AA nn nn uu aa ll RR ee pp oo rr tt 22 00 00 77
D i r e c t o r s a n d O f f i c e r s
Directors
B. J. Cooke, AdvDipNFC, MIBritF Chairman
D. J. Gawthorpe, BSc (Hons), MIBritF Chief Executive
J. C. Roby, FCA Finance Director
M. A. Lewis Managing Director, CNC Speedwell Ltd
G. Cooper Managing Director, William Lee Ltd
A. J. Smith, MIBritF, IEng Non-executive
C. P. King, FCA Non-executive
G. B. Wainwright, MIMgt, MIEx, FRSA Non-executive
Secretary and
J. C. Roby, FCA
Registered Office Lichfield Road,
Registrars
Auditors
Solicitors
Bankers
Stockbrokers
Brownhills,
West Midlands, WS8 6JZ
Tel: 01543 374341
Fax: 01543 377483
Web: www.castings.plc.uk
Capita Registrars
Northern House,
Woodsome Park,
Fenay Bridge,
Huddersfield.
West Yorkshire, HD8 0LA
Tel: 0870 162 3100
Fax: 020 8658 3430
BDO Stoy Hayward LLP
Chartered Accountants
125 Colmore Row,
Birmingham, B3 3SD
Enoch Evans (incorporating Kenneth Cooke & Co.)
St Paul’s Chambers,
6/9 Hatherton Road,
Walsall,
West Midlands, WS1 1XS
Pinsent Masons
3 Colmore Circus,
Birmingham, B4 6BH
HSBC Bank plc
High Street,
Brownhills,
West Midlands, WS8 6HJ
Arden Partners
Arden House,
Highfield Road,
Edgbaston,
Birmingham, B15 3DU
Registered No.
91580
A n n u a l
R e p o r t
2 0 0 7
1
D i r e c t o r s
Executive Directors
Non-Executive Directors
Brian Cooke
Gerard Wainwright
Aged 67, he joined the company in 1960
Aged 57, he was appointed a director in
after attending foundry college and
1998 and is the senior
independent
serving an engineering apprenticeship. He
director. He is chairman of Turmarine S.A.
worked in all departments of
the
and has been chief executive of a wide
company and was appointed a director in
range of manufacturing companies for
1966, becoming joint managing director
over
twenty
years
together with
in 1968 and managing director in 1970.
continuous international experience. He is
He has been Chairman since 1983.
chairman of the remuneration committee
Chris Roby
Aged 59, he joined the company in 1988
and a member of
the audit and
nomination committees.
as company secretary and was appointed
Paul King
finance director later in that year. Prior to
Aged 70, he was appointed a director in
that date he had been working in a
1998. He retired from practice as a
professional accounting firm specialising
partner with Coopers & Lybrand and is a
in manufacturing
and
international
member of
the Boards of Claverley
companies.
David Gawthorpe
Aged 45, he joined the company in 1984
and became local technical director at
Brownhills in 1994. He was appointed a
director
in 2003 and became chief
Company and Thomas Walker plc. He is
chairman of
the audit committee and
is regarded as the financial expert of
that committee and is also a member
of
the remuneration and nomination
committees.
executive in April 2007 and is the director
Tony Smith
with environmental responsibility.
Aged 60, he joined the company in 1962
Mark Lewis
Aged 43, he joined CNC Speedwell
in
1990 becoming their managing director in
1996. He has overseen the machining
requirements for
the group and was
appointed a director in 2003.
Graham Cooper
Aged 53, he joined William Lee in 1977
becoming operations director there in
2003 and their managing director on 1st
January 2005.
and became a director in 1985, ultimately
being managing director at Brownhills. In
2004 he retired from executive duties. His
continuing involvement is invaluable to
the company with his experience in
foundry production and human relations.
He adds to the existing strength of our
non-executive directors. He is a member
of the audit, remuneration and nomination
committees.
2
A n n u a l
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C h a i r m a n ’ s S t a t e m e n t
Turnover has increased from
£76.7m to £86.2m and
profits are up from £12.70m
to £13.06m compared to
last year.
Employees
The success of
the company is only
possible with the enthusiasm and loyalty
of all our employees. On behalf of the
board and the shareholders I would like to
express our sincere appreciation to them.
Board changes
On 2nd April 2007 David Gawthorpe was
appointed Chief Executive
of
the
company. He joined the company in 1984
and has held a series of senior positions
including Managing Director at our
Brownhills foundry.
I am confident that with the support
of our directors and employees the
company will continue to prosper under
his leadership.
Prospects
The demand for castings and finished
products continues at a high level, but
world competition makes for a very
competitive market. We are confident that
our commitment to supply on time with
excellent
quality will
benefit
our
customers and ourselves now and in the
future.
B. J. COOKE
Chairman
20th June 2007
An interim dividend of 2.58 pence per
share was paid in January 2007. Your
board recommends a final dividend of
6.94 pence per share compared with
6.67 pence per share last year.
The results have been affected by
delayed recovery of raw material costs
and rapid increases in energy prices from
1st October 2006. These factors were
reported last year and again in the interim
statement in November.
Foundry production
We have again enjoyed a sustained
high demand from our
period of
customers both at Castings Brownhills
and William Lee but, despite improved
productivity and quality, our margins have
reduced again due to increases in raw
material prices, energy prices and
employment
costs,
coupled
with
inflationary increases in almost all items
we purchase that have not yet been
recovered. This will have to be addressed
in the future in order
to improve
profitability
and
returns
on
our
investments. We will continue with
investments in the foundries to improve
productivity and one such improvement is
to be made to one of our moulding lines
at Brownhills.
CNC Speedwell
The moving of the machine shop from the
Fradley Park site to Brownhills was
completed last August and the move has
proved to be of great benefit
to the
management of CNC Speedwell and to
the more efficient running of the business.
The turnover at CNC increased by well
over 30% during the year and the profits
improved, which again has justified our
considerable investment in this facility,
but immediate capital expenditure will
reduce.
We expect
turnover
to continue to
increase during this financial year.
A n n u a l
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3
B u s i n e s s a n d F i n a n c i a l R e v i e w
Turnover increased by 12.4% to £86.2
Despite ending the year with less
The pension valuation under IAS19
million, of which 65% was exported. The
cash, the rise in interest rates helped
showed a surplus of £4.3 million but, as
dispatch weight of castings to outside
increase finance income by £357,000 to
accounting practices recommend, this
customers was 53,500 tonnes which was
£1,497,000, an increase of 31%. Cash
has not been shown as an asset due to
an increase of 3,000 tonnes from the
outflow included £9.6 million (2006: £4.3
future
uncertainties
surrounding
its
previous year. The group produced
million) on capital equipment, particularly
realisation.
56,000 tonnes of castings compared to
for CNC Speedwell, and £4.4 million
52,500 tonnes last year. CNC Speedwell
being the balance paid into the final
increased its turnover by 36%.
salary pension schemes as mentioned in
last year’s report. This has also helped to
produce a lower tax bill.
Unfortunately,
significant
cost
increases, in particular unrecovered raw
material and electricity costs, resulted in
profit
from operations only being the
same as last year, and reducing the
operating margin to 13.4% from 15.1%.
Our policy of continual improvement
and investment has, however, reduced
the number of hours it takes to produce
one tonne of castings, mitigating the fall
in the margin.
The directors are recommending an
increase of 4% in the final dividend that
will be paid in August which, with the
interim dividend paid in January, will
result in the return of £4.15 million to
shareholders.
4
A n n u a l
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D i r e c t o r s ’ R e p o r t
The directors submit their
Annual Report and the Audited
Accounts for the year
ended 31st March 2007.
Directors
The present directors of the company are listed on page 1 and their interests in the shares
of the company are shown below.
The interests of directors in the ordinary share capital at the beginning and end of the
Trading activities
year were:
supplies
Castings P.L.C.
spheroidal
graphite iron castings to a variety of
manufacturing industries from its fully
mechanised foundries at Brownhills.
William Lee Limited supplies spheroidal
graphite iron castings from Dronfield,
Sheffield and CNC Speedwell Limited is a
machinist operation. There were no
significant changes in the principal
activities of these companies during the
year, which are considered to be one
class of business only.
The progress of
these companies
is recorded in the
during the year
accounts and the chairman’s statement
on page 3.
Dividends
An interim dividend of 2.58 pence per
share was paid on 12th January 2007.
The directors now recommend a final
dividend of 6.94 pence per share payable
on 17th August 2007, making a total
distribution of 9.52 pence for the year.
Share capital
The movements in the share capital of the
company during the year are shown in
note 16 on page 24.
B. J. Cooke
A. J. Smith
J. C. Roby
C. P. King
G. B. Wainwright
D. J. Gawthorpe
M. A. Lewis
G. Cooper
Beneficial Holdings
2007
1,950,986
113,079
128,190
—
—
26,357
3,025
—
2006
1,950,986
113,079
128,190
—
—
26,357
3,025
—
There have been no changes in the shareholdings of directors between 31st March 2007
and 8th June 2007.
The following directors retire under the provisions of the Articles of Association and,
being eligible, offer themselves for re-election:
D. J. Gawthorpe
M. A. Lewis
C. P. King
}
by rotation
The unexpired period of the contracts of service for D. J. Gawthorpe and M. A. Lewis
is one year. Mr C. P. King does not have a contract of service.
The company has made qualifying third-party indemnity provisions for the benefit of
its directors which were made during the year and exist at the date of this report.
Substantial shareholdings
The directors have been notified that the following investors, including directors, held
interests in 3% or more of the company’s issued share capital at 31st March 2007 and
8th June 2007:
Aberforth Partners’ Clients
Hunter Hall Value Growth Trust
B. J. Cooke
Hamstall Investments Inc.
Rathbone Investment Management Ltd
Legal & General Group plc
Business review
Number
6,147,271
4,640,826
1,950,986
1,800,000
1,600,000
1,516,376
%
14.1
10.6
4.5
4.1
3.7
3.5
The Chairman’s Statement on page 3, the Business and Financial Review on page 4, the
Corporate Governance Statement on page 7, and the Notes to the Accounts on pages 17
to 25 provide detailed information relating to the group, the operation and development of
the business and the results and financial position for the year ended 31st March 2007.
Future prospects
Future prospects are dealt with in the Chairman’s Statement on page 3.
A n n u a l
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5
D i r e c t o r s ’ R e p o r t
Special business
There will be three items of Special
Business at the Annual General Meeting.
Directors’ authority to allot shares
for a special
Approval will be sought
resolution to renew the authority given to
the directors to allot shares in the
company. The present authority was
granted on 15th August 2006 and under
Section 80 of the Companies Act must be
renewed at least every 5 years. Authority
will also be sought from shareholders to
allow the directors to issue new shares for
cash to persons other than to existing
members up to a maximum nominal
amount of £218,160, being approximately
5% of the current issued share capital.
Both Authorities are to be for the period
commencing on the date of passing of the
Resolution until 13th August 2012 but will
be put to annual shareholder approval. The
proposed Resolutions are set out as items 8
and 9 in the Notice of Meeting.
Authority to purchase own shares
At the Annual General Meeting in 2006, the
board was given authority to purchase and
cancel up to 4,358,844 of its own shares
representing 9.99% of
the company’s
existing shares, through market purchases
on The London Stock Exchange. The
maximum price to be paid on any exercise
of the authority was restricted to 105% of
the average of
the middle market
quotation for the shares for the five dealing
days immediately preceding the day of a
purchase. The minimum price which may
be paid for each share is 10 pence.
The current authority to make market
purchases expires at
the forthcoming
Annual General Meeting. The directors are
now seeking the approval of shareholders
for the renewal of this authority upon the
same terms, save that the authority is now
sought to allow the company to purchase
and cancel up to 4,358,844 of its own
shares, representing 9.99% of its issued
share capital at 31st March 2007. The
authority is sought by way of a special
resolution, details of which are also
included in the notice of the meeting as
item 10. This authority will only be
exercised if the directors, in the light of
market conditions prevailing at the time,
expect it to result in an increase in future
earnings per share, and if it is in the best
interests of shareholders generally.
Fixed assets
The market value of the group’s interests in
land cannot be accurately established
without obtaining a revaluation of all the
land and buildings owned by the group.
The directors consider that although a
revaluation would show the market value
of the land and buildings to be in excess of
book value, this excess would not be
significant in the context of group trading
and would not justify the expense of a
revaluation.
Employee involvement
informed weekly of
Employees
production
relative
the
production performance. Similarly, they are
kept informed of any factor affecting the
group and the industry generally.
are
levels
and
Their
involvement
in the group’s
performance is encouraged by means of a
production bonus and at the time of annual
wages and salaries review they are made
aware of all economic factors affecting the
previous year’s performance and the
outlook for the ensuing year.
Health and safety
As required by legislation, the group’s
policy for securing the health, safety and
welfare at work of all employees has been
brought to their notice. In addition, safety
committees hold regular meetings.
Employment of disabled
persons
The group continues to give full and fair
consideration
for
employment made by registered disabled
persons. If necessary, we endeavour to
retrain any employee who becomes
disabled during the period of employment
with the group.
applications
to
suppliers are made aware of the terms of
payment and abide by them provided the
supplier complies with all relevant terms
and conditions. The company does not
follow any code or standard on payment
practice. Individual operating businesses
within the group are responsible for
establishing appropriate policies with
regard to the payment of their suppliers.
The
purchases
outstanding for payment by the company
at the year end was 41 (2006 – 41).
number
days’
of
Financial instruments
Details of the use of financial instruments
by the group are contained in note 19 of
the accounts.
indicated
their willingness
Auditors
The auditors, BDO Stoy Hayward LLP,
have
to
continue in office. A resolution proposing
their
the
reappointment as auditors of
company and authorising the directors to
remuneration will be
determine their
submitted at the Annual General Meeting.
In the case of each of the persons
who are directors of the company at the
date when this report was approved so
far as each of the directors is aware, there
is no relevant audit information of which
the company’s auditors are unaware, and
each of the directors has taken all steps
that he ought to have taken as a director
to make himself aware of any relevant
audit
information (as defined) and to
establish that the company’s auditors are
aware of that information.
Capital gains tax
For capital gains tax purposes the
adjusted market value of the 10p ordinary
shares in the company on 31st March
1982 was 4.92 pence.
Policy on payment of
creditors
The group’s policy is to settle the terms of
payment with suppliers when agreeing
the terms of each transaction, ensure that
By order of the board
B. J. COOKE
Chairman
20th June 2007
6
A n n u a l
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C o r p o r a t e G o v e r n a n c e
Internal control
The Combined Code on Corporate
Governance introduced a requirement that
the directors review the effectiveness of the
group’s systems of internal controls. This
extended the existing requirement in respect
of internal financial controls to cover all
controls including financial, operational and
compliance controls and risk management.
for
process
The board is ultimately responsible for
the group’s system of internal controls,
including internal financial control, and for
monitoring its effectiveness. There is a
identifying,
continuous
evaluating and managing the significant
risks faced by the group which is regularly
reviewed and has been in place throughout
the year under review and up to the date of
approval of
report and
the annual
accounts. However, such a system is
designed to manage rather than eliminate
the risk of
failure to achieve business
objectives and can provide only reasonable
and not absolute assurance against
material misstatement or loss. The review
covers all controls including financial,
risk
compliance
operational,
management.
and
necessary
The directors confirm that they have
established procedures
to
implement the guidance for directors on the
Combined Code such that they fully comply
with it for the accounting period ended on
31st March 2007.
Internal financial control
The directors are responsible for maintaining
the group’s systems of internal financial
control. These controls are designed to both
safeguard the group’s assets and ensure the
reliability of financial information used within
the business and for publication. As with any
such systems, controls can only provide
reasonable and not absolute assurance
against material misstatement or loss.
Internal financial control
is operated
within a clearly defined organisational
structure with clear control responsibilities
and authorities, and a practice throughout
the group of regular management and
board meetings to review all aspects of the
group’s businesses including those aspects
where there is a potential risk to the group.
all
with
Complying
relevant
legislation, process,
environmental
planning and discharge authorisations,
as appropriate to its operations.
Pursuing best practice techniques in
the use of energy and raw materials.
Encouraging the beneficial
re-use,
recycling and recovery of its waste
products.
considered
issues
Ensuring that environmental
are
when making
decisions to invest in capital plant
and in the planning and controlling of
manufacturing processes.
Promoting environmental awareness
throughout the group and ensuring
that personnel whose activities have
the potential to cause a significant
impact on the environment receive
appropriate training.
that
adopt
suppliers
and
Ensuring
contractors
environmental
practices on site that are compatible
with our
exacting environmental
standards.
Establishing
maintaining
and
adequate contingency procedures
and plans to deal effectively with any
accidental discharge or emission of
pollutants.
Communicating our Environmental
to any interested
Policy Statement
parties.
Board of directors
The board meets regularly to monitor the
current
and to
state of business
determine its future strategic direction.
During the year the board comprised five
executive directors and three non-
executive directors. The non-executive
directors are independent of executive
management and do not participate in
share
executive
remuneration schemes nor do they qualify
for pension benefits.
option
other
or
For each business there are regular
weekly and monthly reports, reviewed by
boards and management, which contain
both written reports and accounts. The
accounts include profit and loss accounts
and balance sheets for the period under
review, year to date and previous year
and are compared with expected results.
A variety of operational and financial
ratios are also produced.
Continual monitoring of the systems of
internal financial control is conducted by all
management. The external auditors, who
are engaged to express an opinion on the
group accounts, also consider the systems
of internal financial control to the extent
necessary to express that opinion. The
external auditors report the results of their
work to management, including members
of the board and the audit committee.
The board does not consider there is
a need for an internal audit function due
to the size of the group.
Auditors’ independence
The non-audit work undertaken in the year
by the group auditors, BDO Stoy Hayward
LLP, was restricted to an involvement in the
preparation of the tax computations of the
group companies and a review of
the
interim financial statements.
Environment
The board is committed to adopting
policies, processes and procedures which
will lead to the continual improvement in
environmental performance.
Specifically, the company is committed
to:
Implementing and maintaining an
Environmental Management System
in accordance with the ISO14001
standard.
Establishing procedures to review the
impact of current or new activities or
processes on the environment.
Reviewing audit results and initiating
corrective action to address any
deficiencies found within the group’s
environmental management system,
policy, objectives or targets.
Using techniques to avoid, reduce or
control pollution.
A n n u a l
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7
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
C o r p o r a t e G o v e r n a n c e
Directors receive regular updates appropriate to the business throughout the year.
To assist with the conduct of their function, the non-executive directors are able to obtain professional advice at the company’s
expense if required in connection with their duties. In addition, all directors have access to the services of the company secretary.
Attendance at board and board committee meetings during the year is detailed in the table shown below:
Director
B. J. Cooke
D. J. Gawthorpe
J. C. Roby
M. A. Lewis
G. Cooper
C. P. King
G. B. Wainwright
A. J. Smith
Board
Audit
Committee
Remuneration
Committee
Eligible to
attend
9
9
9
9
9
9
9
9
Attended
9
9
9
5
9
9
9
7
Eligible to
attend
—
—
—
—
—
2
2
2
Attended
—
—
—
—
—
2
2
2
Eligible to
attend
—
—
—
—
—
1
1
1
Attended
—
—
—
—
—
1
1
1
The chairman communicates frequently with the non-executive and executive directors. Directors are also encouraged to discuss any
issues or concerns with the chairman at any time throughout the year.
The remuneration committee reviews the performance of the directors, including the chairman.
Board committees
The principal committees established by
the directors are:
Audit committee
This committee comprised the three non-
executive directors and is chaired by C. P.
King. The finance director and other
executive directors may also attend
meetings as appropriate to the business in
the
hand but are not members of
committee.
The committee meets at least twice a
year and examines any matters relating to
the financial affairs of the group including
the review of annual and interim results,
and
internal
accounting
audit
practices.
committee meets with the auditors
periodically and as necessary.
procedures
control
The
Relations with
shareholders
The company holds meetings from time to
time with institutional shareholders to
discuss the company’s strategy and
financial performance. The Annual General
Meeting is used to communicate with
private and institutional investors.
Summary
The board takes its responsibilities seriously
even though there are a number of the
provisions of the Code with which it does
not comply. It does not feel that the size or
complexity of the group and the way in
which it governs would be enhanced or
strengthened by further changing the
already existing high standards of corporate
governance practised.
For the year ended 31st March 2007 the
company complied with the Combined
Code other than the following points:
there are three non-executive directors
but one does not conform to the
definition of independent;
the non-executive directors do not have
specified term contracts;
the chairman is also an executive
director;
there is no formal arrangement whereby
staff may, in confidence, raise concerns
about possible improprieties in matters
of financial reporting or other matters.
These are considered appropriate in relation
to the size of the company and the way in
which it operates.
Remuneration committee
As detailed in the remuneration report
below.
Nomination committee
This committee comprised the three non-
executive directors and the chairman.
8
A n n u a l
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(cid:1)
(cid:1)
(cid:1)
(cid:1)
R e m u n e r a t i o n R e p o r t
The company has complied throughout
the year under review with the Combined
Code provisions concerning directors’
remuneration.
Items marked * have been subject to
audit and reported on in the auditors’
report on page 12.
This report has been prepared in
accordance with Schedule 7A to the
Companies Act 1985 and also meets the
relevant requirements of the Listing Rules
of
In
the Financial Services Authority.
accordance with the regulations, a
resolution will be proposed at the Annual
General Meeting
the
remuneration report for the financial year
ended 31st March 2007.
approve
to
Remuneration committee
This committee comprised the three non-
executive directors and is chaired by G.
B. Wainwright. The chairman of the group
Directors’ Emoluments*
B. J. Cooke
J. C. Roby
D. J. Gawthorpe
M. A. Lewis
G. Cooper
C. P. King
G. B. Wainwright
A. J. Smith
is invited to attend meetings where
appropriate but is not a member of the
committee.
None of the executive directors were
present at meetings of the committee
own
during
remuneration.
consideration
their
of
rates and the performance of the individual
and of the company. Policies for benefits
(which include company cars and private
health insurance) are reviewed regularly and
comparisons with other companies are
made. Reports and published data are also
taken into consideration in setting salary
and benefit packages.
No advice has been provided by
external advisers or consultants.
Remuneration in 2007
Remuneration policy
The underlying policy in setting the
remuneration of the executive directors is
that it shall be designed to retain and
motivate the directors and be reasonable
and fair in relation to their responsibilities.
Executive
emoluments
directors’
comprise annual salary, an annual bonus,
membership of a company pension scheme
and other benefits. The committee ordinarily
reviews directors’ salaries annually, effective
from 1st April, taking into account market
The individual elements of remuneration of
each director are set out in the table
below.
Annual bonus
in
Executive directors participate
a
performance-related annual bonus scheme.
Bonuses are payable based on the group
obtaining profits before tax and exceptional
items above a predetermined threshold.
Details of annual bonuses payable in
respect of 2007 are set out in the table
below.
Salaries
£000
126
107
105
100
95
—
—
—
533
Fees
£000
—
—
—
—
—
17
17
17
51
Benefits
£000
4
14
8
9
9
—
—
—
Performance
related bonus
£000
80
80
80
80
80
—
—
—
2007
Total
£000
210
201
193
189
184
17
17
17
44
400
1,028
2006
Total
£000
202
195
180
180
169
16
16
16
974
Share options*
Pension arrangements
The company has in place the 1998
Executive Share Option Scheme but no
share options have been granted under
this discretionary scheme.
Executive directors are members of the
Castings P.L.C. Staff Pension and Life
Assurance Scheme. Their dependants are
eligible for dependants’ pensions and the
payment of a lump sum in the event of
death in service. The scheme provides for
a pension accrued at 1/60th per year of
service to 2005 and 1/80th per year
of
final
pensionable
thereafter
remuneration on retirement at normal
retirement age. Pension contributions are
not paid on benefits and only paid on a
capped element of bonuses that brings
the pensionable remuneration up to the
equivalent level of that before they were
directors.
A n n u a l
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9
R e m u n e r a t i o n R e p o r t
Directors’ pension entitlements*
Directors’
contributions
in the
year
(note 1)
Age at
year end
Name of director
Increase
in accrued
pension
Increase during year
excluding
pension any increase
during for inflation
in accrued
Transfer
value of
increase
less
directors’
(note 2) contributions
the year
Accumulated Accumulated
total
accrued
pension at
31 March
2006
total
accrued
pension at
31 March
2007
(note 3)
Difference
in transfer
values
less
(note 3) 31/03/2007 31/03/2006 contributions
Transfer
value of
accrued
benefits
Transfer
value of
accrued
benefits
£
J. C. Roby
8,895
D. J. Gawthorpe
8,707
M. A. Lewis
7,786
G. Cooper
6,637
Notes to pension benefits:
1. These relate to the contributions paid or payable in the year by the directors under the terms of the Scheme.
£
33,231
38,080
16,193
20,491
£
30,993
35,556
14,282
18,772
£
5,344
325
1,006
3,681
£
2,238
2,524
1,911
1,719
£
1,115
1,235
1,393
1,038
£
390,081
241,864
97,151
187,885
58
45
43
53
£
364,371
232,816
87,927
171,751
£
16,815
341
1,438
9,497
2. The increase in accrued pension during the year (and transfer value of the increase) excludes any increase for inflation.
3. The pension entitlement shown is that which would be paid annually on retirement based on service to the end of the company
financial year.
Members of the Scheme have the option to pay Additional Voluntary Contributions. Neither the contributions nor the resulting benefits are
included in the above table.
Performance graph
Directors’ contracts
The following graph shows the company’s performance, measured by total shareholder
return, compared with the performance of the FTSE All Share Index — Engineering sub-
sector, also measured by total shareholder return. This index has been selected for this
comparison because this is the most relevant index in which the company’s shares are
quoted.
Castings
FTSE Eng. & Machinery
200
180
160
140
120
100
80
60
40
April 2002
2002
2003
2004
2005
2006
March 2007
are
contracts
Executive directors have contracts of
service terminable on one year’s notice.
considered
These
appropriate in the context of the overall
remuneration policy, as in the opinion of
the board it is consistent for directors to
take a long-term rather than a short-term
view of their conduct and planning of the
company’s affairs. None of the contracts
contains any provision for predetermined
compensation in the event of termination.
The date of contracts currently in
the executive directors is
place for
1st April 2007.
Messrs King, Wainwright and Smith
do not have a contract of service and do
not participate in the company’s bonus
schemes and are not eligible to join a
company pension scheme.
Source: Thomson Financial – Thomson One Banker
On behalf of the board
G. B. WAINWRIGHT
Chairman of the remuneration committee
20th June 2007
10
A n n u a l
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S t a t e m e n t of D i r e c t o r s ’ R e s p o n s i b i l i t i e s
the group,
The directors are responsible for keeping
proper accounting records which disclose
with reasonable accuracy at any time the
financial position of
for
safeguarding the assets of the company,
the
taking reasonable steps for
for
prevention and detection of fraud and
other irregularities and for the preparation
of a Directors’ Report and Directors’
Remuneration Report which comply with
the Companies
the requirements of
Act 1985.
The directors are responsible for
preparing the annual
report and the
financial statements in accordance with
the Companies Act 1985. The directors
are also required to prepare financial
statements for the group in accordance
with International Financial Reporting
Standards as adopted by the European
Union (IFRSs) and Article 4 of the IAS
Regulation. The directors have chosen to
prepare financial statements for
the
accordance with UK
company
Generally Accepted Accounting Practice.
in
Group financial statements
International Accounting Standard 1 requires
that financial statements present fairly for
each financial year the group’s financial
position, financial performance and cash
flows. This requires the faithful presentation
of the effects of transactions, other events
and conditions in accordance with the
definitions and recognition criteria for assets,
liabilities, income and expenses set out in
the International Accounting Standards
Board’s ‘framework for the preparation and
presentation of
In
virtually all circumstances, a fair presentation
will be achieved by compliance with all
applicable IFRSs. A fair presentation also
requires the directors to:
financial statements’.
consistently
appropriate policies;
select
and
apply
present
including
information,
accounting policies, in a manner that
reliable,
relevant,
provides
understandable
and
comparable
information; and
the
with
provide additional disclosures when
compliance
specific
requirements in IFRSs is insufficient
to enable users to understand the
impact of particular
transactions,
other events and conditions on the
entity’s financial position and financial
performance.
Parent company financial
statements
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 profit or loss of the company for that
period.
financial
statements, the directors are required to:
In preparing
these
select suitable accounting policies
and then apply them consistently;
prepare the financial statements on
the going concern basis unless it is
the
inappropriate to presume that
company will continue in business;
make judgements and estimates that
are reasonable and prudent; and
have
state whether applicable accounting
standards
followed,
subject to any material departures
disclosed and explained in the
financial statements.
been
in
preparation
Financial statements are published on
the group’s website in accordance with
the United Kingdom
legislation
and
the
governing
dissemination of
financial statements,
which may vary from legislation in other
jurisdictions.
and
integrity of the group’s website is the
responsibility of
the directors. The
directors’ responsibility also extends to
the ongoing integrity of
the financial
statements contained therein.
The maintenance
A n n u a l
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11
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
I n d e p e n d e n t A u d i t o r s ’ R e p o r t
To the shareholders of Castings P.L.C.
comprise
We have audited the group and parent
company financial statements of Castings
P.L.C. for the year ended 31st March 2007
which
the group income
statement, the group and parent company
the group cash flow
balance sheets,
statement,
the group statement of
recognised income and expense and the
related notes. These financial statements
have been prepared under the accounting
policies set therein.
We have also audited the information
in the Directors’ Remuneration Report that
is described as having been audited.
Respective
responsibilities of
directors and auditors
The directors’ responsibilities for preparing
the Annual Report and the group financial
statements in accordance with applicable
law and International Financial Reporting
Standards (IFRSs), as adopted by the
European Union, and for preparing the
parent company financial statements and
the Directors’ Remuneration Report
in
accordance with applicable law and
United Kingdom Accounting Standards
(United Kingdom Generally Accepted
Accounting Practice) are set out in the
Statement of Directors’ Responsibilities.
Our
responsibility is to audit
the
financial statements and the part of the
Directors’ Remuneration Report
to be
audited in accordance with relevant legal
and
and
International Standards on Auditing (UK
and Ireland).
requirements
regulatory
We report to you our opinion as to
whether the financial statements give a
true and fair view and whether the financial
statements and the part of the Directors’
Remuneration Report to be audited have
been properly prepared in accordance with
the Companies Act 1985 and whether, in
addition, the group financial statements
have
in
properly
accordance with Article 4 of
the IAS
Regulation. Additionally, we report to you
the information given in the
whether
Directors’ Report is consistent with those
financial statements. We also report to you
if, in our opinion, the company has not
kept proper accounting records, if we have
the information and
not
received all
prepared
been
explanations we require for our audit, or if
information specified by law regarding
directors’
other
transactions is not disclosed.
remuneration
and
reflects
the Corporate
We review whether
the
Governance Statement
company’s compliance with the nine
provisions of the 2003 FRC Combined
Code specified for our
review by the
Listing Rules of the Financial Services
Authority, and we report if it does not. We
are not required to consider whether the
board’s statements on internal control
cover all risks and controls, or form an
opinion on the effectiveness of the Group’s
corporate governance procedures or its
risk and control procedures.
The
other
We read other information contained in
the Annual Report and consider whether it
is consistent with the audited financial
statements.
information
comprises only the Directors’ Report, the
Chairman’s Statement, the Business and
Financial Review, the unaudited part of the
Directors’ Remuneration Report and the
Corporate Governance Statement. We
consider the implications for our report if we
apparent
of
become
misstatements or material inconsistencies
with
statements. Our
responsibilities do not extend to any other
information.
financial
aware
any
the
Our report has been prepared pursuant
to the requirements of the Companies Act
1985 and for no other purpose. No person
is entitled to rely on this report unless such
a person is a person entitled to rely upon
this report by virtue of and for the purpose
of the Companies Act 1985 or has been
expressly authorised to do so by our prior
written consent. Save as above, we do not
accept responsibility for this report to any
other person or for any other purpose and
we hereby expressly disclaim any and all
such liability.
Basis of audit opinion
We 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 and the part of the Directors’
Remuneration Report to be audited. 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
the information and
as to obtain all
considered
explanations which we
necessary in order
to provide us with
sufficient evidence to give reasonable
assurance that the financial statements and
the part of the Directors’ Remuneration
Report to be audited 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 and the part of
the Directors’ Remuneration Report to be
audited.
Opinion
In our opinion:
the group financial statements give a
true and fair view, in accordance with
IFRSs as adopted by the European
Union, of the state of the group’s affairs
as at 31st March 2007 and of its profit
for the year then ended;
the group financial statements have
been properly prepared in accordance
with the Companies Act 1985 and
Article 4 of the IAS Regulation;
parent
company
the
financial
statements give a true and fair view, in
accordance with United Kingdom
Accounting
Accepted
Generally
Practice, of the state of the parent
company’s affairs as at 31st March
2007;
parent
company
the
financial
the
statements and the part of
Directors’ Remuneration Report to be
audited have been properly prepared in
accordance with the Companies Act
1985; and
the information given in the Directors’
Report is consistent with the financial
statements.
BDO Stoy Hayward LLP
Chartered Accountants and Registered
Auditors
Birmingham
20th June 2007
12
A n n u a l
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(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
C o n s o l i d a t e d I n c o m e S t a t e m e n t
for the year ended 31st March 2007
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Profit from operations
Finance income
Profit before income tax
Income tax expense
Profit for the year attributable to equity holders of the parent company
Earnings per share
Basic and diluted
Notes to the accounts are on pages 17 to 25.
Notes
2
3
6
7
17
9
2007
£000
86,230
(63,701)
22,529
(1,293)
(9,676)
11,560
1,497
13,057
(3,647)
9,410
2006
£000
76,696
(55,157)
21,539
(1,128)
(8,850)
11,561
1,140
12,701
(3,946)
8,755
21.57p
20.07p
A n n u a l
R e p o r t
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13
C o n s o l i d a t e d B a l a n c e S h e e t
31st March 2007
ASSETS
Non-current assets
Property, plant and equipment
Financial assets
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Current tax liabilities
Non-current liabilities
Retirement benefit obligations
Deferred tax liabilities
Total liabilities
Net assets
Equity attributable to equity holders of the parent company
Share capital
Share premium account
Other reserves
Retained earnings
Total equity
2005
Notes
10
11
15
12
13
14
5
15
20,565
16
17
17
17
2007
£000
35,495
823
—
36,318
6,318
21,784
25,452
53,554
89,872
16,212
883
17,095
—
2,141
2,141
19,236
70,636
4,363
874
13
65,386
70,636
2006
£000
32,566
1,139
574
34,279
5,276
20,449
27,686
53,411
87,690
15,063
1,808
16,871
1,913
1,781
3,694
20,565
67,125
4,363
874
13
61,875
67,125
The accounts on pages 13 to 25 were approved and authorised for issue by the board of directors on 20th June 2007, and were signed on
its behalf by:
B. J. Cooke
J. C. Roby
Chairman
Finance Director
Notes to the accounts are on pages 17 to 25.
14
A n n u a l
R e p o r t
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C o n s o l i d a t e d C a s h F l o w S t a t e m e n t
for the year ended 31st March 2007
Cash flows from operating activities
Cash generated from operations
Interest received
Tax paid
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of financial assets
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of financial assets
Net cash used in investing activities
Cash flow from financing activities
Dividends paid to shareholders
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year (see below)
Cash and cash equivalents at end of year (see below)
Cash and cash equivalents:
Short-term deposits
Cash available on demand
2005
Notes
19
19
2007
£000
12,582
1,497
(2,858)
11,221
(9,637)
(47)
45
220
(9,419)
(4,036)
(4,036)
(2,234)
27,686
25,452
£000
24,923
529
25,452
2006
£000
12,678
1,140
(3,060)
10,758
(4,301)
—
9
21
(4,271)
(3,875)
(3,875)
2,612
25,074
27,686
£000
26,725
961
27,686
This statement should be read in conjunction with the reconciliation on page 16.
Notes to the accounts are on pages 17 to 25.
A n n u a l
R e p o r t
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15
C o n s o l i d a t e d S t a t e m e n t o f R e c o g n i s e d
I n c o m e a n d E x p e n s e
for the year ended 31st March 2007
Profit for the year
Change in fair value of available for sale financial assets
Actuarial (losses)/gains on defined pension schemes
Tax effect of gains and losses recognised directly in equity
Total recognised income for the year
2005
2005
2005
Notes
5
15
Year to
Year to
31st March
20031st March
2007
£000
9,410
(143)
(2,500)
780
7,547
2006
£000
8,755
176
1,987
(649)
10,269
S u p p l e m e n t a r y S t a t e m e n t
Reconciliation of profit before income tax to net cash inflow from operating activities
2005
2005
2005
Notes
10
Year to
Year to
31st March
20031st March
2007
£000
13,057
6,663
(1,497)
(4,413)
(1,042)
(1,335)
1,149
12,582
2006
£000
12,701
4,889
(1,140)
(2,357)
183
(3,668)
2,070
12,678
Profit before income tax
Depreciation
Interest received
Excess of employer pension contributions over income statement charge
(Increase)/decrease in inventories
Increase in receivables
Increase in payables
Net cash inflow from operating activities
Notes to the accounts are on pages 17 to 25.
16
A n n u a l
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N o t e s t o t h e A c c o u n t s
convention, except where
adjusted for revaluations of
certain assets, and in
accordance with applicable
Accounting Standards and
those parts of the Companies
Act 1985 applicable to
companies reporting under
IFRS. A summary of the
principal group IFRS
accounting policies is set out
below.
Basis of consolidation
The consolidated income statement and
balance sheet include the accounts of the
parent company and its subsidiaries
made up to the end of the financial year.
These subsidiaries include William Lee
Limited and CNC Speedwell Limited,
both of which are 100% owned and are
based in the UK.
Business combinations
and goodwill
tangible
Shares issued as consideration for the
acquisition of companies have a fair value
attributed to them, which is normally their
market value at the date of acquisition,
are
assets
Net
consolidated at a fair value to the group
at the date of acquisition. All changes to
these assets and liabilities, and the
resulting gains and losses that arise after
the
the group has gained control of
subsidiary, are credited and charged to
the post-acquisition income statement.
acquired
Under UK GAAP, goodwill arising on
acquisitions prior to 1998 was written off
to reserves. There have been no
acquisitions since 1998. Following the
exemption in IFRS 1 this treatment has
continued to be followed.
Basis of accounting
The financial information
presented in these accounts
has been prepared on the
basis of all International
Financial Reporting Standards
(‘IFRS’), including International
Accounting Standards (‘IAS’)
and interpretations issued by
the International Accounting
Standards Board (‘IASB’) and
its committees, and as
interpreted by any regulatory
bodies applicable to the group
published by 31st March 2007
and endorsed by the EU. These
are subject to ongoing
amendment by the IASB and
subsequent endorsement by
the European Commission and
are therefore subject to
possible change. Further
standards and interpretations
may also be issued that will be
applicable for financial years
beginning on or after 1st April
2007 or that are applicable to
later accounting periods but
may be adopted early.
The preparation of financial
statements in accordance with
IFRS requires the use of
certain accounting estimates.
It also requires management to
exercise its judgement in the
process of applying the group’s
accounting policies.
The primary statements
within the financial information
contained in this document
have been presented in
accordance with IAS 1,
‘Presentation of Financial
Statements’.
The accounts are prepared
under the historical cost
Revenue recognition
Revenue, which excludes value added tax
and intra-group sales,
represents the
invoiced value of goods and services sold
to customers. Appropriate provisions for
are
returns
deducted from revenue as appropriate.
The group has no barter transactions.
allowances
other
and
Under IAS 18 ‘Revenue’ the group’s
revenue has been recognised when
goods have been dispatched.
Post-retirement benefits
are
the
gains
charged
type. Under
Two of the Group’s pension plans are of a
defined benefit
IAS 19
‘Employee Benefits’
employer’s
portion of the current service costs and
to
curtailment
operating profit for these plans, with the
interest cost net of the expected return
on assets in the plans also being credited
to operating profit. Actuarial gains and
losses are recognised directly in equity, in
the statement of recognised income and
expenditure, and the balance sheet
reflects the schemes’ surplus or deficit at
the balance sheet date. A full valuation is
the
tri-annually
carried
projected unit credit method.
using
out
Payments to the defined contribution
scheme are charged to the income
statement as they become payable.
Property, plant and
equipment
IAS 16 ‘Property, Plant and
Under
Equipment’ assets are held at cost less
accumulated depreciation. Depreciation
is provided on property, plant and
equipment, other than freehold land and
assets in the course of construction, at
rates calculated to write off the cost of
each asset on a straight-line basis over its
expected useful life as follows:
i.
ii
Freehold buildings over 50 years.
Leasehold land and buildings over 50
years or
the lease,
the period of
whichever is less.
iii Plant and equipment over a period of
3 to 14 years.
The group annually reviews the
assessment of residual values and useful
lives in accordance with IAS 16.
A n n u a l
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17
N o t e s t o t h e A c c o u n t s
Inventories
In accordance with IAS 2 ‘Inventories’ the
group’s inventories are valued at
the
lower of cost on a first in, first out basis
and net realisable value. Cost includes a
proportion of production overheads
based on normal
levels of activity.
Provision is made for obsolete and slow-
moving items.
Cash and cash
equivalents
Cash and cash equivalents includes cash
in hand, deposits at call with banks and
other
liquid
investments.
short-term
highly
Foreign currencies
Assets and liabilities in foreign currencies
are translated at the mid-market rates of
exchange ruling at
the balance sheet
date. Exchange differences are dealt with
through the income statement.
Financial assets
Financial assets are recognised when the
group becomes party to the contracts
that give rise to them and are classified
as available for sale financial assets under
the requirements of IAS 39.
Financial risk
management
The group’s operations bring about a
include
variety of
fluctuations in foreign currency, liquidity,
interest rates and credit risk.
risks that
financial
The board of directors has the overall
responsibility for the risk management
policies applied by the group.
a) Foreign exchange risk
As a result of the group’s geographical
presence and operations, it is exposed to
foreign currency risks primarily with
respect to the euro. The group requires its
operating units to apply transactional
hedging for highly probable sales receipts
and purchase commitments denominated
in currencies other
than the units’
functional currency. Operating units may
enter into forward currency contracts for
a period of up to twelve months directly
with their relationship banks. The group,
however, does not hedge account for the
cash flow hedge instruments.
Income tax is provided for using current
rates.
b) Interest rate risk
The group maintains a policy to minimise
interest rate risk on its deposits. As the
group currently has net cash, interest rate
risk is managed without the need to use
derivative financial instruments.
c) Credit risk
is
no
there
ensure
The group regularly reviews its operations
significant
to
concentration of credit risk. The group
policy requires appropriate credit checks
to be carried out on potential customers
prior to trading. The amount of exposure
to an
to any counterparty is subject
approved limit, which is reviewed by local
management.
d) Liquidity risk
The group maintains a mixture of short-
term, uncommitted and medium-term,
committed facilities to ensure a sufficient
its
level of
business operations.
funds are available for
e) Price risk
The group does not have derivative
financial instruments which expose it to
price risk.
Current and deferred tax
Deferred tax is provided using the liability
method. Deferred income tax assets are
recognised to the extent
is
probable that future taxable profit will be
available against which the temporary
differences can be utilised.
that
it
In the holding company and its
subsidiaries the liability is assessed with
reference to the individual company. On
consolidation, the liability is assessed
with reference to the group as a whole.
Deferred tax is measured at
the
average tax rates that are expected to
apply in the periods in which the
temporary differences are expected to
reverse, based on tax rates and laws that
have been enacted or substantially
enacted by the balance sheet date.
Dividends
The final dividend is only recognised at
the point it is declared and approved by
the shareholders at the Annual General
Meeting. Interim dividends are recognised
on payment.
Standards, intepretations
and amendments to
published standards that
are not yet effective.
The following standards have not been
adopted in the financial statements. In
each case the potential impact has been
noted.
IFRS 7 Financial Instruments (effective for
periods beginning on 1 January 2007) —
disclosure impact only.
IFRS 8 Operating Segments (effective for
periods beginning on 1 January 2009 not
endorsed by the EU) — disclosure impact
only.
IAS 1 — Amendment — Capital
periods
(effective
Disclosures
beginning on 1 January 2007) —
disclosure impact only.
for
under
restatement
IFRIC 7 Applying the
Financial
approach
Reporting in Hyperinflationary Economies
(effective for periods beginning on
1 March 2006) — no impact.
IAS 29
IFRIC 8 Scope of IFRS 2 (effective for
periods beginning on 1 May 2006) — no
impact.
IFRIC 9 Reassessment of embedded
periods
(effective
derivatives
beginning on 1 June 2006) — no impact.
for
IFRIC 10 Interim Financial Reporting and
Impairment
periods
beginning on 1 November 2006) — no
impact.
(effective
for
IFRIC 11 & IFRS 2 — Group and Treasury
Share Transactions (effective for periods
beginning on 1 March 2006) — no
impact.
12
concession
Service
IFRIC
arrangements
for periods
(effective
beginning on 1 January 2008) — no
impact.
18
A n n u a l
R e p o r t
2 0 0 7
2 Segment information
The geographical analysis of revenues by destination for the year is as follows:
United Kingdom
Sweden
Rest of Europe
North and South America
Other
2007
£000
30,321
17,145
37,377
1,375
12
86,230
2006
£000
27,034
14,544
34,062
1,056
—
76,696
All the turnover arises in the United Kingdom from the group’s continuing principal activity, which the directors believe to be the only class
of business carried out by the group.
3 Profit from operations
This has been arrived at after charging/(crediting):
Staff costs (note 4)
Depreciation of property, plant and equipment
Operating lease expense
— Plant and machinery
Fees payable to the company’s auditor for the audit of the company’s annual accounts
Fees payable to the company’s auditor for other services:
The audit of the company’s subsidiaries
Tax services
Profit on disposal of fixed assets
4 Employee information
Average number of employees during the year was:
Production
Management and administration
Staff costs (including directors) comprise:
Wages and salaries
Short-term non-monetary benefits
Defined contribution pension costs
Defined benefit pension cost (note 5)
Employer’s national insurance contributions and similar taxes
2007
£000
31,381
6,663
216
20
21
8
62
2007
900
90
990
2007
£000
27,302
410
589
413
2,667
31,381
2006
£000
28,257
4,889
207
20
20
12
44
2006
870
95
965
2006
£000
24,689
290
164
726
2,388
28,257
5 Pensions
The group operates two pension schemes providing benefits based on final pensionable pay. These schemes are closed to new entrants.
The assets are independent of the finances of the group and are administered by Trustees.
The latest actuarial valuation was made as at 6th April 2005 using the attained age method. It assumed that the rate of return on
investments was 6.25% per annum for pre-retirement and 4.75% per annum for post-retirement, and the rate of increase in wages and
salaries was 4.4% per annum and price inflation was 2.9%.
The next actuarial valuation is due as at 6th April 2008.
In addition, the group operates a money purchase pension scheme whereby contributions are invested through individual accounts
under an insurance policy administered by Trustees.
Composition of the scheme
The group operates defined benefit schemes (in addition to a defined contribution scheme) in the UK. Full actuarial valuations of the
defined benefit schemes were carried out at 6th April 2005 and updated to 31st March 2007 using the projected unit method by a qualified
independent actuary. The service cost has been calculated using the projected unit method. The major assumptions used by the actuary
were (in nominal terms):
Rate of increase in salaries
Rate of increase of pensions in payment
Discount rate
Inflation assumption
2005
3.9%
2.9%
5.4%
2.9%
2007
4.2%
3.2%
5.4%
3.2%
2006
3.9%
2.9%
5.0%
2.9%
A n n u a l
R e p o r t
2 0 0 7
19
N o t e s t o t h e A c c o u n t s
continued
5 Pension disclosures under IAS 19
Change in benefit obligation
Benefit obligation at beginning of year
Current service cost
Interest cost
Plan participants’ contributions
Actuarial (gain)/loss
Benefits paid
Benefit obligation at end of year
Change in plan assets
Fair value of plan assets at beginning of year
Expected return on plan assets
Actuarial gain/(loss)
Employer contribution
Member contributions
Benefits paid
Fair value of plan assets at end of year
Funded status
Effect of paragraph 58(b) limit
Net amount recognised in the balance sheet
Components of pension cost
Current service cost
Interest cost
Expected return on plan assets
Total pension cost recognised in the income statement (note 4)
Total pension cost recognised in the statement of recognised income and expense
Plan assets
The weighted average assets allocations at the year end were as follows:
Assets category
Equities
Bonds
Real estate
Other
Other
2007
£000
38,872
539
1,939
387
(1,875)
(1,088)
38,774
36,959
2,065
(27)
4,826
387
(1,088)
43,122
4,348
(4,348)
—
Year to
31 March
2007
£000
539
1,939
(2,065)
413
1,848
Plan assets
at 31 March
2007
£000
71%
22%
4%
3%
100%
2006
£000
33,949
552
1,845
393
2,674
(541)
38,872
27,692
1,671
4,661
3,083
393
(541)
36,959
(1,913)
—
(1,913)
Year to
31 March
2006
£000
552
1,845
(1,671)
726
1,987
Plan assets
at 31 March
2006
£000
68%
26%
1%
5%
100%
To develop the expected long-term rate of return on assets assumption, the company considered the current level of expected returns on
risk-free investments (primarily government bonds), the historical level of risk premium associated with the other asset classes in which the
portfolio is invested and the expectations for future returns of each asset class. The expected return for each asset class was then
weighted based on the target asset allocation to develop the expected long-term rate of return on assets assumption for the portfolio. This
resulted in the selection of the 5.5% (2006 – 6.0%) assumption.
20
A n n u a l
R e p o r t
2 0 0 7
5 Pension disclosures under IAS 19 continued
Actuarial return on plan assets
Weighted average assumptions used to determine benefit obligations:
Discount rate
Rate of compensation increase
Weighted average assumptions used to determine net pension cost:
Discount rate
Expected long-term return on plan assets
Rate of compensation increase
History of experience gains and losses
Financial year ended in:
Difference between expected and actual return on scheme assets:
amount
percentage of scheme assets
Experience gains and losses on scheme liabilities:
amount
percentage of scheme assets
Total gains and losses:
amount
percentage of scheme assets
6
Finance income
Interest on short-term deposits
Income from listed investments
Other
7
Income tax
Corporation tax based on a rate of 30% (2006 – 30%)
UK Corporation tax
Current tax on profits for the year
Adjustments to tax charge in respect of prior periods
Deferred tax
Current year origination and reversal of temporary differences
Prior year deferred tax movement
Taxation on profit on ordinary activities
Profit on ordinary activities before tax
Profit on ordinary activities at the standard rate of corporation tax in the UK of 30% (2006 – 30%)
Effect of:
Expenses not deductible for tax purposes
Franked investment income
Adjustment to tax charge in respect of prior periods
Adjustment to deferred tax charge in respect of prior periods
Total tax charge for period
Effective rate of tax (%)
2007
£000
2,038
5.4%
4.2%
5.0%
5.5%
3.9%
2006
£000
6,332
5.00%
3.90%
5.40%
6.00%
3.90%
2007
£000
2006
£000
(27)
0%
4,661
13%
2005
£000
1,369
5%
(1,875)
2,674
(5%)
7%
1,266
4%
1,848
5%
1,987
5%
103
0%
2007
£000
1,322
30
145
1,497
2007
£000
2,225
(292)
1,933
1,654
60
3,647
13,057
3,917
13
(51)
(292)
60
3,647
27.93
2006
£000
1,081
35
24
1,140
2006
£000
3,475
62
3,537
532
(123)
3,946
12,701
3,810
207
(10)
62
(123)
3,946
31.07
.
A n n u a l
R e p o r t
2 0 0 7
21
N o t e s t o t h e A c c o u n t s
continued
8 Dividends
Final paid of 6.67p per share for the year ended 31st March 2006 (2005 – 6.35p)
Interim paid of 2.58p per share (2006 – 2.53p)
2007
£000
2,910
1,126
4,036
2006
£000
2,771
1,104
3,875
The directors are proposing a final dividend of 6.94 pence (2006 – 6.67 pence) per share totalling £3,028,000 (2006 – £2,910,000). This
dividend has not been accrued at the balance sheet date.
9 Earnings per share
Earnings per share is calculated on the profit on ordinary activities after taxation of £9,410,000 (2006 – £8,755,000) and on the weighted
average number of shares in issue at the end of the year of 43,632,068 (2006 – 43,632,068).
There are no share options, hence the diluted earnings per share is the same as above.
10 Property, plant and equipment
Cost
At 1st April 2006
Additions during year
Disposals
At 31st March 2007
Depreciation and amounts written off
At 1st April 2006
Charge for year
Disposals and adjustments
At 31st March 2007
Net book values
At 31st March 2007
At 31st March 2006
Cost
At 1st April 2005
Additions during year
Disposals
At 31st March 2006
Depreciation and amounts written off
At 1st April 2005
Charge for year
Disposals and adjustments
At 31st March 2006
Net book values
At 31st March 2006
At 31st March 2005
Land and
buildings
£000
10,955
1,561
—
12,516
1,712
306
—
2,018
10,498
9,243
9,812
1,143
—
10,955
1,525
187
—
1,712
9,243
8,287
Plant
and other
equipment
£000
61,237
8,076
(1,138)
68,175
37,914
6,357
(1,093)
43,178
24,997
23,323
60,026
3,158
(1,947)
61,237
35,150
4,702
(1,938)
37,914
23,323
24,876
Total
£000
72,192
9,637
(1,138)
80,691
39,626
6,663
(1,093)
45,196
35,495
32,566
69,838
4,301
(1,947)
72,192
36,675
4,889
(1,938)
39,626
32,566
33,163
The net book value of group land and buildings includes £1,625,000 (2006 – £1,625,000) for land which is not depreciated. Land and
buildings include £359,000 for property held on long leases (2006 – £359,000).
11 Financial assets
Listed investments at market value
2007
£000
823
2006
£000
1,139
22
A n n u a l
R e p o r t
2 0 0 7
12 Inventories
Raw materials
Work in progress
Finished goods
13 Trade and other receivables
Due within one year:
Trade receivables
Other receivables
Prepayments
14 Trade and other payables
Current trade and other payables:
Trade payables
Social security
Other payables
Accruals and deferred income
1,418
2,140
5,45
1,418
2,140
5,45
50
9
50
9
1,418
50
2007
£000
1,458
2,672
2,188
6,318
2007
£000
18,368
1,778
1,638
21,784
2007
£000
8,004
1,682
326
6,200
2,140
5,45
9
16,212
2006
£000
1,349
2,152
1,775
5,276
2006
£000
16,419
1,624
2,406
20,449
2006
£000
6,892
1,416
331
6,424
15,063
15 Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 30% (2006 – 30%). The movement
on the deferred tax account is shown below:
Deferred tax — net
At 1st April 2006
Taken to equity
Charge
At 31st March 2007
1,418
5,45
50
9
2007
£000
1,207
(780)
1,714
2,141
2006
£000
149
649
409
1,207
Deferred tax assets in 2006 have been recognised in respect of all tax losses and other temporary differences giving rise to deferred tax
assets because it is probable that these assets will be recovered.
The movement in deferred tax assets and liabilities during the year are shown below:
Deferred tax liabilities
At 1st April 2006
Charged to income statement
Charged to statement of recognised income and expense
At 31st March 2007
Accelerated
tax depreciation
£000
3,330
(223)
—
3,107
Other
£000
(1,549)
626
(43)
(966)
Total
£000
1,781
403
(43)
2,141
A n n u a l
R e p o r t
2 0 0 7
23
N o t e s t o t h e A c c o u n t s
continued
15 Deferred tax continued
Deferred tax assets
At 1st April 2006
Taken to equity
Taken to income statement
At 31st March 2007
At 31st March 2006
Pensions
£000
574
737
(1,311)
—
574
Total
£000
574
737
(1,311)
—
574
The utilisation of the deferred tax asset is dependent on future taxable profits being in excess of the profits arising from the reversal of
existing taxable temporary differences.
The deferred tax charged to equity during the year is as follows:
Tax on actuarial (gains)/losses
Tax on change in fair value of available for sale financial assets
Tax on items taken directly to reserves
16 Share capital
Authorised 50,000,000 10p ordinary shares
Allotted and fully paid 43,632,068 10p ordinary shares
17 Statement of changes in shareholders’ equity
1,418
2,140
5,45
1,418
2,140
50
9
50
2007
£000
(737)
(43)
(780)
2007
£000
5,000
4,363
At 1st April 2006
Profit retained
Dividends
Changes in fair value of available
for sale financial assets
Actuarial gains/(losses) on pension schemes
Tax on items taken to reserves
At 31st March 2007
At 1st April 2005
Profit retained
Dividends
Changes in fair value of available
for sale financial assets
Actuarial gains on pension schemes
Tax on items taken to reserves
At 31st March 2006
Share
capital
£000
4,363
—
—
—
—
—
4,363
4,363
—
—
—
—
—
4,363
Share Capital redemption
reserve (b)
£000
13
—
—
premium (a)
£000
874
—
—
Retained
earnings (c)
£000
61,875
9,410
(4,036)
—
—
—
874
874
—
—
—
—
—
874
—
—
—
13
13
—
—
—
—
—
13
(143)
(2,500)
780
65,386
55,481
8,755
(3,875)
176
1,987
(649)
61,875
a) Share premium — Amount subscribed for share capital in excess of nominal value.
b) Capital redemption reserve — Amounts transferred from share capital on redemption of issued shares.
c) Retained earnings — Cumulative net gains and losses recognised in the consolidated income statement.
18 Commitments
Capital commitments contracted for by the
group but not provided for in the accounts
2,140
2007
£000
3,283
2006
£000
596
53
649
2006
£000
5,000
4,363
Total
equity
£000
67,125
9,410
(4,036)
(143)
(2,500)
780
70,636
60,731
8,755
(3,875)
176
1,987
(649)
67,125
2006
£000
1,637
24
A n n u a l
R e p o r t
2 0 0 7
19 Financial instruments
a) Foreign exchange risk
The group had no outstanding foreign currency forward contracts at 31st March 2007 (2006 – £Nil).
b) Interest rate risk
The currency and interest profile of the group’s financial assets and liabilities are as follows:
Sterling
$US
Euro
Sterling
$US
Euro
Sterling
Euro
Floating rate
assets
2007
£000
430
1
98
Fixed rate
assets
2007
£000
24,741
—
182
529
Floating rate
assets
2006
£000
875
—
86
961
24,923
Fixed rate
assets
2006
£000
25,424
—
1,301
26,725
Interest free
assets
2007
£000
13,151
—
5,217
18,368
Interest free
assets
2006
£000
11,175
55
5,189
16,419
Interest free
liabilities
2007
£000
7,669
335
8,004
Total
£000
38,322
1
5,497
43,820
Total
£000
37,474
55
6,576
44,105
Interest free
liabilities
2006
£000
6,406
486
6,892
Fixed rate assets attracted interest rates between 5% to 5.56% (2006 – 4.5% to 4.62%) on sterling deposits and interest rates of 3.39%
(2006 – 2.36%) on euro deposits.
Floating rate assets consisted of overnight cash at bank at nominal interest rates.
c) Credit risk
All cash and cash equivalents are held with financial institutions. The directors do not consider there to be any concentration of credit risk.
d) Liquidity risk
The group has unused bank overdraft and foreign exchange facilities amounting to £10,000,000 (2006 – £10,000,000) which are reviewed
on an annual basis.
A n n u a l
R e p o r t
2 0 0 7
25
F i v e Y e a r R e v i e w — u n a u d i t e d
For the years ended 31st March
2007
IFRS
£000
2006
IFRS
£000
2005
IFRS
£000
2004
UK GAAP
£000
2003
UK GAAP
£000
Trading results
Revenue
Profit before tax
Profit after tax
Dividends
Balance sheet summary
Equity
Share capital
Reserves
Total equity
Assets
86,230
76,696
69,037
61,176
59,895
13,057
12,701
9,410
4,036
8,755
3,875
9,632
6,792
3,704
8,693
6,079
3,678
5,694
4,145
3,573
4,363
66,273
70,636
4,363
62,762
67,125
4,363
56,368
60,731
4,363
54,772
59,135
4,363
52,371
56,734
Property, plant and equipment
35,495
32,566
33,163
31,043
32,067
Financial assets
Deferred tax asset
Current assets
Total liabilities
823
—
36,318
53,554
1,139
574
34,279
53,411
984
1,877
36,024
47,314
704
—
31,747
43,617
704
—
32,771
42,669
(19,236)
(20,565)
(22,607)
(16,229)
(18,706)
70,636
67,125
60,731
59,135
56,734
Dividends and earnings
Pence per share paid and proposed
Number of times covered
9.52
2.3
9.20
2.3
8.79
1.8
8.43
1.6
8.19
1.2
Earnings per share — basic and diluted
21.57p
20.07p
15.57p
13.93p
9.50p
The main changes from UK GAAP to IFRS relate to pensions, financial assets and taxation.
26
A n n u a l
R e p o r t
2 0 0 7
P a r e n t C o m p a n y A c c o u n t s U n d e r U K G A A P
As noted on page 11, the company has elected to prepare its financial statements under UK GAAP
P a r e n t C o m p a n y B a l a n c e S h e e t
31st March 2007
Fixed assets
Tangible assets
Investments
Current assets
Stocks
Debtors
Short-term deposits
Cash at bank and in hand
Creditors — amounts falling due within one year
Net current assets
Total assets less current liabilities
Provisions for liabilities
Capital and reserves
Called up share capital
Share premium
Capital redemption reserve
Profit and loss account
Shareholders’ funds
2005
Notes
4
5
6
7
8
9
10
11
11
11
2007
£000
13,370
6,104
3,780
19,589
15,892
428
39,689
12,524
27,165
46,639
(97)
46,542
4,363
874
13
41,292
46,542
2006
£000
13,749
6,420
3,104
15,934
19,875
168
39,081
12,337
26,744
46,913
—
46,913
4,363
874
13
41,663
46,913
The parent company accounts on pages 27 to 32 were approved and authorised for issue by the board of directors on 20th June 2007, and
were signed on its behalf by:
B. J. Cooke
J. C. Roby
Chairman
Finance Director
Notes to the accounts are on pages 28 to 32.
A n n u a l
R e p o r t
2 0 0 7
27
N o t e s t o t h e P a r e n t C o m p a n y A c c o u n t s
The Directors’ report is on pages 5 to 6 of the Annual Report and Accounts
1 Accounting policies
Stocks
Basis of accounting
The accounts are prepared under the
historical cost convention except for
revaluation of certain financial
instruments as required by FRS26 and
in accordance with applicable UK
Accounting Standards and the
Companies Act 1985.
Depreciation
Depreciation is calculated on the straight-
line basis to write off the initial cost of
fixed assets at
the following rates
per annum:
Buildings
Plant and other
equipment
2%
7% to 33%
Freehold land is not depreciated.
Pension costs
The cost of providing retirement pensions
and related benefits is charged to the
profit and loss account over the periods
benefiting from the employees’ services
in accordance with FRS 17.
In the
company, the defined benefit schemes
are treated as multi-employee schemes.
Turnover
(less
sales
Turnover is the aggregate of the invoiced
and
values of
returns
charged
allowances)
external
to
customers of
the company, excluding
value added tax. Turnover is recognised
when goods are dispatched.
Stock and work in progress have been
consistently valued at the lower of cost
and net realisable value. The valuation of
work in progress and finished stocks
includes appropriate manufacturing and
works overheads computed on the basis
of normal activity.
Foreign currencies
Monetary assets and liabilities denominated
in foreign currencies are translated at the
rate of exchange ruling at the balance sheet
date. Transactions in foreign currencies are
recorded at the rate ruling at the date of the
transaction, all differences being taken to
the profit and loss account.
Deferred tax
Deferred tax is recognised in respect of
all timing differences that have originated
but not reversed at the balance sheet
date where transactions or events that
result in an obligation to pay more tax in
the future or a right to pay less tax in the
future have occurred at the balance sheet
date. Timing differences are differences
between the company’s taxable profits
and its results as stated in the accounts.
Deferred tax is measured at
the
average tax rates that are expected to
apply in the periods in which the timing
differences are expected to reverse,
based on tax rates and laws that have
been enacted or substantially enacted by
the balance sheet date. Deferred tax is
measured on a non-discounted basis.
Investments
Listed investments are accounted for at
fair value in accordance with FRS 26
Instruments: Measurement’.
‘Financial
Investments in subsidiaries are held at
cost
impairment
annually.
and reviewed for
Financial instruments
a) Foreign exchange risk
As a result of the company’s geographical
presence and operations, it is exposed to
foreign currency risks primarily with
respect to the euro. The company may
enter into forward currency contracts for
a period of up to twelve months directly
with its relationship banks. The company,
however, does not hedge account for the
cash flow hedge instruments,
b) Interest rate risk
The company maintains a policy to
minimise interest rate risk on its deposits.
As the company currently has net cash,
interest rate risk is managed without the
need
financial
instruments.
derivative
use
to
c) Credit risk
there
regularly
to ensure
reviews
is
its
The company
operations
no
significant concentration of credit risk.
The policy requires appropriate credit
checks to be carried out on potential
customers prior to trading. The amount of
exposure to any counterparty is subject
to an approved limit, which is reviewed by
local management.
d) Liquidity risk
The company maintains a mixture of
short-term, uncommitted and medium-
term, committed facilities to ensure a
sufficient level of funds are available for
its business operations.
e) Price risk
The company does not have derivative
financial instruments which expose it to
price risk.
28
A n n u a l
R e p o r t
2 0 0 7
2 Company profit and loss account
Castings P.L.C. has taken advantage of section 230(3) of the Companies Act 1985 and has not included its own profit and loss account in
these accounts. The company’s loss after tax was £228,000 (2006 – profit £606,000).
The profit and loss account includes £21,000 (2006 – £20,000) for audit fees.
3 Dividends
Final paid of 6.67p per share for the year ended 31st March 2006 (2005 – 6.35p)
Interim paid of 2.58p per share (2006 – 2.53p)
2007
£000
2,910
1,126
4,036
2006
£000
2,771
1,104
3,875
The directors are proposing a final dividend of 6.94 pence (2006 – 6.67 pence) per share totalling £3,028,000 (2006 – £2,910,000). This
dividend has not been accrued at the balance sheet date.
4
Fixed assets
Cost
At 1st April 2006
Additions during year
Disposals
At 31st March 2007
Depreciation and amounts written off
At 1st April 2006
Charge for year
Disposals and adjustments
At 31st March 2007
Net book values
At 31st March 2007
At 31st March 2006
Land and
buildings
£000
7,784
1,455
—
9,239
1,275
219
—
1,494
7,745
6,509
Plant
and other
equipment
£000
22,810
667
(223)
23,254
15,570
2,274
(215)
17,629
5,625
7,240
Total
£000
30,594
2,122
(223)
32,493
16,845
2,493
(215)
19,123
13,370
13,749
The net book value of land and buildings includes £1,225,000 (2006 – £1,225,000) for land which is not depreciated. Land and buildings
include £359,000 for property held on long leases (2006 – £359,000).
5
Investments
Subsidiary companies
At cost
Listed investments at market value
2007
£000
5,281
823
6,104
2006
£000
5,281
1,139
6,420
The company owns 100% of the issued share capital of William Lee Limited, CNC Speedwell Limited and W.H. Booth & Co. Limited,
companies which operate in the United Kingdom. William Lee Limited supplies spheroidal graphite iron castings from Dronfield, Sheffield
and CNC Speedwell Limited is a machinist operation. W.H. Booth & Co. Limited does not trade and is dormant.
A n n u a l
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29
N o t e s t o t h e P a r e n t C o m p a n y A c c o u n t s
continued
6 Stocks
Raw materials
Work in progress
Finished goods
7 Debtors
Due within one year:
Trade debtors
Amounts owed by subsidiary companies
Other debtors
Prepayments
Deferred tax asset (note 9)
8 Creditors
Due within one year:
Trade creditors
Amounts owed to subsidiary companies
Corporation tax
Other taxation and social security
Other creditors
Accruals
9 Provisions for liabilities
Deferred taxation
At 1st April 2006
Taxation deferred this year
At 31st March 2007
Deferred tax is provided as follows:
Accelerated capital allowances
Other timing differences
The deferred tax asset has been shown in debtors (note 7).
10 Called up share capital
Authorised 50,000,000 10p ordinary shares
Allotted and fully paid 43,632,068 10p ordinary shares
1,418
2,140
5,45
1,418
1,418
2,140
1,418
5,45
50
9
50
50
50
9
1,418
50
2,140
2,140
2,140
5,45
2,140
5,45
2,140
5,45
1,418
2,140
2007
£000
406
1,886
1,488
3,780
2007
£000
13,596
3,348
1,769
876
—
19,589
2007
£000
4,277
2,782
361
758
182
4,164
9
12,524
2007
£000
(107)
204
97
1,006
(909)
97
2007
£000
5,000
4,363
9
9
50
2006
£000
415
1,491
1,198
3,104
2006
£000
12,407
255
1,621
1,544
107
15,934
2006
£000
3,673
2,578
766
757
183
4,380
12,337
2006
£000
279
(386)
(107)
1,390
(1,497)
(107)
2006
£000
5,000
4,363
30
A n n u a l
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11 Reserves
At 1st April 2006
(Loss)/profit retained
Changes in fair value of investments
At 31st March 2007
Share
capital
£000
4,363
—
—
4,363
Share Capital redemption
reserve
£000
13
—
—
premium
£000
874
—
—
Profit and
loss account
£000
41,663
(228)
(143)
874
13
41,292
12 Reconciliation of movements in shareholders’ funds
Profit for the year
Changes in fair value of investments
Dividends
Net addition to shareholders’ funds
Opening shareholders’ funds
Closing shareholders’ funds
13 Employee information
Average number of employees during the year was:
Production
Management and administration
Staff costs (including directors) comprise:
Wages and salaries
Short-term non-monetary benefits
Defined contribution pension cost
Defined benefit pension cost
Employer’s national insurance contributions and similar taxes
1,418
1,418
2,140
1,418
2,140
5,45
1,418
1,418
2,140
1,418
1,418
2,140
2,140
2,140
2,140
5,45
2007
£000
3,808
(143)
(4,036)
(371)
46,913
46,542
2007
443
32
475
2007
£000
13,235
209
161
589
1,272
15,466
50
50
50
9
50
50
50
50
9
Total
equity
£000
46,913
(228)
(143)
46,542
2006
£000
4,481
176
(3,875)
782
46,131
46,913
2006
450
32
482
2006
£000
12,696
208
156
522
1,203
14,785
14 Pensions
It is not possible to identify the company’s share of the underlying assets and liabilities in respect of the group defined benefit schemes on
a consistent and reasonable basis. Contributions to the schemes by the company are based on professional and independent actuarial
advice. During the year the contributions payable by the company to the funds amounted to £589,000 (2006 – £522,000). The last
valuation was performed with an effective date of 6th April 2005. Further details of the schemes are contained in note 5 of the consolidated
accounts of Castings P.L.C.
15 Capital commitments
Authorised, but not provided in the accounts
5,45
9
2007
£000
203
2006
£000
628
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31
N o t e s t o t h e P a r e n t C o m p a n y A c c o u n t s
continued
16 Financial instruments
a) Foreign exchange risk
The company had no outstanding foreign currency forward contracts at 31st March 2007 (2006 – £nil).
b) Interest rate risk
The currency and interest profile of the company’s financial assets and liabilities are as follows:
Sterling
$US
Euro
Sterling
$US
Euro
Sterling
Euro
Floating rate
assets
2007
£000
361
1
66
Fixed rate
assets
2007
£000
15,710
—
182
428
Floating rate
assets
2006
£000
82
—
86
168
15,892
Fixed rate
assets
2006
£000
18,786
—
1,089
19,875
Interest free
assets
2007
£000
9,828
—
3,768
13,596
Interest free
assets
2006
£000
8,621
55
3,731
12,407
Interest free
liabilities
2007
£000
4,080
197
4,277
Total
£000
25,899
1
4,016
29,916
Total
£000
27,489
55
4,906
32,450
Interest free
liabilities
2006
£000
3,187
486
3,673
Fixed rate assets attracted interest rates between 5% to 5.56% (2006 – 4.5% to 4.62%) on sterling deposits and interest rates of 3.39%
(2006 – 2.36%) on euro deposits.
Floating rate assets consisted of overnight cash at bank at nominal interest rates.
c) Credit risk
All cash and cash equivalents are held with financial institutions. The directors do not consider there to be any concentration of credit risk.
d) Liquidity risk
The company has unused bank overdraft and foreign exchange facilities amounting to £5,500,000 (2006 – £5,500,000) which are reviewed
on an annual basis.
32
A n n u a l
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N o t i c e of M e e t i n g
Notice is hereby given that
the one
hundredth Annual General Meeting of
Castings P.L.C.
(the “Company”) will be
held at Holiday Inn, Birmingham M6, Junc.
7, Chapel Lane, Great Barr, Birmingham,
West Midlands, B43 7BG, on Tuesday,
14th August 2007 at 3.30 p.m.
for the
following purposes:
As ordinary business
1
To receive and adopt
the directors’
report and audited accounts for the
year ended 31st March 2007.
2
3
4
5
6
7
To declare a final dividend.
To re-elect Mr D. J. Gawthorpe as a
director.
To re-elect Mr M. A. Lewis as a director.
To re-elect Mr C. P. King as a director.
To approve the directors’ remuneration
report for the year ended 31st March
2007.
To reappoint BDO Stoy Hayward LLP as
auditors of the Company at a fee to be
agreed with the directors.
To consider and, if thought fit, pass the
following resolutions, of which resolution 8
will be proposed as an ordinary resolution
and resolutions 9 and 10 will be proposed
as special resolutions.
As an ordinary resolution
8
THAT:
(a)
and
the directors be and are hereby
generally
unconditionally
authorised in accordance with
Section 80 of the Companies Act
1985 to exercise all the powers of
the Company to allot
relevant
securities (as defined in the said
Section 80) provided that
the
aggregate nominal value of such
exceed
securities
£636,793,
represents
which
approximately 14.6% of the current
issued
the
Company;
capital
share
shall
not
of
(b)
the foregoing authority shall expire
on 13th August 2012 save that the
Company may before such expiry
into an
make an offer or enter
agreement which would or might
require relevant securities to be
allotted after the expiry of such
period and the directors may allot
relevant securities in pursuance of
any such offer or agreement as if
the authority conferred had not
expired;
(c)
the foregoing authority shall be in
substitution for the authorities given
to the directors under Section 80 of
the Companies Act 1985 on
15th August 2006, which authorities
are accordingly hereby revoked;
(d)
this authority will be put to annual
shareholder approval.
(b)
(c)
As special business
As special resolutions
9
that Act)
THAT the directors be and are hereby
empowered pursuant to Section 95 of
the Companies Act 1985 to allot equity
(within the meaning of
securities
Section 94 of
for cash
to the general authority
pursuant
conferred by the ordinary resolution
numbered 7 set out
in the notice
convening this meeting as if Section
89(1) of the said Act did not apply to
any such allotment provided that this
power shall be limited:
the minimum price which may be paid
for each ordinary share is 10p,
exclusive
of
the
purchase;
expenses
of
the maximum price (exclusive of
expenses) which may be paid for
each ordinary share is an amount
equal to 105% of the average of the
middle market quotations for the
ordinary shares as derived from the
Daily Official List of the London
Stock Exchange Limited for the five
immediately
days
business
preceding the day of purchase;
(a)
(b)
of
to allotments in connection with an
offer of equity securities to the
ordinary
the
shareholders
Company where the securities
respectively attributable to the
interests of
such holders are
proportionate (as nearly as may be
and subject to such exclusions or
other arrangement as the directors
may
appropriate,
necessary or expedient to deal with
any fractional entitlements or with
any legal or practical difficulties in
respect of overseas holders or
otherwise)
respective
numbers of ordinary shares then
held by such shareholders; and
consider
the
to
to the allotment
(otherwise than
pursuant to subparagraph (a) of this
resolution) of equity securities having,
in the case of relevant shares (as
defined in Section 94 of
the
Companies Act 1985), an aggregate
nominal amount, or, in the case of
other equity securities, giving the
right to subscribe for or convert into
relevant shares having an aggregate
nominal amount not exceeding
represents
which
£218,160,
approximately 5% of
the current
issued share capital of the Company,
and shall expire at the conclusion of the
next Annual General Meeting following
the date of this resolution save that the
Company shall be entitled before such
expiry to make an offer or agreement
which would or might require equity
securities to be allotted after such
expiry and the directors shall be entitled
to allot equity securities in pursuance of
such offer or agreement as if the power
conferred hereby had not expired.
and
10 THAT the Company be and is hereby
generally
unconditionally
authorised for the purposes of Section
166 of
the Companies Act 1985 to
make one or more market purchases
(within the meaning of section 163 of
the Companies Act 1985) of any of its
ordinary shares of 10p each (the
“ordinary shares”), provided that:
(a)
the maximum number of ordinary
shares hereby authorised to be
purchased
4,358,844
is
representing 9.99% of the issued
share capital at 31st March 2007;
(d) unless previously revoked or varied,
the authority hereby conferred shall
expire at the conclusion of the next
the
Annual General Meeting of
Company following the date of this
resolution, unless such authority is
renewed on or prior to such date;
(e)
the Company may, before the
expiry of this authority, conclude a
contract
to purchase ordinary
shares under this authority which
will or may be executed wholly or
partly after such expiry and may
make a purchase of ordinary shares
pursuant to any such contract, as if
such authority had not expired.
The record date for payment of the final
dividend is 27th July 2007. Assuming the final
dividend is approved by the members,
the dividend will be paid on 17th August
2007.
By order of the board
J. C. ROBY
Company Secretary
Registered Office:
Lichfield Road,
Brownhills,
West Midlands, WS8 6JZ.
20th June 2007
the Company’s
Note:
Any member of the company entitled to
this meeting may
attend and vote at
appoint one or more proxies, who need not
also be a member, to attend and vote, on a
poll, in his stead. The instrument appointing
a proxy, including authority under which it is
signed (or a notarially certified copy of such
authority), must be deposited at the offices
of
registrars: Capita
Registrars, The Registry, 34 Beckenham
Road, Kent, BR3 4TU, not less than 48
hours before the time appointed for the
meeting.
To have the right to attend and vote at the
Annual General Meeting a person must be
entered on the register of members on or
before 6.00 p.m. on 12th August 2007
(being not more than 48 hours prior to the
time fixed for the meeting).
A n n u a l
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33
34
A n n u a l
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