TANFIELD GROUP PLC
Page 32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008

1
Presentation of Financial Statements

The financial statements have been prepared in accordance with International Financial Reporting
Standards as endorsed by the EU ("IFRS").
These financial statements are presented in Sterling.
2
Revenue (Group)
An analysis of the Group's Revenue is as follows:
2008
2007
£000's
£000's
Continuing Operations
Powered Access Platforms
114,388
90,064
Zero Emission Vehicles
25,087
26,109
Other
6,259
7,115
145,734
123,288

3
Business and Geographical segments (Group)

Business segments (Continuing operations)
For management purposes, the Group is currently organised into three operating divisions ­ Powered
Access Platforms, Zero Emission Vehicles and other operations. These divisions are the basis on which
the Group reports its primary segment information.
Principal activities are as follows:
Powered Access Platforms: design and manufacture of powered access equipment
Zero Emission Vehicles: design, manufacture, service and maintenance of electric vehicles
Other: design and manufacture of engineering parts.

Segment information about these businesses is presented on the next page.















AnnualReport2008 Page 35
TANFIELD GROUP PLC
Page 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008


3
Business and Geographical Segments
For the twelve months ending 31st December 2008
Powered Access
Platforms
Zero Emission
Vehicles
Other
Segments
Consolidated
£000's
£000's
£000's
£000's
Revenue
External Sales
114,388
25,087
6,259
145,734
Inter-segment sales
Total revenue
114,388
25,087
6,259
145,734

Result
Segment Result before restructuring
(82,689)
(1,389)
(3,879)
(87,957)
Restructuring Costs
(263)
(38)
(71)
(372)
Segment Result
(82,952)
(1,427)
(3,950)
(88,329)
Unallocated corporate expenses
-
Loss from operations
(88,329)
Finance costs
(456)
Loss before tax
(88,785)
Income tax expense
239
Loss after tax
(88,546)

Other information
Capital additions
2,179
5,317
22
7,518
Depreciation and amortisation
2,025
904
265
3,195
Impairments
88,385
1,097
180
89,662

Balance Sheet
Assets:
Segment assets
38,557
21,388
57,725
117,670
Consolidated total assets
38,557
21,388
57,725
117,670
Liabilities:
Segment Liabilities
19,133
3,677
9,079
31,889
Consolidated total liabilities
19,133
3,677
9,079
31,889

















AnnualReport2008 Page 36
TANFIELD GROUP PLC
Page 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008

3
Business and Geographical Segments
For the twelve months ending 31st December 2007
Powered
Access
Platforms
Zero Emission
Vehicles
Other
Segments
Consolidated
£000's
£000's
£000's
£000's
Revenue
External Sales
90,064
26,109
7,115
123,288
Inter-segment sales
Total revenue
90,064
26,109
7,115
123,288

Result
Segment Result before restructuring
9,486
2,848
177
12,511
Restructuring Costs
(1,270)
-
-
(1,270)
Segment Result
8,216
2,848
177
11,241
Unallocated corporate expenses
317
Profit from operations
11,558
Finance costs
879
Profit before tax
12,437
Income tax expense
(560)
Profit after tax
11,877

Other information
Capital additions
2,825
3,025
122
5,972
Depreciation and amortisation
1,484
933
307
2,724

Balance Sheet
Assets:
Segment assets
164,412
25,762
8,718
198,892
Consolidated total assets
164,412
25,762
8,718
198,892
Liabilities:
Segment Liabilities
26,225
4,150
3,303
33,678
Consolidated total liabilities
26,225
4,150
3,303
33,678


AnnualReport2008 Page 37
TANFIELD GROUP PLC
Page 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008

3
Business and Geographical segments (continued)
Geographical segments
The Group's operations are located in the UK, US, Australasia and Japan.

The following table provides an analysis of the Group's sales by
geographic market, irrespective of the
origin of the goods/services
.

2008
2007
£000's
£000's
UK
28,721
43,982
Europe
25,983
29,249
USA
58,349
35,597
Other
32,681
14,460
145,734
123,288
In 2007, revenue from discontinued operations totalled £219k.
The following is an analysis of the carrying amount of segment assets, and additions to property, plant
and equipment and intangible assets analysed by the geographical area in which the assets are located:
Carrying amount of segment
Assets
Additions to property, plant,
equipment and intangible assets
2008
2007
2008
2007
£000's
£000's
£000's
£000's
UK
63,313
122,007
6,989
5,888
USA
37,179
64,172
442
64
Japan
3,965
3,133
24
-
Australasia
13,213
9,580
62
20
117,670
198,892
7,517
5,972
4
Staff Costs

Group
2008
2007
Average monthly number of employees
No.
No.
Production
834
812
Head Office and Administration
316
323
Total
1,150
1,135

Aggregate remuneration comprised
2008
2007
Continuing
£000's
£000's
Wages and Salaries
28,756
20,313
Share scheme expense
683
833
Social Security Costs
2,431
2,008
Other Pension Costs
327
513
Total staff costs from continuing operations
32,197
23,667
Discontinuing
Wages and Salaries
-
138
Social Security Costs
-
13
Other Pension Costs
-
2
Total staff costs
32,197
23,820

AnnualReport2008 Page 38
TANFIELD GROUP PLC
Page 36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008






5
Depreciation and Amortisation
2008
2007
Continuing
£000's
£000's
Depreciation of property, plant & equipment
1,165
974
Amortisation of intangible fixed assets
2,030
1,750
Total depreciation and amortisation from continuing operations
3,195
2,724
Discontinuing
Depreciation of property, plant & equipment
-
17
Amortisation of intangible fixed assets
-
2
Total depreciation and amortisation charge
3,195
2,743
6
Profit from continuing operations (Group)

2008
2007
£000's
£000's
Operating lease rentals
939
1,417
Depreciation of property, plant & equipment
- owned assets
894
581
- leased assets
271
410
Amortisation of intangible fixed assets
2,030
1,752
(Profit)/Loss on sale of property, plant & equipment
(587)
57
Grants received
(500)
(750)
One off bank charges relating to interest rate swap
145
-
Staff costs (see Note 4)
31,514
22,987
Income from Snorkel bad debt previously written off
-
(2,019)
Share options granted (see Note 4)
683
833
Restructuring costs
372
1,270
Net (profit) on foreign exchange
(2,433)
(2,186)
Auditors' remuneration (see below)
228
195
Research and development costs
308
-
Impairment of Goodwill
31,895
-
Impairment of Intangible assets
12,605
-
Impairment of property, plant & equipment
83
-
Impairment of Inventories
22,185
-
Impairment of Receivables
22,894
-
Restructuring costs of £372k relate to employee costs and expenses incurred while resizing the
Group in line with current market conditions and future expectations.

Prior year costs of £1,157k relate to employee costs and expenses incurred during the alignment of
the businesses after the Snorkel acquisition.
Also in the prior year, other restructuring costs of £113k are from the acquisition of the Upright
business.
Staff costs (continued)
Details of Directors' fees and salaries, bonuses, pensions, benefits in kind and other benefit schemes
together with details in respect of Directors' share option plans are given in the Directors Remuneration
Report on pages 13 to 16.

AnnualReport2008 Page 39
TANFIELD GROUP PLC
Page 37


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
6
Profit from Operations (Group) continued
2008
2007
£000's
£000's
Amounts payable to Baker Tilly UK Audit LLP and their associates
in respect of both audit and non audit services

Audit Services
- statutory audit of parent and consolidated accounts
148
155
Other Services
-
audit of subsidiaries pursuant to legislation, where such
services are provided by Baker Tilly UK Audit LLP
-
-
-
work provided by associates of Baker Tilly UK Audit LLP
in respect of consolidation returns or local legislative
requirements
30
-

Other services relating to taxation
- compliance services
40
40
Services relating to Corporate finance
10
191
228
386
Comprising:
-
audit services
178
155
-
non audit services
50
231
228
386
The figures presented are for Tanfield Group plc and subsidiaries as if they were a single entity.
Tanfield Group plc has taken the exemption permitted by SI 2005 2417 Reg 5 to omit information
about its individual accounts.

The parent of Tanfield Group PLC is exempt from disclosing its income statement. The loss for the
year is £78,223k (2007: £291k loss).
7
Finance costs and interest receivable (Group)
Continuing operations
2008
2007
£000's
£000's
Interest on bank overdrafts and loans
650
142
Interest on Invoice Discounting
146
40
Interest on obligations under finance leases
117
149
Total borrowing costs
913
331
Less Interest Receivable
(457)
(1,210)
456
(879)
The Invoice Discounting interest relates solely to Snorkel Elevating Work Platforms PTY Limited.



AnnualReport2008 Page 40
TANFIELD GROUP PLC
Page 38


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
8
Income Tax Expense (Group)
2008
2007
£000's
£000's
Current Tax
Domestic ­ current year
(278)
1,201
Domestic ­ prior year
-
(1,038)
Foreign
727
176
449
339
Deferred Tax
Current year
(688)
200
Prior Year
-
21
(688)
221
(239)
560

2008
2007
£000's
£000's
(Loss) / Profit before tax
(88,546)
10,953
Tax at the domestic income tax rate 28% (2007: 30%)
(24,793)
3,286
Tax effect of expenses that are not deductible
in determining taxable profit
(3,356)
(2,917)
Capital allowances in excess of depreciation
(286)
(359)
Short term timing differences
-
-
Tax losses for which no relief available
-
-
Tax adjustments and relief
29,362
1,099
Accounting adjustments
-
(229)
Prior Year Tax adjustments
-
(988)
Deferred tax asset recognised in the period
(688)
-
Effect of different tax rates of subsidiaries operating in other
jurisdictions
-
668
Tax expense
(239)
560
9
Discontinued Operations
Group
2008
2007
£000's
£000's
Revenue
-
219
Operating costs
-
(1,301)
Goodwill Impairment
-
(402)
Profit/(loss) before tax
-
(1,484)
Income tax expense
-
-
Profit/(Loss) on ordinary activities after tax
-
(1,484)
Discontinued operations in 2007 relate to the Saxon Specialist Vehicles trade within Tanfield
Engineering Systems Ltd, E-Comeleon Ltd, JoeKnowsIt? Ltd and ClickHere Ltd which have been
discontinued. Also included are costs relating to a non trading company, Express 2 Automotive Ltd,
in respect of leasing costs.

AnnualReport2008 Page 41
TANFIELD GROUP PLC
Page 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
10 Earnings per Share
Including discontinued operations
The calculation of the basic and diluted earnings per share is based on the following data:
Continuing and discontinuing operations
2008
2007
£000's
£000's

Earnings
Earnings for the purposes of earnings per share
(88,546)
10,393

Number of shares
Number
Number
Weighted average number of ordinary shares for the purposes of basic
earnings per share
370,361,089
331,253,401

Effect of dilutive potential ordinary shares
Share Options
9,298,615
16,584,411
Weighted average number of ordinary shares for the purposes of diluted
earnings per share
379,659,704
347,837,812
Basic earnings per share
(23.91)p
3.14p
Diluted earnings per share
(23.91)p
2.99p

From continuing operations
2008
2007
£000's
£000's

Earnings
Earnings for the purposes of diluted earnings per share
(88,546)
11,877
Basic earnings per share
(23.91)p
3.59p
Diluted earnings per share
(23.91)p
3.41p

From discontinued
2008
2007
Basic and diluted loss per share
-
(0.45)p

From continuing operations before exceptional items
2008
2007
£000's
£000's

Earnings
Earnings for the purposes of earnings per share
(88,546)
11,877
Impairments
89,662
-
Restructuring
372
1,270
Earnings for the purposes of earnings per share before exceptional items
1,488
13,147

Basic earnings per share
0.40p
3.97p
Diluted earnings per share
0.39p
3.78p

AnnualReport2008 Page 42
TANFIELD GROUP PLC
Page 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
11 Property, Plant and Equipment
Group
Leasehold
property
&
alterations
Plant &
Machinery
Fixtures,
Fittings &
equipment
Motor
Vehicles
Total
£000's
£000's
£000's
£000's
£000's
At 1 January 2007
2,181
4,258
972
917
8,328
Additions
822
1,706
394
101
3,023
Acquisitions of subsidiary undertakings
-
708
337
113
1,158
Exchange Differences
15
9
8
4
36
Disposals
(645)
(203)
-
(229)
(1,077)
At 1 January 2008
2,373
6,478
1,711
906
11,468
Additions
90
664
258
75
1,087
Disposals
(167)
(2,292)
(1,031)
(212)
(3,702)
Reclassification
33
127
(83)
(77)
-
Exchange Differences
44
378
114
16
552
At 31 December 2008
2,373
5,355
969
708
9,405
Depreciation:
At 1 January 2007
357
3,276
875
86
4,594
Charge for the year
161
399
129
302
991
Exchange differences
-
1
-
-
1
Impairment of assets
21
17
9
-
47
Eliminated on disposals
(87)
-
-
(176)
(263)
At 1 January 2008
452
3,693
1,013
212
5,370
Charge for the year
131
562
248
224
1,165
Exchange differences
2
75
23
5
105
Impairment of assets
-
-
83
-
83
Eliminated on disposals
(167)
(2,292)
(1,029)
(176)
(3,664)
Reclassification
-
-
(9)
9
-
At 31 December 2008
418
2,038
329
274
3,059
Carrying amount:
At 31 December 2008
1,955
3,317
640
434
6,346
At 31 December 2007
1,921
2,785
698
694
6,098
The net book value of assets held under finance leases and hire purchase agreements is £1,321k
(2007:£1,647k). The balances relate solely to plant and machinery.
The impairment of £83k relates to legacy I.T system costs.

AnnualReport2008 Page 43
TANFIELD GROUP PLC
Page 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
12 Goodwill
Group
2008
2007
£000's
£000's
Cost
1 January
33,147
5,644
Recognised on acquisition of subsidiary undertakings
-
27,323
Exchange differences
7
180
31 December
33,154
33,147
Accumulated impairment losses
1 January
903
501
Impairment losses (see Note 31)
31,895
402
Exchange differences
-
-
31 December
32,798
903
Carrying Amount
356
32,244


Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units
(CGUs) that are expected to benefit from that business combination.
A segment level summary of the goodwill allocated is presented below;
2008
2007
£000's
£000's
Powered Access
-
31,888
Zero emission vehicles
356
356
Carrying values
356
32,244

The group tests goodwill annually for impairment, or more frequently if there are indications that
goodwill might be impaired (see note 31).

AnnualReport2008 Page 44
TANFIELD GROUP PLC
Page 42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008

13
Intangible Assets
Group
Development
Costs
Manufacturing
schedules
Other
Intangible
Assets
Computer
Software
Total
£000's
£000's
£000's
£000's
£000's
Cost:
At 1 January 2007
1,709
-
4,621
237
6,567
Additions
2,799
-
150
2,949
Acquisitions of subsidiary
undertakings
-
10,938
4,619
-
15,557
Exchange differences
-
148
62
-
210
At 1 January 2008
4,508
11,086
9,302
387
25,283
Additions
6,396
-
-
35
6,431
Disposals
-
-
(112)
(135)
(247)
Exchange differences
-
4,206
1,776
3
5,985
At 31 December 2008
10,904
15,292
10,966
290
37,452
Amortisation:
At 1 January 2007
146
-
475
154
775
Charge for the year
171
456
1,089
36
1,752
Impairment
-
-
71
-
71
At 1 January 2008
317
456
1,635
190
2,598
Charge for the year
451
456
1,065
58
2,030
Disposals
-
-
(112)
(135)
(247)
Impairment
-
8,303
4,302
-
12,605
Exchange differences
-
3,536
1,776
1
5,313
At 31 December 2008
768
12,751
8,666
114
22,299
Carrying amount:
At 31 December 2008
10,136
2,541
2,300
176
15,153
At 31 December 2007
4,191
10,630
7,667
197
22,685

The development costs in the year are in relation to the new product developments carried out in the year
which includes the Ampere and other Zero Emission vehicles.
Other intangible assets include trademarks, manufacturing schedules, customer order book and customer lists
which arose on acquisition of the Snorkel International in 2007. The brought forward values of other intangible
assets arose on the acquisition of the Norquip, SEV and Upright businesses.

The impairment balance of £12,605k is made up of £12,094k provided against the intangible asset created on
the acquisition of Snorkel International Inc (see Note 31) and £511k relating to the discontinued Norquip
product line.



AnnualReport2008 Page 45
TANFIELD GROUP PLC
Page 43

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
14
Subsidiaries (Group)
Details of the Company's subsidiaries at 31 December 2008 are as follows:
Name of subsidiary
Place of
incorporation
(or
registration)
and operation
Proportion of
ownership
interest
%
Proportion of
voting power
held
%
Principal activity
Aggregate
capital
reserves
£000
Profit /
(loss) after
Taxation
£000
Tanfield Engineering Systems
Ltd
UK
100
100
Engineering
(30,746)
(37,476)
Tanfield Engineering Systems US
(Inc)
US
100
100
Powered Access
(778)
(422)
HBWP Inc
US
100
100
Dormant
-
-
Snorkel Holdings LLC
US
100
100
Holding Company
-
-
Snorkel International Inc
US
100
100
Powered Access
7,045
(5,808)
Snorkel Elevating Work
Platforms PTY Limited
AUS
100
100
Powered Access
(444)
(2,518)
Snorkel Elevating Work
Platforms Limited
NZ
100
100
Powered Access
522
209
Snorkel Europe BV
Netherlands
100
100
Powered Access
-
-
SEV Group Ltd
UK
100
100
Vehicle Service, Hire
& Maintenance
(2,670)
(1,259)
E-Comeleon Ltd
UK
100
100
Non Trading
-
-
JoeKnowsIt? Ltd
UK
74
74
Non Trading
-
-
ClickHere Ltd
UK
100
100
Non Trading
-
-
Express 2 Automotive Ltd
UK
100
100
Non Trading
-
-
Sandco 854 Ltd
UK
100
100
Holding Company
-
-
Saxon Specialist Vehicles Ltd
UK
100
100
Dormant
-
-
HMH Sheet Metal Fabrications
Ltd
UK
100
100
Dormant
-
-
Norquip Ltd
UK
100
100
Dormant
-
-
YEV Ltd
UK
100
100
Dormant
-
-
Tanfield Powered Access Ltd
UK
100
100
Non Trading
-
-
Tanfield Asia Pacific PTE. Ltd
Singapore
100
100
Powered Access
632
(11)

The minority interest in JoeKnowsIt? Limited has not been recognised as JoeKnowsIt? Limited has net
liabilities which are unlikely to be recoverable from the third party.
Details of the investments held in the Company accounts are as follows:
2008
2007
£000's
£000's
Snorkel International
13,013
47,937
Tanfield Engineering Systems Limited
2,111
2,111
E-Comeleon Limited
-
-
15,124
50,048
During the year an impairment of £34,535k was made against the investment in Snorkel International
Inc.

During the prior year the investment of £175k in E-Comeleon Limited was impaired to £nil value due to
the company ceasing to trade.


AnnualReport2008 Page 46
TANFIELD GROUP PLC
Page 44

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
15
Inventories
Group
2008
2007
£000's
£000's
Raw materials and consumables
33,665
38,221
Work-in-progress
2,087
5,731
Finished Goods and goods for resale
24,808
16,400
60,560
60,352

During the year an impairment of £22.2m was made against obsolete and slow moving stock (Note 31).
16
Financial assets
Trade and other receivables
Group
Company
2008
2007
2008
2007
Current
£000's
£000's
£000's
£000's
Trade amounts receivable
21,243
44,146
-
-
Allowance for estimated irrecoverable
amounts
(1,483)
(112)
-
-
Amounts due from subsidiary undertakings
-
-
59,688
81,772
Other Taxes
203
954
-
305
Other debtors and prepayments
632
2,209
44
56
20,595
47,197
59,732
82,133
Non-current
Trade amounts receivable
1,500
-
-
-
2008
2007
Average credit period taken on goods
51
142
The following table provides analysis of trade and other receivables that were past due at 31 December,
but not impaired. The Group believes that the balances are ultimately recoverable based on a review of
past payment history and the current financial status of the customers.
2008
£'000
2007
£'000
Up to three months
2,915
2,701
Up to six months
825
757
During the year an impairment of £22.9m (2007: £Nil) was made against potentially bad and
irrecoverable debts (Note 31) from whom payment was over due by more than three months.
The directors consider that the carrying amount of trade and other receivables approximates their fair
value.
Bank balances and cash
comprise cash and short-term deposits held by the group treasury function.
The carrying amount of these assets approximates their fair value.
Credit risk ­
The Group's principal financial assets are bank balances and cash and trade and other
receivables, which represent the Group's maximum exposure to credit risk in relation to financial assets.
The Group's credit risk is primarily attributable to its trade receivables. The Group has no significant
concentration of credit risk, with exposure spread over a large number of counterparts and customers.

AnnualReport2008 Page 47
TANFIELD GROUP PLC
Page 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
17
Investments
Group
2008
2007
£000's
£000's
At 1 January
120
94
Additions
45
24
Exchange movements
86
2
At 31 December
251
120
The investment relates to the current value of a money market investment.
18
Trade and other payables
Group
Company
2008
2007
2008
2007
£000's
£000's
£000's
£000's
Trade payables
9,314
15,692
465
179
Social security and other Taxes
1,085
1,004
219
-
Accruals and deferred Income
9,408
9,710
85
148
19,807
26,406
769
327
2008
2007
Average credit period taken on trade purchases
77
64
The directors consider that the carrying amount of trade payables approximates to their fair value.
19
Financial instruments recognised in the balance sheet (Group)
2008
2007
£000's
£000's
£000's
£000's
£000's
£000's
Held for
trading
Held to
maturity
Total
Held for
trading
Held to
maturity
Total
ASSETS
Non current assets
Trade and other receivables
1,500
-
1,500
-
-
-
1,500
-
1,500
-
-
-
Current assets
Trade amounts receivable
19,760
-
19,760
44,034
-
44,034
Investments
-
251
251
-
120
120
Cash and cash equivalents
11,130
-
11,130
27,952
-
27,952
30,890
251
31,141
71,986
120
72,106
Total
32,390
251
32,641
71,986
120
72,106

LIABILITIES
Current liabilities
Trade and other payables
19,807
-
19,807
26,406
-
26,406
Finance leases
565
-
565
684
-
684
Other creditors
9,954
-
9,954
467
-
467
30,326
-
30,326
27,557
-
27,557
Non current liabilities
Finance leases
569
-
569
1,100
-
1,100
Other creditors
-
-
-
5,021
-
5,021
569
-
569
6,121
-
6,121
Total
30,895
-
30,895
33,678
-
33,678

AnnualReport2008 Page 48
TANFIELD GROUP PLC
Page 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
20
Obligations Under Finance Leases
Group
Minimum lease
Present value of
minimum
Payments
lease payments
2008
2007
2008
2007
£000's
£000's
£000's
£000's
Amounts payable under finance leases
Within one year
640
829
565
684
In the second to fifth years (inclusive)
626
1,232
569
1,100
1,266
2,061
1,134
1,784
Less future finance charges
(132)
(277)
Present value of lease obligations
1,134
1,784
1,134
1,784
Less: Amount due for settlement within 12 months
(shown under current liabilities)
(565)
(684)
Amount due for settlement after 12 months
569
1,100

Company
Minimum lease
Present value of
minimum
Payments
lease payments
2008
2007
2008
2007
£000's
£000's
£000's
£000's
Amounts payable under finance leases
Within one year
10
127
10
120
In the second to fifth years (inclusive)
-
10
-
10
10
137
10
130
Less future finance charges
-
(7)
Present value of lease obligations
10
130
10
130
Less: Amount due for settlement within 12 months
(shown under current liabilities)
(10)
(120)
Amount due for settlement after 12 months
-
10
It is the Group's policy to lease certain of its fixtures and equipment under finance leases. The
average lease term is 5 years. For the year ended 31 December 2008, the average effective borrowing
rate was 10% (2007: 10%). Interest rates are fixed at the contract date.
Obligations under finance leases are secured on the assets to which they relate.

The fair value of the Group's lease obligations approximate to their carrying amount.












AnnualReport2008 Page 49
TANFIELD GROUP PLC
Page 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
21
Other Creditors
Group
Company
2008
2007
2008
2007
£000's
£000's
£000's
£000's
Buyback Lease Liability
342
386
-
-
Invoice Discounting
2,909
81
-
-
Deferred consideration
6,703
-
5,720
-
Other creditors payable within one year
9,954
467
5,720
-
Deferred consideration
-
5,021
-
5,021
Other Creditors
-
-
-
-
Other creditors payable after one year
-
5,021
-
5,021
The directors consider that the carrying amount of other creditors approximates to their fair value
22
Deferred Tax
Group
Group
Company
2008
2007
2008
2007
£000's
£000's
£000's
£000's
Analysis for financial reporting purposes:
Deferred tax (liabilities)
(307)
-
-
-
Deferred tax assets
1,779
785
-
278
Net asset / (liability) position at 31 December
1,472
785
-
278
The movement in the year in the Group's net deferred tax position was as follows:
At 1 January
785
(19)
278
-
Recognised on acquisition of subsidiary
undertakings
-
1,025
-
-
Credit / (charge) to income for the year
687
(200)
(278)
278
Release to income for the prior year
-
(21)
-
-
At 31 December
1,472
785
-
278
The following are the major deferred tax components recognised by the Group and the movements thereon
during the period:
Deferred tax assets / (liabilities)
Group
Group
Company
Tax losses
£000's
Other
£000's
Other
£000's
At 1 January 2008
785
-
278
Credit / (charge) to income for the year
994
(307)
(278)
Release to income for the prior year
-
-
-
At 31 December 2008
1,779
(307)
-
At the balance sheet date, the group has unused tax losses of £49,237k (2007: £3,973k) available for
offset against future profits of the same trade. A deferred tax asset has been recognised in respect of
£1,779k (2007: £785k) of such losses. No deferred tax asset has been recognised in respect of the
remaining £42,884k (2007: £1,356k) due to the unpredictability of future profit streams.

AnnualReport2008 Page 50
TANFIELD GROUP PLC
Page 48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
23
Provisions (Group)
Legal
Reserve
Total
£000's
£000's
At 1 January 2007
262
262
Utilisation of provision
(262)
(262)
At 1 January 2008
-
-
Utilisation of provision
-
-
At 31 December 2008
-
-
24
Share Capital
Group and Company
2008
2007
£000's
£000's
Authorised:
500,000,000 (2007 ­ 500,000,000) Ordinary Shares of 1p each
5,000
5,000
Issued and Fully Paid:
370,386,089 (2007 ­ 370,286,089) Ordinary shares of 1p each
3,704
3,703

The Company has one class of ordinary shares which carry no right to fixed income.

On 14 April 2008, 100,000 share options were exercised at a price of £1 per share for a total
consideration of £100,000.

The premium net of related charges on the issue of these shares has been credited to the share premium
account.
25
Translation reserve
Group
Company
£000's
£000's
Balance at 1 January 2007
-
-
Foreign exchange differences on retranslation of net assets of subsidiary
undertakings
879
-
Foreign exchange differences on retranslation of Investments in subsidiary
undertakings
-
338
Balance at 1 January 2008
879
338
Foreign exchange differences on retranslation of net assets of subsidiary
undertakings
8,411
-
Foreign exchange differences on retranslation of Investments in subsidiary
undertakings
-
(338)
Balance at 31 December 2008
9,290
-
26
Retained Earnings
Group
Company
£000's
£000's
At 1 January 2007
1,896
(505)
Profit / (loss) for the year
10,393
(291)
Share options charged directly to equity
96
96
At 1 January 2008
12,385
(700)
Profit / (loss) for the year
(88,546)
(78,223)
Share options exercised charged directly to equity
22
22
Balance at 31 December 2008
(76,139)
(78,901)

AnnualReport2008 Page 51
TANFIELD GROUP PLC
Page 49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
27 Capital reserves
Group
Share
Loan
Capital
Share
capital
Share
premium
Option
reserve
Stock
reserve
Merger
reserve
Reduction
reserve
Translation
reserve
Total
£000's
£000's
£000's
£000's
£000's
£000's
£000's
£000's
Balance at 1 January 2008
3,703
138,493
992
-
1,534
7,228
879
152,829
Issue of Ordinary share capital (net of
expenses)
-
-
-
-
-
-
-
Exercise of convertible loan stock
-
-
-
-
-
-
-
-
Share options exercised
1
18
-
-
-
-
-
19
Share option provision
-
-
661
-
-
-
-
661
Foreign exchange differences on retranslation
of net assets of subsidiary undertakings
-
-
-
-
-
-
8,411
8,411
Balance at 31 December 2008
3,704
138,511
1,653
-
1,534
7,228
9,290
161,920
Company

Share
Loan
Capital
Share
capital
Share
premium
Option
reserve
Stock
reserve
Merger
reserve
Reduction
reserve
Translation
reserve
Total
£000's
£000's
£000's
£000's
£000's
£000's
£000's
£000's
Balance at 1 January 2008
3,703
138,493
992
-
1,534
7,228
338
152,288
Issue of Ordinary share capital (net of
expenses)
-
-
-
-
-
-
-
-
Exercise of convertible loan stock
-
-
-
-
-
-
-
-
Share options exercised
1
18
-
-
-
-
-
19
Share option provision
-
-
661
-
-
-
-
661
Foreign exchange differences on retranslation
of Investments in subsidiary undertakings
-
-
-
-
-
-
(338)
(338)
Balance at 31 December 2008
3,704
138,511
1,653
-
1,534
7,228
-
152,630
28 Retirement benefits

Defined contribution plans
The Group operates defined contribution retirement benefit plans for all qualifying employees of its construction
and leasing divisions in the UK. The assets of the schemes are held separately from those of the Group in funds
under the control of trustees. Where there are employees who leave the scheme prior to vesting fully in the
contributions, the contributions payable by the Group are reduced by the amount of forfeited contributions.

The employees of the Group's subsidiary in Australia are members of a state-managed retirement benefit scheme
operated by the government of Australia. The subsidiary is required to contribute a specified percentage of their
payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect
to the retirement benefit scheme is to make the specified contributions.

The total cost charged to income of £327k (2007:£515k) represents contributions payable to these schemes by the
Group at rates specified in the rules of the schemes. As at 31 December 2008, contributions of £27k (2007: £51k)
due in respect of the current reporting period had not been paid over to the schemes.

AnnualReport2008 Page 52
TANFIELD GROUP PLC
Page 50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
29 (a) Reconciliation of profit from operations to net cash used in operating activities
Group
Company
2008
2007
2008
2007
£000's
£000's
£000's
£000's
Operating Activities
(continuing and discontinuing)
Profit (loss) from operations
(88,329)
10,074 (78,570)
(1,853)
Adjustments for:
Depreciation of property, plant and equipment
1,165
991
-
-
Negative goodwill
-
-
-
-
Amortisation of intangible fixed assets
2,030
1,752
-
-
(Gain) Loss on disposal of fixed assets
(587)
57
-
-
Impairment of Goodwill
31,895
402
-
-
Impairment of Intangible assets
12,605
71
-
-
Impairment of property, plant and equipment
83
47
-
-
Impairment of Inventories
22,185
-
-
Impairment of Receivables
22,894
-
-
Loss on intercompany loan write off
-
-
51,618
1,400
Loss on impairment of investments
-
-
34,535
175
Operating cash flows before movements in working
capital
3,941
13,394
7,583
(278)
Decrease (Increase) in receivables
4,585 (19,049) (29,199) (57,290)
Increase (decrease) in payables
(8,140)
9,779
1,125
994
(Decrease) in provisions
2,612
(4,416)
-
-
(Increase) in inventories
(13,933) (28,749)
-
-
Net Cash used in Operating activities
(10,935) (29,041) (20,491) (56,574)
30 Operating Lease Arrangements
The Group as a lessee:
At the balance sheet date, the Group had total commitments under non-cancellable
operating leases, which fall due as follows:
2008
2007
£000's
£000's
Within one year
2,422
1,888
In the second to fifth years inclusive
5,912
4,767
Greater than five years
16,710
19,093
25,044
25,748




AnnualReport2008 Page 53
TANFIELD GROUP PLC
Page 51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
31
Impairments
The impairment losses recognised in the Consolidated Income Statement result from impairment
reviews triggered by the significant changes in the market outlook for the Powered Access division,
experienced during June 2008.
In particular, the company addressed the valuation of the Intangible Assets and Goodwill arising from
the acquisition of Snorkel International Inc and its subsidiaries in August 2007.

In accordance with IAS 36 the Group values Goodwill at the lower of its carrying value or its
recoverable amount, where the recoverable amount is the higher of the value if sold and its value in use.
In addition IAS38 requires intangible assets with finite useful lives to follow the same impairment
testing as Goodwill including the use of value in use calculations.

The impact of market changes in June and the uncertainty within this market going forward, described
elsewhere in this statement, have meant that the assumptions in the value in use calculations, prepared
to support previous valuations, are significantly altered.

The Group identified individual cash generating units for the purposes of IAS 36 within the group.
Value in use calculations were prepared for Snorkel and its subsidiaries, UpRight and Smith Electric
Vehicles. These have been compared with the assets for that unit and the impairments calculated
accordingly.

The value in use calculations were prepared using amended pre-tax cash flow projections based on
financial budgets for the period to December 2011 based on management experience and current
trading expectations, extrapolated to a ten year period using conservative growth assumptions, given
current uncertainty.

The key assumptions applied to the Snorkel calculations after 2011 on Gross Margin are 25%-30% and
Growth Rate are in the range 2 -3%. The discount rate is set at 9.3% (2007 5%) to reflect the current
market assessment of the time value of money and the specific risks of the cash generating unit.

The key assumptions applied to the UpRight calculations after 2011 on Gross Margin are 30% and on
Growth Rate is in the range 0% - 3%. The discount rate is set at 9.3% (2007 5%) to reflect the current
market assessment of the time value of money and the specific risks of the cash generating unit.

The key assumptions applied to the Smith Electric Vehicles calculations after 2011 on Gross Margin
are 35% and Growth Rate are in the range 2% - 3%. The discount rate is set at 9.3% (2007 5%) to
reflect the current market assessment of the time value of money and the specific risks of the cash
generating unit. No impairment was made in Smith Electric Vehicles.
Based on the value in use calculations, the Group has determined that the value of the Goodwill has
been impaired and as such an impairment charge of £31.9m (Snorkel £27.5m, UpRight £4.4m) (2007:
nil) has been made to write down the carrying value of the asset.
Based on the value in use calculations the Group has determined that the value of the intangible assets
has been impaired and as such an impairment charge of £12.6m (Snorkel £12.6) (2007: nil) has been
made.
Allowance for doubtful receivables
A provision has been made against accounts that in the estimation of management may be impaired.
Within each of the business segments an assessment has been made as to the impact of the dramatic
reduction in volumes caused by the changes in market conditions and the reduction in availability of
credit on the financial viability of customers, together with the importance of those customers in
providing a route to market, and their effect on the recoverability of accounts receivable. The
impairment was calculated, with reference to debt collection strategies in place, as the amount
identified as problematic at specific customers less an estimate of the amount that may be collected
when the market recovers discounted (9.3%) to reflect time to and probability of collection, that amount
collected not limited to repayment of the principal but other revenue benefits.

AnnualReport2008 Page 54
TANFIELD GROUP PLC
Page 52

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008

During the year the Group charged £22.9m (2007: £Nil) to the income statement against trade
receivables.

The Group holds a provision for impairment of receivables at 31 Dec 2008 amounting to £1.4 million
(2007: £nil)
Inventories
In accordance with IAS2 the group regularly reviews its inventory to ensure it is carried at the lower of
cost or net realisable value. At 31 December 2008 the management believes the carrying value of
inventories to be impaired by £22.2m due to slow moving and obsolete items arising from changes in
the product mix demanded by customers, reductions in overall volumes, supplier failures and strategic
resourcing decisions. Obsolescence provisions have been calculated based on current market values and
future sales of inventories.


































AnnualReport2008 Page 55
TANFIELD GROUP PLC
Page 53


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008
32
Share Based Payments (Group)
Equity settled share based payment transactions

Details of the Company's and group share option scheme are given in the Directors Remuneration
Report on pages 13 to 16.

Movement in outstanding options
2008
2007
Options
(Number)
Weighted
average exercise
price (£)
Options
(Number)
Weighted
average
exercise price
(£)
Outstanding at 1 January
19,665,004
0.228
14,453,671
0.188
Granted during the year
-
-
12,083,333
0.22
Forfeited during the year
-
-
Exercised during the year
(100,000)
0.01
(6,872,000)
0.107
Expired during the year
(83,333)
-
-
Outstanding at 31 December
19,481,671
0.228
19,665,004
0.228
Exercisable at 31 December
8,231,671
8,415,004

The weighted average share price at the date of exercise for share options exercised during the year was
£1.00. The options outstanding at 31 December 2008 had a weighted average exercise price of £0.228,
and a weighted average remaining contractual life of 8.1 years. The range of exercise price is 1p to 40p.

On 31 December 2008 the market price of the ordinary shares was 5p. The range during 2008 was 3.5p
to 124.75p.

Income statement charge

A charge to the income statement of £684k has been made for options issued on or after 7
November
2002 that had not vested as at 1 January 2005 in accordance with IFRS2 `Share Based Payments'.
The inputs into the Black-Scholes model are as follows:
2008
Weighted average share price
22.01p
Weighted average exercise price
42.58p
Expected volatility
43.2%
Expected life
3 years
Risk free rate
4.6%
Expected dividends
-
Expected volatility was determined by calculating the historical volatility of the Group's share price
over the previous 3 years. The expected life used in the model has been adjusted, based on
management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural
considerations.

AnnualReport2008 Page 56
TANFIELD GROUP PLC
Page 54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008

33 Financial risk management

Credit Risk
The group is exposed to credit risk due to its trade receivables due from customers and cash deposits
with financial institutions

The Group has no concentration of customer credit risk, with exposure spread over a large number of
counterparties and customers. Although the Group has implemented policies and uses procedures to
ensure that sales are made only to customers with appropriate credit history, the group has seen many
previously creditworthy customers default due to the underlying market conditions. During the year the
Group has also seen credit insurance removed against many of its customers leaving the Group with a
much greater exposure which is reflected in the group's trade receivables impairment.
Liquidity Risk

The Group is exposed to liquidity risk arising from having insufficient funds to meet the financing needs
of the Group.

The Group holds funds on deposit and has short term committed facilities that are designed to ensure
that the Group has sufficient funds available for the forecast requirements of the Group. As well as
forecasting the Group's core liquidity needs, the Group Financial Management ensure subsidiary
companies' liquidity needs are met.
Foreign Exchange Risk

The Group is exposed to movements in foreign exchange rates due to its commercial trading
denominated in foreign currencies, the net assets of its foreign operations into the consolidated
statements and foreign currency denominated costs.

Where possible the Group uses natural hedging of currencies where customer and purchase currencies
are matched, otherwise the Group uses currency derivative financial instruments such as foreign
exchange contracts to reduce exposure.

The material foreign currency denominated costs include the purchase of components from low cost
based countries, principally in US dollars.
Interest rate risk

The Group is exposed to interest rate risk due to its cash deposits. Cash and cash equivalents are the
only interest bearing financial assets held by the Group.
34
Non-cash transactions
Additions to fixtures and equipment during the year amounting to £Nil (2007: £1,172k) were financed
by new finance leases.
35
Contingent Liabilities
There are no contingent liabilities of which the Directors are aware.




AnnualReport2008 Page 57
TANFIELD GROUP PLC
Page 55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2008

36
Related Party Transactions

Group

Transactions between the Company and its subsidiaries and between subsidiaries, which are related
parties, have been eliminated on consolidation. These transactions are a management charge from
Tanfield Group PLC to is subsidiaries. The bank hold a cross guarantee in relation to all the Group
Company bank accounts. There are no other related party transactions.

Company

Details of the Company's share in Group undertakings are given in note 14.

The Company entered into transactions with its subsidiaries as disclosed below.
Subsidiaries
2008
2007
£000's
£000's
Management charge for provision of
services
5,567
3,425
Amounts owed by related parties at year
end

59,688
81,772
During the year the company impaired £7,944k against Snorkel International Inc outstanding loans and
also forgave £43,645k in loans to Tanfield Engineering Systems Ltd.

Remuneration of key management personnel
The remuneration of the key management personnel, which includes Directors, is set out below in
aggregate for each of the categories specified in IAS 24 Related Party Disclosures. Further information
about the remuneration of individual directors is provided in the Directors' Remuneration Report on
pages 13 to 16.
Directors Emoluments
2008
2007
£000's
£000's
Short-term employee benefits
1,379
1,339
Post employment benefits
87
60
Gain on exercise of share options
-
10,015
Total
1,466
11,414
Directors' transactions
There were no other transactions with Directors during the year. There have been no related party
transactions with any Director.