Annual report and accounts 2015 Our customers rely on our expertise and technology Dewhurst plc Financial highlights We are a global supplier of quality components to the lift, transport and keypad industries Steady progress on earnings and dividends Lift Pushbuttons Indicators Transport Highway products Parking equipment Auxiliary equipment Pushbuttons Lift control and monitoring systems Indicators and associated products Keypads Banking terminals Security Ticketing machines Petrol pumps Group revenue Operating profit* Earnings per share Dividend per share – 2015 £(000) 2014 £(000) £45,946 £46,616 £5,588 51.99p 13.00p £5,475 46.22p 9.00p Contents 1 Financial highlights 2 Chairman’s statement 3 Our global reach 4 Strategic report 10 Financial review 11 Group five year review 12 Board of directors 13 Report of the directors 16 Consolidated financial statements 20 Notes to the accounts 38 Company financial statements 41 Report of the independent auditor 42 Notice of meeting 43 Group companies 44 Advisers and company information * Operating profit before goodwill write down, amortisation of acquired intangibles and gain on property disposal Revenue £ million –1% Operating profit* £ million +2% 2011 2012 2013 2014 2015 41.5 2011 4.9 51.6 2012 43.7 46.6 45.9 2013 2014 2015 4.1 5.6 5.5 5.6 * Operating profit before goodwill write down, amortisation of acquired intangibles and gain on property disposal Earnings per share Pence +12% Dividend per share Pence +44% 2011 2012 2013 11.28 2014 2015 30.67 42.98 46.22 2011 2012 2013 2014 6.69 7.02 12.02† 8.00 9.00 51.99 2015 10.00 13.00† † Includes special dividend of 3p (2012: 5p) per share 1 Chairman’s statement Our global reach We continue our focus on quality to help drive future growth Results I am pleased to report improved profits for the year albeit on slightly lower sales which fell 1.4% to £45.9 million (2014: £46.6 million) mainly due to currency movements. Operating profit before amortisation of acquired intangibles and gains on property disposal was £5.6 million (2014: £5.5 million), very close to the previous record figures; profit before tax was £5.3 million (2014: £4.8 million) up 11% and by a small margin our best ever. The year followed the pattern set in the first half. After last year’s strong performance in the UK, sales dropped back this year, whereas all but one of the overseas companies achieved better revenues. As last year, the continued strengthening of the pound reduced the reported impact in sterling of the local improvements. The adverse effect of the change in currency translation rates was £1.1 million on sales and £0.2 million on profits. Sales were down at the Transportation Division, marginally down overall at the Lift Division and broadly flat for Keypads. Many of our operations have faced challenges this year to meet customers’ ever more demanding expectations. Our employees are focussed on our efforts to improve and I would like to thank them for their contribution to our progress this year. We are planning to continue our progressive improvement in the dividend in line with our stated target, with another 1p increase in the basic dividend proposed for the year. We sold our remaining building on the Inverness Road site during the year and this provided a welcome gain on disposal of £0.4 million. As a result we are proposing a special additional dividend of 3p to distribute a significant proportion of the cash raised from that transaction. Operations and people Our General Manager at Australian Lift Components (ALC) left us during the year. Brad Newell has taken on that position. Brad is new to the lift industry, but has made good progress in addressing a number of ALC’s key 2 issues. We welcome him to the Group and wish him continued success in his role. We have increased our investment in equipment this year with one new high speed laser machine purchased for Canada and another similar one ordered for Feltham. We have also replaced some of our older moulding machines. We have continued the drive to improve our quality and the reliability of our processes, with investment in additional staffing and equipment. Products We have launched several products in the last 3 months that we have put considerable effort and investment into during the year. Our latest control system, Ethos 2, has been released after a lengthy development programme. This offers an intuitive touchscreen based control and integrated speed profiling, simplifying set up for our customers. At recent industry exhibitions in North America and Europe we also launched a touchscreen lift car operating panel, which provides end users with flexibility in appearance and floor designations. In our Transportation Division we introduced a more robust and simpler version of our retroreflective reboundable traffic bollard earlier in the year and more recently a new highways passively safe chevron sign system. Outlook We had a strong first quarter for 2015, but that does not look as though it will be replicated in the coming year. Instead the pattern from the second quarter of last year onwards is continuing, with demand in the UK rather weak, but most of our overseas markets stable or gently growing. There are signs of potential future improvement in the UK with project activity quite high, but timing of orders uncertain. At some point these projects will feed through to sales, but our business does tend to lag behind the general performance of the economy. Richard Dewhurst Chairman Our broad spread across continents provides a degree of resilience Dewhurst companies and agents The Americas Canada Dupar Controls Product areas Lift UK & Europe USA The Fixture Company Elevator Research Manufacturing Corp. United Kingdom Dewhurst Thames Valley Control Traffic Management Products Hungary Dewhurst (Hungary) Asia & Australia Hong Kong Dewhurst (Hong Kong) Australia Australian Lift Components Lift Material Australia Dual Engraving Product areas Lift Transport Keypad Product areas Lift Transport Group sales 26% Employees 97 Group sales 47% Employees 216 Group sales 27% Employees 59 3 United Kingdom Birmingham New Street Station Strategic report Our products are widely used in key infrastructure projects Business review The Group’s principal activity in 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. 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 to the Group are quality measures and on-time deliveries to our customers. 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 24). Operating highlights It has been a difficult year in our European markets, including the United Kingdom. Sales in Group companies in this area have either been flat or have fallen. Encouragingly though, outside this region we have seen quite a different picture, with sales in the vast majority of Group companies increasing. In line with the Chairman I would like to thank all our employees in our Group companies, who have worked hard all year and ensured that we have been able to deliver these results. 4 UNITED KINGDOM Dewhurst UK Manufacturing Sales at Dewhurst UK Manufacturing fell by 3% on the previous year, primarily as a result of reduced infrastructure spending in the UK. Last year, the General Election caused a number of private and public authority projects to be stalled which added to the challenge of effectively growing our sales. We have however put a great deal of energy into strengthening our overseas markets and this has led to an increase of 10% in our export sales. The two primary areas of growth were Canada, where we have been able to broaden the range of products we sell to our sister company, Dupar Controls. The Middle East was the second area of growth. We have focused our effort here for the last two years and these efforts are now starting to pay off with some reasonable signalisation orders from a range of customers. Our new UniBlade products and other products that we have developed for Destination Despatch Lift Systems have sold well. We have won significant projects in the UK, Canada and Dubai for both new builds and modernisation. Research and development through the year focused primarily on smaller projects aimed at broadening and improving our current range of products. We added a number of variants to our UniBlade family of products and we have also improved the illuminators on our core Compact 3 and Jumbo pushbuttons. We have maintained the focus on Continuous Improvement of our FastFit Our new customer service for landing and car fixtures: • Simple order codes • Pre-approved drawings • Fast turnaround The redeveloped Birmingham New Street Station was opened in September 2015 after a 5 year programme of work. There is now a grand concourse with 30 new escalators and 15 new lifts. This gives passengers more space and makes platforms more accessible. We have provided lift operating panels, controllers and lift monitoring for the station. 5 Our keypads are used in various parking systems around the world. This unit for a multi-space pay station in North America allows input of license plate information where the parking authority requires it. Despite the large number of keys it remains a relatively compact unit. North America Parking pay stations 6 Strategic report processes and our most significant event for this year was the launch of our new online ordering system. The system allows customers to order our fastest moving pushbutton products as well as key switches and other lift auxiliaries online. In addition to providing 24 hour access, we feel it also presents the products in a clearer and much more appealing way. Initial feedback from customers has been positive and we would expect good take up of the system over the coming year. £700,000 invested in new laser cutters In the three years following our move from Hounslow to Feltham, our main priority has been to bed down the production facility and ensure that everything is working as we would like it to. Capital investment has remained relatively low. It is therefore pleasing to report that this year we have made some significant investments in new plant, with the purchase of two new Arburg moulding machines, to replace existing machines that were over 20 years old. Towards the end of the year we also ordered a new Amada fibre laser cutter that we have now commissioned. Fibre laser machines are able to cut our stainless steel faceplates significantly faster than conventional CO2 machines. As well as cutting faster, they have much lower running costs in terms of laser gases, electricity and maintenance costs. Thames Valley Controls (TVC) After a really excellent year last year, we knew that TVC would struggle to live up to that performance again this year and indeed they did experience a 16% fall in sales. TVC’s orders are made up of a steady flow of base orders and then a smaller number of one off projects. Last year we had an unusually high number of projects and this year those project orders returned to more normal levels. Despite the fall in sales, TVC contributed strongly to Group profits. Even though we have seen a reduction in the number of projects compared with last year, we have continued to be successful with our Navigator Destination Despatch Control System. We have won a number of new projects in the commercial sector including at Manchester’s Arndale Centre and for a landmark building on Euston Road in London. We have continued to build on the success of our lift monitoring products by adding in new features and facilities, specifically an integrated CCTV function. This provides lift operators with an enhanced safety offering, particularly in unmanned environments, as well as providing safeguards against anti-social behaviour. Traffic Management Products (TMP) In line with our other UK companies TMP encountered difficult trading conditions and sales fell 18% on the previous year. However costs were well controlled and TMP’s profits were not significantly impacted. The team at TMP has continued to make good progress this year. We have invested in new products with the launch of Evo-N our new reflective, reboundable bollard, which complies with all current standards. Evo-N has achieved a passive safety level of 100NE4, which means that even if hit by a vehicle at 100 km/h it will rebound intact. This illustrates the robustness of its design. We have also developed and launched a new range of Chevrons called Evo-Chev. These products pinpoint hazardous bends Evo-N A new version of our reboundable bollard was launched. It complies with all current standards and remains passively safe and fully functional after a 100km/h impact. and roundabouts, helping to reduce accidents in the locations. Evo-Chev incorporates the TMP patented self- righting base (used on our bollard products) and allows the Chevron to return to an upright position following impact. Investment has been made at TMP in our marketing material with the launch of a new website including the facility for online ordering. EUROPE Dewhurst Hungary Sales at Dewhurst Hungary were more or less identical to last year, although price reductions over the previous year meant that there was some growth in terms of the number of units shipped. Improved processes both at the factory in Hungary but also in terms of our supply chain, have allowed us to reduce our costs and achieve some growth in profits. We have built up a strong and knowledgeable quality team in Hungary, with the support of a key customer. The systems we now have in place are far more sophisticated and effective than those we have across our other companies in the Group. As a result, this year we have broadened the remit of our Dewhurst Hungary Quality Manager and promoted her to the new role of Group Quality Manager. We have established a set of new quality measures which we expect all Group companies to report within the next twelve months. Once companies have established these measures, we will be able to pinpoint areas of opportunity and work to achieve continuous improvement in our quality level. NORTH AMERICA Dupar Controls While the UK and Europe experienced challenging market conditions our other markets experienced reasonable growth. Dupar was typical in this respect and following a number of years of growth reported a 15% increase in sales over the previous year. This was an excellent achievement and created quite a challenge for production. 7 Strategic report 11% growth in overseas sales (in local currency terms) We did see a squeeze on margins with the Canadian dollar weakening against both the British pound and the US dollar, but despite this Dupar generated good profit growth. There has been significant investment this year in new computer software to improve our processes. This investment is on-going but we aim to see the rewards during the next twelve months. Dupar have also been involved in a major new product development and towards the end of the year we launched the US1 Touch Car Operating Panel. This product is a state of the art alternative to traditional pushbuttons. It allows you to create your own style of pushbutton on the touch screen, with a background that complements the design of your building or lift car. It is however quite a niche product, designed for high end installations and we currently see it complementing our range of traditional pushbuttons rather than replacing them. The increased sales have meant it has been critical for us to continue to invest in new plant and machinery. As with Dewhurst UK we needed to replace Dupar’s laser machine and we have purchased the same Amada fibre laser cutting machine for Dupar. This was installed and commissioned halfway through the year and we have benefitted greatly from its increased capacity and reliability. Elevator Research & Manufacturing (ERM) Sales have been flat at ERM over the last twelve months however increases in costs pushed ERM into a small loss for the year. It has been a difficult year operationally and we have operated with an Interim General Manager at the company whilst we work to find a new General Manager. 8 ERM is a good company, with a wonderful opportunity to improve service levels and grow sales outside the Los Angeles area. We believe that in the right hands ERM can prosper greatly and we are not going to rush to fill the post of General Manager. We need to be absolutely confident that we have the correct person for the job. AUSTRALIA & ASIA Australian Lift Components (ALC) ALC saw strong demand this year and grew sales by nearly 20% over the previous year. As a result profits recovered considerably from last year’s disappointing level. There was a change of personnel at ALC and we welcome Brad Newell our new General Manager. We have reenergised our Continuous Improvement initiatives in the plant and focused hard on streamlining our assembly processes, as well as implementation of rigid 5S activity. ALC are now working to increase their market share with the major lift companies to ensure that the growth in sales continues through the coming year. Pacific region. Most projects include installation of the handrails in addition to supplying the material. This requires a great deal of organisation. The logistics of ensuring the people, installation tools and product are in the right place at the right time, in a country as vast as Australia is quite demanding. Dual Engraving Dual had an excellent year with 20% sales growth on last year. They have been involved in some major modernisation projects in Perth, the most notable of which was Central Park. This is a landmark building located in Perth’s Central Business District with 51 floors and a total of 23 lifts. Dual supplied and installed bespoke new car interiors and entrances for the lifts. Dewhurst Hong Kong Dewhurst Hong Kong grew sales by just over 10% to achieve a record year for both sales and profit. We have been able to broaden our market and are now achieving notable levels of sales in other South East Asian countries, primarily Singapore and Malaysia. Approved and signed on behalf of the board David Dewhurst Group Managing Director 7 December 2015 EHC EHC NT handrails are increasingly being specified for prestige projects in Australia. We have fitted handrails on Perth and Melbourne Metro systems and most of Australia’s major airports in addition to a number of shopping centres. Lift Material It was very much a year of consolidation at Lift Material. Sales continued to grow steadily, increasing 10% on the previous year. We continue to win business for the EHC escalator handrails all around Australia and in other countries in the Australia Central Park, Perth Originally built in 1992, Central Park is Perth’s tallest office tower at 51 floors and a landmark building in Perth’s Central Business District. Its 23 lifts were recently refurbished by Dual Engraving with most cars incorporating modernist artworks from a celebrated local artist matching his original artworks in the Atrium. 9 Financial review Continued growth in earnings drives progress on dividends and shareholder value Trading results Dewhurst sales continued a similar trend to that reported in the half year with full year revenue marginally down on last year. UK revenue continued to weaken across all domestic companies but again overseas companies performed strongly. The regions of biggest revenue growth were in Canada and Australia which saw double digit percentage increases in local terms, with nearly all those subsidiaries reporting record sales in local currency. Unfortunately, upon retranslation into Pounds Sterling for group reporting, the strengthened pound reduced like for like sales by £1.1 million or 2.4% and accounts for more than the reported Group decrease. Overall revenue decreased by 1.4% from £46.6 million to £45.9 million. The same foreign retranslation also impacted operating profits by £0.2 million or 2.9%, but despite this the Group’s overseas operations still reported improvements on last year. Operating profit before gain on disposal of property and acquired intangible amortisation increased by 2.1% from £5.5 million to £5.6 million and in percentage terms increased from 11.7% to 12.2% of revenue. Strong cash position Cash flow was once again very good with £3.6 million of cash being generated from operations (2014: £3.9 million). Despite pension contributions of £1.4 million, increased dividends, as well as investing £0.9 million in key plant and equipment, the Group ended the year with cash and short-term deposits at £15.0 million, up £2.1 million from £12.9 million in 2014. 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 21 under IAS 19, but I am pleased to report that this year, Dewhurst plc saw no material increase in the scheme deficit of £12.2 million. The net effect of three key actuarial assumptions changes: the liability discount rate changing from 3.8% to 3.7%, the RPI 10 rate changing from 2.9% to 3.0% and the mortality table changing to reflect more accurately the recent past and current mortality rates, resulted in an overall £5k adjustment. The scheme was closed to future accrual in 2010 but the Group 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 actuary to eliminate the scheme deficit within an agreed timeframe have been fully implemented. 50% increase in normal dividend over 5 years Contingent liability settlement Following dismissal of the lawsuit in the Arizona Court, without admission or finding of liability, Dewhurst (Hungary) Kft and AIG agreed and paid in the current financial year a confidential full and final settlement of all claims arising from this dispute. Gain on disposal of property The old factory site in Hounslow (Inverness Road) was sold in 2012 generating the cash to acquire and develop the current site in Feltham. At that time, the property developers were not interested in acquiring the caretaker’s bungalow which was also owned by Dewhurst plc and was adjacent to the old site. The directors therefore chose to retain this bungalow in the short term whilst the Hounslow site was redeveloped into residential properties in the expectation that the redevelopment would enhance the bungalow’s future value. The directors sold this property in May 2015 giving rise to a £0.4 million gain on disposal. Amortisation of acquired intangibles The amortisation relates to Dual Engraving’s acquired customer list and key relationships which are being written off over 3 years. These will be fully written off in February 2016. Group five year review 2011 £(000) 2012 £(000) 2013 £(000) 2014 £(000) 2015 £(000) Revenue 41,487 51,555 43,698 46,616 45,946 Adjusted operating profit * 4,880 5,605 4,084 5,475 5,588 Operating profit 4,424 5,660 2,594 5,179 5,675 Profit before taxation 4,038 5,314 2,219 4,812 5,318 As a percentage of total equity 18.6% 24.6% 10.1% 21.4% 21.8% Taxation 1,428 1,688 1,307 866 851 Profit after taxation 2,610 3,626 912 3,946 4,467 Total equity 21,754 21,564 21,870 22,448 24,338 Earnings per share, basic and diluted 30.67p 42.98p 11.28p 46.22p 51.99p Dividends per share 6.69p 12.02p 8.00p 9.00p 13.00p * Operating profit before goodwill write down, amortisation of acquired intangibles and gain on property disposal Shareholders’ return 600p 500p 400p 300p 200p 100p Sept 2010 Sept 2011 Sept 2012 Sept 2013 Sept 2014 Sept 2015 Ordinary share price ‘A’ ordinary share price Subsidiary share repurchase As a result of amortising the acquired intangibles within Dual Engraving, this subsidiary will have little or no retained earnings for dividend redistribution until distributable profits surpass the A$1.6 million amortisation being written off but the subsidiary does have surplus cash above its day to day working capital requirements. Therefore to redistribute this surplus cash back to its shareholders, Dual Engraving exercised a share repurchase of A$500k in December 2014. Since Dual Engraving is only 70% owned by Dewhurst plc, this transaction is reported both within the consolidated and Company cash flow statement as well as within related party transactions – see note 23. 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 half 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 24. Dividends Dividends are accounted for when paid or approved by shareholders, and not when proposed, therefore the proposed final dividend for 2015 has not been accrued at the balance sheet date. The total dividend for 2015 of 13.00p per share is 44% up on 2014 and is covered 4.1 times by earnings. Total equity improved from £22.4 million to £24.3 million. There was no change in the number of allotted shares during the year. Jared Sinclair Finance Director 7 December 2015 11 Board of directors Report of the directors Jared Sinclair BSc, ACA Finance Director, 45, joined in 1997. Previously with Moores Rowland, Chartered Accountants, Audit Senior. Richard Dewhurst BA (Eng Sc), ACMA Chairman, 59, joined in 1985. Previously with Ford Motor Co, Ernst & Whinney Senior Management Consultant. Peter Tett MA, MSc Non-executive Director, 76, joined in 2000. Previously with Halma plc, Director. Richard Young MBA, BSc, CEng, MIET Managing Director – Thames Valley Controls, 59, joined in 1996. Previously with MBM Technology Ltd, Director and General Manager. David Dewhurst BSc (Elec Eng) Group Managing Director, 54, joined in 1987. Previously with Holmes & Marchant plc. John Bailey Non-executive Director, 45, joined in 2008. Previously with Brett Landscaping & Building Products, Commercial Director. 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 2015. Results and dividends The trading profit for the year, after taxation, amounted to £4.5 million (2014: £3.9 million). A 3p special dividend in addition to the normal final dividend on the Ordinary and ‘A’ non-voting ordinary shares of 7.00p per share (2014: 6.20p) for the financial year ended 30 September 2015 will be proposed at the Annual General Meeting (AGM) to be held on 2 February 2016. If approved, this dividend will be paid on 17 February 2016 to members on the register at 22 January 2016. An interim dividend of 3.00p per share (2014: 2.80p) was paid on 25 August 2015. A final dividend on the Ordinary and ‘A’ non-voting ordinary shares of 6.20p per share (2013: 5.66p) which amounted to £525k (2013: £482k) for the financial year ended 30 September 2014 was approved at the AGM held on 3 February 2015 and was paid on 19 February 2015 to members on the register at 16 January 2015. Post balance sheet events There have been no post balance sheet events since the year end. Share repurchases There have been no share purchases during the financial year. Directors The members of the board during the year were: Substantial shareholdings At 19 November 2015, 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 651,000 Fidelity NorthStar Fund 200,000 Mr R M Dewhurst (chairman) Mr D Dewhurst (group managing director) Mr J C Sinclair Mr R Young Mr J Bailey (non-executive) 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. Mrs B Bruce Ms E Dewhurst Mr J H Ridley 190,208 175,333 138,148 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 518,000 387,000 PFS Discretionary Unit Fund 350,000 TD Direct Investing Nominees Ltd 270,010 Vidacos Nominees Ltd 251,500 HDSL Nominees Ltd Ms E Dewhurst 203,000 167,416 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 2015 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 2014. Mr R M Dewhurst Mr D Dewhurst Mr J C Sinclair Mr R Young Mr J Bailey Mr P Tett 30 September 2015 ‘A’ ordinary shares Ordinary shares 30 September 2014 ‘A’ ordinary shares Ordinary shares 492,333 123,666 492,333 123,666 419,595 69,932 419,595 69,932 1,000 1,000 1,000 1,000 – – – – 1,000 1,000 1,000 1,000 – – – – 12 13 At 30 September 2015 and 30 September 2014 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. Report of the directors 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 Non-executive directors: Mr J Bailey Mr P Tett Salary and fees £(000) Bonus £(000) Benefits in kind £(000) Pension 2015 Total 2014 Total £(000) £(000) £(000) 129 113 95 90 26 19 95 80 29 50 9 – 4 3 – – – – – – 10 14 – – 228 196 134 154 35 19 215 185 124 181 44 18 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. 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 on several occasions. 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, control costs and maintain a strong cash balance 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. Chantrey Vellacott DFK LLP has merged its practice with Moore Stephens LLP and now practices under the name of Moore Stephens LLP. A resolution will be proposed at the Annual General Meeting to appoint Moore Stephens LLP as auditor and to authorise the directors to determine their remuneration. Directors’ responsibilities statement 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 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 7 December 2015 and detection of fraud and other irregularities. The directors are responsible for preparing the annual report, the strategic 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 14 15 Consolidated financial statements The notes on pages 20 to 37 form part of these financial statements Consolidated statement of comprehensive income Consolidated balance sheet For the year ended 30 September 2015 Continuing operations Revenue Operating costs Adjusted operating profit* Gain on disposal of property Amortisation of acquired intangibles Operating profit Finance income Finance costs Profit before taxation Taxation Profit for the financial year Other comprehensive income: Actuarial gains/(losses) on the defined benefit pension scheme 21 Deferred tax effect Total that will not be subsequently reclassified to income statement Exchange differences on translation of foreign operations Deferred tax effect Total that may be subsequently reclassified to income statement Other comprehensive income/(expense) for the year, net of tax Total comprehensive income for the year Profit for the year attributable to: Equity shareholders of the company Non-controlling interests Total comprehensive income for the year attributable to: Equity shareholders of the company Non-controlling interests Notes 2015 £(000) 2014 £(000) 2 3 5 6 7 8 45,946 46,616 (40,271) (41,437) 5,588 5,475 357 (270) 5,675 107 (464) 5,318 (851) 4,467 (884) 177 (707) (1,282) 257 (1,025) (1,732) 2,735 4,406 61 4,467 – (296) 5,179 85 (452) 4,812 (866) 3,946 (2,570) 514 (2,056) (669) 134 (535) (2,591) 1,355 3,930 16 3,946 2,759 1,379 (24) (24) 2,735 1,355 At 30 September 2015 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 2015 £(000) 2014 £(000) 10 11 12 19 14 15 16 17 18 21 20 2,695 171 8,581 2,491 3,129 463 8,665 2,086 13,938 14,343 4,751 8,056 – 14,958 27,765 41,703 4,501 9,199 26 12,928 26,654 40,997 4,502 5,398 348 318 – 959 5,168 6,357 12,197 17,365 24,338 847 157 290 (11) 22,521 23,804 534 12,192 18,549 22,448 847 157 290 929 19,590 21,813 635 24,338 22,448 The financial statements were approved by the board of directors and authorised for issue on 7 December 2015 and were signed on its behalf by: Basic and diluted earnings per share 9 51.99p 46.22p * Operating profit before goodwill write down, gain on disposal of property and amortisation of acquired intangibles Richard Dewhurst Chairman Jared Sinclair Finance Director Company Registration Number: 160314 16 17 Consolidated financial statements The notes on pages 20 to 37 form part of these financial statements Consolidated statement of changes in equity Consolidated cash flow statement Translation reserve Retained earnings Non- controlling interest Total equity £(000) £(000) £(000) Share capital For the year ended 30 September 2015 £(000) At 1 October 2013 851 Shares issued Exchange differences on translation of foreign operations Actuarial gains/(losses) on defined benefit pension scheme Deferred tax effect Share repurchase – nominal Share repurchase – cost Dividends paid Profit for the year – – – – (4) – – – Share premium account £(000) 157 Capital redemption reserve £(000) 286 – – – – – – – – – – – – 4 – – – At 30 September 2014 847 157 290 Shares repaid Exchange differences on translation of foreign operations Actuarial gains/(losses) on defined benefit pension scheme Deferred tax effect Dividends paid Profit for the year – – – – – – – – – – – – – – – – – – £(000) 1,425 – (630) – 134 – – – – 929 – (1,197) – 257 – – 18,540 – – (2,570) 514 – (104) (720) 3,930 19,590 – – (884) 177 (768) 4,406 At 30 September 2015 847 157 290 (11) 22,521 611 48 21,870 48 (40) (670) – – – – – 16 635 (77) (2,570) 648 – (104) (720) 3,946 22,448 (77) (85) (1,282) – – – 61 534 (884) 434 (768) 4,467 24,338 For the year ended 30 September 2015 Cash flows from operating activities Operating profit 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 Tax paid Net cash from operating activities Cash flows from investing activities Acquisition of business and assets Subsidiary share repurchase – non-controlling interest element Proceeds from sale of property, plant and equipment Purchase of property, plant and equipment Development costs capitalised Interest received Net cash generated from/(used in) investing activities Cash flows from financing activities Dividends paid Purchase of own shares 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 Cash and cash equivalents at end of year Notes 2015 £(000) 2014 £(000) 5,675 991 5,179 1,194 (1,343) (1,360) (251) (423) 4,649 (250) 1,143 (896) (641) 4,005 (428) 3,577 – (77) 458 (893) (61) 107 (466) (768) – (768) 2,343 16 12,928 (57) (21) 4,935 56 (643) (47) 207 4,508 (605) 3,903 (112) – 47 (408) (70) 85 (458) (720) (104) (824) 2,621 10,506 (313) (199) 16 14,958 12,928 18 19 Notes to the accounts 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 21 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 2015, 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. 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. 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). A deferred tax asset has been recognised in relation to the pension scheme deficit. 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. 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. 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. 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 other comprehensive income. 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 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. 20 21 Notes to the accounts 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) 2015 £(000) 13,603 8,527 13,654 12,915 248 Revenue 2014 £(000) 16,250 7,635 12,884 12,868 – Operating profit 2014 £(000) 2015 £(000) 1,753 1,232 1,103 1,562 25 1,932 965 1,271 1,011 – 48,947 49,637 5,675 5,179 (3,001) (3,021) Consolidated revenue/profit before tax for the year 45,946 46,616 United Kingdom Europe The Americas Asia & Australia Other 2015 £(000) 15,407 5,860 10,913 8,980 543 Assets 2014 £(000) 16,021 6,277 9,280 9,179 240 (357) 5,318 2015 £(000) 7,461 2,258 4,366 2,772 508 (367) 4,812 Liabilities 2014 £(000) 9,033 2,719 3,874 2,746 177 Consolidated assets/liabilities for the year 41,703 40,997 17,365 18,549 Capital additions Depreciation and amortisation 2014 £(000) 2015 £(000) 2014 £(000) 2015 £(000) 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 22 147 80 474 185 7 893 202 50 149 236 1 638 246 77 174 483 11 991 2015 £(000) 332 77 184 597 4 1,194 Revenue 2014 £(000) 36,452 36,577 2,501 9,994 3,093 9,967 48,947 49,637 (3,001) (3,021) 45,946 46,616 Lift Transport Keypad Total Group 2015 £(000) Assets 2014 £(000) Capital additions 2014 £(000) 2015 £(000) 34,417 32,460 1,855 5,431 1,937 6,600 41,703 40,997 799 68 87 954 530 50 58 638 The Group has one major customer who accounts for £9.6 million (2014: £9.7 million) of the keypad revenue which is split across the United Kingdom, Europe, Asia & Australia and the Americas. Note 3 Operating costs Movement in inventory provision obsolescence Cost of inventories recognised as an expense Staff costs (see note 4) Depreciation Amortisation Foreign exchange differences Other operating charges Operating costs 2015 £(000) 116 20,721 14,245 668 323 (18) 4,216 40,271 2014 £(000) (5) 21,668 14,188 789 405 101 4,291 41,437 Other operating charges include lease rentals on premises £376k (2014: £367k) and lease rentals on motor vehicles £81k (2014: £84k), gain on sale of property, plant and equipment £423k (2014: gain of £21k) and auditor’s remuneration detailed below. Expenditure on research and development was £876k (2014: £831k). Auditor’s remuneration: Amounts paid to Moore Stephens and associates (previously Chantrey Vellacott DFK LLP and DFK associates) * Statutory audit services Pension audit services Taxation compliance services Other taxation advisory services 2015 £(000) 58 5 10 102 175 The Group 2014 £(000) 2015 £(000) The Company 2014 £(000) 82 5 12 22 121 22 1 1 102 126 21 1 1 21 44 * Chantrey Vellacott DFK LLP merged its practice with Moore Stephens LLP and now practices under the name of Moore Stephens LLP. 23 Notes to the accounts Note 4 Staff costs and information regarding employees Costs during the year were as follows: Wages and salaries Social security costs Pension costs (see note 21) The average number of employees during the year was: Office and management Manufacturing 2015 £(000) The Group 2014 £(000) 12,655 12,557 884 706 920 711 14,245 14,188 2015 No. 168 204 372 The Group 2014 No. 164 201 365 2015 £(000) 580 74 75 729 The Company 2014 £(000) 584 70 93 747 2015 No. The Company 2014 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 2015 £(000) 688 54 742 2014 £(000) 687 62 749 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 £228k (2014: £215k). The highest paid director, under the defined benefit scheme has accrued pension of £126k (2014: £122k) and an accrued lump sum of £2,745k (2014: £2,332k). Note 5 Finance income Bank deposit interest Note 6 Finance costs Net costs on defined benefit pension scheme (note 21) 2015 £(000) 107 2015 £(000) (464) 2014 £(000) 85 2014 £(000) (452) Note 7 Tax Current tax UK corporation tax at 20.5% (2014: 22.0%) Adjustment on prior years tax Overseas taxation Deferred tax Movement in deferred taxation provision Tax expense in the income statement 2015 £(000) (57) (25) 931 849 2 851 2014 £(000) 8 (160) 757 605 261 866 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 and other adjustments Effective tax rate for the year 2015 £(000) 5,318 20.5% 2014 £(000) 4,812 22.0% (0.5%) (3.3%) 0.1% 0% 0.5% (2.8%) (1.8%) 0.1% 5.4% 0% (6.2%) 0% 16.0% 18.0% Note 8 Profit for the financial year The Group profit for the year includes £3,697k (2014: £1,459k) 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. 24 25 Notes to the accounts Note 9 Earnings per share and dividend per share Weighted average number of shares For basic and diluted earnings per share 2015 No. 2014 No. 8,474,898 8,504,298 The calculation of basic and diluted earnings per share is based on the profit for the financial year of £4,406,018 and on 8,474,898 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 2014 final paid of 6.20p (2013: 5.66p) 2015 interim paid of 3.00p (2014: 2.80p) Unclaimed dividends returned – more than 12 years old 2015 £(000) (525) (254) 11 (768) 2014 £(000) (482) (238) – (720) The final proposed dividend is based on 3,309,200 Ordinary 10p shares and 5,165,698 ‘A’ non-voting ordinary 10p shares, being the latest number of shares in issue. The directors are proposing a 3p special dividend in addition to the normal final dividend of 7.00p (2014: 6.20p) per share, totalling £847k (2014: £525k). 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 2014 £(000) 2015 £(000) The Company 2014 £(000) 2015 £(000) 9,588 (565) – 9,740 (312) 160 9,023 9,588 6,459 (131) – 6,567 (108) – 6,328 6,459 2,695 3,129 – – – – – – – – – – – – – – – – – – Goodwill is allocated at acquisition to the business units that are expected to benefit from that acquisition. The remaining goodwill relates to three CGUs in Australia, Australian Lift Components Pty Ltd acquired in February 2000 – £954k (2014: £1,108k), Lift Material Australia Pty Ltd acquired in July 2005 – £680k (2014: £789k) and Dual Engraving Pty Ltd acquired in February 2013 – £1,061k (2014: £1,232k). Goodwill values have been tested for impairment by comparing them against the fair value of the relevant CGUs. The fair value 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. 26 The key assumptions used for the fair value calculation for these CGUs are the sales and margin projections, the private company price index (PCPI) multiple applied to forecast EBITDA 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. The fair value measurements are categorised within level 2 of the fair value hierarchy. Based upon these key assumptions the goodwill impairment charge that arose during the current year is nil (2014: nil). Note 11 Other intangibles 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 The Group 2014 £(000) 2015 £(000) The Company 2014 £(000) 2015 £(000) 1,571 (112) – 61 – 1,563 (62) – 70 – 1,520 1,571 1,108 (82) 323 – 727 (24) 405 – 1,349 1,108 171 463 463 836 – – – – – – – – – – – – – All amortisation has been charged to the income statement through operating costs and no intangible items are held as security. – – – – – – – – – – – – – 27 Notes to the accounts Note 12 Property, plant and equipment Note 13 Investments – shares in subsidiary undertakings Cost or valuation: At 1 October 2013 Exchange adjustment Additions Disposals At 1 October 2014 Exchange adjustment Additions Disposals Property £(000) Plant and equipment £(000) The Group Total Property £(000) £(000) Plant and equipment £(000) The Company Total £(000) 8,488 (155) 33 – 8,366 (260) 19 (43) 6,529 15,017 6,208 172 6,380 (199) 375 (98) (354) 408 (98) – 22 – – – – – 22 – 6,607 14,973 6,230 172 6,402 (268) 874 (730) (528) 893 (773) – 10 (43) – – – – 10 (43) At 30 September 2015 8,082 6,483 14,565 6,197 172 6,369 Depreciation: At 1 October 2013 Exchange adjustment Charge for the year Disposals At 1 October 2014 Exchange adjustment Charge for the year Disposals 926 (44) 182 – 4,851 5,777 (142) 607 (72) (186) 789 (72) 1,064 5,244 6,308 (72) 179 (12) (182) 489 (726) (254) 668 (738) At 30 September 2015 1,159 4,825 5,984 309 – 121 – 430 – 123 (12) 541 Net book value: At 30 September 2015 At 30 September 2014 6,923 7,302 1,658 1,363 8,581 8,665 5,656 5,800 49 – 35 – 84 – 32 – 116 56 88 358 – 156 – 514 – 155 (12) 657 5,712 5,888 Capital commitments contracted by the Group at 30 September 2015 amounted to £493k (2014: £102k) and by the company £58k (2014: £58k). Capital commitments authorised but not contracted by the Group at 30 September 2015 amounted to £56k (2014: £32k) and by the company £Nil (2014: £Nil). The Company Investments (ordinary shares) are: Cost Provision for impairment Investments in subsidiary undertakings are: Cost (after provision for impairment): Dewhurst UK Manufacturing Ltd Thames Valley Controls Ltd Traffic Management Products 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 (deregistered 19/07/15) Dual Engraving Pty Ltd Dewhurst Australian Property Pty Ltd Dewhurst (Hong Kong) Ltd 2015 £(000) 2014 £(000) 11,147 11,328 (6,938) 4,209 2015 £(000) (6,938) 4,390 2014 £(000) 175 300 – 72 35 – – 175 300 – 72 35 – – 1,798 1,798 85 – 85 – 1,646 1,827 97 1 97 1 4,209 4,390 The company has eleven wholly-owned subsidiaries, Dewhurst UK Manufacturing Ltd, Thames Valley Controls Ltd and Traffic Management Products Ltd (TMP), 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 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 which operates solely in the transport sector and Dewhurst Australian Property Pty Ltd, which operates solely to hold Australian Lift Components Pty Ltd’s property. 28 29 Notes to the accounts Note 14 Inventories Raw materials and components Work-in-progress Finished goods and goods for re-sale 2015 £(000) 2,640 441 1,670 4,751 The Group 2014 £(000) 2,708 377 1,416 4,501 2015 £(000) The Company 2014 £(000) – – – – – – – – Note 16 Cash and cash equivalents Cash Short-term deposits There is no material difference between the replacement cost of inventories and the amounts stated above. Note 17 Trade and other payables Trade receivables are shown net of provision for impairment. The movements in the provision for impairment of receivables were as follows: Note 18 Short-term provisions Note 15 Trade and other receivables Trade receivables Amounts due from subsidiary undertakings Other receivables Prepayments and accrued income 2015 £(000) 7,823 – 75 158 8,056 The Group 2014 £(000) 9,052 – 15 132 9,199 2015 £(000) – The Company 2014 £(000) – 2,755 3,326 15 18 – 21 2,788 3,347 At 1 October Charge for the year Costs recovered / (incurred) At 30 September 2015 £(000) 221 23 (24) 220 The Group 2014 £(000) 2015 £(000) The Company 2014 £(000) 180 37 4 221 – – – – – – – – 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 2015 As at 30 September 2014 Total £(000) 7,823 9,052 Within terms £(000) 5,399 6,710 Up to 1 month Up to 2 months Over 2 months overdue £(000) overdue £(000) overdue £(000) 2,170 1,782 250 297 4 263 2015 £(000) 8,958 6,000 The Group 2014 £(000) 9,428 3,500 14,958 12,928 2015 £(000) 913 6,000 6,913 The Company 2014 £(000) 261 3,500 3,761 2015 £(000) 1,511 551 90 2,350 4,502 The Group 2014 £(000) 2015 £(000) The Company 2014 £(000) 2,038 733 156 2,471 5,398 12 4 – 438 454 12 10 49 278 349 Trade payables Other taxes and social security costs Other payables Accruals and deferred income The directors consider that the carrying amount of trade payables approximates to their fair value. Warranty provisions 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 £545k (2014: £297k). Amounts utilised by the Group in the year were £1,186k (2014: £89k). There were no amounts charged or utilised this year or last year by the company. 2015 £(000) 318 The Group 2014 £(000) 959 2015 £(000) – The Company 2014 £(000) – 30 31 Notes to the accounts Note 19 Deferred taxation Deferred tax asset: At 1 October Transfer directly (to)/from equity Foreign exchange on deferred tax Transfer (to)/from income statement At 30 September Deferred tax at 30 September relates to the following: Defined benefit pension scheme Provisions Exchange differences on translation of foreign operations 2015 £(000) 2,086 433 (26) (2) The Group 2014 £(000) 1,709 648 (10) (261) 2015 £(000) 2,343 177 – (81) 2,491 2,086 2,439 The Company 2014 £(000) 2,141 514 – (312) 2,343 2015 £(000) 2,439 284 (232) The Group 2014 £(000) 2,438 137 (489) 2015 £(000) 2,439 – – The Company 2014 £(000) 2,438 (95) – Deferred tax asset 2,491 2,086 2,439 2,343 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 (2014: 3,309,200) Ordinary – 5,165,698 (2014: 5,165,698) ‘A’ non-voting ordinary 2015 £(000) 450 900 2014 £(000) 450 900 1,350 1,350 2015 £(000) 331 516 847 2014 £(000) 331 516 847 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. Note 21 Retirement benefit obligation The Group operates pension schemes in the UK, Canada, USA, Australia and Hong Kong, and also complies with Hungarian state legislation in relation to retirement provision. 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 £706k (2014: £711k). All, apart from £50k (2014: £70k) of defined benefit pension protection fund levy fees relates to defined contribution schemes. The Hungarian, Canadian, USA, Australian and Hong Kong schemes are of the defined contribution type and the cost to the Group amounted to £331k (2014: £349k). There was £20k of prepaid charges at the balance sheet date in respect of the defined benefit scheme (2014: outstanding charges of £31k). 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 (2014: £1,404k) which will be reviewed at the next actuarial valuation of the scheme on 1 June 2015. This method of calculating the 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. 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 6,062 at 30 September 2015 (2014: 6,623). Assumptions The following actuarial assumptions, updated to 30 September 2015 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 – for females Future expected lifetime for a member retiring in 20 years’ time – for males – for females The sensitivities regarding the principal assumptions used are set out below: 2015 3.0% n/a 3.0% 3.7% 23.0 yrs 24.4 yrs 25.0 yrs 25.8 yrs 2014 2.9% n/a 2.9% 3.8% 23.4 yrs 24.5 yrs 26.2 yrs 26.5 yrs Assumption Liability Discount Rate Rate of inflation (RPI) Rate of mortality Change in assumption Increase/decrease by 0.1% Increase/decrease by 0.1% Increase/decrease by 0.1 year Impact on plan liabilities Decrease/increase by 2.0% Increase/decrease by 0.8% Increase/decrease by 0.3% IAS 19 requires the value of annuities purchased in respect of pensioners and widow(er)s to be taken into current year calculations. 32 33 Notes to the accounts Note 21 Retirement benefit obligation continued The movement in the scheme assets, liabilities and the net deficit are as follows: Total fair value of scheme assets Present value of scheme liabilities Scheme deficit Related deferred tax asset Net pension liability Long-term rate of return expected at 30 Sept 2015 Fair value at 30 Sept 2015 £(000) Long-term rate of return expected at 30 Sept 2014 Fair value at 30 Sept 2014 £(000) Fair value at 30 Sept 2013 £(000) 3.7% 28,167 3.8% 27,495 25,341 (40,364) (12,197) 2,439 (9,758) (39,687) (35,871) (12,192) (10,530) 2,438 (9,754) 2,211 (8,319) The amounts charged to operating profit in relation to current service costs are £nil (2014 & 2013: £nil). Amounts charged to other finance costs: Expected return on pension scheme assets Interest on pension scheme liabilities Net benefit/(cost) 2015 £(000) 1,044 2014 £(000) 1,090 2013 £(000) 888 (1,508) (1,542) (1,362) (464) (452) (474) Deficit in scheme at 1 October 27,495 (39,687) (12,192) (10,530) (11,856) 2015 Assets £(000) 2015 Liabilities £(000) 2015 Total £(000) 2014 Total £(000) 2013 Total £(000) Movement in the year – Current service cost – Secured pensioners value movement – Benefits paid – Contributions – Administration charge – Other finance costs – Actuarial gains/(losses) – (240) (761) 1,404 (61) 1,044 (714) – 240 761 – – (1,508) (170) – – – – – – – – – 1,404 1,404 1,404 (61) (464) (884) (44) (452) (2,570) (48) (474) 444 Deficit in scheme at 30 September 28,167 (40,364) (12,197) (12,192) (10,530) Included in retained earnings is (£13,504k) (2014: (£12,620k)) being the cumulative actuarial gains or (losses) on the defined benefit pension scheme. Amounts recognised in the statement of comprehensive income (SOCI): Note 22 Lease commitments 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 SOCI History of experience gains and losses: Difference between the expected and actual return on scheme assets Percentage of scheme assets Experience gains and losses on scheme liabilities Percentage of the present value of scheme liabilities Total amount recognised in SOCI Percentage of the present value of scheme liabilities 2015 £(000) (714) (41) (129) (884) 2015 £(000) (714) 2014 £(000) 542 (5) (3,107) (2,570) 2014 £(000) 542 (2.5%) 2.0% (41) 0.1% (884) 2.2% (5) 0.01% (2,570) 6.5% (1.2%) Total future minimum lease payments under non-cancellable operating leases for each of the following periods: Within one year Within two to five years 2015 Land and buildings £(000) 238 74 312 2015 Other £(000) 78 90 168 The Group 2014 Land and buildings £(000) 146 34 180 2014 Other 2015 Other The Company 2014 Other £(000) £(000) £(000) 70 144 214 – – – – – – 2013 £(000) 1,707 (138) (1,125) 444 2013 £(000) 1,707 6.7% (138) 0.4% 444 34 35 Notes to the accounts Note 23 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 Subsidiary share repurchase Loans and trade receivables due 2015 £(000) 830 255 89 2014 £(000) 832 255 103 3,725 1,955 102 181 94 – 2,755 3,326 Note 24 Financial instruments 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. On 30 September 2015, Dewhurst plc entered into a A$2,650,000 Australian Dollar foreign exchange contract, in the amount of £1,225,249 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 30 October 2015. Currency and interest rate exposure of financial assets and liabilities The cash and cash equivalent amount of £14,958k (2014: £12,928k) is made up of cash of £8,958k (2014: £9,428k) and short-term deposits of £6,000k (2014: £3,500k). The cash was invested at overnight rates based on the relevant national LIBOR. Short-term deposits were on 95 days notice at an average yearly rate of 1.35% (2014: 1.35%). Of the cash, £10,458k (2014: £9,080k) is denominated in Sterling with the balance of £4,500k (2014: £3,848k) 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 At 30 September 2014 Sterling AUS Dollars US Dollars CAN Dollars Other Floating rate assets £(000) 5,580 1,321 692 1,673 162 9,428 4,458 1,685 887 1,789 139 Fixed rate assets £(000) 3,500 – – – – 3,500 6,000 – – – – At 30 September 2015 8,958 6,000 Interest free assets £(000) 4,115 1,455 2,170 1,149 163 9,052 2,873 1,519 2,217 1,111 103 7,823 The Group Interest free liabilities £(000) Floating rate assets £(000) Fixed rate assets £(000) 1,070 255 3,500 390 333 159 86 – 6 – – – – – – 2,038 261 3,500 509 269 341 206 186 913 6,000 – – – – – – – – 1,511 913 6,000 Interest free assets £(000) The Company Interest free liabilities £(000) – – – – – – – – – – – – 13 – – – – 13 13 – – – – 13 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 US Dollars with a balance of £280k (2014: £198k), trade receivables denominated US Dollars with a balance of £1,464k (2014: £1,243k) and trade payables denominated in Euros with a balance of £162k (2014: £80k). 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 (2014: no facility). 36 37 Company financial statements The notes on pages 20 to 37 form part of these financial statements Finance income Company statement of changes in equity For the year ended 30 September 2015 At 1 October 2013 Actuarial gains/(losses) on defined benefit pension scheme Deferred tax effect Share repurchase – nominal Share repurchase – cost Dividends paid Profit for the year At 30 September 2014 Actuarial gains/(losses) on defined benefit pension scheme Deferred tax effect Dividends paid Profit for the year At 30 September 2015 5 85 100 Share premium account £(000) 157 Capital redemption reserve £(000) 286 – – – – – – – – 4 – – – Share capital £(000) 851 – – (4) – – – 847 157 290 – – – – – – – – – – – – 847 157 290 Retained earnings £(000) 7,315 Total equity £(000) 8,609 (2,570) (2,570) 514 – (104) (720) 1,459 5,894 (884) 177 (768) 3,697 8,116 514 – (104) (720) 1,459 7,188 (884) 177 (768) 3,697 9,410 Company balance sheet At 30 September 2015 Non-current assets Property, plant and equipment Deferred tax asset Investments in subsidiaries Current assets Trade and other receivables 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 2015 £(000) 2014 £(000) 12 19 13 15 16 17 21 20 5,712 2,439 4,209 5,888 2,343 4,390 12,360 12,621 2,788 6,913 9,701 3,347 3,761 7,108 22,061 19,729 454 454 12,197 12,651 9,410 847 157 290 8,116 9,410 349 349 12,192 12,541 7,188 847 157 290 5,894 7,188 The financial statements were approved by the board of directors and authorised for issue on 7 December 2015 and were signed on its behalf by: Richard Dewhurst Chairman Jared Sinclair Finance Director Company Registration Number: 160314 38 39 Company financial statements The notes on pages 20 to 37 form part of these financial statements Report of the independent auditor Company cash flow statement For the year ended 30 September 2015 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 (Increase)/decrease in trade and other receivables Increase/(decrease) in trade and other payables Cash generated from/(used in) operations Income tax paid Net cash from/(used in) operating activities Cash flows from investing activities Acquisition of business and assets Subsidiary share repurchase Proceeds from closure of subsidiary undertakings 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 Purchase of own shares 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 Notes 2015 £(000) 367 155 2014 £(000) 122 156 (1,343) (1,360) (357) – (1,178) (1,082) 559 105 (514) (6) (520) – 181 – 388 (10) 156 3,725 4,440 (768) – (768) 3,152 3,761 6,913 541 13 (528) (4) (532) (112) – 124 – (22) 150 1,955 2,095 (720) (104) (824) 739 3,022 3,761 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 2015, which comprise the consolidated statement of comprehensive income, the consolidated and parent company balance sheets, the consolidated and parent company statement of changes in equity, the consolidated and parent company cash flow statements, 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 directors’ responsibilities statement, 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 2015 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 parent company financial statements have been prepared in accordance with the requirements of the Companies Act 2006; 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 Moore Stephens LLP Chartered Accountants and Statutory Auditor London 7 December 2015 40 41 Notice of meeting Group companies Notice is hereby given that the ninety sixth 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 2 February 2016 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. 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 31 January 2016 (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 31 January 2016 (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. Ordinary resolutions 1 To receive and adopt the statement of accounts for the year ended 30 September 2015 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 22 January 2016. 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 Moore Stephens LLP (previously 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 774,855 ‘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 2017 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 2015 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 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@tmp.solutions www.tmp.solutions Dan Robinson Managing Director OVERSEAS SUBSIDIARIES 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 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 Brad Newell General Manager 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 SECRETARY AND REGISTERED OFFICE Jared Sinclair Dewhurst plc Unit 9, Hampton Business Park Hampton Road West Feltham TW13 6DB Registered No.160314 ADVISERS Auditor Moore Stephens LLP Chartered Accountants and Statutory Auditor 150 Aldersgate Street London EC1A 4AB 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 44 Design www.gilldavies.co.uk www.dewhurst.co.uk
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