ROBERT WALTERS PLC — Interim / Quarterly Report 2012

Jun 30, 2012

Half-yearly financial results 2012 Robert Walters plc

robert walters plc

We are one of the world's leading specialist professional recruitment businesses.

We stand for innovation, vision and leadership in the global recruitment market and manage the careers of the highest calibre professionals across the specialist disciplines of accounting & finance, banking, engineering, human resources, information technology, legal, sales & marketing, secretarial & support and supply chain & procurement.

Our client base ranges from multinational blue-chip corporates and the world's leading financial services organisations through to SMEs and start ups.

51Offices 23 Countries 2,100⁺Staff

• 02 Interim Management Report
• 04 Condensed Consolidated Income Statement
• 04 Condensed Consolidated Statement of Comprehensive Income and Expense
• 05 Condensed Consolidated Balance Sheet
• 06 Condensed Consolidated Cash Flow Statement
• 07 Condensed Consolidated Statement of Changes in Equity
• 08 Notes to the Condensed Set of Financial Statements
• 11 Responsibility Statement
• 12 Independent Review Report to Robert Walters plc
• 13 Our Offices

financial highlights

£275.0m Revenue (2011: £241.6m) £92.4m Net fee income (2011: £89.1m) £3.4m Operating profit (2011: £7.2m) £3.1m Profit before taxation (2011: £7.1m) 2.9p Basic earnings per share (2011: 6.5p) 1.47p Interim dividend per share (2011: 1.47p) £4.6m Net cash (30 June 2011: £10.7m)

Interim Management Report

The Group produced a resilient performance during the first half of the year, delivering net fee income growth across all regions against a backdrop of deteriorating market conditions and challenging year-on-year comparatives. Revenue was up 14% to £275.0m (2011: £241.6m) and gross profit ('net fee income') by 4% (3% in constant currency) to £92.4m (2011: £89.1m), resulting in an operating profit of £3.4m (£3.4m in constant currency) (2011: £7.2m) and a profit before taxation of £3.1m (£3.1m in constant currency) (2011: £7.1m). The Group has a strong balance sheet and maintained a healthy cash position with net cash of £4.6m as at 30 June 2012 (30 June 2011: £10.7m).

Market conditions and client and candidate confidence levels remained fragile during the first half, with permanent recruitment within the banking sector most severely affected. Our long-term strategy of geographic and discipline diversification is providing the Group with resilience, competitive strength and opportunities for growth. The Group has in place the right blend of permanent, contract and interim income streams, supported further by the growth of our market-leading recruitment outsourcing business, Resource Solutions.

In line with our strategy for growth, we opened four new offices during the first half; San Francisco, Rio de Janeiro, Milton Keynes and Parramatta bringing the Group's global footprint to 51 offices in 23 countries. Headcount increased to 2,159 (2011: 1,932) however, the rate of headcount growth slowed during the second quarter in response to market conditions in some of our more challenging locations.

Contract recruitment now represents 31% (2011: 29%) of the Group's recruitment net fee income. The balance of contract and permanent recruitment provides greater resilience when market conditions are challenging and also positions us well to grow quickly and benefit from operational gearing when confidence returns.

Resource Solutions performed strongly and we have invested significantly in strengthening the offering across Asia Pacific and Europe. With clients increasingly looking to work with global recruitment partners that are able to provide an end-to-end recruitment solution, we believe that Resource Solutions provides the Group with a significant competitive advantage.

Asia Pacific (50% of net fee income)

Revenue was £134.7m (2011: £109.9m) and net fee income increased by 3% (0% in constant currency) to £45.9m (2011: £44.5m) delivering an operating profit of £3.3m (£3.1m in constant currency) (2011: £5.8m).

Australia, our largest business in the region, continued to perform well benefiting not only from high activity levels in the resources industry but our general strength in the commerce sector. The Asia region was impacted by the slowdown in the banking sector but opportunities for strong growth exist as evidenced by excellent performances from our newer businesses in Malaysia and Thailand. In China, we have continued to invest and restructured the management team to optimise long-term performance.

We continue to successfully diversify our businesses across the region into other recruitment disciplines and expect to achieve improved growth rates during the second half.

United Kingdom (26% of net fee income)

Revenue was £93.4m (2011: £86.2m) and net fee income increased by 5% to £23.9m (2011: £22.9m) delivering an operating profit of £0.0m (2011: £0.3m).

The UK business delivered a respectable increase in net fee income despite challenging market conditions. Permanent recruitment levels in the banking sector remained weak, however our London commerce business and our regional offices have performed relatively well. We opened a new office in Milton Keynes to further strengthen our regional presence.

Resource Solutions performed strongly during the first half of the year. We have been successful across a number of competitive tenders, securing new client engagements across both the commercial and banking sectors and extending a number of contracts at existing client sites.

Europe (22% of net fee income)

Revenue was £44.0m (2011: £42.9m) and net fee income increased by 3% (8% in constant currency) to £19.9m (2011: £19.4m) delivering an operating profit of £0.3m (£0.4m in constant currency) (2011: £1.0m).

France, our largest business in the region, continued to perform well whilst our newest business in Germany produced strong net fee income growth. In the Netherlands, market conditions remained tough and net fee income declined marginally year-on-year. Elsewhere across the region, recruitment activity levels were also muted as a result of the ripple effect of the Eurozone's ongoing economic and political uncertainty.

The Americas and South Africa (2% of net fee income)

Revenue was £2.9m (2011: £2.5m) and net fee income increased by 11% (16% in constant currency) to £2.7m (2011: £2.4m) delivering an operating loss of £0.2m (£0.2m operating loss in constant currency) (2011: operating profit of £0.1m).

We invested heavily in the region during the first half, increasing our offices from three to five. South Africa produced strong net fee income growth; in the USA our New York business was impacted by the banking sector slowdown whilst our new office in San Francisco has started well. Activity levels in Brazil slowed during the second quarter however, we believe South America is a strategically important long-term growth market for the Group and we therefore opened a second office in Rio de Janeiro.

Cash flow

The Group maintained a strong net cash position of £4.6m as at 30 June 2012 (30 June 2011: £10.7m) despite a significant increase in contractor numbers. Working capital in the period has increased by £10.7m and notable cash outflows included a dividend of £2.6m, £2.9m of tax payments and capital expenditure of £2.8m.

Dividend

The interim dividend will be maintained at 1.47p per share (2011: 1.47p) and will be paid on 19 October 2012 to those shareholders on the Company's register as at 7 September 2012.

Treasury management, currency risk and other principal risks and uncertainties affecting the business

The Group does not have material transactional exposures although is exposed to translation differences on the profits and cash flows generated in its overseas operations. Overseas currency balances that are surplus to local working capital requirements are converted on a regular basis to pounds sterling and there is a particular emphasis on minimising holdings in euros given the current uncertainty over the potential break-up of the Eurozone. The main functional currencies of the Group are pounds sterling, the euro, the Australian dollar and the Japanese yen.

The other principal risks and uncertainties affecting the business activities of the Group remain those detailed within the Operating and Financial Review section of the Annual Report and Accounts for the year ended 31 December 2011, namely the economic environment, people management, brand and reputation, laws and regulations and technology. The Board does not foresee a material change in respect of these factors for the remainder of the year.

Outlook

Current trading conditions remain difficult necessitating close management of the Group's cost base, particularly in those locations where market conditions are most challenging. We will continue to selectively invest in the long-term geographic growth and diversification of the Group and are confident that this strategy, combined with our strong balance sheet, market-leading global brand and experienced management team, will ensure that the Group is well positioned for the future.

1 August 2012

Philip Aiken Robert Walters Chairman Chief Executive

Condensed consolidated income statement

	Notes	2012 6 mths to 30 June Unaudited £'000	2011 6 mths to 30 June Unaudited £'000	2011 12 mths to 31 December Audited £'000
Continuing operations Revenue Cost of sales	4	275,006 (182,628)	241,618 (152,489)	528,114 (344,671)
Gross profit	4	92,378	89,129	183,443
Administrative expenses		(88,940)	(81,910)	(167,810)
Operating profit	4	3,438	7,219	15,633
Finance income		76	24	368
Finance costs		(347)	(172)	(730)
(Loss) profit on foreign exchange		(100)	17	(189)
Profit before taxation	5	3,067	7,088	15,082
Taxation		(1,028)	(2,304)	(4,909)
Profit for the period		2,039	4,784	10,173
Attributable to:		2,042	4,543	9,866
Owners of the Company		(3)	241	307
Non-controlling interest		2,039	4,784	10,173
Earnings per share (pence): Basic Diluted	7	2.9 2.6	6.5 5.8	14.1 12.7

Condensed consolidated statement of comprehensive income and expense

	2012 6 mths to 30 June Unaudited £'000	2011 6 mths to 30 June Unaudited £'000	2011 12 mths to 31 December Audited £'000
Profit for the period Exchange differences on translation of overseas operations	2,039 (1,187)	4,784 452	10,173 397
Total comprehensive income and expense for the period	852	5,236	10,570
Attributable to: Owners of the Company Non-controlling interest	855 (3)	4,995 241	10,263 307
	852	5,236	10,570

Condensed consolidated balance sheet

Note	2012 30 June Unaudited £'000	2011 30 June Unaudited £'000	2011 31 December Audited £'000
Non-current assets Intangible assets Property, plant and equipment Deferred tax assets	9,363 12,217 6,813	8,968 7,147 7,844	9,292 11,564 6,942
	28,393	23,959	27,798
Current assets Trade and other receivables Corporation tax receivables Cash and cash equivalents	121,890 1,711 22,898	112,729 101 22,355	115,680 327 28,965
	146,499	135,185	144,972
Total assets	174,892	159,144	172,770
Current liabilities Trade and other payables Corporation tax liabilities Bank overdrafts and loans 9 Provisions	(83,567) (784) (18,339) (727)	(79,688) (1,621) (11,701) (975)	(87,059) (1,295) (11,904) (1,318)
	(103,417)	(93,985)	(101,576)
Net current assets	43,082	41,200	43,396
Non-current liabilities Deferred tax liabilities Provisions	(67) (423) (490)	(844) (347) (1,191)	(65) (382) (447)
Total liabilities	(103,907)	(95,176)	(102,023)
Net assets	70,985	63,968	70,747
Equity Share capital Share premium Other reserves Own shares held Treasury shares held Foreign exchange reserves Retained earnings	17,113 21,247 (73,410) (9,121) (19,860) 10,459 124,055	17,113 21,247 (73,410) (13,982) (19,860) 11,701 120,720	17,113 21,247 (73,410) (12,028) (19,860) 11,646 125,534
Equity attributable to owners of the Company Non-controlling interest	70,483 502	63,529 439	70,242 505
Total equity	70,985	63,968	70,747

Condensed consolidated cash flow statement

Note	2012 6 mths to 30 June Unaudited £'000	2011 6 mths to 30 June Unaudited £'000	2011 12 mths to 31 December Audited £'000
Cash (used) generated by operating activities 8 Income taxes paid	(3,342) (2,859)	(2,214) (5,890)	16,983 (10,004)
Net cash (used) generated by operating activities	(6,201)	(8,104)	6,979
Investing activities Net interest paid Purchases of computer software Purchases of property, plant and equipment	(271) (506) (2,330)	(149) (643) (3,234)	(362) (1,291) (9,350)
Net cash used by investing activities	(3,107)	(4,026)	(11,003)
Financing activities Equity dividends paid Proceeds from issue of equity Proceeds from bank loans Repayment of bank loans Release (purchase) of own shares (net of proceeds of option exercises)	(2,631) – 7,150 (699) –	(2,457) 228 4,818 (132) 211	(3,484) 228 5,070 (270) (528)
Net cash generated by financing activities	3,820	2,668	1,016
Net decrease in cash and cash equivalents	(5,488)	(9,462)	(3,008)
Cash and cash equivalents at beginning of the period Effect of foreign exchange rate changes	28,965 (579)	31,906 (89)	31,906 67
Cash and cash equivalents at end of the period	22,898	22,355	28,965

Condensed consolidated statement of changes in equity

	Share capital £'000	Share premium £'000	Other reserves £'000	Own shares held £'000	Treasury shares held £'000	Foreign exchange reserves £'000	Retained earnings £'000	Total £'000	Non controlling interest £'000	Total equity £'000
Balance at 1 January 2011	17,092	21,040	(73,410)	(14,115)	(19,860)	11,249	120,017	62,013	198	62,211
Profit for the period Foreign currency	–	–	–	–	–	–	4,543	4,543	241	4,784
translation differences	–	–	–	–	–	452	–	452	–	452
Total comprehensive income and expense for the period	–	–	–	–	–	452	4,543	4,995	241	5,236
Dividends paid	–	–	–	–	–	–	(2,457)	(2,457)	–	(2,457)
Own shares purchased Adjustment in respect	–	–	–	(211)	–	–	–	(211)	–	(211)
of share schemes New shares issued	– 21	– 207	– –	344 –	– –	– –	(1,383) –	(1,039) 228	– –	(1,039) 228
Unaudited balance at 30 June 2011	17,113	21,247	(73,410)	(13,982)	(19,860)	11,701	120,720	63,529	439	63,968
Profit for the period Foreign currency	–	–	–	–	–	–	5,323	5,323	66	5,389
translation differences	–	–	–	–	–	(55)	–	(55)	–	(55)
Total comprehensive income and expense for the period Dividends paid	– –	– –	– –	– –	– –	(55) –	5,323 (1,027)	5,268 (1,027)	66 –	5,334 (1,027)
Own shares purchased Adjustment in respect of share schemes	– –	– –	– –	(749) 2,703	– –	– –	– 518	(749) 3,221	– –	(749) 3,221
Balance at 31 December 2011	17,113	21,247	(73,410)	(12,028)	(19,860)	11,646	125,534	70,242	505	70,747
Profit for the period Foreign currency	–	–	–	–	–	–	2,042	2,042	(3)	2,039
translation differences	–	–	–	–	–	(1,187)	–	(1,187)	–	(1,187)
Total comprehensive income and expense for the period Dividends paid Adjustment in respect	– –	– –	– –	– –	– –	(1,187) –	2,042 (2,631)	855 (2,631)	(3) –	852 (2,631)
of share schemes	–	–	–	2,907	–	–	(890)	2,017	–	2,017
Unaudited balance at 30 June 2012	17,113	21,247	(73,410)	(9,121)	(19,860)	10,459	124,055	70,483	502	70,985

Notes to the condensed set of financial statements

1 Statement of accounting policies

Basis of preparation

The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union. The condensed set of financial statements has been prepared in accordance with the International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.

The accounting policies applied by the Group are as set out in detail in the Annual Report for the year ended 31 December 2011.

The Group was profitable for the period and has considerable financial resources including £4.6m of net cash at 30 June 2012 together with a diverse range of clients and suppliers across different geographic locations and sectors. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.

After making enquiries, the Directors have formed a judgement, at the time of approving the half-yearly financial results, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months. For this reason the Directors continue to adopt the going concern basis in preparing the condensed set of financial statements.

2 Financial information

The financial information on pages 4 to 11 was formally approved by the Board of Directors on 1 August 2012. The financial information set out in this document does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory

accounts prepared under IFRS for the year ended 31 December 2011 for Robert Walters plc have been delivered to the Registrar of Companies. The auditor's report on these accounts was not qualified, did not draw attention to any matters by way of emphasis and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

The financial information in respect of the period ended 30 June 2012 is unaudited but has been reviewed by the Company's auditor. Their report is attached on page 12. The financial information in respect of the period ended 30 June 2011 is also unaudited.

3 Currency conversion

The reporting currency of the Group is pounds sterling and the condensed set of financial statements has been prepared on this basis.

The condensed consolidated income statement for the period 30 June 2012 has been prepared using, among other currencies, average exchange rates of €1.2157 to the pound (period ended 30 June 2011: €1.1492; year ended 31 December 2011: €1.1512); ¥125.750 to the pound (period ended 30 June 2011: ¥132.460; year ended 31 December 2011: ¥127.990) and AUD\$1.5285 to the pound (period ended 30 June 2011: AUD\$1.5648; year ended 31 December 2011: AUD\$1.5544).

The condensed consolidated balance sheet as at 30 June 2012 has been prepared using the exchange rates on that day of €1.2418 to the pound (30 June 2011: €1.1133; 31 December 2011: €1.1936); ¥124.219 to the pound (30 June 2011: ¥129.748; 31 December 2011: ¥119.645) and AUD\$1.5373 to the pound (30 June 2011: AUD\$1.5121; 31 December 2011: AUD\$1.5191).

4 Segmental information

	2012 6 mths to 30 June Unaudited £'000	2011 6 mths to 30 June Unaudited £'000	2011 12 mths to 31 December Audited £'000
i) Revenue:
Asia Pacific	134,695	109,926	246,613
UK	93,438	86,241	188,958
Europe	43,982	42,912	87,449
The Americas and South Africa	2,891	2,539	5,094
	275,006	241,618	528,114

4 Segmental information continued

	2012 6 mths to 30 June Unaudited £'000	2011 6 mths to 30 June Unaudited £'000	2011 12 mths to 31 December Audited £'000
ii) Gross profit: Asia Pacific UK Europe The Americas and South Africa	45,930 23,883 19,911 2,654	44,505 22,851 19,380 2,393	92,721 46,952 39,130 4,640
	92,378	89,129	183,443
iii) Profit before taxation: Asia Pacific UK Europe The Americas and South Africa	3,266 29 309 (166)	5,819 306 1,032 62	12,327 488 2,786 32
Operating profit	3,438	7,219	15,633
Net finance costs	(371)	(131)	(551)
Profit before taxation	3,067	7,088	15,082
iv) Total assets: Asia Pacific UK Europe The Americas and South Africa Unallocated corporate assets*	54,894 64,398 21,543 2,635 31,422 174,892	47,475 55,962 23,185 2,222 30,300 159,144	51,966 59,905 22,556 2,109 36,234 172,770
v) Total liabilities: Asia Pacific UK Europe The Americas and South Africa Unallocated corporate liabilities*	(20,464) (47,998) (13,775) (2,480) (19,190) (103,907)	(16,709) (48,754) (14,122) (1,425) (14,166) (95,176)	(24,387) (48,119) (14,381) (1,872) (13,264) (102,023)
vi) Revenue by business grouping: Robert Walters Resource Solutions	229,046 45,960 275,006	206,126 35,492 241,618	446,169 81,945 528,114

For the purposes of segmental information, unallocated corporate assets and liabilities include cash, bank loans and * corporate and deferred tax balances.

Notes to the condensed set of financial statements

Continued

5 Taxation

	30 June	30 June	31 December
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Current tax	1,016	2,059	5,603
Deferred tax	12	245	(694)
Total tax charge for the period	1,028	2,304	4,909

The tax charge is based on the expected annual tax rate of 33.5% (2011: 32.5%) on profit before taxation.

6 Dividends

	2012 6 mths to 30 June Unaudited £'000	2011 6 mths to 30 June Unaudited £'000	2011 12 mths to 31 December Audited £'000
Amounts recognised as distributions to equity holders in the period: Final dividend for 2011 of 3.68p (2010: 3.5p) Interim dividend for 2011 of 1.47p (2010: 1.47p)	2,632 –	2,457 –	2,457 1,027
	2,632	2,457	3,484
Proposed interim dividend for 2012 of 1.47p (2011: 1.47p)	1,039	1,031	n/a

The proposed interim dividend was approved by the Board on 1 August 2012 and has not been included as a liability at 30 June 2012.

7 Earnings per share

The calculation of earnings per ordinary share is based on the profit for the period attributable to owners of the Company and the weighted average number of shares of the Company.

	2012	2011	2011
	6 mths to	6 mths to	12 mths to
	30 June	30 June	31 December
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Profit for the period attributable to owners of the Company	2,042	4,543	9,866
	Number of	Number of	Number of
	shares	shares	shares
Weighted average number of shares: Shares in issue throughout the period Shares issued in the period Treasury and own shares held	85,568,121 – (14,915,606)	85,463,121 52,680 (16,107,233)	85,463,121 79,054 (15,810,840)
For basic earnings per share	70,652,515	69,408,568	69,731,335
Outstanding share options	7,630,651	7,835,802	7,841,200
For diluted earnings per share	78,283,166	77,244,370	77,572,535

8 Notes to the cash flow statement

	2012 6 mths to 30 June Unaudited £'000	2011 6 mths to 30 June Unaudited £'000	2011 12 mths to 31 December Audited £'000
Operating profit for the period Adjustments for:	3,438	7,219	15,633
Depreciation and amortisation charges Loss on disposal of property, plant and equipment	1,870	1,323	3,216
and computer software	21	83	173
Movement in share scheme balance	2,062	1,541	3,377
Operating cash flows before movements in working capital Increase in receivables (Decrease) increase in payables	7,391 (7,553) (3,180)	10,166 (11,359) (1,021)	22,399 (15,202) 9,786
Cash (used) generated by operating activities	(3,342)	(2,214)	16,983

9 Bank loans

In June 2010 the Group entered into a committed, three-year, £20.0m receivables financing agreement. In February 2012 this facility was increased to a committed £25.0m receivables financing agreement and the term extended until February 2014. At 30 June 2012, £17.3m was drawn down under this facility.

10 Related party transactions

There have been no related party transactions or changes in the related party transactions described in the latest Annual Report that have had a material effect on the financial position or performance of the Group in the first six months of the financial year.

11 Registered office

The Company's registered office is located at 11 Slingsby Place, St Martin's Courtyard, London, WC2E 9AB.

RESPONSIBILITY STATEMENT

We confirm to the best of our knowledge:

• a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';
• b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
• c) the interim management report and note 10 includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

By order of the Board,

Alan Bannatyne Chief Financial Officer 1 August 2012

INDEPENDENT REVIEW REPORT TO ROBERT WALTERS PLC

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 which comprises the Condensed Consolidated Income Statement, the Condensed Consolidated Statement of Comprehensive Income and Expense, the Condensed Consolidated Balance Sheet, the Condensed Consolidated Cash Flow Statement, the Condensed Consolidated Statement of Changes in Equity, and related notes 1 to 11. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review 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, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in the half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting,' as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Deloitte LLP Chartered Accountants and Statutory Auditor London, United Kingdom 1 August 2012

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36th Floor, Suite D/E 1 Hanzhong Road Baixia District Nanjing China 210029 T +86 25 8801 5888

Shanghai

Suite 12B Crystal Century Plaza 567 Wei Hai Road Shanghai China 200041 T +86 21 5153 5888

Suzhou

Suite 2106 Zhongyin Huilong Building No. 8 Suhua Road Suzhou Industrial Park Jiangsu China 215021 T +86 512 6873 5888

France

Lyon 94 Quai Charles de Gaulle 69006 Lyon T +33 (0) 4 72 44 04 18

Paris 25 rue Balzac 75008 Paris T +33 (0) 1 40 67 88 00

Paris (Walters People) 16 rue Washington 75008 Paris T +33 (0) 1 40 76 05 05

Strasbourg 3rd Floor Centre d'Affaire Delta Bleu 5 Place du Corbeau 67000 Strasbourg T +33 (0) 3 88 65 58 25

St Quentin (Walters People)

43 avenue du centre 78180 Montigny-le-Bretonneux T +33 (0) 1 30 48 21 80

Germany Düsseldorf

Benrather Straße 12 40213 Düsseldorf T +49 (0) 211 30 180 000

Frankfurt

Taunusanlage 1 60329 Frankfurt am Main T +49 (0) 69 95798 985

Hong Kong Hong Kong

20/F Nexxus Building 41 Connaught Road Central Central Hong Kong T +852 2103 5300

Indonesia

Jakarta 50th Floor Menara BCA Grand Indonesia JI. MH. Thamrin No. 1 Jakarta 10310 T +62 (21) 2358 4489

Ireland

Dublin 2nd Floor Riverview House 21-23 City Quay Dublin 2 T +353 (0) 1 633 4111

Japan

Osaka Pias Tower 15th Floor 3-19-3 Toyosaki Kita-ku, Osaka-shi Osaka 531-0072 T +81 (0) 6 4560 3100

Tokyo

Shibuya Minami Tokyu Building 14th Floor 3-12-18 Shibuya Shibuya-ku Tokyo 150-0002 T +81 (0) 3 4570 1500

Luxembourg

Luxembourg 20 rue Eugène Ruppert L-2453 Luxembourg T +352 2647 8585

Malaysia

Kuala Lumpur Level 24, Menara 3 Petronas Persiaran KLCC 50088 T +603 2380 8700

Netherlands

Amsterdam WTC, Toren H Zuidplein 28 1077 XV Amsterdam T +31 (0) 20 644 4655

Eindhoven

Begijnenhof 4-6 5611 EL Eindhoven T +31 (0) 40 7999 910

Rotterdam

Groothandelsgebouw Entrance A, 3rd Floor Stationsplein 45 P.O. Box 746 3000 AS Rotterdam T +31 (0) 10 7998 090

New Zealand

Auckland Level 9 22 Fanshawe Street Auckland T +64 (0) 9 302 2280

Wellington

Level 8 Featherston House 119-123 Featherston Street Wellington T +64 (0) 4 499 7711

Singapore

Singapore 6 Battery Road 22-01 Singapore 049909 T +65 6228 0200

South Africa

Johannesburg World Trade Center Johannesburg Cnr West Road South and Lower Road Morningside, Sandton Johannesburg, 2196 T +27 (0) 11 881 2400

South Korea

Seoul 27F, West Center Center 1 Building 67 Suha-dong Jung-gu Seoul 100-210 T +82 (0) 2 6030 8811

Spain

Madrid Plaza de la Independencia 2 3º planta 28001 Madrid T +34 91 309 7988

Switzerland

Zürich Brandschenkestrasse 6 8001 Zürich T +41 (0) 44 809 35 00

Taiwan

Taipei 16F, Far Eastern Plaza No 207 Sec 2 Dunhua South Road Da'an Dist. Taipei T +886 2 8722 0080

Thailand

Bangkok 1 Zuellig House 3rd Floor Unit 302 Silom Road Bangrak Bangkok 10500 T +66 (0) 2 344 4800

United Kingdom

Birmingham 9th Floor 11 Brindley Place Birmingham B1 2LP T +44 (0) 121 281 5000

Guildford

Bishops Wharf 1 Walnut Tree Close Guildford GU1 4UP T +44 (0) 1483 510 400

London

11 Slingsby Place St Martin's Courtyard London WC2E 9AB T +44 (0) 20 7379 3333

Manchester

9th Floor 3 Hardman Street Manchester M3 3HF T +44 (0) 161 214 7400

Milton Keynes

Ground Floor Luminous House 300 South Row Milton Keynes MK9 2FR T +44 (0) 1908 933 975

United States

New York 7 Times Square Suite 1606 New York NY 10036 T +1 212 704 9900

San Francisco

4 Embarcadero Center Suite 1400 San Francisco CA 9411 T +1 415 926 7770

Vietnam

Unit 1403

District 1 Ho Chi Minh City T +84 8 3520 7900

Ho Chi Minh City Level 14 39 Le Duan Street

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