19
Remuneration Committee Report
(extract from the full report)
The Remuneration Committee comprises the
Chairman and all of the Non-Executive Directors. Its
principal functions are to determine the Company’s
overall policy for the remuneration of Executive
when its membership comprises the Chairman and
the Chief Executive. The Committee has complied
with the recommendations of the UK Corporate
Governance Code; it met four times during Year 7.
Remuneration Policy Craigielaw’s overall
shareholder value. In establishing the detailed
remuneration packages for each Director, the
Committee has given full consideration to Section B
of the UK Corporate Governance Code annexed to
The main elements of the Executive Directors’
remuneration packages are:
• a base salary;
• a short-term bonus scheme;
• benefits in kind, including the provision of a
Salary, bonuses and benefits in kind
Directors’ remuneration is set out in the following table.
Year 7 Year 7 Year 6 Year 6
Salary Bonus Benefits Total Salary Benefits Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Chairman
Sir Alan Alder (from April Year 7) 228 – – 228
Non-Executive Directors’ fees
Year 7 Year 6
£’000 £’000
J K Johnston 40 40
Long-term incentive scheme and Options The
long-term incentive scheme provides for Executive
Directors and Senior Managers to be awarded
conditional rights to receive specific maximum
numbers of Ordinary shares, calculated by
reference to their salaries and to the average share
price of the preceding financial year. The number
(SAYE Scheme), which is open to all UK
employees, and under the (now closed) Executive
Pension Arrangements All the Executive
Directors are full members of the Senior
Committee recognises the benefit that the
Company may obtain through personal
development of Executive Directors as a result of
their holding external non-executive directorships
of other companies. Such appointments are subject
Share Interests The beneficial interests of the
Directors, including their family interests, are set
out in the table below.
Beneficial holdings
31.12.Yr 7 1.1.Yr 7
or date of
H P Hope 3,842 2,656
Contracts of Employment All of the Executive
Directors other than Mr Durie have service
contracts that can be terminated by two years’
The Chairman and each of the Non-Executive
Directors have a service contract that can be
terminated by 12 months’ notice or less.
21
Summary of financial data Year 3 to Year 7
Year 7 Year 6 Year 5 Year 4 Year 3
Summary of statements of financial position £m £m £m £m £m
Property, plant and equipment 870 814 765 681 678
Investments and long-term receivables 94 85 54 15 19
Ordinary capital 105 105 104 104 104
Year 7 Year 6 Year 5 Year 4 Year 3
Associated undertakings – – 1 1 1
Restructuring costs – 1 – 25 2
Operating profit 166 151 170 153 190
Per 25p ordinary share p p p P p
Independent auditors’ report to the members of Craigielaw plc
[Note that there would also be financial statements for the parent company, not reproduced here but noted in
the audit report to indicate the scope of the full audit.]
Opinion
We have audited the Group financial statements of Craigielaw plc for the year ended 31 December
Year 7 which comprise the Group Income Statement, the Group Statement of Other Comprehensive
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the Auditors’
responsibilities for the audit of the financial statements section of our report. We are independent of
Conclusions relating to going concern
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
Our application of materiality
An overview of the scope of our audit
Other information
The Directors are responsible for the other information. The other information comprises the
23
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared
in accordance with the Companies Act 2006.
Matters on which we are required to report by exception [Detail not included here]
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement [set out on pages 17 to 18], the
Directors are responsible for the preparation of the financial statements and for being satisfied that
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
Other matter
We have reported separately on the parent company financial statements of Craigielaw plc for the
year ended 31 December Year 7 and on the information in the Directors’ Remuneration Report that is
described as having been audited.
24
Group income statement
Year ended 31 December
Note
Year 7
£m
Year 6
£m
Continuing operations
Revenue 1,2 2,081.5 2,080.3
Operating profit 165.7 151.0
25
Group Statement of other comprehensive income
Year 7 Year 6
Group statement of changes in equity
Share
capital
Share
premium
Revaluation
reserve
Retained
earnings
Total
£m £m £m £m £m
Balance at 31 December Year 5 104.4 143.9 20.4 383.3 652.0
Comprehensive income for the year 97.6 97.6
26
Group statement of financial position
GROUP
Year 7 Year 6
31 December Note £m £m
Non-current assets
Property, plant and equipment 12 869.5 813.8
Current liabilities
Amounts payable (creditors) 18 (472.6) (501.0)
Non-current liabilities
Loans 21 (227.2) (172.6)
Other 19 (33.3) (36.3)
27
Group statement of cash flows
Year ended 31 December Note Year 7 Year 6
£m £m £m
Cash flows from investing activities
Gross purchase of property, plant and equipment (200.6) (175.0)
Inception of finance leases 59.6 4.1
Purchase of property, plant and equipment (141.0) (170.9)
Purchase of trade investments (0.2)
(4.4)
Cash flows from financing activities
Issue of ordinary share capital 4.0 7.9
New loans 24.7 36.8
28
Statement of accounting policies
Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as
adopted by the European Union, International Financial Reporting Interpretations Committee (IFRIC) interpretations and
with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
Period of account
Foreign currencies
The results of overseas subsidiaries are translated into sterling at the average of exchange rates during the year. The
statements of financial position of overseas subsidiaries are translated into sterling at the rates at which the currencies could
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost to the Group or at revalued amount on an open-market existing-use basis.
Inventory (stock) valuation
Inventories (stocks) are stated at cost or net realisable value, whichever is lower. Cost includes factory overheads.
Research expenditure
Expenditure on research is written off to administrative expenses in the year in which it is incurred.
Acquisitions, disposals and goodwill
The results of companies acquired and disposed of during the year are dealt with from/to the effective date of
29
Notes to accounts
1. Revenue
2. Operating segments
[The following is an extract from the full segmental analysis, which complies with IFRS 8 but is too lengthy to
reproduce in full]
For the purposes of reporting to the chief operating decision-maker, the Group is currently organised into three main
business sectors.
Business sector analysis
Coatings &
Sealants
Polymer
Products
Fibres &
Chemicals Miscellaneous Total
Year ended 31 Dec Year
7
Year
6
Year
7
Year
6
Year
7
Year
6
Year
7
Year
6
Year
7
Year
6
Geographical areas
Revenues Non-current assets
Year
7
Year
6
Year
7
Year
6
£m £m £m £m
30
Notes to accounts continued
Analysis of operations (continued) Year 7 Year 6
External revenue by destination £m £m
The United Kingdom 306 303
3. Analysis of expenses Continuing
operations
£m
Discontinued
operations
£m
Year 7
Total
£m
Continuing
operations
£m
Discontinued
operations
£m
Year 6
Total
£m
Cost of sales 1,464.9 10.0 1,474.9 1,492.7 124.1 1,616.8
4. Restructuring costs £m £m
Taxation
The tax effect of the items detailed above was £nil (Year 6 £0.3m credit).
5. Profit on ordinary activities before taxation
is stated after charging the following amounts:
Directors’ remuneration (see pages 16 to 17) 2.3 2.0
Wages and salaries 390.8 417.4
6. Finance costs net of investment income
Interest element of finance lease payments 1.8 0.3
31
7. Taxation charge on profits
8. Craigielaw plc
The profit and loss account includes the results of the Company and its subsidiary undertakings. Under the provisions of
12. Property, plant and equipment
Group
Land and
buildings
£m
Plant and
equipment
£m
Factories under
development
£m
Total
£m
Cost or valuation
At 31 December Year 6 185.9 1,041.9 165.6 1,393.4
Exchange adjustments (15.1) (56.8) (6.8) (78.7)
32
12. Property, plant and equipment (continued)
At 30 June Year 6, land and buildings were revalued by the Directors on an open-market existing-use basis. This
GROUP
Year 7
£m
Year 6
£m
13. Investments held as fixed assets
14. Acquisitions and disposals
[The detailed note sets out the effects of various acquisitions and disposals during the year. No goodwill arose on the
acquisitions.]
All goodwill arising on acquisitions of previous years has been fully amortised.
GROUP
Year 7 Year 6
15. Inventories (stocks) £m £m
GROUP
Year 7 Year 6
16. Receivables (debtors) £m £m
Trade receivables (debtors) 339.3 356.1
17. Cash and cash equivalents
The Company and certain UK and overseas subsidiary undertakings are parties to grouped banking facilities under
33
18. Payables (creditors) GROUP
Year 7 Year 6
£m £m
Trade payables (creditors) 281.3 287.7
19. Other payables (creditors) (non-current)
Taxation 1.7 3.5
20. Loans and overdrafts (current liabilities)
Bank overdrafts – secured 1.5 –
21. Loans GROUP
Year 7 Year 6
£m £m
Debenture loans
Secured
34
The secured borrowings of subsidiary undertakings are secured by various charges on the assets of those undertakings.
Interest is payable on the bank loans mainly at rates varying with market rates.
Year 7
Year 6
Borrowings repayable after more than Bank Other Total Bank Other Total
one year are repayable as follows: £m £m £m £m £m £m
Group
Between one and two years 19.5 24.6 44.1 4.2 0.1 4.3
22. Analysis of net interest payable and currency borrowings
[This note, not reproduced here, contains details of interest payable and borrowings analysed by currency.]
23. Analysis of net debt 31 Dec
Year 6
£m
Cash
flow
£m
Reclassified
(exc. cash &
overdrafts)
£m
Other non-
cash
changes
£m
Exchange
adjustment
£m
31 Dec
Year 7
£m
Cash and demand deposits (60.2) 10.4 – – 3.9 (45.9)
24. Provisions for liabilities and
charges
Restructuring
provisions
£m
Acquisition
provisions
£m
Deferred
tax
£m
Other
tax
£m
Other
£m
Total
£m
The provision for liabilities and charges of the Company of £5.2 million (Year 6 £4.1m) represents deferred tax.
25. Deferred tax liability GROUP
£m
At 31 December Year 6 3.7
Movement in year 2.2
35
26. Share capital and reserves Authorised Issued and fully paid
Years 6 and 7
£m
Year 7
£m
Year 6
£m
27. Analysis of cash flows
Reconciliation of operating profit to operating cash flow Continuing
operations
£m
Discontinued
operations
£m
Year 7
Total
£m
Year 6
Total
£m
Operating profit 166.0 (0.1) 165.9 163.9
Depreciation 79.3 0.3 79.6 83.7
GROUP
Year 7 Year 6
29. Annual external commitments under operating leases
[A note here sets out details of commitments.]
30. Pension commitments
The Group operates a number of pension schemes around the world, most of which are of the defined benefit type with
the date of acquisition.
36
Principal Subsidiary and Associated Undertakings (extract from list)
At 31 Dec Year 7
Country
Company
Main activities
EUROPE
The United Kingdom Craigielaw Aerospace Ltd Advanced composite materials, ballistic products and
solar industrial films
SOUTH AND CENTRAL AMERICA
Brazil Craigielaw Paints Ltda Marine, protective, yacht, packaging and powder
coatings and architectural paints for the professional
market
Mexico Cia Mexicana de Pinturas ‘Craigielaw’ SA de
CV
Marine and protective coatings and architectural paints
for the professional market
37
Analysis of Ordinary Shareholdings
At 31 December Year 7
Size of shareholding
Number of
shareholders
Number of ordinary shares
million per cent
1 – 250 11,334 1.3 –