AnnuAl report & Accounts 2013 Dewhurst plc FinAnciAl highlights We are a global supplier of quality components to the lift, keypad and rail industries. Revenue £ million 2009 35.8 2010 2011 2012 2013 37.0 41.5 51.6 43.7 eARnInGS PeR SHARe pence 2009 2010 2011 2012 2013 15.70 38.43 40.97 34.35 44.48 Contents Financial highlights Chairman’s statement Dewhurst at a glance Strategic report Financial review Group five year review Board of directors Report of the directors Consolidated financial statements Notes to the accounts Company financial statements Report of the independent auditor Notice of meeting Group companies Advisers and company information 1 2 3 4 10 11 12 13 16 19 38 41 42 43 44 2013 £(000) 2012 £(000) Group revenue £43,698 £51,555 Operating profit* £4,084 £5,605 Earnings per share 15.70p 44.48p Dividends per share 8.00p 12.02p OPeRATInG PROFIT* £ million 2009 2010 2011 2012 2013 4.5 4.9 4.9 5.6 4.1 DIvIDenD PeR SHARe pence 2009 2010 2011 2012 6.06 6.36 6.69 7.02 12.02† 2013 8.00 * Operating profit before goodwill write down, amortisation of acquired intangibles and gain on property disposal † Includes special dividend of 5p per share 1 chAirmAn’s stAtement Dewhurst At A glAnce Acquisition and reorganisation In February this year we acquired a 70% controlling shareholding in Dual Engraving (Dual) based in Perth, Western Australia (WA). Dual provides fixtures, cab interiors and metalwork to the lift industry in WA. Dual complements our existing companies in Australia and allows us to provide improved support for customers across this vast continent. Action has been taken to restructure the transport division in the UK and the Australian lift fixture businesses to improve performance and operational control. Dividends We believe it is prudent to retain a cash reserve for the business and do not intend to change that view. However, one of our objectives is to increase the cash returned to shareholders. Our dividend cover has historically been very conservative, but we have consumed cash on a number of planned investment projects in recent years and the continuing support of the pension scheme. With our current business position we believe we can raise the dividend and still remain relatively conservative. As a result it is our intention to increase the dividend to a level where on average the maximum cover is 4 times earnings per share. Clearly this is subject to the cash position remaining healthy and any exceptional items. In view of these intentions we are proposing to increase the dividend this year despite the disappointing performance. outlook The transport division continues to struggle with weak demand caused by the cutbacks in public sector spending in the UK and we do not expect this to change in the short term. However there are currently definite signs of recovery in some of our major markets, although there is uncertainty about the sustainability of the trend. The UK economy is growing again and North America continues to improve. Conversely Australia has fallen back in the majority of our markets on the East Coast. At the moment this is expected to be a relatively short term dip, but we do feel it will last until at least the half year point. Overall, as long as the recovery maintains its momentum, we feel there is a good opportunity to achieve improved performance in the coming year. the strategic reviews of our businesses this year have been focussed on returning the Group to growth. RICHARD DeWHURst Chairman results Although we had predicted it, it is still disappointing to report a fall in sales and profits. We did expect that the deterioration in customer confidence we detected during 2012 would impact our performance this year. We also warned that keypad sales would fall back after an exceptional 2012. Sales were down 15% to £43.7 million (2012: £51.6 million), operating profit before goodwill write down and amortisation of acquired intangibles was £4.1 million (2012: £5.6 million before exceptional gain on property) and profit before tax was £2.6 million (2012: £5.4 million) down 52%. The primary cause of the fall in sales was the reduction in keypad sales back to normal levels. There was also a significant drop in transport division sales in the UK and a smaller fall in UK lift business sales. In Australia and Asia the fall in sales from continuing businesses was more than offset by the part year contribution from our acquisition in this market. Apart from the acquisition, the other area of growth has been North America, where performance has improved significantly in the last year. It has been a difficult year in a number of respects. But the Group’s employees have shown great flexibility and resilience to help us work our way through this period. I would like to thank them for their contribution to what we have achieved this year. 2 group compAnies the AmericAs canada Dupar Controls usA The Fixture Company Elevator Research Manufacturing Corp. sAles BY region uniteD KingDom Dewhurst Thames Valley Controls Traffic Management Products Cortest europe hungary Dewhurst (Hungary) AsiA china Dewhurst (Hong Kong) AustrAlAsiA Australia Australian Lift Components Lift Material Australia JAS Engineering Dual Engraving 29% united Kingdom 13% europe 9% Asia 27% the Americas 22% Australasia LIFT cOmPOnenTS KeyPADS TRAnSPORT PRODucTS Pushbuttons Indicators Banking terminals Highway products Security Parking equipment Auxiliary equipment Ticketing machines Pushbuttons Lift control and monitoring systems Petrol pumps Indicators and associated products Dewhurst company Dewhurst company Dewhurst company Dewhurst agent Dewhurst agent 3 to the Group are quality measures and on-time deliveries to our customers. operating highlights It has been a very tough year for most operating companies within the Group. After an excellent year last year, we were aware that this year would be much more difficult. All employees though have worked hard during this period and have remained motivated through some difficult times. We have continued to improve our processes, reduce our lead times, focus on our on-time deliveries and work on quality improvements. These advances, coupled with a good number of excellent new products to sell and the feeling that we are selling them into improving markets, ensures that we enter the new financial year in a stronger position. UnIteD KInGDoM Dewhurst uK manufacturing After the excitement of last year with our move to our new premises in Feltham and sales well above forecast, this year was a return to reality. We got on with the hard graft of doing business in the current difficult business environment. Early in the year and having operated for over 12 months in the new facility, we recruited a Continuous Improvement Manager. She has really helped us to be more efficient in our new premises in Feltham, making some good improvements, particularly in the way we manufacture and assemble our fixtures. We have also embarked on a rigorous 5S programme throughout the factory and offices to Sort, Set in Order and Standardise our processes and procedures. This has ensured that we continue to work in a professional environment. Over the last 12 months we have had two significant exhibitions, LiftEx held in London, in May and Interlift, customer-FrienDlY weBsite new functionality for our website is currently being tested internally. our aim is for the customer to have an enhanced purchasing experience, being guided through the selection process. At the end they will have a graphical representation of the pushbutton they have selected. strAtegic report We have supported our commitment to quality with significant investment during the year. DAvID DeWHURst Group Managing Director Business review The company and Group principal activity, in the course of the year, continued to be the manufacture of electrical components and control equipment for industrial and commercial capital goods. The Group maintained its position as a specialist supplier of equipment to lift, transport and keypad sectors. A business review of the Group’s operations is dealt with below in operating highlights and in the Chairman’s Statement on page 2. principal risks and uncertainties The board is informed at every meeting of the principal risks and uncertainties across the Group which could have a material impact on the Group’s long and short term performance and action plans to mitigate these risks. The Group’s risk assessment process is designed to identify, manage and mitigate business risks. Business and operational risks are referred to in the business review. Financial risks, being currency and credit risk are covered within the financial review and the financial instruments note (note 25). Key performance indicators The directors believe that the key financial performance indicators relevant to the Group are earnings per share, adjusted operating profit, profit before tax and return on equity which are stated in the five year review on page 11. The key non-financial performance indicators relevant 4 proDuct expAnsion we have developed a new version of our larger Jumbo button, which is shallower than previous variants but performs better and offers a wider range of features and options. 1m minimum switching operations 10 joules impact resistance 5 strAtegic report continued held in Germany in October. When it comes to product development, exhibitions are a good incentive for focusing attention. This year we have continued to develop our Hall Lantern products and ancillary products for Destination Control. We have launched a new range of UniBlade Lanterns, which are quite striking in their design and easy to install. UniBlade is available as both a Hall Lantern for regular lift installations or as a Lift Identifier for Destination Control Installations. As well as these products we have broadened our range of conventional Hall Lanterns, created a new vandal resistant surface mount faceplate range and made numerous minor improvements to other existing products. As previously indicated, the last financial year was tough for Dewhurst UK Manufacturing and sales were down significantly from the previous year. We had however anticipated this to a certain extent and had already taken significant steps to reduce our overheads, with the result that despite relatively low sales our overall financial performance showed an encouraging improvement. Indications are that the UK Lift Industry, in line with the UK economy as a whole, is improving and we will be working to capitalise on this. remote liFt monitoring customers have told us they want simple access to monitor their lifts from mobile devices. cms Anywhere provides this functionality within an intuitive and easy to use package. thames Valley controls New Product Development was also one of the key activities for TVC during the year. Although they do not exhibit overseas, LiftEx was an important opportunity to showcase new developments at the company and TVC made the most of it. At LiftEx we previewed the successor to our current Ethos microprocessor, Ethos 2. This new processor features a highly intuitive touch screen, which will make both system set up and troubleshooting significantly easier for lift engineers. We are looking for Ethos 2 to come on line during the current financial year. We also launched an upgraded version of our monitoring system platform CMS Anywhere. The look of the screens has been changed to a more modern tabulated view which allows easy viewing over a wider range of platforms such as tablets and mobile devices. There is also a new MAPS facility that enables users to pinpoint the exact location of their lift or escalator 6 and to show its current status. This is particularly useful if a person is trapped in a lift or if a critical escalator has malfunctioned. Our flagship product, Navigator, the Ethos Hall Call Destination System, continues to gain traction in the market and 2013 saw more systems being installed in major modernisation projects in London. Although the UK market has been difficult, TVC has fared better than Dewhurst UK in terms of orders received, so we start the year with a stronger order book than last year. tmp After last year’s solid sales growth, TMP was not immune this year to the difficult environment in the UK and we suffered a reduction in sales. The market continues to be tough and there are some potential code changes which will create challenges but also opportunities for TMP. We have continued to invest heavily in new product development. We launched our Apollo range of sign lights in the first half of the year and we are now promoting these with local authorities. Engineering focus is now back on our core range of products and a new range of bollards is due to be launched early in this financial year. In mid-2013 John Bailey resigned as Managing Director of TMP to pursue other interests, although he remains a non-executive Director of Dewhurst plc. We have not yet found a suitable successor but we are looking to fill the position shortly. Cortest ceased trading during the year. eURoPe Dewhurst hungary Sales in Hungary last year were exceptional. We knew that revenues would fall this year and sales in the year were in line with our expectations. There continues to be pressure on margins and the team in Hungary have worked hard to implement efficiency changes which have been reasonably effective. A great deal of attention is paid to product quality and this year we installed a test laboratory at the plant in Hungary. This allows us to run product validation tests on a continual basis on random units taken straight from the production line. The strong focus on quality has allowed us to achieve a significant reduction in rejects, measured in parts per million by our key customer for the keypad parts. We cannot achieve this alone and our team in Hungary work closely with our supply base to ensure that we have a robust supply chain. Over the years we have suffered significant foreign exchange gains and losses in Hungary. We have now changed our base currency from the Forint to Sterling and we are confident that this will significantly reduce the impact of foreign exchange on the reported results. leD technologY our Apollo signlight was designed to improve the efficiency of lighting a range of different shaped road signs while still being a stylish and attractive addition to the street scene. 50% reduction in energy 100 litres per minute water jet tested 7 strAtegic report continued noRtH AMeRICA Dupar controls Dupar Controls have performed well over the last few years, despite the North American market being quite difficult. This year however the market has improved and Dupar Controls benefitted from that improvement. The growth in the first half of the year was significant enough to create challenges. The team at Dupar Controls were quick to respond and boosted their capacity to ensure that customer expectations continued to be met. It is critical in all our businesses that we achieve a high level of on-time delivery. It is also important that high levels of quality and accuracy are maintained, so when customers receive goods they meet expectations. Dupar Controls and all our other fixtures businesses focus closely on these aspects and we are confident that this strategy is helping us to increase our market share. Much of the product development carried out at Dewhurst UK, is tailored specifically to the requirements of our key export markets, such as North America. Both Dupar Controls and Elevator Research and Manufacturing will be promoting these products heavily during the coming year. elevator research & manufacturing (erm) We made a large number of changes in the business last year, dropping product lines that were no longer profitable. We also relocated the fixture business into a more suitable building and introduced some lean processes into the operation. The results have been encouraging and the business is now on a much sounder footing. There is however a lot more work to be done to bring the operation up to the standard of other fixture businesses around the Group. This will take time to achieve but it should allow ERM to thrive. AUstRALAsIA & AsIA Australian lift components (Alc) It appeared that the Australian market was immune to the downturn that had affected most other parts of the world. Inevitably this could not last forever and during 2013 the business environment turned and became much more difficult. ALC sales dropped significantly as did those of JAS and it became clear that we should merge these two businesses to ensure that we made synergistic savings as the market softened. In 2013 we therefore incorporated JAS into ALC and we now operate with one lift fixture company in New South Wales. This is in reality a more efficient way to operate, has simplified the management structure and will allow us to provide a higher and more consistent level of service to our customers. Although the market has remained difficult through 2013, there are signs that following the election the economy is beginning to pick up. 8 lift material Lift Material obviously experienced the same market uncertainty as ALC. We did have our first full year of sales of the Escalator Handrail Company (EHC) products and we were confident that this would be a strong product line for us which would generate significant sales. The pickup was not quite as fast as we had hoped but nevertheless, we generated good sales of EHC products which reduced the overall impact of the market turndown. The EHC product line takes up a considerable amount of space and it was clear in early 2013 that we had outgrown our Sydney warehouse. We have therefore moved into larger premises, still conveniently located near all the lift companies and with plenty of office and warehouse space to allow us to expand over the medium term. The interest in EHC products continues to build and we are still very confident that this will be a key product line for us over the coming years. expAnDing our oFFer to customers Dual Engraving provide high specification car interiors to the western Australia market. many panels are polished stainless steel or back painted glass and have to be precisely manufactured to fit seamlessly within the lift car. Dual engraving We acquired Dual Engraving in February 2013 and revenues have been generally in line with expectations. Dual Engraving specialise in the design and installation of lift car interiors including the fixtures. They have worked on a large number of the most prestigious new buildings in Perth and have designed some quite spectacular interiors. We have often looked at car interiors as a natural addition to our range and with the acquisition of Dual we have access to the expertise required to carry out this work. It is true to say that Dual’s fortunes are very much linked to the fortunes of Perth. We can look to broaden their reach but certainly in the short term they are dependent on growth in Perth. The city does remain buoyant and we are confident that Dual will contribute significantly to the Group over the coming years. Approved and signed on behalf of the board David Dewhurst Group Managing Director 144 different combinations mADe to meAsure our uniBlade hall lantern is bright and clear from any angle and is also a modular design, which can be easily tailored to fit with any architect’s design scheme for the building lobby. 350º maximum viewing angle 9 FinAnciAl reView In 31 out of the last 32 years the dividend has grown by 5% or more. JAReD sInCLAIR Finance Director trading results Dewhurst had a very difficult trading year with sales down on last year, primarily affected by the decline in transport and keypad sales. The UK transport sector continued to face a very tough and challenging year with sales to local authorities down significantly in bollards and non- destructive testing. As a result TMP has been restructured to reduce its operational costs and Cortest has ceased operation and will be wound up. Last year’s keypad sales were aided by £3.1 million of additional pass through revenue, but even allowing for the loss of these additional sales, the keypad decline was still double digit. However this was anticipated, because we recognised 2012 was an exceptional year for keypad sales due to a customer building up stock. The lift sector maintained overall sales of £31.5 million with the drop in UK and Australian fixture and UK controller sales being partially offset by strong fixture and cab sales in North America along with the additional 8 months sales from the new lift division acquisition Dual Engraving. Overall revenue decreased by 15.2% from £51.6 million to £43.7 million whilst operating profit before goodwill write down, acquired intangible 200 amortisation and the gain on the property disposal fell by 27.1% from £5.6 million to £4.1 million. 400 500 300 100 and so required a further and final goodwill write down. In Sydney we had two companies providing lift fixtures to the local market. We felt that this was a confusion in the market and also we believed operational efficiency and control could be enhanced by merging JAS Engineering (JAS) into Australian Lift Components. With this merger the goodwill at JAS could not really be separately identified, so it has been decided to fully write this goodwill down. More information can be found in note 10 to the accounts. strong cash position Despite a poor operating performance and pension contributions of £1.4 million, cash flow was still good with £3.8 million of cash being generated from operations. The Group spent £1.7 million, as planned, acquiring 70% of Dual Engraving as well as £1.0 million on an enhanced dividend but still ended the year at a strong £10.5 million. We started and finished the year with no borrowing or bank overdraft facility. Pension scheme deficit A more detailed analysis of the retirement benefit fund assets and liabilities movements is reported in note 22 under IAS 19, but this year has seen the scheme deficit decrease by £1.4 million from £11.9 million to £10.5 million. The scheme was closed to future accrual in 2010 and the company has since paid in £1.4 million annually to reduce the deficit. As previously reported the movement in the liability discount rate, which is used to calculate the net present value of future liabilities and is traditionally based upon the 15 year AA bond yields, tends to have the biggest impact on the scheme deficit and this year is no different. With a move back up from 4.0% to 4.3% this one assumption change had approximately a £2.0 million positive impact on the scheme position. We were also assisted this year by improved investment returns. This has meant that, in total over the past 3 years, investment returns have performed broadly as expected. The Group will continue to pay a fixed sum of £1.4 million annually to reduce the defined benefit pension scheme deficit and all recommendations made by the scheme’s shAreholDers’ return Total shareholders’ return over the last five years has been 111% for the ‘A’ shares and 200% for the ordinary shares. 500p 400p 300p 200p 100p goodwill write down TMP’s poor local sales and performance again meant that the company fell short of its original purchase valuation Sept 2008 Sept 2009 Sept 2010 Sept 2011 Sept 2012 Sept 2013 Ordinary share price ‘A’ Ordinary share price GRoUP fIve yeAR RevIeW 2009 £(000) 2010 £(000) 2011 £(000) 2012 £(000) 2013 £(000) Revenue 35,835 36,975 41,487 51,555 43,698 Adjusted operating profit* 4,511 4,871 4,880 5,605 Operating profit Profit before taxation 4,511 4,871 4,424 5,660 4,428 4,827 4,320 5,442 4,084 2,594 2,595 As a percentage of total equity 22.7% 22.9% 19.9% 25.2% 11.9% Taxation Profit after taxation Total equity 1,157 1,339 1,428 1,688 3,271 3,488 2,892 3,754 1,307 1,288 19,480 21,087 21,754 21,564 21,870 Earnings per share, basic and diluted 38.43p 40.97p 34.35p 44.48p 15.70p Dividends per share 6.06p 6.36p 6.69p 12.02p 8.00p * Operating profit before goodwill write down, amortisation of acquired intangibles and gain on property disposal actuary to eliminate the scheme deficit within an agreed timeframe have been fully implemented. treasury policy The Group seeks to reduce or eliminate financial risk to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The policies and procedures operated are regularly reviewed and approved by the board. By varying the duration of its fixed and floating cash deposits, the Group maximises the return on interest earned. With over three quarters of profit before tax earned and held in foreign currencies the Group continues to hedge internally where possible and to consider the need to use derivatives in the form of foreign exchange contracts to manage its currency risk, as reported in note 25. The Group for several years has been particularly aware of the translational currency risk resulting from Dewhurst (Hungary) Kft’s functional currency being Sterling, yet its local reporting currency being Hungarian Forints. As a result from 1 October 2013 Dewhurst (Hungary) Kft’s local reporting currency has been switched to Sterling to reduce the impact of currency risk. Dividends Dividends are accounted for when paid or approved by shareholders, and not when proposed, therefore the proposed final dividend for 2013 has not been accrued at the balance sheet date. The total dividend for 2013 of 8.00p per share is 14% up on 2012 (before last year’s 5p special dividend) and is covered 1.9 times by earnings. Total equity improved from £21.6 million to £21.9 million. There was no change in the number of allotted shares during the year. 10 11 BoArD oF Directors report oF the Directors The directors present their annual report on the affairs of the Group together with the financial statements and auditor’s report for the year ended 30 September 2013. share repurchases The company did not repurchase any shares during the year. results and dividends The trading profit for the year, after taxation, amounted to £1.3 million (2012: £3.8 million). A final dividend on the Ordinary and ‘A’ non-voting ordinary shares of 5.66p per share (2012: 4.68p plus 5.00p special) for the financial year ended 30 September 2013 will be proposed at the Annual General Meeting (AGM) to be held on 4 February 2014. If approved, this dividend will be paid on 20 February 2014 to members on the register at 17 January 2014. An interim dividend of 2.34p per share (2012: 2.34p) was paid on 27 August 2013. A 5p special dividend in addition to the normal final dividend on the Ordinary and ‘A’ non-voting ordinary shares of 4.68p per share which amounted to £834k for the financial year ended 30 September 2012 was approved at the AGM held on 5 February 2013 and was paid on 21 February 2013 to members on the register at 18 January 2013, compared with 4.46p the previous year (£380k). Acquisitions On 4 February 2013, Dual Engraving Pty Ltd, a newly formed and 70% owned Australian subsidiary of Dewhurst plc acquired the business and assets of the partnership trading as Dual Engraving from D.E. Corporate Pty Ltd and Datree Pty Ltd for a maximum cash consideration of A$4.1 million (£2.6 million). The 30% stake is retained by Michael Cook (through D.E. Corporate Pty Ltd) who is a director of Dual Engraving Pty Ltd and is actively involved in the running of the business. post balance sheet events There have been no post balance sheet events since the year end. Directors The members of the board during the year were: Mr R M Dewhurst (chairman) Mr D Dewhurst (group managing director) Mr J C Sinclair Mr R Young Mr J Bailey (non-executive from 8 April 2013) Mr P Tett (non-executive) The directors retiring by rotation at this year’s Annual General Meeting are Mr J Sinclair and Mr J Bailey who, being eligible, offer themselves for re-election. The unexpired period of Mr J Sinclair and Mr J Bailey’s service agreement is less than one year. During the year and at the date of approval of the accounts, the Group maintained liability insurance for all directors. substantial shareholdings At 24 November 2013, the company had been advised of the following beneficial interests in excess of 3% of the ordinary voting share capital (other than the holdings shown under directors’ share interests). Mrs V E Dewhurst Fidelity NorthStar Fund Mrs B Bruce Ms E Dewhurst Mr J H Ridley 651,000 200,000 190,208 175,333 126,000 Directors’ share interests The table below sets out the names of the persons who were directors of the company during the financial year ended 30 September 2013 together with details of their own and their families’ beneficial interests in the shares of the company at that date and corresponding details at 30 September 2012. Mr R M Dewhurst Mr D Dewhurst Mr J C Sinclair Mr R Young Mr J Bailey Mr P Tett 30 September 2013 30 September 2012 ‘A’ ordinary shares ‘A’ ordinary shares Ordinary shares Ordinary shares 494,333 123,666 494,333 123,666 419,595 69,932 419,595 69,932 1,000 1,000 1,000 1,000 – – – – 1,000 1,000 1,000 1,000 – – – – 13 At 30 September 2013 and 30 September 2012 there were no share options allocated to the directors. During the financial year no director was materially interested in any contract which was significant to the Group’s business. On 2 October 2013 Mr R M Dewhurst purchased 2,000 non-voting ‘A’ ordinary shares. richArD Dewhurst BA (Eng Sc), ACMA Chairman, 57, joined in 1985. Previously with Ford Motor Co, Ernst & Whinney Senior Management Consultant. DAViD Dewhurst BSc (Elec Eng) Group Managing Director, 52, joined in 1987. Previously with Holmes & Marchant plc. JAreD sinclAir BSc, ACA Finance Director, 43, joined in 1997. Previously with Moores Rowland, Chartered Accountants, Audit Senior. John BAileY Non-executive Director, 43, joined in 2008. Previously with Brett Landscaping & Building Products, Commercial Director. 12 richArD Young MBA, BSc, CEng, MIET Managing Director – Thames Valley Controls, 57, joined in 1996. Previously with MBM Technology Ltd, Director and General Manager. peter tett MA, MSc Non-executive Director, 74, joined in 2000. Previously with Halma plc, Director. report oF the Directors continued Directors’ emoluments The remuneration of the directors is shown below: Executive directors: Mr R M Dewhurst Mr D Dewhurst Mr J C Sinclair Mr R Young Mr J Bailey (up to 7 April 2013) Non-executive directors: Mr J Bailey (from 8 April 2013) Mr P Tett Salary and fees £(000) Bonus £(000) Benefits in kind £(000) Pension 2013 Total 2012 Total £(000) £(000) £(000) 122 108 89 86 44 10 17 64 55 16 29 8 – – 3 2 – – 1 – – – – 12 13 – – – 189 165 117 128 53 10 17 262 223 140 166 133 – 17 At the same date the register shows interests in excess of 3% of the ‘A’ non-voting ordinary share capital (other than directors’ holdings) of: Mrs V E Dewhurst W B Nominees Ltd Discretionary Unit Fund Schweco Nominees Ltd –16495 Acct Vidacos Nominees Ltd TD Direct Investing Nominees Ltd Ms E Dewhurst 518,000 387,000 350,000 302,500 251,500 217,960 167,416 employee involvement Meetings, chaired by managing directors, are held with employee representatives. The financial position and prospects of the company are discussed together with details of investment and changes in facilities which are planned by management. Opportunity is given at the meetings to question senior executives about matters which concern the employees. health and safety Regular attention is given to health and safety with all reasonable precautions taken to provide and maintain safe working conditions for both employees and visitors alike, which comply with statutory requirements and appropriate codes of practice. In order to minimise the instances of occupational accidents and illnesses detailed policies and risk improvement programmes are regularly updated. employment policies The Group is committed to ensuring that: All employees are treated fairly and equally irrespective of gender, ethnic origin, religion, nationality, marital status, sexuality or disability. 14 The working environment is conducive to achievement and free from sexual harassment and intimidation. Full and fair consideration is given to the employment of disabled persons, having regard to their particular aptitudes and abilities. Wherever possible, continuing employment is provided for employees who become disabled with appropriate arrangements for re-training being made where necessary. The Group has a development policy committing it to the training and continuous development of its employees to develop their full potential and to achieve a more flexible and skilled workforce. Dewhurst plc, the company, achieved IiP (Investors in People) status which was awarded in January 2002 and has since been successfully re-appraised. research and development The Group continues to invest in research and development programmes for new products as well as new processes and technologies to improve overall operational effectiveness. going concern Positive steps to develop sales and control costs have been taken by management to ensure the company has adequate resources to continue in operational existence for the foreseeable future, therefore the directors continue to adopt a going concern basis in preparing the financial statements. Auditor The current directors have taken all the steps that they ought to have taken to make themselves aware of any information needed by the Group’s auditor for the purposes of the audit and to establish that the auditor is aware of that information. The directors are not aware of any relevant audit information of which the auditor is unaware. A resolution will be proposed at the Annual General Meeting to re-appoint Chantrey Vellacott DFK LLP as auditor and to authorise the directors to determine their remuneration. statement of directors’ responsibilities The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the Group and for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for preparing the annual report, the directors’ report and the financial statements in accordance with the Companies Act 2006. The directors have prepared the financial statements for the Group and the company in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. 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 representation 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 financial statements’. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRS. A fair presentation also requires the directors to: consistently select and apply appropriate accounting policies; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business; and present information, including accounting policies, in a manner that provides relevant, reliable comparable and understandable information; and provide additional disclosures when compliance with the specific requirements in IFRS 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. Financial statements are published on the Group’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance 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. By order of the board Jared Sinclair Secretary 2 December 2013 15 consoliDAteD FinAnciAl stAtements ConsoLIDAteD InCoMe stAteMent ConsoLIDAteD bALAnCe sHeet For the year ended 30 September 2013 Continuing operations Revenue Operating costs Adjusted operating profit* Goodwill write down Amortisation of acquired intangibles Gain on disposal of property Operating profit Finance income Finance costs Profit before taxation Taxation Profit for the financial year Attributable to: Equity shareholders of the company Non-controlling interests Notes 2013 £(000) 2012 £(000) 2 3 43,698 51,555 (41,104) (45,895) 4,084 5,605 10 (1,266) (3,889) (224) – – 3,944 2,594 5,660 100 (99) 124 (342) 2,595 5,442 (1,307) (1,688) 1,288 3,754 1,336 (48) 1,288 3,786 (32) 3,754 5 6 7 8 21 Basic and diluted earnings per share 9 15.70p 44.48p *Operating profit before goodwill write down, amortisation of acquired intangibles and gain on property disposal ConsoLIDAteD stAteMent of ReCoGnIseD InCoMe AnD exPense Net income/(expense) recognised directly in equity: Actuarial gains/(losses) on the defined benefit pension scheme Exchange differences on translation of foreign operations Tax on items taken directly to equity Net income/(expense) recognised directly in equity in the year Profit for the financial year Total recognised income and expense for the year Attributable to: Equity shareholders of the company Non-controlling interests Notes 22 21 2013 £(000) 2012 £(000) 68 (947) 184 (695) 1,288 593 717 (124) 593 (3,619) 49 821 (2,749) 3,754 1,005 1,004 1 1,005 At 30 September 2013 Non-current assets Goodwill Other intangibles Property, plant and equipment Deferred tax asset Current assets Inventories Trade and other receivables Current tax assets Cash and cash equivalents Total assets Current liabilities Trade and other payables Current tax liabilities Short-term provisions Non-current liabilities Retirement benefit obligation Total liabilities Net assets Equity Share capital Share premium account Capital redemption reserve Translation reserve Retained earnings Total attributable to equity shareholders of the company Non-controlling interests Total equity Notes 2013 £(000) 2012 £(000) 10 11 12 19 14 15 16 17 18 3,173 836 9,240 1,709 3,555 125 9,669 2,037 14,958 15,386 4,557 8,556 20 10,506 23,639 38,597 4,852 8,421 – 11,101 24,374 39,760 5,445 5,583 – 752 35 722 6,197 6,340 22 10,530 16,727 21,870 851 157 286 1,425 18,540 21,259 611 20 21 21 21 21 21 11,856 18,196 21,564 851 157 286 2,097 18,173 21,564 – 21,870 21,564 The financial statements were approved by the board of directors and authorised for issue on 2 December 2013 and were signed on its behalf by: Richard Dewhurst Chairman Jared Sinclair Finance Director Company Registration Number: 160314 The notes on pages 19 to 37 form part of these financial statements The notes on pages 19 to 37 form part of these financial statements 16 17 consoliDAteD FinAnciAl stAtements continued notes to the Accounts ConsoLIDAteD CAsH fLoW stAteMent For the year ended 30 September 2013 Cash flows from operating activities Operating profit Goodwill write down Depreciation and amortisation Additional contributions to pension scheme Exchange adjustments (Profit)/loss on disposal of property, plant and equipment (Increase)/decrease in inventories (Increase)/decrease in trade and other receivables Increase/(decrease) in trade and other payables Increase/(decrease) in provisions Cash generated from operations Interest paid Tax paid Net cash from operating activities Cash flows from investing activities Acquisition of subsidiary undertakings Acquisition of business and assets Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment Development costs capitalised Interest received Notes 2013 £(000) 2012 £(000) 2,594 1,266 1,198 5,660 3,889 875 (1,356) (1,399) 35 75 3,812 415 (135) (308) 30 (155) (3,964) 4,906 (583) (27) 361 247 3,814 4,904 (1) (869) (5) (889) 2,944 4,010 – 26 (1,716) 22 (587) (112) 100 (585) – 4,588 (1,374) (104) 124 Net cash generated from/(used in) investing activities (2,293) 2,649 Cash flows from financing activities Dividends paid Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Exchange adjustments on cash and cash equivalents (1,023) (1,023) (372) 16 11,101 (223) (579) (579) 6,080 5,009 12 Cash and cash equivalents at end of year 16 10,506 11,101 The notes on pages 19 to 37 form part of these financial statements 18 note 1 ACCoUntInG PoLICIes Basis of preparation Dewhurst plc prepares its consolidated and company financial statements on a going concern basis and in accordance with International Financial Reporting Standards (IFRS) adopted by the European Union (EU). The Group and company financial statements have been prepared in accordance with those parts of the Companies Act 2006 that are applicable to companies adopting IFRS. The company is registered and incorporated in the United Kingdom; and quoted on AIM. The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to the years presented, unless otherwise stated. The results have been prepared on the basis of all IFRS issued by the International Accounting Standards Board currently effective. The directors consider the effects of standards issued but not yet effective to be immaterial. The preparation of financial statements in conformity with IFRS requires the use of judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis and revisions are recognised in the period in which the estimate or assumption is revised. The key areas where estimates have been used and assumptions applied are in impairment testing of goodwill and investments, provisioning, taxation and in assessing the defined benefit pension scheme liabilities (see notes 10, 13, 18, 19 and 22 respectively). The financial statements have been prepared under the historical cost convention and are presented in Sterling to the nearest thousand (£’000). consolidation The consolidated financial statements incorporate the results of Dewhurst plc and all of its subsidiary undertakings made up to 30 September 2013, adjusted to eliminate intra-group balances, transactions, income and expenses. The Group has used the acquisition method of accounting to consolidate the results of subsidiary undertakings, which are included from the date of acquisition. revenue Revenue is measured at the fair value of sales of goods and services less returns and sales taxes. Revenue is recognised on dispatch or on written acceptance by customers, whichever is earlier. customer loyalty rebates The cost of customer loyalty rebates is recognised as a cost of sale, with an accrual equal to the estimated fair value of the loyalty rebate recognised when the original transaction occurs. On redemption, the cost of redemption is offset against the accrual. property, plant and equipment Property, plant and equipment is stated at cost or deemed cost less accumulated depreciation and any recognised impairment loss. Depreciation is charged so as to write off the cost over the assets expected useful life. The depreciation rates used are: Buildings (basic structure) 1½% – on a declining balance basis Buildings (fittings) 5% to 20% – on a straight-line basis Plant and equipment 10% to 331/3% – on a straight-line basis investments in subsidiaries In the accounts of the company, investments held as non- current assets are stated at cost less provision for impairment. goodwill Goodwill arising on the acquisition of a subsidiary undertaking is the difference between the fair value of the consideration paid and the fair value of the assets and liabilities acquired, and is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed. On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Goodwill arising on acquisitions before the date of transition to IFRS has been retained at the previous UK GAAP amount subject to being tested for impairment at that date. inventories Inventories are stated at the lower of weighted average cost and net realisable value. Cost represents direct materials, labour and appropriate production overheads. The Group provides for all inventories where there is more than one year’s usage held and where there is no annual usage. Therefore the directors consider the carrying amounts are stated at their fair value after deduction of appropriate allowances for estimated irrecoverable amounts. taxation The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from the net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all material taxable temporary differences and deferred tax assets are only recognised to the extent that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based upon tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. 19 notes to the Accounts continued Foreign currencies Foreign currency transactions of individual companies are translated at the rates ruling when they occurred. Foreign currency monetary assets and liabilities are retranslated at the rates ruling at the balance sheet date. Any differences are taken to the income statement. The results of overseas operations are translated at the average rates of exchange during the year and their balance sheets translated into Sterling at the rates of exchange ruling at the balance sheet date. Exchange differences which arise from translation of the opening net assets and results of foreign subsidiary undertakings and from translating the income statement at an average rate are taken to reserves. All other differences are taken to the income statement. which dividends are approved by shareholders or paid, which ever is earlier. Financial instruments The Group does not hold or issue derivative financial instruments for speculative purposes. trade receivables and payables Trade receivables do not carry any interest and trade payables are not interest bearing. Receipts and payments occur over a short period and are subject to an insignificant risk of changes in value. The Group provides for all trade receivables that are more than ninety days overdue therefore the directors consider the carrying amounts are stated at their fair value after deduction of appropriate allowances for estimated irrecoverable amounts. The treatment of tax charges or credits resulting from the exchange differences reported above match the accounting treatment and are either taken to reserves or to the income statement as appropriate. Financial liabilities Financial liabilities incurred by the Group are classified according to the substance of the contractual arrangements entered into and measured at their amortised cost. cash and cash equivalents Cash and cash equivalents comprise cash on hand and short- term deposits that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. provisions Provisions are recognised for liabilities of uncertain timing or amount when there is a present legal or constructive obligation that has arisen as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the obligation, and where the amount of the obligation can be reliably estimated (see notes 15 and 18). research and development Development expenditure that satisfies the criteria of IAS 38 for recognition as an intangible asset is capitalised and then amortised on a straight-line basis over its expected useful life of up to three years. Expenditure on development activities that does not meet these criteria along with research activities are recognised as an expense in the period in which they are incurred. operating leases Rentals under operating leases are charged to the income statement in equal annual amounts over the lease term. Benefits received as incentives to enter into the agreements are also spread on a straight-line basis over the lease term. Employee benefits The Group operates both a defined contribution and a defined benefit type pension scheme. Contributions in respect of the defined contribution schemes are charged to the income statement in the year they fall due. The defined benefit scheme has been set up under a trust deed with its financial assets held separately from those of the Group and is controlled by the trustees. The pension cost is assessed in accordance with the advice of an independent qualified actuary to recognise the expected cost of providing pensions on a systematic and rational basis over the expected remaining service lives of employees. The liability recognised in the balance sheet in respect of the defined benefit pension scheme is the present value of the defined benefit obligation at the balance sheet date less the fair value of scheme assets, together with adjustments for unrecognised actuarial gains and losses and past service costs. The defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high- quality corporate bonds approximating to the terms of the related pension liability. Actuarial gains and losses are recognised in full in the statement of recognised income and expense. Current and past service costs are charged to the income statement under pension costs in operating expenses. Interest on the pension scheme’s liabilities and the expected return on the scheme’s assets are recognised within finance costs in the income statement. Dividends Dividend distribution to the company’s shareholders is recognised in the Group’s financial statements in the year in 20 note 2 seGMent RePoRtInG For management purposes, the Group reports its primary segmental information by geographical destination. The geographical analysis by significant regions is as follows: United Kingdom Europe The Americas Asia & Australia Other Inter-company sales Finance income/(costs) Consolidated revenue/profit before tax for the year 43,698 51,555 2,595 United Kingdom Europe The Americas Asia & Australia Other 2013 £(000) Assets 2012 £(000) 14,587 15,675 4,663 8,952 5,828 6,867 10,208 11,255 187 135 2013 £(000) 7,872 2,040 3,704 2,981 130 Consolidated assets/liabilities for the year 38,597 39,760 16,727 18,196 2013 £(000) 13,029 5,690 13,088 14,633 69 Revenue 2012 £(000) 16,481 9,984 12,307 15,884 59 Operating profit 2012 £(000) 2013 £(000) (72) 553 1,542 571 – 1,470 1,377 338 2,470 5 46,509 54,715 2,594 5,660 (2,811) (3,160) 1 (218) 5,442 Liabilities 2012 £(000) 8,844 2,815 3,176 3,254 107 343 51 200 280 1 875 Revenue 2012 £(000) 34,391 4,878 15,446 54,715 Capital additions 2013 £(000) 281 53 113 2,752 1 2012 £(000) 1,076 113 82 205 2 Depreciation and amortisation 2012 £(000) 2013 £(000) 345 70 230 550 3 3,200 1,478 1,198 2013 £(000) 34,082 2,797 9,630 46,509 (2,811) (3,160) 43,698 51,555 21 United Kingdom Europe The Americas Asia & Australia Other Total Group The secondary segmental reporting is by the following business sectors: Sector Lift Transport Keypad Inter-company sales notes to the Accounts continued note 2 seGMent RePoRtInG continued note 4 stAff Costs AnD InfoRMAtIon ReGARDInG eMPLoyees Lift Transport Keypad Total Group note 3 oPeRAtInG Costs Movement in inventory provision obsolescence Cost of inventories recognised as an expense Staff costs (see note 4) Depreciation Amortisation Write down of goodwill Gain on disposal of property Foreign exchange differences Other operating charges Operating costs 2013 £(000) Assets 2012 £(000) Capital additions 2012 £(000) 2013 £(000) 30,933 30,567 3,055 1,256 1,669 5,995 2,965 6,228 138 7 89 133 38,597 39,760 3,200 1,478 2013 £(000) (35) 20,279 13,692 858 340 1,266 – 210 4,494 2012 £(000) 25 25,959 14,105 738 137 3,889 (3,944) 155 4,831 41,104 45,895 Other operating charges include lease rentals on premises £393k (2012: £366k) and lease rentals on motor vehicles £91k (2012: £78k), loss on sale of property, plant and equipment £75k (2012: profit of £20k) and auditor’s remuneration detailed below. Expenditure on research and development was £830k (2012: £766k). Auditor’s remuneration: Amounts paid to Chantrey Vellacott DFK LLP and DFK associates Statutory audit services Pension audit services Taxation compliance services Other taxation advisory services 2013 £(000) 81 5 14 10 The Group 2012 £(000) 73 5 11 64 110 153 2013 £(000) 19 1 1 4 25 The Company 2012 £(000) 14 2 1 62 79 22 Costs during the year were as follows: Wages and salaries Social security costs Pension costs (see note 22) The average number of employees during the year was: Office and management Manufacturing 2013 £(000) The Group 2012 £(000) 12,132 12,477 866 694 939 689 13,692 14,105 2013 £(000) 472 60 70 602 The Company 2012 £(000) 676 87 128 891 2013 No. 164 198 362 The Group 2012 No. 163 194 357 2013 No. The Company 2012 No. 8 – 8 8 – 8 The executive directors comprise the key management personnel of the Group and company in both the current and previous years. The total amount of the directors’ remuneration was as follows: Emoluments – Executive directors Emoluments – Non-executive directors 2013 £(000) 627 27 654 2012 £(000) 905 17 922 Four directors became deferred members in the company’s defined benefit pension scheme after the scheme closed to future accrual on 30 September 2010. The emoluments of the directors is reported on page 14 of the directors report and the remuneration of the highest paid director during the year was £189k (2012: £262k). The highest paid director, under the defined benefit scheme has accrued pension of £118k (2012: £113k) and an accrued lump sum of £2,090k (2012: £2,127k). note 5 fInAnCe InCoMe Bank deposit interest Other interest receivable note 6 fInAnCe Costs Interest payable on bank overdraft and loans Net costs on defined benefit pension scheme 2013 £(000) 100 – 100 2013 £(000) (1) (98) (99) 2012 £(000) 121 3 124 2012 £(000) (5) (337) (342) 23 notes to the Accounts continued note 7 tAx Current tax UK corporation tax at 23.5% (2012: 25.0%) Adjustment on prior years tax Overseas taxation Deferred tax Movement in deferred taxation provision Tax expense in the income statement 2013 £(000) 7 (43) 849 813 494 1,307 2012 £(000) – (135) 1,260 1,125 563 1,688 The tax assessed for the year is different from the standard rate of corporation tax in the UK. The differences are explained below: Profit before tax Standard rate of corporation tax in the UK Effects of: Adjustments in respect of prior years Overseas withholding tax Deferred tax Unrelieved tax losses in the period Additional reduction for R&D expenditure Expenses not deductible for tax purposes Effective tax rate for the year 2013 £(000) 2,595 23.5% (1.7%) 0.3% 19.0% 13.5% (6.5%) 2.3% 50.4% 2012 £(000) 5,442 25.0% (2.5%) 0.8% 10.4% – (2.0%) (0.7%) 31.0% note 8 PRofIt foR tHe fInAnCIAL yeAR The Group profit for the year includes £1,992k (2012: £769k) of profit after tax, which has been dealt with in the financial statements of the holding company. The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own income statement in these financial statements. note 9 eARnInGs PeR sHARe AnD DIvIDenD PeR sHARe Weighted average number of shares For basic and diluted earnings per share 2013 No. 2012 No. 8,511,398 8,511,398 The calculation of basic and diluted earnings per share is based on the profit for the financial year of £1,336,093 and on 8,511,398 Ordinary 10p and ‘A’ non-voting ordinary 10p shares, being the weighted average number of shares in issue throughout the financial year. Paid dividends per 10p ordinary share 2012 final paid of 9.68p (2011: 4.46p) 2013 interim paid of 2.34p (2012: 2.34p) 2013 £(000) (824) (199) 2012 £(000) (380) (199) The final proposed dividend is based on 3,309,200 Ordinary 10p shares and 5,202,198 ‘A’ non-voting ordinary 10p shares, being the latest number of shares in issue. The directors are proposing a final dividend of 5.66p (2012: 9.68p which included a 5p special dividend) per share, totalling £482k (2012: £824k). This dividend has not been accrued at the balance sheet date. note 10 GooDWILL Cost or valuation: At 1 October Exchange adjustment Additions on acquisition of subsidiaries At 30 September Amortisation and impairment: At 1 October Exchange adjustment Write down At 30 September Net book value: At 30 September The Group 2012 £(000) 2013 £(000) The Company 2012 £(000) 2013 £(000) 9,032 (577) 1,285 9,740 5,477 (176) 1,266 6,567 8,938 94 – 9,032 1,581 7 3,889 5,477 3,173 3,555 – – – – – – – – – – – – – – – – – – Goodwill is allocated at acquisition to the business units that are expected to benefit from that acquisition. The carrying amounts of goodwill have been allocated as follows: United Kingdom Asia & Australia 2013 £(000) – 3,173 3,173 The Group 2012 £(000) 667 2,888 3,555 2013 £(000) The Company 2012 £(000) – – – – – – The goodwill relates to two Cash Generating Units (CGU) in the UK, Traffic Management Products business acquired in January 2006 and the Switching Components business acquired in October 2007, two CGUs in America, Elevator Research Manufacturing Corp. and Winter & Bain acquired in December 2010 and four CGUs in Australia, Australian Lift Components Pty Ltd acquired in February 2000, Lift Material Australia Pty Ltd acquired in July 2005, JAS Engineering Pty Ltd acquired in December 2010 and Dual Engraving Pty Ltd acquired in February 2013. Goodwill values have been tested for impairment by comparing them against the value in use of the relevant CGUs. The value in use calculations are based on current or projected pre-tax profits, derived from current results or 12 month forecasts approved by the board, discounted at 5% per annum to calculate their net present value. The key assumptions used for the ‘value in use’ calculation for these CGUs are the sales and margin projections, the private company price index (PCPI) multiple applied to forecast profits and the discount rate. Sales growth is not based upon past experience but on future expectations because of recent product development. Margins are in line with past experience, and both the PCPI multiple and discount rate are derived from external sources of information and felt to be most appropriate. Based upon these key assumptions the goodwill impairment charge that arose during the current year is in relation to Traffic Management Products and JAS Engineering Pty Ltd with goodwill written down by £667k & £599k (2012: £160k, £3,130k & £599k write down on Switching Components, Traffic Management Products and Elevator Research Manufacturing Corp) respectively in the financial year. 24 25 notes to the Accounts continued note 11 otHeR IntAnGIbLes note 12 PRoPeRty, PLAnt AnD eqUIPMent Development costs Cost or valuation: At 1 October Exchange adjustment Additions on acquisition of subsidiaries Additions Disposal At 30 September Amortisation: At 1 October Exchange adjustment Charge for the year Disposal At 30 September Net book value: At 30 September At 30 September – prior year 2013 £(000) 777 (114) 1,031 111 (242) 1,563 652 (23) 340 (242) 727 836 125 The Group 2012 £(000) 2013 £(000) The Company 2012 £(000) 738 – – 104 (65) 777 580 – 137 (65) 652 125 158 – – – – – – – – – – – – – 65 – – – (65) – 65 – – (65) – – – All amortisation has been charged to the income statement through operating costs and no intangible items are held as security. Cost or valuation: At 1 October 2011 Exchange adjustment Additions Disposals At 1 October 2012 Exchange adjustment Additions on acquisition of subsidiaries Additions Disposals Property £(000) Plant and equipment £(000) The Group Total Property £(000) £(000) Plant and equipment £(000) 8,665 7,712 16,377 6,249 53 785 37 589 90 1,374 (819) (2,084) (2,903) – 765 (816) 8,684 (210) – 14 – 6,254 14,938 6,198 (224) (434) 185 574 185 588 (260) (260) – – 10 – 346 – 170 (344) 172 – – – – The Company Total £(000) 6,595 – 935 (1,160) 6,370 – – 10 – At 30 September 2013 8,488 6,529 15,017 6,208 172 6,380 Depreciation: At 1 October 2011 Exchange adjustment Charge for the year Disposals At 1 October 2012 Exchange adjustment Charge for the year Disposals At 30 September 2013 Net book value: At 30 September 2013 At 30 September 2012 834 7 164 (226) 779 (43) 190 – 926 5,962 6,796 7 574 14 738 321 – 93 345 – 11 (2,053) (2,279) (224) (344) 4,490 5,269 (144) 668 (163) (187) 858 (163) 4,851 5,777 190 – 119 – 309 12 – 37 – 49 666 – 104 (568) 202 – 156 – 358 7,562 7,905 1,678 1,764 9,240 9,669 5,899 6,008 123 160 6,022 6,168 Capital commitments contracted by the Group at 30 September 2013 amounted to £80k (2012: £73k) and by the company £65k (2012: £73k). Capital commitments authorised but not contracted by the Group at 30 September 2013 amounted to £Nil (2012: £78k) and by the company £Nil (2012: £Nil). 26 27 notes to the Accounts continued note 13 InvestMents – sHARes In sUbsIDIARy UnDeRtAKInGs note 14 InventoRIes The Company Investments (ordinary shares) in subsidiary undertakings are: Cost: Dewhurst UK Manufacturing Ltd Thames Valley Controls Ltd Traffic Management Products Ltd Cortest Ltd Dewhurst (Hungary) Kft Dupar Controls Inc. The Fixture Company Elevator Research Manufacturing Corp. Australian Lift Components Pty Ltd Lift Material Australia Pty Ltd JAS Engineering Pty Ltd Dual Engraving Pty Ltd (created 4 Oct 2012) Dewhurst Australian Property Pty Ltd Dewhurst (Hong Kong) Ltd Provision for impairment 2013 £(000) 175 300 2012 £(000) 175 300 4,516 4,516 – 72 35 32 2,390 1,798 85 123 1,716 97 1 11,340 (6,938) 4,402 50 72 35 32 2,390 1,798 85 123 – 97 1 9,674 (6,138) 3,536 The company has thirteen wholly-owned subsidiaries, Dewhurst UK Manufacturing Ltd, Thames Valley Controls Ltd, Traffic Management Products Ltd (TMP) and Cortest Ltd, registered and principally operating in England, Dewhurst (Hungary) Kft, registered and principally operating in Hungary, Dupar Controls Inc., registered and principally operating in Canada, The Fixture Company and Elevator Research Manufacturing Corp. (ERM) registered and principally operating in the United States of America, Australian Lift Components Pty Ltd, Lift Material Australia Pty Ltd, JAS Engineering Pty Ltd and Dewhurst Australian Property Pty Ltd, all registered and principally operating in Australia and Dewhurst (Hong Kong) Ltd registered and principally operating in Hong Kong. Dual Engraving Pty Ltd which principally operates in Australia is not wholly-owned but instead is 70% owned. All companies have similar principal activities to Dewhurst plc, except TMP and Cortest, which operate solely in the transport sector and Dewhurst Australian Property Pty Ltd, which operates solely to hold Australian Lift Components Pty Ltd’s property. TMP, TFC and ERM have all been 100% provided for at the end of this financial year (2012: 3,715k of TMP, £32k of TFC and £2,390k of ERM). Raw materials and components Work-in-progress Finished goods and goods for re-sale 2013 £(000) 2,865 330 1,362 4,557 The Group 2012 £(000) 3,075 328 1,449 4,852 2013 £(000) The Company 2012 £(000) – – – – – – – – There is no material difference between the replacement cost of inventories and the amounts stated above. note 15 tRADe AnD otHeR ReCeIv AbLes Trade receivables Amounts due from subsidiary undertakings Other receivables Prepayments and accrued income 2013 £(000) 8,419 – 29 108 The Group 2012 £(000) 8,312 – 24 85 2013 £(000) – The Company 2012 £(000) – 3,869 3,910 – 19 – – 8,556 8,421 3,888 3,910 Trade receivables are shown net of provision for impairment. The movements in the provision for impairment of receivables were as follows: At 1 October Charge for the year Costs incurred At 30 September 2013 £(000) 149 67 (36) 180 The Group 2012 £(000) 2013 £(000) The Company 2012 £(000) 242 (48) (45) 149 – – – – – – – – At the balance sheet date the ageing analysis of trade receivables, with normal terms being 30 days net monthly, not provided for was as follows: As at 30 September 2013 As at 30 September 2012 Total £(000) 8,419 8,312 Within terms £(000) 6,034 6,556 Up to 1 month overdue £(000) 1,569 1,266 Up to 2 months overdue £(000) 511 313 Over 2 months overdue £(000) 305 177 28 29 notes to the Accounts continued note 16 CAsH AnD CAsH eqUIv ALents note 19 DefeRReD tAxAtIon Cash Short-term deposits note 17 tRADe AnD otHeR PAyAbLes Trade payables Other taxes and social security costs Other payables Accruals and deferred income 2013 £(000) 8,006 2,500 The Group 2012 £(000) 8,101 3,000 10,506 11,101 2013 £(000) 522 2,500 3,022 The Company 2012 £(000) 677 3,000 3,677 2013 £(000) 2,134 662 122 2,527 5,445 The Group 2012 £(000) 2013 £(000) The Company 2012 £(000) 2,351 497 103 2,632 5,583 – 13 41 282 336 3 17 41 491 552 Deferred tax asset: At 1 October Transfer directly (to)/from equity Transfer (to)/from income statement At 30 September Deferred tax at 30 September relates to the following: Deferred taxation Defined benefit pension scheme Provisions Exchange differences on translation of foreign operations 2013 £(000) 2,037 166 (494) The Group 2012 £(000) 1,779 821 (563) 2013 £(000) 2,684 (14) (529) The Company 2012 £(000) 2,426 832 (574) 1,709 2,037 2,141 2,684 2013 £(000) 2,211 121 (623) The Group 2012 £(000) 2,726 133 (822) 2013 £(000) 2,211 (70) – The Company 2012 £(000) 2,726 (42) – Deferred tax asset 1,709 2,037 2,141 2,684 The directors consider that the carrying amount of trade payables approximates to their fair value. note 18 sHoRt-teRM PRovIsIons Warranty provisions 2013 £(000) 752 The Group 2012 £(000) 722 2013 £(000) – The Company 2012 £(000) – Warranties are provided in the normal course of business based on current issues and are costed on an assessment of future claims with reference to past claims. The provision is in relation to replacement and change-out costs and although it is not possible to estimate the timing of crystallisation of the potential liability it is expected that it will be utilised during the coming year. Amounts charged to the Group income statement during the year were £135k (2012: £424k). Amounts utilised by the Group in the year were £105k (2012: £177k). There were no amounts charged or utilised this year or last year by the company. note 20 sHARe CAPItAL Authorised: Shares of 10p each – 4,500,000 Ordinary – 9,000,000 ‘A’ non-voting ordinary Allotted and fully paid: Shares of 10p each – 3,309,200 (2012: 3,309,200) Ordinary – 5,202,198 (2012: 5,202,198) ‘A’ non-voting ordinary 2013 £(000) 450 900 2012 £(000) 450 900 1,350 1,350 2013 £(000) 331 520 851 2012 £(000) 331 520 851 The Ordinary shares and the ‘A’ non-voting ordinary shares rank in all respects pari passu except that the ‘A’ non-voting ordinary shares do not carry the right to receive notices, attend or vote at meetings of the company. 30 31 notes to the Accounts continued note 21 CHAnGes In eqUIty note 22 RetIReMent benefIt obLIGAtIon Share capital £(000) Share Capital Translation reserve premium redemption reserve account £(000) £(000) £(000) The Group Retained Non- earnings controlling interest £(000) £(000) Share capital £(000) The Company Retained earnings Share Capital premium redemption reserve account £(000) £(000) £(000) At 1 October 2011 851 157 286 2,059 18,252 149 851 157 286 8,889 Exchange differences on translation of foreign operations – Actuarial gains/(losses) on defined benefit pension scheme Net costs of acquiring the final stake in ERM Tax on items taken directly to equity Dividends paid Profit for the year – – – – – – – – – – – – – – – – – 49 – – (3,619) – – – (467) (149) (11) 832 – – (579) 3,754 At 1 October 2012 851 157 286 2,097 18,173 Shares issued Exchange differences on translation of foreign operations Actuarial gains/(losses) on defined benefit pension scheme Tax on items taken directly to equity Dividends paid Profit for the year – – – – – – – – – – – – – – – – – – – (871) – – 735 (76) – 68 199 (14) (1,023) – – 1,336 (48) – – – – – – – – – – – – – – – – – – – – – – (3,619) – – – – – 832 (579) 769 851 157 286 6,292 – – – – – – – – – – – – – – – – – – – – 68 (14) (1,023) 1,992 At 30 September 2013 851 157 286 1,425 18,540 611 851 157 286 7,315 Included in retained earnings is (£10,050k) (2012: (£10,118k)) being the cumulative actuarial gains or (losses) on defined benefit pension scheme. The Group operates pension schemes in the UK, Canada, Australia and the USA, and also complies with Hungarian state legislation. During the year the UK operated both defined contribution schemes, the assets of which are held in independently administered funds, and a defined benefit scheme, the assets of which are held in trustee administered funds. The total pension cost for the Group was £694k (2012: £689k), of which £694k (2012: £587k) relates to defined contribution schemes and £Nil (2012: £102k) relates to the defined benefit scheme. The Hungarian, Canadian, USA and Australian schemes are of the defined contribution type and the cost to the Group amounted to £363k (2012: £310k). There was £22k of outstanding charges at the balance sheet date in respect of the defined benefit scheme (2012: £22k). On 30 September 2010 the company closed the defined benefit scheme to future accrual and offered all existing members future pension benefits in a new Group defined contribution scheme. There were still contributions during the year of £1,404k into the defined benefit scheme (2012: £1,404k). This method of calculating the rate and amount has been agreed with the actuary. The percentage contribution covered the current service accruals and the fixed sum is paid to reduce the fund deficit. As required under the Welfare Reform and Pensions Act 1999 and Stakeholder Pension Schemes Regulations 2000 the Group has offered access to a stakeholder pension scheme to employees in its UK-based companies. The pension cost relating to the UK defined benefit scheme is assessed in accordance with the advice of qualified actuaries using the new scheme specific funding regime which came into force in September 2005. The latest actuarial valuation of the scheme was on 1 June 2012. Generally, it has been assumed that future investment yields would be at 4.6% per annum (pre-retirement) and 3.1% (post-retirement). At the date of the latest actuarial valuation of the UK scheme, the market value of the assets of the scheme exceeded £21.1 million and the funding level on the on-going valuation basis was 59%. The 2012 actuarial valuation takes account of secured pensioners when assessing the assets and liabilities of the fund. All the recommendations made by the scheme’s actuary to eliminate the scheme deficit have been fully implemented. IAS 19 Employee benefits Under IAS 19 a snapshot is taken of the retirement benefit fund assets and liabilities to coincide with the company’s financial year- end. Thus movements in equity and bond markets and in discount rates may create some volatility in the calculation of the scheme assets and liabilities. The FTSE-100 index stood at 6,462 at 30 September 2013 (2012: 5,742). Assumptions The following actuarial assumptions, updated to 30 September 2013 by the scheme actuary, have been used in preparing the disclosures required under IAS 19: Retail price index expected to rise by Pensionable salaries will increase by Deferred pensions and pensions in payment will increase by Liabilities discounted at a rate of Expected lifetime for a member retiring at the accounting date – for males Future expected lifetime for a member retiring in 20 years’ time – for males – for females – for females 2013 3.0% n/a 3.0% 4.3% 23.2 yrs 24.4 yrs 26.0 yrs 26.4 yrs 2012 2.4% n/a 2.4% 4.0% 23.1 yrs 24.3 yrs 25.9 yrs 26.3 yrs 32 33 notes to the Accounts continued note 22 RetIReMent benefIt obLIGAtIon continued The assets in the scheme and the expected rates of return: History of experience gains and losses: Difference between the expected and actual return on scheme assets IAS 19 requires the value of annuities purchased in respect of pensioners and widow(er)s to be taken into current year calculations. Percentage of scheme assets Long-term rate of return expected at 30 Sept 2013 Fair value at 30 Sept 2013 £(000) Long-term rate of return expected at 30 Sept 2012 Fair value at 30 Sept 2012 £(000) Fair value at 30 Sept 2011 £(000) 7.5% 4.3% 2.5% 17,468 3,910 3,963 25,341 (35,871) (10,530) 2,211 (8,319) 6.2% 4.0% 3.0% 14,282 15,074 4,402 3,505 1,293 3,169 22,189 19,536 (34,045) (28,835) (11,856) 2,726 (9,130) (9,299) 2,418 (6,881) Experience gains and losses on scheme liabilities Percentage of the present value of scheme liabilities Total amount recognised in SoRIE Percentage of the present value of scheme liabilities note 23 LeAse CoMMItMents 2013 £(000) 1,348 5.3% (138) 0.4% 2012 £(000) 788 2011 £(000) (2,217) 3.6% (11.3%) (159) 0.5% – – 68 (3,619) (0.2%) 10.6% (2,423) 8.4% Equities Bonds Other Total fair value of scheme assets Present value of scheme liabilities Scheme deficit Related deferred tax asset Net pension liability Amounts charged to operating profit: Current service cost Total operating charge Amounts charged to other finance costs: Expected return on pension scheme assets Interest on pension scheme liabilities Net benefit/(cost) Amounts recognised in the statement of recognised income and expenses (SoRIE): Actual return less expected return on pension scheme assets Experience gains and losses arising on the scheme liabilities Changes in assumptions underlying the present value of the scheme liabilities Actuarial gains/(losses) recognised in SoRIE The movement in the scheme assets, liabilities and the net deficit are as follows: Deficit in scheme at 1 October Movement in the year Current service cost Contributions Administration charge Other finance costs Actuarial gains/(losses) Deficit in scheme at 30 September 34 2013 £(000) – – 2012 £(000) – – 2013 £(000) 1,247 2012 £(000) 1,087 (1,345) (1,424) (98) (337) 2013 £(000) 1,348 (138) (1,142) 68 2012 £(000) 788 (159) (4,248) (3,619) 2011 £(000) – – 2011 £(000) 1,256 (1,377) (121) 2011 £(000) (2,217) – (206) (2,423) 2013 £(000) 2012 £(000) 2011 £(000) (11,856) (9,299) (8,068) – – – 1,404 1,404 1,404 (48) (98) 68 (5) (337) (3,619) (10,530) (11,856) (91) (121) (2,423) (9,299) Total future minimum lease payments under non-cancellable operating leases for each of the following periods: 2013 Land and buildings £(000) 252 180 432 2013 Other £(000) 52 57 109 2012 Land and buildings £(000) 203 149 352 The Group 2012 Other 2013 Other The Company 2012 Other £(000) £(000) £(000) 67 40 107 – – – – – – Within one year Within two to five years note 24 ReLAteD PARtIes The controlling party of the Group is Dewhurst plc. Transactions between the company and its subsidiaries, which are related parties to the company, have been eliminated on consolidation. However during the year, in the company’s financial statements, there have been the following transactions: purchase and sale of goods at arm’s length, group management charges, interest on loans at floating rates on a commercial basis and dividend income received. All transactions are settled by cash. Any loans given are secured on the assets of the relevant company. Management charges to subsidiaries Rent charges to subsidiaries Interest income received Dividend income received Dividends paid to directors Loans and trade receivables due 2013 £(000) 881 255 123 3,339 134 3,869 2012 £(000) 848 250 138 4,076 76 4,709 35 notes to the Accounts continued note 25 fInAnCIAL InstRUMents note 26 InvestMents – sHARes In sUbsIDIARy UnDeRtAKInGs On 4 February 2013, Dual Engraving Pty Ltd, a newly formed and 70% owned Australian subsidiary of Dewhurst plc acquired the business and assets of the partnership trading as Dual Engraving from D.E. Corporate Pty Ltd and Datree Pty Ltd for a maximum cash consideration of A$4.1 million (£2.6 million). The 30% stake is retained by Michael Cook (through D.E. Corporate Pty Ltd) who is a director of Dual Engraving Pty Ltd and is actively involved in the running of the business. The deferred consideration of A$0.3 million (£0.2 million) is dependent upon the first 12 months sales of the business and is only payable if greater than A$4.5 million which at 30 September 2013 is not guaranteed and so has not been accounted for. Details of the transaction: Non-current assets: Property, plant and equipment Current assets: Inventories Accruals Net assets acquired Consideration Intangibles Goodwill Cash flows The net outflow of cash arising from acquisition was as follows: Cash consideration, as above Proceeds of non-controlling interest (30%) Local taxes – stamp duty (paid 5 November 2013) Net outflow of cash in respect of Dual Engraving Notes Book value £(000) Fair value £(000) 12 185 185 120 (43) 262 2,578 1,031 1,285 11 10 120 (43) 262 2,578 1,031 1,285 £(000) 2,578 (735) (127) 1,716 Since the acquisition date, Dual has contributed £1,922k of sales and £132k of losses to the Group. If the acquisition had occurred on 1 October 2012, Group turnover would have been £44,659k and Group operating profit for the period would have been £2,528k. The Group’s policies towards using financial instruments to manage interest rate, liquidity and currency exposure risks are explained in the financial review on page 11. credit risk The Group is mainly exposed to credit risk from credit sales. It is Group policy, implemented locally, to assess the credit risk of new customers before entering contracts. Such credit ratings, taking into account local business practices, are then factored into any contracts. interest risk The Group is exposed to interest risk but purely on bank deposits. It is Group policy to maximise the return on interest earned whilst taking adequate steps to monitor the viability of the bank and safe guarding the assets of the Group. Foreign exchange contracts During the year the Group used derivatives to manage credit risk. At the year end Dewhurst plc entered into a A$3,350,000 Australian Dollar foreign exchange contract, in the amount of £1,941,152 Sterling, the purpose of which is to hedge against Australian Dollar currency fluctuations. The contract was stated at its fair value and the Group does not hedge account. This contract matured on 31 October 2013. Currency and interest rate exposure of financial assets and liabilities The cash and cash equivalent amount of £10,506k (2012: £11,101k) is made up of cash of £8,006k (2012: £8,101k) and short-term deposits of £2,500k (2012: £3,000k). The cash was invested at overnight rates based on the relevant national LIBOR. Short-term deposits were fixed for 12 months up to March 2013 and then on 95 days notice at an average yearly rate of 1.98% (2012: 2.70%). Of the cash, £7,026k (2012: £6,670k) is denominated in Sterling with the balance of £3,480k (2012: £4,431k) held in foreign currencies. Other financial assets and liabilities do not attract interest. Currency and interest profile Sterling AUS Dollars US Dollars CAN Dollars Other Floating rate assets £(000) Fixed rate assets £(000) The Group Interest free liabilities £(000) Interest free assets £(000) Floating rate assets £(000) 3,670 3,000 4,053 1,005 1,878 1,288 688 577 – – – – 1,448 1,689 999 123 446 681 125 94 383 161 133 – – Fixed rate assets £(000) 3,000 – – – – At 30 September 2012 8,101 3,000 8,312 2,351 677 3,000 Sterling AUS Dollars US Dollars CAN Dollars Other 4,526 2,500 3,740 1,300 749 1,117 314 – – – – 1,522 1,815 1,213 129 940 323 507 107 257 322 196 4 – – 2,500 – – – – At 30 September 2013 8,006 2,500 8,419 2,134 522 2,500 The Company Interest free liabilities £(000) Interest free assets £(000) – – – – – – – – – – – – 3 – – – – 3 – – – – – – The only operation that holds material monetary assets and liabilities in currencies other than their functional currency is the Hungarian subsidiary Dewhurst (Hungary) Kft, which holds cash denominated in Sterling with a balance of £1,927k (2012: £448k) and US Dollars with a balance of £536k (2012: £988k), trade receivables denominated in Sterling with a balance of £748k (2012: £1,236k) and US Dollars with a balance of £725k (2012: £1,035k) and trade payables denominated in Sterling with a balance of £104k (2012: £135k) and US Dollars with a balance of £86k (2012: £406k). Fair value of financial instruments Fair value is defined as the amount at which a financial instrument could be exchanged in an arm’s length transaction between informed and willing parties, excluding accrued interest, and is calculated by reference to market rates discounted to current value. Accordingly, the directors believe that there is no material difference between the carrying amount and the fair value of its financial instruments. Bank facilities The Group has no undrawn committed bank overdraft facility (2012: no facility). 36 37 compAnY FinAnciAl stAtements CoMPAny stAteMent of ReCoGnIseD InCoMe AnD exPense CoMPAny bALAnCe sHeet Net income/(expense) recognised directly in equity: Actuarial gains/(losses) on the defined benefit pension scheme Tax on items taken directly to equity Net income/(expense) recognised directly in equity in the year Profit for the financial year Total recognised income and expense for the year 2013 £(000) 2012 £(000) 68 (14) 54 1,992 2,046 (3,619) 832 (2,787) 769 (2,018) At 30 September 2013 Non-current assets Property, plant and equipment Deferred tax asset Investments in subsidiaries Current assets Trade and other receivables Current tax assets Cash and cash equivalents Total assets Current liabilities Trade and other payables Non-current liabilities Retirement benefit obligation Total liabilities Net assets Equity Share capital Share premium account Capital redemption reserve Retained earnings Total equity Notes 2013 £(000) 2012 £(000) 12 19 13 15 16 17 22 20 21 21 21 6,022 2,141 4,402 6,168 2,684 3,536 12,565 12,388 3,888 – 3,022 6,910 3,910 19 3,677 7,606 19,475 19,994 336 336 10,530 10,866 8,609 851 157 286 7,315 8,609 552 552 11,856 12,408 7,586 851 157 286 6,292 7,586 The financial statements were approved by the board of directors and authorised for issue on 2 December 2013 and were signed on its behalf by: Richard Dewhurst Chairman Jared Sinclair Finance Director Company Registration Number: 160314 The notes on pages 19 to 37 form part of these financial statements The notes on pages 19 to 37 form part of these financial statements 38 39 compAnY FinAnciAl stAtements continued report oF the inDepenDent AuDitor Notes 2013 £(000) 2012 £(000) (894) 156 (1,356) – 850 (1,244) 22 (216) (2,543) 104 (1,399) (3,944) 5,315 (2,467) (823) (28) (1,438) (3,318) – 12 (2) (8) (1,426) (3,328) – 26 (1,716) (585) – 4,536 (935) 191 4,076 7,283 (579) (579) 3,376 301 3,677 – (10) 181 3,339 1,794 (1,023) (1,023) (655) 3,677 3,022 CoMPAny CAsH fLoW stAteMent For the year ended 30 September 2013 Cash flows from operating activities Operating profit /(loss) Depreciation and amortisation Additional contributions to pension scheme (Profit)/loss on disposal of property, plant and equipment Write-down of investments (Increase)/decrease in trade and other receivables Increase/(decrease) in trade and other payables Cash generated from operations Interest paid Income tax paid Net cash from/(used in) operating activities Cash flows from investing activities Acquisition of subsidiary undertakings Acquisition of business and assets Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment Interest received Dividends received Net cash generated from/(used in) investing activities Cash flows from financing activities Dividends paid Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 16 16 The notes on pages 19 to 37 form part of these financial statements 40 independent auditor’s report to the members of Dewhurst plc We have audited the Group and parent company financial statements (‘the financial statements’) of Dewhurst plc for the year ended 30 September 2013, which comprise the consolidated income statement, the consolidated and parent company balance sheets, the consolidated and parent company cash flow statements, the consolidated and parent company statements of recognised income and expense, and the related notes. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union. This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. respective responsibilities of directors and auditors As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s and the parent company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the financial statements to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion: the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 30 September 2013 and of the Group’s profit for the year then ended; the Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union; the parent company financial statements have been properly prepared in accordance with IFRS as adopted by the European Union; the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. opinion on other matters prescribed by the companies Act 2006 In our opinion the information given in the directors’ report and strategic report for the financial year for which the financial statements are prepared is consistent with the financial statements. matters on which we are required to report by exception We have nothing to report in respect of the following matters: Under the ISAs (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is: materially inconsistent with the information in the audited financial statements; or apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Group acquired in the course of performing our audit; or is otherwise misleading. Under the Companies Act 2006 we are required to report to you if, in our opinion: adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or the parent company financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. Paul Fenner Senior Statutory Auditor for and on behalf of Chantrey Vellacott DFK LLP Chartered Accountants and Statutory Auditor London, 2 December 2013 41 notice oF meeting group compAnies Notice is hereby given that the ninety fourth Annual General Meeting of Dewhurst plc will be held at its registered office, Unit 9 Hampton Business Park, Hampton Road West, Feltham, TW13 6DB on 4 February 2014 at 11:00 am. The meeting will be held in order to consider and, if thought fit, pass resolutions 1 to 6 as ordinary resolutions. ordinary resolutions 1 To receive and adopt the statement of accounts for the year ended 30 September 2013 and the reports of the directors and auditor thereon. 2 To declare and approve a final dividend on the Ordinary and ‘A’ non-voting ordinary shares to shareholders on the register of members on 17 January 2014. 3 To re-elect as a director Mr J Sinclair, who retires by rotation under the Articles of Association. 4 To re-elect as a director Mr J Bailey, who retires by rotation under the Articles of Association. 5 To re-appoint Chantrey Vellacott DFK LLP as auditor at a fee to be agreed by the directors. 6 As special business to consider and, if thought fit, pass the following ordinary resolution: that the company be and is hereby generally and unconditionally authorised to make market purchases (within the meaning of section 693(4) of the Companies Act 2006) of up to an aggregate of 496,380 Ordinary shares and 780,330 ‘A’ non-voting ordinary shares of 10p each (representing 15% of the issued share capital) in the company at a price per share (exclusive of expenses) of not less than 10p and not more than 105% of the average of the middle market quotations for such Ordinary and ‘A’ non-voting ordinary shares, as derived from the Stock Exchange Daily Official List, for the ten dealing days immediately preceding the day of the purchase; such authority to expire at the conclusion of the Annual General Meeting to be held in 2015 save that the company may purchase shares at any later date where such purchase is pursuant to any contract made by the company before the expiry of this authority. 7 To transact any other ordinary business of the company. By order of the board Jared Sinclair Secretary 31 December 2013 notes 1 All Shareholders who wish to attend and vote at the meeting must be entered on the company’s register of members no later than 11:00 am on 2 February 2014 (being 48 hours prior to the time fixed for the meeting) or, in the case of an adjournment, as at 48 hours prior to the time of the adjourned meeting. Changes to entries on the register after that time will be disregarded in determining the rights of any person to attend or vote at the meeting. ‘A’ non-voting ordinary shares do not carry the right to attend or vote at meetings of the company. 2 Shareholders entitled to attend and vote at the meeting may appoint a proxy or proxies to attend, vote and speak on their behalf. A proxy need not be a member of the company. Investors who hold their shares through a nominee may wish to attend the meeting as a proxy, or to arrange for someone else to do so for them, in which case they should discuss this with their nominee or stockbroker. Shareholders are invited to complete and return the enclosed Proxy Form. Completion of the Proxy Form will not prevent a Shareholder from attending and voting at the meeting if subsequently he/she finds that he/she is able to do so. To be valid, completed Proxy Forms must be received by the Company Secretary at the registered office of the company, Dewhurst plc, Unit 9 Hampton Business Park, Hampton Road West, Feltham, TW13 6DB, by fax at +44 (0)20 8744 8206, with the scanned Proxy Form by email at cosec@dewhurst.co.uk by no later than 48 hours before the time appointed for the holding of the meeting, or, in the case of an adjournment, as at 48 hours prior to the time of the adjourned meeting. 3 Representatives of Shareholders which are corporations attending the meeting should produce evidence of their appointment by an instrument executed in accordance with Section 44 of the Companies Act 2006 or signed on behalf of the corporation by a duly authorised officer or agent and in accordance with article 71 of the company’s Articles of Association. 4 The company, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those holders of Ordinary Shares registered in the register of members of the company at 11:00 am on 2 February 2014 (being 48 hours prior to the time fixed for the meeting) shall be entitled to attend and vote at the Annual General Meeting in respect of such number of shares registered in their name at that time. Changes to entries in the register of members after that time shall be disregarded in determining the rights of any person to attend or vote at the meeting. 5 A copy of the company’s current Articles of Association will be available for inspection during usual business hours on any weekday (Saturdays, Sundays and Public Holidays excluded) at the registered office of the company until the date of the Annual General Meeting and at the place of the meeting for 15 minutes prior to and until the termination of the meeting. Dual engraving pty ltd Unit 5, 7 Neil Street Osborne Park, WA 6017 Australia Tel: 00 618 9443 3677 Fax: 00 618 9443 3688 garry@dualengraving.com.au www.dualengraving.com.au Garry Holden General Manager Dewhurst (hong Kong) ltd Unit 19, 7/F, Block A Hoi Luen Industrial Centre 55 Hoi Yuen Road Hong Kong Tel: 00 852 3523 1563 Fax: 00 852 3909 1434 efung@dewhurst.co.uk www.dewhurst.co.uk Eric Fung General Manager otHeR oveRseAs RePResentAtIon The Group maintains overseas representation in major countries throughout the world HeAD offICe oveRseAs sUbsIDIARIes Dewhurst plc Unit 9 Hampton Business Park Hampton Road West Feltham TW13 6DB Tel: 020 8744 8200 Fax: 020 8744 8299 cosec@dewhurst.co.uk www.dewhurst.co.uk UK sUbsIDIARIes Dewhurst uK manufacturing ltd Unit 9 Hampton Business Park Hampton Road West Feltham TW13 6DB Tel: 020 8744 8200 Fax: 020 8744 8299 cosec@dewhurst.co.uk www.dewhurst.co.uk David Dewhurst Managing Director thames Valley controls ltd Unit 15 Manor Farm Industrial Estate Flint, Flintshire Wales CH6 5UY Tel: 01352 793222 Fax: 01352 793255 info@tvcl.co.uk www.tvcl.co.uk Richard Young Managing Director Traffic Management Products Ltd Unit 7 Gatwick Distribution Point Church Road, Lowfield Heath Crawley West Sussex RH11 0PJ Tel: 08456 808066 Fax: 08456 808077 info@traffic-products.co.uk www.traffic-products.co.uk Dewhurst (hungary) Kft H-2038, Soskut Hrsz. 3518/8 Hungary Tel: 00 362 356 0550 Fax: 00 362 356 0559 Laszlo Denk Managing Director Dupar controls inc. 1751 Bishop Street Cambridge, Ontario Canada N1T 1N5 Tel: 001 519 624 2510 Fax: 001 519 624 2524 info@dupar.com www.dupar.com George Foleanu General Manager elevator research manufacturing corp. 1417 Elwood Street Los Angeles CA 90021 USA Tel: 001 213 746 1914 Fax: 001 213 749 1355 sales@elevatorresearch.com www.elevatorresearch.com Barnet Rogers General Manager Australian lift components pty ltd 5 Saggartfield Road Minto NSW 2566 Australia Tel: 00 612 9603 0200 Fax: 00 612 9603 2700 info@alc.au.com www.alc.au.com Chris Carroll Managing Director lift material Australia pty ltd PO Box 7164 Alexandria, Sydney NSW 2015 Australia Tel: 00 612 9310 4288 Fax: 00 612 9698 4990 info@liftmaterial.com www.liftmaterial.com Tony Pegg Managing Director 42 43 ADVisers AnD compAnY inFormAtion AUDItoR chantrey Vellacott DFK llp Chartered Accountants and Statutory Auditor Russell Square House 10-12 Russell Square London WC1B 5LF bAnKeRs national westminster Bank plc 275–277 High Street Hounslow Middlesex TW3 1EG ReGIstRARs capita irg plc Northern House Woodsome Park Fenay Bridge Huddersfield West Yorkshire HD8 0LA noMInAteD ADvIseR AnD bRoKeR cantor Fitzgerald europe 1 Churchill Place Canary Wharf London E14 5RD soLICItoRs Keystone law 53 Davies Street London W1K 5JH seCRetARy AnD ReGIsteReD offICe Jared sinclair Dewhurst plc Unit 9 Hampton Business Park Hampton Road West Feltham TW13 6DB Registered No.160314 44 45 Design www.gilldavies.co.uk www.Dewhurst.co.uK 46
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