest level than in the previous financial year. Our UK business experienced a pronounced upturn and like for like sales continued to benefit from our retailing efforts in the UK.

Our initiatives to reduce our cost base and restructure the business continued in FY 2010. Significant progress was made towards outsourcing much of our finance function and this will continue into 2011. Other initiatives also began to kick in and the improvement in our performance was helped by all of these. In the current climate, these efforts will continue and will assist in the continuing improvement of our trading performance in future years.

In October 2009 the Group entered into a consortium arrangement with Pierse Contracting and Top Oil, known as ‘the SuperStop Consortium’. The SuperStop Consortium was awarded the contract to design, build, maintain and operate six motorway service areas by the National Roads Authority. Much of our activities in FY 2010 have been taken up with the mobilisation for the opening of these six motorway service stations. This represented a major project entailing the complete fit out, recruitment and training of 330 staff and the preparation for the launch of the facilities, all in less than 12 months. Applegreen Service Areas Limited has been engaged to operate these six service areas.

Great credit is due to the team involved and to the staff who kept the rest of the business going during this extremely busy period.

As a fast expanding business, Petrogas like many other companies has been hampered by the lack of available credit facilities, especially in Ireland. Our stable and consistent cash flows and our position in a secure sector provide a high degree of reassurance and hopefully this credit situation will improve significantly during the coming year.

My thanks must go to everyone who contributed to what was a very successful year for the company. Great credit is due to the retail organisation that worked hard to limit the potential damage from the downturn in consumer spending and the whole organisation that contributed to the winning of the contract to design and operate the first six motorway service areas in Ireland. As a consequence of all these efforts we have enjoyed a strong performance versus the previous year and we are now very well positioned for the future.

My thanks to everyone involved with Petrogas, our licensees, our suppliers, contractors and other stakeholders who contributed so much to our success. We continue to look forward to the future with confidence.

robert c etchingham Chairman


“ Our uK business experienced a pronounced upturn and like for like sales continued to benefit from our retailing efforts in the uK.”

chAirmAn’s reviewrobert c etchingham Chairman


irelAnd’s first mOtOrwAy service AreAfinAnciAl clOse

Petrogas, as part of the SuperStop Consortium, won the PPP contract, awarded by the National Roads Authority, to design and operate Ireland’s first Motorway Service Areas, in October 2009. The picture below shows the final legal documents and represents the work undertaken to win the lengthy tender process. Work began almost immediately to build the three Motorway Service Areas located at Lusk and Castlebellingham on the M1 between Dublin and Belfast and on the M4 at enfield on the road between Dublin and Galway.


msA cOnstructiOndevelOPment infOrmAtiOn

Construction first began on the M1 Northbound on the service amenity building and forecourt. The motorway services areas amenity buildings have been designed and constructed with a sophisticated, occupant controlled approach to sustainability, resulting in an overall Building energy Rating of B2, and 20% of the energy demand being provided by renewables. Active energy reduction techniques such as mechanical ventilation heat recovery, energy efficient lighting with automatic controls & on-site electricity generation further reduce energy consumption, when passive measures are not applicable.

Petrogas’s financial year ending June 2010 mirrored a challenging economic year worldwide. Despite this, Petrogas Group achieved a gross profit of €41.6 million and a net profit before tax of €4 million, 133% increase on the prior year. Turnover for the period was €399 million, an increase of 29% year on year. These positive results were driven by four new site acquisitions, overall group cost saving initiatives, a pronounced upturn in the UK business and an improved in-store promotional strategy.

Overall fuel volumes grew 7.8% and both the UK and Irish business enjoyed fuel volume growth during this period in part behind the continued expansion of the network. Like for like fuel volumes were slightly down at -0.9%. This figure stands behind strong growth in the UK sites and a small decline in fuel volumes in Ireland. The overall fuel market in Ireland experienced a much greater economic contraction, but Petrogas fared better than the market behind the continued commitment to “low fuel prices, always”.

The first major cost saving initiative in Ireland was an optimisation of our staffing levels on site. This led to some redundancies, improved efficiencies and overall operating cost reduction, the full benefits of which will be seen in the next financial year. The second cost saving initiative was the expanded operation of the Petrogas Central Distribution Warehouse, which saw a 55% increase in case movements. The distribution system now services all Petrogas sites across Ireland and holds chilled, ambient and frozen goods.

The establishment and expansion of central warehouse distribution allowed Petrogas to significantly improve its buying power, which in turn enabled the organisation to pass on cost efficiencies to our customers. It also allowed the Group to enjoy further logistical efficiencies, for example the distribution of products via the uniquely designed Applegreen trucks. These hold ambient, frozen and chilled products in one truck which reduces the number of deliveries required on site and the number of trucks required to fulfill orders, a major green initiative.

The outcome of these savings was the commitment long term to the “better value, always” promotional campaign, which during this period expanded from single product multi-buys to whole category involvement across minerals and confectionary. This successful campaign was then further extended across categories within the store. The second benefit to the consumer was the direct passing on of cost savings via a reduction in retail pricing across certain product ranges, such as food to go. Therefore the Petrogas consumer across this period enjoyed better value for money when shopping in the sites. This program was key to the success of holding like for like shop volumes flat, whilst growing market share in a contracting market.


“ despite a challenging economic year worldwide, Petrogas achieved a gross profit of €41.6 million and a net profit before tax of €4 million, a 133% increase on the prior year.”

OPerAting reviewJoe barrett Retail Director

8 | Petrogas Annual report 2010 | Overview08 | Petrogas Annual report 2010 | Overview


OPerAting review (CONTINUeD)

The warehouse distribution system allowed Petrogas to further develop the Applegreen Own Label product range. The largest own label initiative in this time period was the launch of Applegreen Milk 1 Litre and 2 Litre. Sourcing centrally allowed the business to retail at a competitive price point of €1 for 1 Litre, significantly cheaper than branded competitors. The product is sourced from the Republic of Ireland, therefore supporting Irish industry and jobs, which was important to Petrogas and its customers during a year of deepening economic recession.

The Company also invested in environmental initiatives that in turn led to reduced running costs at site level. In March 2010, Applegreen Mount Merrion opened on a major artery road out of Dublin. This was the first site in Ireland to use LeD lights in the forecourt canopy, which are up to 80% more energy efficient and have a significantly longer life span than traditional lights. A recent analysis showed that there was up to an 11% energy cost saving on this site versus similar Applegreen sites due to the implementation of this technology.

This site was also fitted with Fuel Pumps which are designed to collect the vapours from the nozzle and vacuum them back into the tank, minimising wet stock loss through vapour release. The price display has an auto reduction function to reduce the lighting, and therefore energy usage by 30% when not in use. The site also incorporated, similarly to other Petrogas sites, the harvesting of rainwater from the canopy for use in the carwash. The carwash water is then cleaned, recycled and can be used again, further reducing water requirements on site. Towards the end of 2010 Applegreen won the envirocom Award for Best environmental Performance in the Retail Sector.

Overall, these results represent a successful trading year for the Group that has left the Company better positioned to face the road ahead.

Joe barrett Retail Director

“ Overall fuel volumes grew 7.8% and both the uK and irish markets enjoyed fuel volume growth.” Joe barrett, Retail Director

APPlegreen uK sitesApplegreen Corby UK was acquired and became the second Petrogas site to be branded Applegreen in the UK in 2009. This site was awarded joint first place at the NACS International Conference study trip, where 46 delegates from 19 different countries, and representing 12 different retailers, scored sites visited.



APPlegreen wAter

€1 for 1ltrSourced in the Republic of Ireland. At just €1 for 1 litre, €3 for 5 litres, and 85c for 500ml – this represents great value as well as great taste versus competition.

APPlegreen milK

€1 for 1ltrApplegreen milk is proud to carry the National Dairy Council mark, a guarantee that the milk has been sourced from Irish farms and processed in the Republic of Ireland.

APPlegreen Juices

2 for €2Our delicious Apple, Orange and Cranberry juices, only €1.50 are now 2 for €2 as part of Applegreen’s “Better Value Always” promotional campaign.

cAse study

APPlegreen Own lAbel

Applegreen has a long-standing commitment to providing high quality products at a value price point and this has been fundamental in the development of the Own Label brand. The Own Label range is relatively new, with the first products being launched in May 2007. 2009 was an important year as it saw a major launch behind Applegreen’s Own Label milk range.

Applegreen milk is produced in the Republic of Ireland and comes in a wide range of variants and sizes. The 1 litre range includes low fat, skimmed and fortified at an attractive €1 price point. The milk range will expand in 2010 to include a 3 litre milk and 227ml cream, thus catering for all customer size requirements.

To compliment the development of the dairy range during this financial year, Applegreen began work on a range of breakfast items using the same ethos of high quality products at a value price. The first product to launch was Irish Free Range 4 pack of eggs retailing at just €1.50 or 2 for €2 as part of the better value, always promotional program. This was so successful that work began immediately on expanding the dairy wall Own Label range and this project successfully launched in the second half of 2010.

However, work was not focused solely on the food range but also included the initial development of a range of motoring products such as motor oil, antifreeze/coolant, concentrated screen wash and ‘ready to use’ screen wash 5 litre, all of which were launched before the winter season in 2010.

All these products were supported in store behind the ‘better value, always’ campaign in addition to initial launch support and this helped to secure successful trial and consequent re-purchase amongst consumers.

an international humanitarian organisation


cOrPOrAte sOciAl resPOnsibilityevery time A custOmer PurchAses Any PrOduct in Our APPlegreen shOPs, we dOnAte One cent tO Our APPlegreen chAritAble fund

GOAL Ugandan Housing Support Program provides good quality housing for extremely poor families in Southern Uganda.


cOrPOrAte sOciAl resPOnsibilityhelPing tO build irelAnd’s first children’s hOsPice At leOPArdstOwn, dublin

This will provide respite and residential care for children with life limiting conditions. The hospice is planned to open summer 2011.


bOArd Of directOrs

dAmiAn Kennedy finAnce directOr

Damian Kennedy joined Petrogas in 2007. A Chartered Accountant, he first worked with KPMG before moving on to MasterFoods/Mars in 1992 as Finance and Systems Manager in Ireland. In 2003 he was appointed Head of Finance following a year working as a Project Manager in Mars UK. From 2005 to 2007 he fulfilled a number of roles including Finance Director for RTe Television and Project Director with G4S Ireland. He was appointed a Director of Applegreen in May 2008.

rObert c etchinghAm chief executive Officer

Bob has over 30 years experience in the oil industry. He started with esso Ireland as an economist and was subsequently involved in a variety of areas including commercial and fuel distribution. After 11 years with esso in Ireland and the UK, Bob set up Petrogas in 1992. With the continuing expansion of the service station network he oversaw the launch of the Applegreen brand in 2005. He set up the SuperStop Consortium which was awarded the contract by the Irish Government in October 2009 to develop six new Motorway Service Areas (opened in September 2010).

michAel O’ lOughlin mAnAging directOr Of the uK

Michael joined the Company in 1997 and was appointed a Director of the Company in 2005. He has built up an extensive knowledge of forecourt retailing and operations in Ireland and the UK. In 2007 Michael relocated to the UK and led the Applegreen brand’s expansion into the UK market. His keen eye for trends and customer needs has made Applegreen UK one of the most innovative forecourt offers.

JOe bArrett retAil directOr

Joe has been the Retail Director since joining Petrogas in 1993 and has been instrumental in the creation and success of the Applegreen brand. Joe is a regular presenter at industry conferences in Ireland and abroad and a member of numerous retail groups. Joe has also become a regular spokesman for the industry. He holds an MBA from University College Dublin.


Overview | Petrogas Annual report 2010 | 15Overview | Petrogas Annual report 2010 | 15

sOme Of Our PeOPle

trevOr mOOre

Trevor’s retail career commenced with Dunnes Stores on a trainee manager program in early 90s. From 1997 to 2000 Trevor worked in an industrial relations role with Aer Lingus and later returned to retail as Operating Manager for a small independent forecourt group. Since 2006 Trevor has worked for Petrogas Group at Retail Store Manager level before moving into his role as Project Manager within the Developments Department, later becoming Development Manager. Under Trevor’s stewardship he helped deliver the internationally acclaimed Applegreen Mount Merrion and the three Motorway Service Areas in 2010.

dermOt hAssett

Dermot joined Petrogas in 2007 as Systems Manager. As an IT professional with 30 years experience in the Wholesale & Retail sectors of the IT industry, he has extensive experience in leading major systems implementations in Ireland, UK, europe and Asia. He is responsible for the Group’s IT and MIS systems.

AnnAbel tOnge

Annabel worked for Procter & Gamble in the UK after graduating with a Masters Degree from edinburgh University. She worked across P&G’s brand portfolio with retailers and at a national level in both the UK and Ireland before transferring to P&G’s Hong Kong office. In Hong Kong, she managed a multi-functional team with responsibility for a third of P&G’s business in that market. Annabel joined Petrogas in 2008 as Head of Marketing, to develop the Applegreen brand, and took on the additional responsibility of being the Motorway Service Areas Project Manager in 2009/2010.

elizAbeth Pierce

elizabeth graduated from the Smurfit School of Business with a Masters in Accounting in 2004. She was admitted into the Institute of Chartered Accountants in 2007, having trained with PwC for three and a half years, during which time she worked on a wide variety of clients in the public and private sector including Mars Foods Ireland Ltd, DCC Plc and Bord na Móna Plc. elizabeth joined Petrogas in 2008 initially working on a project role and she was appointed Financial Reporting Manager in 2009.

hilAry bArrett

Having qualified with an MSc in Business Management from TCD and a Higher Diploma from DIT, Hilary worked with both Millennium Copthorne & Jurys Hotels Groups in the UK before returning to work in Ireland. Her time in the hospitality industry focused on systems implementation, building renovation projects and operations management. Joining Petrogas in 1998, Hilary commenced as a licensee with the Group. In 2002 Hilary joined the management team and has led a number of projects including Central Purchasing, launch of the Applegreen brand, opening of Central Distribution Centre and creating the aCafé food brand.

dereK murPhy

Derek began working as a retail manager with McDonald’s after graduating with a Bachelor of Arts and Mathematics from NUI Maynooth. Derek moved to Superquinn as a retail manager in 2000 and joined Petrogas in 2005 as a store licensee. Derek oversaw the opening of the first five sites of our UK operation in 2008 before returning to Ireland to run the trading department, the distribution department and also fuel department.

16 | Petrogas Annual report 2010 | finAnciAl stAtements

The Directors present their report together with the audited Group financial statements for the year ended June 30, 2010.

PrinciPAl Activities And review Of the business The principal activity of the Group continues to be the operation of service stations throughout Ireland and in the UK, under the Applegreen brand, for its own account and under licensing arrangements to third party licensees. During the year the Group decided to terminate its master franchise agreement with the Wimpy fast food brand.

The highlights of the Group’s financial statements include:

Turnover for the year of €399 millioneBITDA €10 millionGross assets of €165 millionShareholders’ funds of €47 million

System-wide sales include sales by all Petrogas service stations and Wimpy brand restaurants, whether operated by the Group or by licensees. System wide sales amounted to €423 million for 2010 (2009: €346 million).

There has been no change in the principal activities of the holding company and subsidiary companies during the financial year.

Profits, dividends and reserves €’000

Net profit after taxation attributable to the Group 3,382Deficit attributable to subsidiary companies (and effect of consolidation adjustments) 15,452

Net profit attributable to the holding company 18,834Profit and loss reserve brought forward (for the holding company) 5,801

Profit and loss reserves carried forward (for the holding company) 24,635

The Group revalued its service stations in line with its accounting policy during the year which resulted in a net surplus of €0.2 million (2009 – Deficit €0.07 million) being credited to the revaluation reserve.

The Directors do not propose to pay a dividend for the year under review.

current trAdingThe Group continues to perform well in the current economic circumstances and has benefited from significant like for like volume growth in the UK operations. In Ireland, sales volumes in most categories have declined since 2009 and are running in line with our competition. Overall these reductions are most notable in Food to Go and Car Wash and appear to be bottoming out in Fuel and Shop, while some lower margin categories are now growing again. The payroll cost reductions and business initiatives implemented in early 2009 are delivering almost a full year of benefit in the year to June 2010.

We implemented a central distribution arrangement with a dedicated third party service provider, covering most of the dry goods ranges in early 2009. Despite severe pressure on selling prices, this facility and the concentration of buying power has enabled us to deliver improved margins on our dry goods ranges despite selling price reductions and offering additional value to the consumer. We commenced outsourcing of our finance back office services in mid-2010. The first phase has been successfully completed and we expect to complete the remaining phases 2 and 3 by mid-2011, which will deliver significant savings to the bottom line in addition to allowing finance to provide increased focus on supporting the business initiatives.

While the pace of new site openings has declined over the last year, we have successfully opened the six new motorway sites which has required a lot of management attention and we continue to look at opportunities to expand in Ireland and beyond.

events since the yeAr end And future develOPmentsSince the year end a restructuring of the Group has taken place under which a new holding company, Petrogas Global Limited, has been established holding the entire issued share capital of Petrogas Group Limited. Applegreen Service Areas became a 100% member of the new Group on January 1, 2011.

In October 2009 the Group entered into a consortium arrangement with Pierse Contracting and Top Oil, known as “the SuperStop Consortium”, where each member has an equal share. The SuperStop Consortium was awarded the contract to design, build, maintain and operate six motorway service areas by the National Roads Authority. These sites commenced trading in September and October 2010.

Since the year end the Group has opened three service stations. Applegreen Service Areas Limited, a related company, has opened six motorway service area sites.

In February 2010, the Group announced its intention to outsource certain aspects of its financial reporting and record keeping division in the second half of 2010, which the Group anticipates will deliver savings and efficiencies. This process is ongoing with a number of functions already outsourced and others in progress.

reseArch And develOPmentThe Group did not engage in any research and development activity during the year.

directOrs’ rePOrt

finAnciAl stAtements | Petrogas Annual report 2010 | 17

risKs And uncertAintiesThe Group’s general business activities may be affected by risks associated with all companies in the fuel distribution and retail sector. The Group has identified the following risks specific to its business:

The Group operates in a highly competitive market, with competitors drawn from local and very large scale multi-national •corporations. To mitigate this risk, we focus on delivering superior service at a competitive cost to our customers. To facilitate this at a profitable level, we aim to have the best economies of scale in the industry with central buying and distribution.Petrogas Group Limited may experience decreased customer demand as a result of further economic decline.•Petrogas Group Limited expands the business through a strategy of service station and site acquisitions. The Group’s growth •may be hindered should it be unable to find attractive acquisitions or source the required financial facilities in the current banking environment.Severe weather conditions can impact average traffic volumes which would directly impact on demand for the Group’s •products.Petrogas Group Limited operates in a highly regulated and legally stringent sector. Changes in environmental, health and •safety or governmental laws or regulations could result in significant additional costs to the Group.Changes in the stability of financial institutions may equate to higher costs to be borne by the Group.•An increase in the costs associated with Petrogas Group Limited’s debt or an increase in financing costs could hinder •the Group’s growth.Petrogas Group Limited currently operates in Pounds Sterling as well as the euro. Any changes in the foreign exchange •rate relative to the euro would impact on the Group.

The Directors take such actions as they deem appropriate to minimise the Group’s exposure to identified risks.

subsidiAries And Other substAntiAl undertAKingsThe details of the Company’s subsidiaries and substantial undertakings are disclosed in note 25.

directOrsThe present members of the Board, and those who held office during the financial year, are:

Robert C etchingham Joseph Barrett Michael O’Loughlin Damian Kennedy

In accordance with the Articles of Association, Robert C etchingham and Damian Kennedy retire by rotation and, being eligible, offer themselves for re-election.

interests Of the directOrs/secretAryThe interests of the Directors and Secretary in the share capital of the Company during the year were as follows:

Beneficial No. of Ord. Shares

Robert C etchingham 44,998,800Joseph Barrett 15,061,200Michael O’Loughlin –Damian Kennedy –

60,060,000

Michael O’Loughlin was granted options of 1.5 million shares on January 29, 2007, exercisable between January 29, 2010 and January 29, 2017.

bOOKs Of AccOuntThe measures taken by the Directors to ensure compliance with the requirements of Section 202, Companies Act, 1990, regarding proper books of account are the implementation of necessary policies and procedures for recording transactions, the employment of competent accounting personnel with appropriate expertise and the provision of adequate resources to the finance function. The books of account are maintained at the Company’s head office, Block 17, Joyce Way, Parkwest, Dublin 12 and at various branches.

AuditOrsThe auditors, Phelan Prescott + Co, Chartered Accountants + Registered Auditors, continue in office subject to the provisions of Section 160 of the Companies Act, 1963.

By order of the Board

robert c etchingham Joseph barrettDirector DirectorFebruary 14, 2011 February 14, 2011


The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable Irish law. Under that law, the Directors have elected to adopt Generally Accepted Accounting Practice in Ireland including the accounting standards issued by the Accounting Standards Board and promulgated by The Institute of Chartered Accountants in Ireland.

Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

select suitable accounting policies and then apply them consistently;•make judgements and estimates that are reasonable and prudent; and•prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company •will continue in business.

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

The Directors are responsible for keeping proper books of account that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements are prepared in accordance with accounting standards generally accepted in Ireland and with Irish statute law comprising the Companies Acts, 1963 to 2009, and the european Communities (Companies: Group Accounts) Regulations, 1992.

The Directors are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company and Group’s website. Legislation in Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

robert c etchingham Joseph barrettDirector DirectorFebruary 14, 2011 February 14, 2011

stAtement Of directOrs’ resPOnsibilities


We have audited the financial statements on pages 20 to 38 of Petrogas Group Limited for the year ended June 30, 2010, which comprise of the Group Profit and Loss account, the Group statement of total recognised gains and losses, the Group and Company balance sheets, the Group cashflow statement and the related notes. These financial statements have been prepared under the accounting policies set out therein.

resPective resPOnsibilities Of directOrs And AuditOrsAs described in the Statement of Directors’ Responsibilities, the Company’s Directors are responsible for preparing the financial statements in accordance with applicable law and Generally Accepted Accounting Practice in Ireland including the accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

This Report is made solely to the Company’s members, as a body, in accordance with Section 193 of the Companies Act, 1990. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this Report, or for the opinions we have formed.

We report to you our opinion as to whether the financial statements give a true and fair view in accordance with Generally Accepted Accounting Practice in Ireland and are properly prepared in accordance with the Companies Acts, 1963 to 2009, and the european Communities (Companies: Group Accounts) Regulations, 1992. We also report to you whether in our opinion: proper books of account have been kept by the Company; whether at the balance sheet date, there exists a financial situation requiring the convening of an extraordinary general meeting of the Company; and whether the information given in the Directors’ Report is consistent with the financial statements. In addition, we state whether we have obtained all the information and explanations necessary for the purposes of our audit and whether the balance sheet is in agreement with the books of account.

We also report to you if, in our opinion, any information specified by law regarding Directors’ remuneration and Directors’ transactions is not disclosed and, where practicable, include such information in our Report.

We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This other information comprises only the Directors’ Report, the Chairman’s Review and the Operating Review. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.

bAsis Of Audit OPiniOnWe conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Group’s and Company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

OPiniOnIn our opinion the financial statements:

give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, of the state of affairs •of the Company and of the Group as at June 30, 2010 and of the profit of the Group for the year then ended; andhave been properly prepared in accordance with the requirements of the Companies Acts, 1963 to 2009 and the european •Communities (Companies: Group Accounts) Regulations, 1992.

We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the Company. The Company’s balance sheet is in agreement with the books of account.

In our opinion the information given in the Directors’ Report is consistent with the financial statements.

The net assets of the Company, as stated in the balance sheet, are more than half of the amount of its called-up share capital and, in our opinion, on that basis there did not exist at June 30, 2010 a financial situation which under Section 40(1) of the Companies (Amendment) Act, 1983 would require the convening of an extraordinary general meeting of the Company.

Phelan Prescott + coChartered Accountants + Registered Auditors

Alton House 4 Herbert Street Dublin 2 February 14, 2011

indePendent AuditOrs’ rePOrt tO the shArehOlders


A summary of the principal accounting policies, all of which have been applied consistently throughout the periods being reported, is set out below:

bAsis Of PrePArAtiOnThe financial statements have been prepared in accordance with Accounting Standards generally accepted in Ireland and Irish statute law comprising the Companies Acts, 1963 to 2009, and the european Communities (Companies: Group Accounts) Regulations, 1992. Accounting Standards generally accepted in Ireland in preparing financial statements giving a true and fair view are those published by the Institute of Chartered Accountants in Ireland and issued by the Accounting Standards Board.

bAsis Of AccOuntingThe financial statements have been prepared in euro (€) rounded to the nearest thousand under the historical cost convention, as modified by the revaluation of freehold and leasehold properties.

bAsis Of cOnsOlidAtiOnThe Group financial statements consolidate the financial statements of the holding company, its subsidiary and associated undertakings. The results for subsidiary undertakings acquired or disposed of during the year are included in the Consolidated Profit and Loss account from the date of acquisition or up to the date of disposal. In accordance with Section 3(2) of the Companies (Amendment Act), 1986 the Profit and Loss account for the holding company has not been presented separately in these financial statements.

AssOciAte undertAKingThe associate is accounted for using the equity method. The Group’s share of the profit or loss of the associate is included in the Consolidated Profit and Loss account. The Group’s interests in their net assets or liabilities are included as fixed asset investments in the Consolidated Balance sheet at an amount representing the Group’s share of the net asset at acquisition plus the Group’s share of post acquisition retained profits or losses.

The amounts included in the Consolidated Financial Statements in respect of the post acquisition profits of the associate are taken from their latest financial statements made up to the balance sheet date.

The investment in the associate is shown in the Company’s balance sheet as financial fixed assets and is valued at cost less provision for impairment in value.

turnOverTurnover comprises the value of goods and services supplied to external customers and excludes inter-company sales and value added tax.

gOOdwillGoodwill is the difference between the value of the consideration given on the acquisition of a business and the aggregate market value of the separate net assets acquired.

Goodwill is being amortised through the Profit and Loss account in equal instalments over its estimated economic life of ten years.

Goodwill is reviewed for impairment at the end of the first full financial year following acquisition, and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.

intAngible Assets, Other thAn gOOdwillIntangible assets acquired are capitalised at cost and amortised using the straight-line basis over their useful lives up to a maximum of 20 years.

In all cases, intangible assets are reviewed for impairment at the end of the first full financial year following acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.

freehOld And leAsehOld PrOPertiesAll tangible fixed assets are initially recorded at historic cost.

The Group’s portfolio of freehold and leasehold service station properties are revalued on a rolling basis designed to cover all the properties over a five year period. The properties are valued on an existing use basis inclusive of goodwill which is considered to be inherent in the property site. The revaluation surplus/(deficit) is taken to/(from) the revaluation reserve.

Revaluation gains are recognised in the Profit and Loss account (after adjustment for subsequent depreciation) to the extent that they reverse revaluation losses on the same assets that were previously recognised in the Profit and Loss account. All other revaluation gains are recognised in the statement of total recognised gains and losses.

Revaluation losses caused by a clear consumption of economic benefits are recognised in the Profit and Loss account. Other revaluation losses are recognised in the statement of total recognised gains and losses until the carrying amount reaches its depreciated historical cost. Beyond this the loss is recognised in the Profit and Loss account, except where the recoverable amount of the asset is greater than its revalued amount. Then the loss is recognised in the statement of total recognised gains and losses to the extent that the recoverable amount is greater than its revalued amount.

stAtement Of AccOunting POliciesfOr the yeAr ended June 30, 2010


Freehold and leasehold buildings are depreciated at the following rates:

Freehold buildings 2%Leasehold buildings Over the term of the lease

Freehold and leasehold land is not depreciated.

Other tAngible fixed AssetsOther tangible fixed assets are stated at cost less accumulated depreciation. Depreciation is provided at rates calculated to write off the cost less residual value of each asset over its expected useful life as follows:

Plant and equipment 5%Fixtures and fittings 10%Computer hardware and software 20%Motor vehicles 20%

All tangible fixed assets are eliminated from the balance sheet when fully depreciated.

finAnciAl AssetsInvestments in subsidiary undertakings are stated in the Company balance sheet at cost less provision for diminution in value.

leAsing And hire PurchAse cOmmitmentsAssets obtained under hire purchase contracts and finance leases that substantially transfer all the risks and rewards of ownership to the Group are capitalised as tangible assets and depreciated over their useful lives. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the Profit and Loss account so as to produce constant periodic rates of charge on the net obligations outstanding in each period.

stOcKStock is valued at the lower of cost and net realisable value.

PensiOnsThe Company operates defined contribution pension schemes in respect of its Directors and employees. The assets of the schemes are held separately from those of the Company in independently administered funds. The pension charge in the Profit and Loss account represents contributions paid by the Company to the schemes.

grAntsGovernment grants towards revenue expenditure are credited to the Profit and Loss account in the period in which the expenditure is incurred.

tAxAtiOnCorporation tax in respect of the Group is provided at current rates and is calculated on the basis of the results for the year.

Deferred taxation is calculated on the differences between the taxable profits and the results as stated in the financial statements. These differences are referred to as timing differences which arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements. The revaluation of properties is not considered to constitute a timing difference where there is no intention of disposing of the revalued properties in the foreseeable future.

Provision for a corporation tax surcharge assessable on undistributed investment income (in accordance with Section 440, Taxes Consolidation Act 1997) is provided after the time limit of 18 months has elapsed within which a dividend can be paid to avoid such surcharge.

fOreign currenciesForeign currency transactions have been translated to euro (€) at the rate of exchange ruling on the date of transaction. Assets and liabilities denominated in foreign currencies are translated to euro at the rate of exchange ruling on the balance sheet date. Differences arising from changes in exchange rates are dealt with in the Profit and Loss account.


2010 2009 Note €’000 €’000

Turnover 1 399,463 308,607Continuing operations 379,812 266,275Acquisitions 19,651 42,332Cost of sales (357,890) (276,861)

Gross profit 41,573 31,746Staff costs 2 (16,256) (11,893)Depreciation/amortisation 8/10 (3,570) (2,907)Other operating charges (15,669) (11,626)Other operating income 3 394 505

Group operating profit 6,472 5,825Continuing operations 5,450 5,232Acquisitions 1,022 593Share of loss in associate 10 (3) – Impairment of fixed assets 4 (113) –

Group profit before interest and tax 6,356 5,825Interest receivable and similar income 59 72Interest payable and similar charges 5 (2,407) (4,181)

Group profit before taxation 6 4,008 1,716Taxation 7 (626) (87)

Group profit retained for the year 3,382 1,629

There is no material difference between the historical cost profits and the results shown above.

robert c etchingham Joseph barrettDirector Director

cOnsOlidAted PrOfit And lOss AccOuntfOr the yeAr ended June 30, 2010


2010 2009 €’000 €’000

Profit for the year excluding share of associate’s loss 3,385 1,629Share of associate’s loss for the year (3) – exchange difference on retranslation of subsidiary undertakings (444) (382)Unrealised surplus/deficit on revaluation of properties 235 (720)

Total recognised gains and losses for the year 3,173 527

2010 2009 €’000 €’000

Profit for the year excluding share of associate’s loss 3,385 1,629Share of associate’s loss for the year (3) – exchange difference on retranslation of subsidiary undertakings (444) (382)Unrealised surplus/deficit on revaluation of properties 235 (720)Opening shareholders’ funds 43,923 43,396

Closing shareholders’ funds 47,096 43,923

cOnsOlidAted stAtement Of tOtAl recOgnised gAins And lOssesfOr the yeAr ended June 30, 2010

recOnciliAtiOn Of mOvements in shArehOlders’ fundsfOr the yeAr ended June 30, 2010


2010 2009 Note €’000 €’000

Fixed assets Intangible assets 8 1,025 1,075Tangible assets 9 132,428 130,506Financial assets – Investment in associate 10 – – – Other investments 10 500 500

133,953 132,081

Current assets Stock 11 9,252 6,245Debtors – amounts falling due within one year 12 9,150 8,449 – amounts falling due after more than one year 12 2,135 – Cash at bank and in hand 10,315 9,873

30,852 24,567Creditors – amounts falling due within one year 13 (41,459) (32,573)

Net current liabilities (10,607) (8,006)

Total assets less current liabilities 123,346 124,075Creditors – amounts falling due after more than one year 14 (75,818) (80,152)Provision for liabilities 15 (432) –

Net assets 47,096 43,923

Financed by Capital and reserves Called up share capital 18 763 763Revaluation reserve 19 33,939 33,678Profit and loss account 19 12,394 9,482

Shareholders’ funds 47,096 43,923


cOnsOlidAted bAlAnce sheet At June 30, 2010


2010 2009 Note €’000 €’000

Fixed assets Intangible assets 8 197 528Tangible assets 9 62,255 61,702Financial assets 10 5,110 1,861

67,562 64,091

Current assets Stock 11 5,731 3,775Debtors – amounts falling due within one year 12 6,662 7,030 – amounts falling due after more than one year 12 32,051 12,848Cash at bank and in hand 7,291 5,395

51,735 29,048Creditors – amounts falling due within one year 13 (31,258) (29,024)Net current assets 20,477 24

Total assets less current liabilities 88,039 64,115Creditors – amounts falling due after more than one year 14 (31,014) (25,546)Provision for liabilities 15 (304) –

Net assets 56,721 38,569

Financed by Capital and reserves Called up share capital 18 763 763Revaluation reserve 19 31,323 32,005Profit and loss account 19 24,635 5,801

Shareholders’ funds 56,721 38,569


cOmPAny bAlAnce sheet At June 30, 2010


2010 2009 Note €’000 €’000

Net cash inflow from operating activities 21 10,818 15,389Servicing of finance Interest received 44 54Bank loan interest payments (2,356) (4,120)Interest element of finance lease payments (100) (91)

Cash outflows to servicing of finance (2,412) (4,157)

Taxation 209 (665)

Capital expenditure and disposals Proceeds from sale of tangible fixed assets – – Payments to acquire intangible fixed assets (136) (361)Payments to acquire tangible fixed assets (4,367) (16,645)

(4,503) (17,006)

Acquisitions Acquisition of subsidiaries (net of cash received) 26 (5) (4,356)Proceeds from disposal of subsidiary – 1,427

(5) (2,929)

Financing (Decrease)/increase in debt (3,106) 17,837Capital element of finance leases repaid (594) (525)

(3,700) 17,312

Increase in cash 407 7,944Reconciliation of net cashflow to movement in net debt Increase in cash in the year 407 7,944Cashflow from change in borrowings 3,700 (17,312)

4,107 (9,368)Loans transferred on disposal of subsidiary – 946Cash acquired with subsidiaries – 2Finance leases (515) (1,161)Translation adjustment (407) 156

Movement in net debt in the year 3,185 (9,425)Net debt at beginning of year (72,129) (62,704)

Net debt at end of year 20 (68,944) (72,129)


cOnsOlidAted cAsh flOw stAtement fOr the yeAr ended June 30, 2010


1. turnOver

2010 2009 €’000 €’000

Group operated sales are analysed as follows: Retail 394,841 302,936Distribution 16 91Commissions from licensees and franchised sites 4,606 5,580

399,463 308,607

Turnover arises from continuing operations and is derived from activities in the following geographical locations:

€’000 €’000

Republic of Ireland 331,676 273,198United Kingdom 67,787 35,409

399,463 308,607

2. stAff cOsts And emPlOyees

2010 2009 €’000 €’000

Directors’ emoluments and pension 658 740Wages and salaries (net of grant receivable) 14,098 10,207Social welfare costs 1,366 873Staff pensions 57 54Redundancy (net of government rebates) 77 19

16,256 11,893

The average number of persons (excluding Directors) employed by the Group during the year was:

No. No.

Retail 445 313Administration 70 74

515 387

The Group operates a defined contribution pension scheme in Ireland. No such scheme exists in the United Kingdom based operating units.

3. Other OPerAting incOme

2010 2009 €’000 €’000

Income from licensed and franchised sites 120 362Rental income 226 117Other miscellaneous operating income 48 26

394 505

4. imPAirment Of fixed Assets

2010 2009 €’000 €’000

Impairment of intangible fixed assets 40 – Impairment of tangible fixed assets 73 –

113 –

There is no tax effect arising from the above impairments.

nOtes tO the finAnciAl stAtementsfOr the yeAr ended June 30, 2010


5. interest PAyAble And similAr chArges

2010 2009 €’000 €’000

This charge is in respect of: Bank loans and overdrafts 2,307 4,090Lease finance charges and hire purchase interest 100 91

2,407 4,181

6. PrOfit befOre tAxAtiOn

2010 2009 €’000 €’000

The profit before taxation is stated after charging: Depreciation on tangible assets owned 3,133 2,624Depreciation on tangible assets held under finance leases 283 141

Total Depreciation 3,416 2,765

Amortisation of: Brand development 60 72 Goodwill 46 47 Franchise 8 8 Licenses 40 15

Total amortisation 154 142

Total depreciation and amortisation of fixed assets 3,570 2,907

Directors’ remuneration 658 740Auditors’ remuneration – Audit* 96 75 – Non-audit 20 15Operating leases – land and buildings 4,380 3,150 – plant and equipment – 2And after crediting: Government Grants 35 –

* €50,000 (2009 – €50,000) of this relates to the holding company.

7. tAxAtiOn

2010 2009 €’000 €’000

(a) Analysis of charge in yearCurrent tax:Corporation tax on profits for the year 86 38Adjustment in respect of previous period – 20Surcharge on undistributed investment income 13 29

Total Republic of Ireland current tax 99 87Foreign tax on income for the year 92 – Adjustment in respect of previous period 3 –

Total current tax (note 7b) 194 87

Deferred tax: Origination and reversal of timing differences 432 –

Total deferred tax (note 15) 432 –

Tax on profit on ordinary activities attributable to the Group 626 87Share of tax of associated undertakings – –

626 87

nOtes tO the finAnciAl stAtements (CONTINUeD)fOr the yeAr ended June 30, 2010


(b) Factors affecting the tax charge for the year: The tax assessed for the year is lower than the standard rate of corporation tax in Ireland (12.5%). The differences are explained below:

2010 2009 €’000 €’000

Profit on ordinary activities before tax 4,008 1,716

effect of: Profit on ordinary activities before tax multiplied by the standard rate of corporation tax at 12.5% 501 215Book depreciation in excess of capital allowances 42 (211)Non-taxable expenses and income (101) (50)Income taxable at 25% 33 12Higher tax rates 35 15Group losses utilised (332) 57Adjustment in respect of prior year 3 20Surcharge at 20% 13 29

Total current year tax 194 87

8. intAngible Assets

Brand Development Goodwill Franchises Licences Total Group €’000 €’000 €’000 €’000 €’000

Cost At beginning of year 544 445 123 325 1,437Translation adjustments – 11 – – 11Additions 51 5 – 80 136Impairment of franchise – – (123) – (123)

At end of year 595 461 – 405 1,461

Amortisation At beginning of year 159 78 75 50 362Translation adjustments – 3 – – 3Impairment of franchise – – (83) – (83)Charge for year 60 46 8 40 154

At end of year 219 127 – 90 436

Net book value At June 30, 2010 376 334 – 315 1,025

At June 30, 2009 385 367 48 275 1,075

Brand Development Licences Total Holding Company €’000 €’000 €’000

CostAt beginning of year 544 178 722Additions 51 80 131Disposals (595) – (595)

At end of year – 258 258

Amortisation At beginning of year 159 35 194Charge for year 60 26 86Disposals (219) – (219)

At end of year – 61 61

Net book value At June 30, 2010 – 197 197

At June 30, 2009 385 143 528

The holding company transferred its brand development to another Group undertaking, Petrogas Brands Limited.



9. tAngible fixed Assets

Computer Assets under Plant & Fixtures & Hardware Motor Construction Land Buildings Equipment Fittings & Software Vehicles Total Group €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000

Cost/valuationAt beginning of year 497 82,566 29,249 2,497 19,808 2,240 34 136,891Translation adjustment – 321 280 2 94 11 – 708Additions 335 388 1,058 431 1,967 414 – 4,593Disposals – – – (86) – (2) (3) (91)Transfer of assets (128) – 62 54 12 – – – Fully depreciated – – – – 83 (17) – 66Revaluation/(Impairment) – (1,263) 1,298 – – – – 35

At end of year 704 82,012 31,947 2,898 21,964 2,646 31 142,202

Depreciation At beginning of year – – 595 397 4,753 623 17 6,385Translation adjustment – – 4 – 5 1 – 10Charge for year – – 643 137 2,160 507 7 3,454Disposals – – – (11) – – (2) (13)Fully depreciated – – – – 83 (17) – 66elimination on revaluation – – (128) – – – – (128)

At end of year – – 1,114 523 7,001 1,114 22 9,774

Net book valueAt June 30, 2010 704 82,012 30,833 2,375 14,963 1,532 9 132,428

At June 30, 2009 497 82,566 28,654 2,100 15,055 1,617 17 130,506

Computer Assets under Plant & Fixtures & Hardware Motor Construction Land Buildings Equipment Fittings & Software Vehicles Total Holding Company €’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000

CostAt beginning of year 1,549 37,463 10,909 1,797 13,246 1,722 34 66,720Additions 307 380 881 277 1,314 381 – 3,540Disposals – – – (86) – – (3) (89)Transfer of assets (128) – 62 54 12 – – – Revaluation/Impairment – (2,110) 1,298 – – – – (812)elimination of assets fully depreciated – – – – 83 (17) – 66

At end of year 1,728 35,733 13,150 2,042 14,655 2,086 31 69,425

DepreciationAt beginning of year – – 161 364 3,938 538 17 5,018Charge for year – – 256 98 1,409 386 7 2,156Disposals – – – (11) – – (2) (13)elimination on revaluation – – (57) – – – – (57)elimination of assets fully depreciated – – – – 83 (17) – 66

At end of year – – 360 451 5,430 907 22 7,170

Net book value At June 30, 2010 1,728 35,733 12,790 1,591 9,225 1,179 9 62,255

At June 30, 2009 1,549 37,463 10,748 1,433 9,308 1,184 17 61,702


Included in the above are assets held under finance leases or hire purchase contracts as follows:

2010 2009 NBV Depreciation NBV Depreciation Group €’000 €’000 €’000 €’000

Plant and equipment 545 36 657 42Fixtures and fittings 1,656 198 1,366 87Computer hardware 105 49 127 12

2,306 283 2,150 141

2010 2009 NBV Depreciation NBV Depreciation Holding Company €’000 €’000 €’000 €’000

Plant and equipment 415 29 519 35Fixtures and fittings 1,210 143 865 51Computer hardware 35 11 18 2

1,660 183 1,402 88

Independent valuations are conducted on the Group’s freehold and leasehold service station properties on a rotational basis over a five year period with interim valuations at three yearly intervals. The service station properties have broadly similar characteristics, such that values are likely to be affected by similar market forces and accordingly valuation on a rotational basis is considered appropriate. In keeping with this practice, a number of the properties were valued by CBRe during the year.

The properties are valued on an existing use basis which, because of the nature of the properties, includes goodwill inherent in each service station site.

The historical cost of Group land and buildings is €82 million (holding company €36 million).

10. finAnciAl Assets

Group Holding Company 2010 2009 2010 2009 Investments in subsidiary undertakings €’000 €’000 €’000 €’000

CostAt beginning of year 1,361 1,361Investment during the year 3,246 –

At end of year 4,607 1,361

Unquoted investment At beginning and end of year 500 500 500 500

Group Holding Company 2010 2009 2010 2009 Investment in associate – unquoted €’000 €’000 €’000 €’000

Acquisition at cost 3 – 3 – Share of post acquisition reserves (3) –

– –

Total financial assets at year end 500 500 5,110 1,861

The Directors consider that the unquoted investment, which was most recently valued in late 2009, has not diminished in value and that the market value is similar to cost.

During the year, the holding company increased its investment in two of its subsidiary companies, acquired a Dutch registered company as disclosed in note 26 and invested in the SuperStop Consortium as set out in note 22.



11. stOcK

Group Holding Company 2010 2009 2010 2009 €’000 €’000 €’000 €’000

Goods for resale 9,252 6,245 5,731 3,775

There are no material differences between the replacement cost of stock and the balance sheet amount. 12. debtOrs


Falling due within one year Trade debtors 1,072 1,063 1,036 1,341Other debtors and prepayments 2,251 1,575 1,997 1,285Merchant card receipts outstanding and ATM 4,281 2,110 2,311 1,041Corporation tax refundable – 447 19 200Amounts owed by licensees 1,030 1,491 784 1,400Amounts owed by related companies (note 22) 383 1,658 382 1,658Amounts owed by Directors 133 105 133 105

9,150 8,449 6,662 7,030

Falling due after more than one year Loan notes in associate company 2,135 – 2,135 – Amounts owed by subsidiaries – – 29,916 12,848

2,135 – 32,051 12,848

The Loan notes held in the Company’s associate, SuperStop (Holdings) Limited, are unsecured. Payments of interest and repayment of the loan principal will only be made if sufficient funds are available in the associate (see note 22).

13. creditOrs


Falling due within one year Loans and other borrowings Bank loans and overdrafts 2,882 1,319 1,683 1,062Obligations under finance leases 559 531 559 523

3,441 1,850 2,242 1,585

Other creditors Trade creditors and accruals 33,947 27,056 25,057 23,031Other creditors and accruals 110 106 155 81Amounts due to licensees 57 303 226 243Loans from Directors 192 380 192 380Amounts owed to subsidiaries – – – 271Amounts owed to related companies (note 22) 1,561 2,327 1,561 2,327

35,867 30,172 27,191 26,333

Taxation creditorsCorporation tax 156 – – – Value added tax 1,602 312 1,618 912Other taxation and social welfare 393 239 207 194

2,151 551 1,825 1,106

Total creditors falling due within one year 41,459 32,573 31,258 29,024


Trade creditors includes an amount of approximately €22 million in respect of goods subject to reservation of title clauses, where ownership of the goods does not pass until payment is made.

The loans from the Directors and related companies are unsecured, interest free and with no specific repayment terms.

14. creditOrs


Falling due after more than one year Bank loans 74,719 78,946 21,895 24,340Obligations under finance leases 1,099 1,206 1,099 1,206Amounts owed to Group undertakings – – 8,020 –

75,818 80,152 31,014 25,546

15. PrOvisiOn fOr liAbilities


Deferred tax – capital allowances in excess of depreciation 432 – 304 –

16. bAnK lOAns And security


Repayable within one year 2,882 1,319 1,539 1,062Repayable within two and five years 68,941 71,186 17,321 21,065Repayable after more than five years 5,778 7,760 4,574 3,275

77,601 80,265 23,434 25,402

SecurityAt June 30, 2010, the following securities are held by the banks in respect of facilities granted to the Group:

Anglo Irish Bank Corporation LimitedA first legal charge over certain of the Group’s freehold and leasehold properties.•The guarantee from subsidiary undertakings supported by first legal charges over freehold and leasehold property interests •held by these undertakings.The joint and several guarantees and indemnities of two Directors supported by joint life cover of €1.26 million.•

ACC Bank plcA first legal charge over certain of the Group’s freehold and leasehold properties.•A guarantee and indemnity of one of the Groups subsidiary undertakings supported by a first legal charge as outlined above.•

Bank of Scotland (Ireland) LimitedA fixed charge over certain of the Group’s freehold properties.•A floating charge over certain of the Company’s other assets.•

PACE Petroleum LimitedA first fixed charge over certain of the Group’s fixed assets and a floating charge over other assets of a subsidiary undertaking.•

Lombard Ireland LimitedA fixed charge over certain of the Group’s leasehold properties.•


17. leAsing ObligAtiOns


Repayable within one year 559 531 559 523Repayable within two and five years 1,099 1,206 1,099 1,206

1,658 1,737 1,658 1,729

18. shAre cAPitAl

2010 2009 €’000 €’000

Authorised:100,000,000 Ordinary shares of €0.01269738 each 1,270 1,270

Allotted, called up and fully paid:60,060,000 Ordinary shares of €0.01269738 each 763 763

Share optionsOptions over 2,900,000 shares have been granted to a number of employees which are exercisable within a ten year period from January 29, 2007. No share options have been exercised by June 30, 2010.

Equity warrantsIn June 2009 the Company issued equity warrants to the bondholders in Yerba Limited, a related company, which give the bondholders the right to subscribe for new ordinary shares in the Company at an agreed discount if Petrogas Group Limited offers new shares to its shareholders. The warrants are exercisable during the term of the loan notes and for a period of six months from the date of repayment which is expected in 2013.

19. reAlised And unreAlised reserves

Unrealised Profit & Revaluation Loss A/c. Reserve Group €’000 €’000

At beginning of year 9,482 33,678Unrealised surplus on revaluation of properties – 235Group profit retained for the year 3,382 – Currency profit on conversion of foreign subsidiaries (470) 26

At end of year 12,394 33,939

Holding Company €’000 €’000

At beginning of year 5,801 32,005Unrealised deficit on revaluation of service station properties – (682)Retained profit for year 18,834 –

At end of year 24,635 31,323



20. AnAlysis Of net debt

Cash Translation At 1.7.2009 Flow Adjustment Other At 30.6.2010 €’000 €’000 €’000 €’000 €’000

Cash balances 9,873 407 35 – 10,315Overdraft – – – – –

9,873 407 35 – 10,315

Debt due within one year (1,850) (1,482) (6) (103) (3,441)Debt due after one year (80,152) 5,182 (436) (412) (75,818)

Total term finance (82,002) 3,700 (442) (515) (79,259)

Net debt (72,129) 4,107 (407) (515) (68,944)

21. recOnciliAtiOn Of grOuP OPerAting PrOfit tO net cAsh inflOw frOm OPerAting Activities

2010 2009 €’000 €’000

Group operating profit for the year 6,472 5,843Depreciation/amortisation charge 3,570 2,907Non-cash movement on acquisitions (17) (123)Non-cash movement on disposal of subsidiary – (5)Share of loss in associate 3 – (Increase) in stocks (2,963) (1,516)(Increase)/decrease in debtors (3,242) 2,369Increase in creditors 7,024 5,928Translation adjustment (29) (14)

Net cash inflow from Group operating activities 10,818 15,389

22. relAted PArty trAnsActiOnsDuring the year ended June 30, 2010, the Group leased properties from its shareholders at a cost of €155,000.

The Group has availed of the exemption under FRS 8, Related Party Transactions, from the requirement to disclose transactions with subsidiaries in which the Company holds a 100% shareholding and whose results are included in these financial statements.

The Company entered into long-term leases with Yerba Limited, a company, which while not presently under the control of the Group, is regarded as a related entity on the basis that the Group holds an option to acquire the share capital of Yerba Limited under certain circumstances at a future date.

Petrogas Group Limited has an arrangement with the bondholders in Yerba Limited by way of an equity warrant in Petrogas Group Limited. The warrant gives the shareholder the right to subscribe for new ordinary shares in Petrogas Group Limited at a discount if Petrogas Group Limited offers new shares to its shareholders.

The Group has entered into related party transactions with other companies outside of the Group which are under the control of the Directors. These are conducted at normal commercial terms. The amount owing from/to related companies at the balance sheet date is disclosed in notes 12 and 13.

The Group has also entered into related party transactions with the Directors in the form of loans from/to Directors at varying terms. The total amount due from/to Directors at the balance sheet date are disclosed in notes 12 and 13.

Share options have been granted to an employee of the Company, who is a relative of one of the Directors, under terms identical to options granted to other employees.



22. relAted PArty trAnsActiOns (CONTINUeD)During the year Petrogas Group Limited formed ‘SuperStop Consortium’ jointly with Tedcastles Oil Products and Pierse Contracting Limited. This consortium was awarded the public private partnership contract to design, build, maintain and operate six motorway service areas by the National Roads Authority (NRA). The consortium incorporated SuperStop (Holdings) Limited, which became an associate of Petrogas Group Limited by its joint ownership with Tedcastles Oil Products and Pierse Contracting Limited. SuperStop (Holdings) Limited is a related company as it has common Directors with Petrogas Group Limited. Petrogas Group Limited has unsecured loan notes in SuperStop (Holdings) Limited, as set out in note 12. Petrogas Group Limited also received €222,227 during the year from SuperStop Limited, a wholly owned subsidiary of SuperStop (Holdings) Limited, in respect of the reimbursement of bid costs in connection with the NRA contract.

Applegreen Service Areas Limited was appointed to operate the six motorway service areas on behalf of the SuperStop Consortium. The balance sheet and trading results for Applegreen Service Areas Limited, which commenced trading in September 2010, are not included within the consolidated results of Petrogas Group Limited, however the two companies are related by virtue of common Directors and shareholders. At 30 June 2010, there was a balance of €355,171 due from Applegreen Service Areas Limited to Petrogas Group Limited.

On January 1, 2011 the Group was re-organised such that the entire issued share capital of Petrogas Group Limited and Applegreen Service Areas Limited were brought within the common ownership of Petrogas Global Limited, a recently incorporated holding company. The ultimate controlling parties at Petrogas Global Limited are identical to the previous controlling parties of Petrogas Group Limited.

23. POst bAlAnce sheet eventsSince the year end the Group has opened three service stations. Applegreen Service Areas Limited, a related company, has opened six motorway service area sites.

As set out in Note 22, on January 1, 2011 the Group was re-organised under a new holding company, Petrogas Global Limited with Applegreen Service Areas Limited becoming part of the new group structure.

In February 2010, the Group announced its intention to outsource certain aspects of its financial reporting and record keeping division. This process is ongoing – Phase 1 is complete, Phase 2 is in progress and Phase 3 is planned for quarter 2, 2011.

24. cOmmitments And cOntingencies a) Capital CommitmentsThe holding company is party to an option agreement whereby it can acquire the entire issued share capital of Yerba Limited for nominal consideration.

At June 30, 2010 Yerba Limited had accumulated losses of €2,909,651. No provision for this contingent loss has been included in these financial statements as the open market value of the properties retained within Yerba Limited will, in the opinion of the Directors, more than compensate for the accumulated loss and consequently the net asset value on acquisition will be positive. The holding company has committed to issue equity shares to the warrant holders of Yerba Limited if certain conditions are met as outlined in note 18.

b) Leasing CommitmentsThe Group has annual rental commitments of €4.8 million in respect of leasehold premises, all of which expire after more than five years.

c) Pension CommitmentsThe holding company operates defined contribution pension schemes for its Directors and employees. The assets of the schemes are held separately from those of the holding company and its subsidiaries in independently administered funds. The pension charge represents the annual obligation of the Company to make contributions to the schemes and amounted to €107,022 (2009 – €101,079).

d) Related Company GuaranteeThe holding company has entered into guarantee agreements which undertake to guarantee the performance of Applegreen Service Areas Limited, a related company in relation to that company’s performance of contracts entered into with Superstop Limited and the National Roads Authority in relation to the operation and management of six Motorway Service Areas.


25. subsidiAries And Other substAntiAl undertAKingsThe holding company and its subsidiary companies, which (except where indicated) are incorporated in Ireland and have their registered office at Block 17, Joyce Way, Parkwest, Dublin 12, the principal activities and the changes, where applicable, during the financial year in the classes of business in which the Company has an interest, as required by Section 158 (1) and (3) respectively of the Companies Act, 1963, are set out below.

Holding Company Holding Principal Activity

Petrogas Group Limited Service station operator on its own account and under licensing arrangements

Subsidiary Companies (Ireland) Holding Principal Activity

Desdale Limited 100% Service station operator on its own account and under licensing arrangementsYerba 2 Limited 100% Service station operator on its own account and under licensing arrangementsBlack Quarry Service Station Limited 100% Service station operator under licensing arrangementsReflare Limited 100% Service station operatorTrukar Limited 100% Service station operator under licensing arrangementsTiknock Service Centre Limited 100% Service station operatorTaciturn Trading Limited 100% Service station operatorPetrogas International Limited 100% Development and service station refurbishmentWimpy Restaurants Ireland Limited 100% Restaurant operator under licensing arrangements – ceased trading during the yearPetrogas Brands Limited 100% Holding of intellectual property

Subsidiary Companies (Outside Ireland) Holding Principal Activity

Petrogas Group UK Limited* 100% Service station operatorPetrogas Group (Southern) Limited* 100% Service station operatorPetrogas Group (Western) Limited* 100% Service station operatorLinkside estates Limited* 100% Non-tradingPetrogas Group NI Limited** 100% Holding companyBadger Close Limited** 100% Service station operatorPetrogas Services B.V.*** 100% Licensing of intellectual property

Associate Holding Principal Activity

SuperStop (Holdings) Ltd 33.33% Holding company, whose subsidiary SuperStop Limited has the contract to design, build, maintain and operate motorway service areas.

* The registered office of Petrogas Group UK Limited, Linkside estates Limited, Petrogas Group (Southern) Limited and Petrogas Group (Western) Limited is 200 Strand Road, London WC2R 1DJ, United Kingdom.

** The registered office of Petrogas Group NI Limited and Badger Close Limited is 1 Lanyon Quay, Belfast BT1 3LG, Northern Ireland.

*** The registered office of Petrogas Services B.V. is Spiegelgracht 15, 1017 JP, Amsterdam, The Netherlands.

26. AcquisitiOns And disPOsAlsAcquisition of subsidiariesDuring the year the Group acquired the entire share capital of Petrogas Services B.V. (formerly Van Veelen B.V.), a Dutch incorporated company, for a consideration of €21,624. Goodwill arising on this acquisition has been capitalised. The investment in the Company has been included in the holding company’s balance sheet at its fair value at the date of acquisition.

Analysis of the acquisition of subsidiaries undertakings:

Book Value Revaluation Fair Values €’000 €’000 €’000

Net assets of the date of acquisitionDebtors 17 – 17

Net assets acquired at fair value 17 – 17

Goodwill arising on acquisition 5

Consideration 22


27. finAnciAl risKsThe main risks attending to the Group’s financial investments are foreign currency risk, interest rate risk, liquidity risk and credit risk. The Board reviews and agrees policies for the prudent management of each of these risks as documented below.

Foreign currency riskThe Group currently purchases goods for resale in foreign currency on a tactical basis where the cost and risk of foreign currency purchasing is materially less than local purchasing and does not have any material foreign exchange transaction risks. The UK operation was initially funded by Group borrowings but is expected to be self funding in the future.

Interest rate riskThe Group’s exposure to changes in interest rates arises in respect of its floating rate borrowings. The Group regularly reviews its loan agreement with a view to fixing a portion of its interest rates once there is any sign of recovery in longer term rates.

Liquidity riskThe Group’s policy in relation to liquidity and cashflow risk is to ensure sufficient resources are available from cash balances or cashflows to ensure all obligations can be met when they fall due. To achieve this, the Group operate demand deposit accounts for excess cash, as it is continuously redeveloping and acquiring stations. Borrowings are incurred for acquisitions and station developments on an interest only basis.

Credit riskThe Group does not consider credit risk a significant risk. Its credit customers tend to be connected to the Group in terms of other commercial relationships, e.g. service station landlords. Others include state or semi-state bodies. Less than 1% of group sales are on credit. Cash and similar financial instruments are drawn on financial institutions with high credit ratings and therefore the credit risk from these is limited.

28. APPrOvAl Of finAnciAl stAtementsThe Board of Directors approved the financial statements on February 14, 2011.



Directors Robert C etchingham Joseph Barrett Michael O’Loughlin Damian Kennedy

Secretary Joseph Barrett

Registered office Block 17 Joyce Way Parkwest Dublin 12

Auditors Phelan Prescott + Co Chartered Accountants + Registered Auditors Alton House 4 Herbert Street Dublin 2

Solicitors Lavery Kirby Gilmartin The Forum 29/31 Glasthule Road Glasthule Co. Dublin

Landwell Solicitors One Spencer Dock North Wall Quay Dublin 1

Bankers Anglo Irish Bank Corporation Ltd ACC Bank plc Bank of Ireland Bank of Scotland (Ireland) Limited

Company Number 179991

directOrs And Other infOrmAtiOn


nOtes

WELcOME

At Petrogas we continuously strive to improve our retail offer by creating simple solutions for our customers, every day.

We grow through the acquisition and redevelopment of forecourt sites under the Applegreen brand.

Petrogas Limited has been trading since 1992 and in 2010 accounted for 11% of the retail fuel market in Ireland.

Certain information included in this Annual Report and Accounts is forward-looking and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward-looking statements. Forward-looking statements cover all matters which are not historical facts and include, without limitation, projections relating to results of operations and financial conditions and the Company’s plans and objectives for future operations. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this report.

2010PETROGAS GROUP LIMITED AnnUAL REPORT AnD FInAncIAL STATEMEnTS

Petrogas Group LimitedBlock 17Joyce WayParkwestDublin 12

Tel: +353 1 512 4800 Fax: +353 1 512 4801 www.applegreen.ie

PE

TR

OG

AS

GR

OU

P L

IMIT

ED

An

nU

AL R

EP

OR

T An

D F

InA

nc

IAL S

TAT

EM

En

TS

2010

Documents

PETROGAS GROUP LIMITED AnnUAL REPORT AnD FInAncIAL …/media/... · energy Rating of B2, and 20% of the energy demand being provided by renewables. Active energy reduction techniques