Annual Report and Accounts 2014
F
W
T
h
o
r
p
e
P
l
c
A
n
n
u
a
l
R
e
p
o
r
t
a
n
d
A
c
c
o
u
n
t
s
2
0
1
4
FW Thorpe Plc
Annual Report and Accounts 2014
INTRODUCTION
CONTENTS
We specialise in designing and
manufacturing professional
lighting equipment. We currently
employ around 500 people and
although each company works
autonomously, our skills and
markets are complementary.
Overview
01 How we have performed
02 Our strategy and business model
03 Chairman’s statement
06 Our offer
Performance
Around the group in 2014
10
14 Why buy from Thorlux?
18 Surface mount technology investment
20 JLR case study
Governance
22 Board of Directors
24 Strategic Report
26 Directors’ Report
29
30
Statement of Directors’ Responsibilities
Independent Auditors’ Report to the
members of FW Thorpe Plc
Accounts
32 Consolidated Income Statement
Consolidated Statement of
33
Comprehensive Income
Consolidated and Company Balance Sheets
34
35 Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
36
Consolidated and Company Statements of
37
Cash Flows
Notes to the Consolidated Financial
Statements
Directors’ Remuneration Report
38
69
Additional information
72 Notice of Meeting
74 Shareholder notes
IBC Financial calendar
Using your smartphone,
scan this code to access further content.
Or visit:
www.fwthorpe.co.uk
Overview Overview
How wE HAvE PERfoRmED
Annual Report and Accounts 2014 01
FW Thorpe Plc
Revenue
£m
+14%
2010
2011
2012
2013
2014
• LED product sales currently represent
in excess of 50% of total revenue
See page 18 for more detail
• Improved operating performance
at Compact, Sugg and TRT
47.0
52.8
55.6
55.3
62.9
See page 10 for more detail
• Joint venture established in the
United Arab Emirates
• Special dividend 1.50p
Operating profit
£m
+8%
2010
2011
2012
2013
2014
10.6
11.3
11.9
10.8
11.6
Basic and diluted earnings per share
– continuing
Pence (continuing operations)
+7%
2010
2011
2012
2013
2014
6.61
7.18
8.48
8.12
restated
8.72
Dividend per share
(excluding special dividend)
Pence
+8%
2010
2011
2012
2013
2014
1.67
1.76
1.94
3.00
3.25
OverviewPerformanceGovernanceAccountsAdditional informationFinancial highlightsOperational highlights 02
FW Thorpe Plc
Annual Report and Accounts 2014
Overview
oUR STRATEgy AnD bUSInESS moDEL
our focus for long-term growth and stability, achieved by delivering
market-leading products, backed by excellent customer service.
oUTSTAnDIng PRoDUCTS
2014 pROgReSS
• LeD product range
further enhanced
The fuTuRe
• Continued LeD
product development
• enhanced controls
and emergency
product ranges
mAnUfACTURIng ExCELLEnCE
2014 pROgReSS
• New pCB facility
operational
• end of line
testing upgraded
The fuTuRe
• expand
pCB capacity
QUALITy PEoPLE
2014 pROgReSS
• Business
development
investment
• Apprenticeship
scheme continues
The fuTuRe
• establish further
offices overseas
• Continual investment
CONTiNuOuS
ReSeARCh AND
DeveLOpmeNT
Overview
CHAIRmAn’S STATEmEnT
Annual Report and Accounts 2014 03
FW Thorpe Plc
“ investment continues at a rapid pace in
regard to product development, virtually
all of which is now LeD orientated.”
Andrew Thorpe, Chairman
group revenue for the financial year ended
30 June 2014 reached a record £62.9m,
being an increase of 13.8% compared to
the previous year. Operating profit similarly
rose to £11.6m, being an increase of 8.2%.
investment income, however, declined in
concert with general interest rates providing
a resultant profit before tax of £12.4m, giving
a pleasing growth resumption of 7.8% above
last year’s figure.
All companies within the group gave a much
improved performance compared to the year
ended 30 June 2013 and i will give more
detailed individual company information
later in this report.
Our results have been assisted by an
improved national economic climate but
this should not overshadow the work done
within to offer our existing customers greater
choices in market leading lighting products
and systems and the instigation of new and
improved marketing techniques to root-out
more new customers both within our normal
market areas and beyond who have not
previously been fortunate enough to use
fW Thorpe plc products.
group LeD sales continue to rise being
currently in excess of 50% of output and still
rising. Restraints on a faster LeD sales growth
pattern should not be presumed to be a fault
of the company. its LeD range is wide and
sophisticated, however, many customers still
request “traditional” fluorescent or high
intensity discharge lighting solutions.
Reasons may include budget restraints as
LeD is more expensive initially, limited
forward lifespan of buildings to be lit or
simply “mature” engineers sticking to what
they know. LeD solutions continue to
become more competitive and so the
technology will prevail further.
export sales represented 13% of group
turnover, an increase in value of 3% over
last year, with more of the smaller group
companies “dipping their toes in” for the
first time. Reflecting on Thorlux again as
the largest exporter, new marketing
techniques have been instigated during
the year to enhance export performance.
Agents abroad are still very important but
to a greater extent the company’s own
presence in a market is proving to provide
higher and more dependable dividends.
Thorlux offices in the Republic of ireland,
Australia and germany have all performed
well and at the time of writing i can advise
of the very recent opening of an fW Thorpe
plc group sales office in Abu Dhabi.
entitled Thorlux Lighting LLC from its
inception, this office is to market all group
products. The name “Thorlux” has been
used due to it already being a well-known
lighting brand in the area. Thorlux Lighting
LLC has a uAe Local manager, a similarly
located Sales engineer and an eminent
uAe National as a local business partner.
investment continues at a rapid pace in
regard to product development, virtually
all of which is now LeD orientated. TRT, the
group’s road and tunnel lighting start-up
company has only required half the financial
support of the previous year and is now
moving into profit. The Solite factory lease
in Denton, manchester is shortly to expire
and a new brown field site in that area was
purchased during the year and a new
factory build commissioned. The cost is
approximately £1.4m and the new factory
should be finished in November 2014.
The new printed circuit board (pCB)
manufacturing centre at the Thorlux factory,
OverviewPerformanceGovernanceAccountsAdditional information 04
FW Thorpe Plc
Annual Report and Accounts 2014
CHAIRmAn’S STATEmEnT ConTInUED
mentioned in the interim report, has now
been “proved”, and is supplying pCBs
complete with LeDs group-wide. This facility
has been designed so that a further
minimum 100% capacity is inherent within
its layout.
The performance of your company for the
2013/14 year moves the Board to recommend
a final dividend of 2.20p per share
(2013: 2.00p) which when added to the
interim paid in may 2014 gives a resultant
dividend for the 2013/14 year of 3.25p
(2013: 3.00p), an increase of 8.3%. given the
level of cash retained in the business, the
Board also recommends a special dividend
of 1.50p per share (2013: nil) to be paid with
the final dividend in November.
Thorlux Lighting
The group’s maker of industrial and
commercial lighting systems improved
monthly order input throughout the year
apart from the odd “blip” month. Output
also showed regular monthly improvements
by and large. profit, however, struggled to
outperform the improved revenue in the
same way that has normally been evident
in pre-LeD days. This suggests that Thorlux,
whilst pleasingly increasing sales revenue
from LeD products, needs to improve LeD
profitability. Work is in hand in this area.
Whilst the new finished goods warehouse
completed during the previous year created
a deal of floor space earmarked for increasing
production capacity, the company has, to
date, not been able to take full advantage
due to continued pressure on the current
manufacturing facilities. it is a “chicken and
egg” situation which is to be addressed in the
coming year.
The new LeD printed circuit board cleanroom
facility surmounted initial teething problems
and is now supplying excellent pCBs
complete with LeDs throughout the group
in quantities for which it was designed.
This cleanroom area has space to well
over double its current capacity as time
progresses.
Overseas agents are still a very important
element in the company’s export effort but
the pursuit of greater export sales volumes
in the future is most likely to be served by
Thorlux employed staff in overseas territories.
Current overseas offices in Dublin, Brisbane
and Dusseldorf made significant progress
overall. Dublin, now with three staff,
managed to restrain revenue decline
brought on by the Republic’s economic
problems and matched last year’s sales value.
The german office recently relocated from
munich to Dusseldorf and currently with five
staff, made the step change requested in last
year’s final Chairman’s statement increasing
invoiced revenue by 92% on a sound profit
basis. The Australian joint venture, with two
staff soon moving to three, similarly had
a successful year increasing invoiced sales
some 100%+, again profitably.
At this time and as mentioned previously
in this report, the group uAe joint venture
based in Abu Dhabi is just commencing
trading and Thorlux will, of course, have
a major influence on events there.
Compact Lighting
Business at retail and display lighting
company, Compact, is still a little frustrating.
Whilst having transformed itself from a
“metal basher” with products made very
much from sheet metal to a company
with an excellent range of highly tooled
track, spot and display lighting products,
they have struggled to achieve the
breakthrough desired.
i mentioned last year in regard to trial
installations being installed at two
“household” names even now only one
or two small store refurbishments have
emanated from these trials and not the
hoped for roll-outs showing, perhaps,
a continued reluctance to invest by the
middle to smaller size store groups,
Compact’s target market.
Overall, Compact gave a much improved
performance compared to last year, breaking
even on revenue up 12%.
Philip Payne
maker of high quality specification exit
signage, philip payne maintained their stoic
performance with a year seeing revenue
of over £2m for the first time with a
correspondingly increased profit.
An uneventful year in regards to investment
has seen paynes assimilate, to their
advantage, the extra space taken on last year.
One of the newcomers to exporting, they
have followed middle eastern export
opportunities to find that recent rule
changes in countries such as Qatar mean
that exit signage and general emergency
light fittings are now required to have a
major third party certification such as the BSi
kitemark or similar and be marketed through
a local certified emergency lighting outlet.
The philip payne pursuit of these
requirements will, no doubt, pay off in the
future as this regime will tend to exclude
low cost poor quality competition.
To continue the regular format i would
name a few “new homes” for philip payne
exit signage as including The globe Theatre,
hugo Boss in Sloane Square, eton College,
and topically the Scottish parliament Building
at holyrood.
Sugg Lighting
my previous statement on Sugg Lighting,
the group’s heritage lantern maker and
refurbisher, advised that top management
was changed at the tail end of the 2012/2013
financial year, and that the company had
entered the new year profitably. Such a
turn-round was probably too good to hope
for but overall during the financial year just
past Sugg reduced its operating loss by 71%.
Over the last year, involvement of directors
from head Office has increased, other
changes to its business have been made and
a much clearer picture of operations at Sugg
has emerged.
Sugg Lighting projects completed during the
year include new grosvenor LeD lanterns for
St Katherine’s Dock and green and gold “Kp”
lanterns to refurbish portobello market.
i sincerely hope that this old and valued
British heritage company will pay its way
this year.
Overview Annual Report and Accounts 2014 05
FW Thorpe Plc
Solite Europe
TRT Lighting
People
Solite, manufacturer of cleanroom lighting
systems has been widening its customer
base since the appointment of a new Sales
Director some 18 months ago. progress has
also been made during the year in
introducing LeD technology throughout
their product portfolio.
i mentioned earlier that a new factory
is being built for Solite, however,
notwithstanding this; the company has
entertained a year of quiet consolidation,
improving products, pursuing possible new
customers and preparing for a company
move. The new factory location is within
easy reach of most current employees and
there should be little disruption in regard
to staff, therefore.
Results for the year have shown an increase
in revenue of some 43% and a significantly
increased profit.
Portland Lighting
portland Lighting, maker of sign lights,
continues to excel and has again won the
group highest profit to sales ratio cup by
a good length.
Revenue improved by 28% with an LeD light
source content of around 60%, the highest in
the group. Notable projects this year include
new sign lighting roll-outs for Nationwide
Building Society and Bargain Booze.
At this time i would like to take this
opportunity to thank mr Andy Truelove, who
retired from the post of managing Director
in June 2013, for his work in building portland
Lighting, he being a founding director. i wish
him well on his boat in menorca.
i would, therefore, like to welcome to the
managing Director role mr David harrison
who has previously been steering the
company’s sales for numerous years as Sales
Director, and whom i would wish every
success for the future.
The group street and road tunnel lighting
systems provider, as previously reported,
required a full £0.5m of group funding in the
2012/13 financial year and i reported last time
that we expected funding requirements to
drop imminently. i am pleased to say that in
the 2013/14 year only half that amount was
required, lessening by the month, and with
funding requirements quite small at the
time of writing.
Road tunnel lighting has been the lead
product range and a number of good
projects have been won in the uK, with
numerous others in the quotation stage.
TRT has now gained all the necessary
certifications etc. to be able to supply their
street lighting lanterns countrywide and
whilst there have been some successes and
numerous trial installations put in place, it
is noticeable that, for some reason, some
authorities are very reluctant to specify an
alternative to their incumbent suppliers,
often from far away shores.
meanwhile, with the success to date TRT is
confident enough to be increasing its sales
capability and we are backing the
profitability horse this year.
Carbon Offsetting Project
The Devauden, monmouthshire “Woodland
Carbon Code” accredited carbon offsetting
project continues to grow, needless to say in
more ways than one!
At the time of the last statement 43,000
trees had been planted. This has now risen
to 53,898 trees, and with each year that
passes our woodland locks up more tonnes
of carbon.
The continuing reluctance of our customers
to participate is not surprising considering
continuing pressure on budgets and this fact
does lend credence to the hypothesis that
governments alone can force carbon
reduction policies.
fW Thorpe plc for one, however, maintains
its carbon neutral stance voluntarily.
i must thank all our people once again for
their sterling performance throughout the
year, both permanent employees and the
many “temps” that join us for our most busy
summer period.
may i once again thank all at fWT for
their diligence.
The Future
Our aim as a company is to always try and
do substantially better than the last year.
We have achieved this aim this year although
not as successfully as some, including
ourselves, would have liked.
The pace is gruelling at present as the status
quo continues in requiring your company to
make around twice the product variations as
in times past with both LeD and “traditional”
products still in volume demand. how long
this will continue must be a matter of
conjecture but it does make life hard, and
tends to soak up energies that could be more
fruitfully spent looking forwards.
Bright points remain, however, with all
subsidiaries moving forward and even last
year’s two laggards making good progress.
Two new “financial” year resolutions must be
to improve returns from LeD products and
put more fWT sales people abroad.
We will press on with our carbon neutral
work in hand.
A B Thorpe
Chairman
9 October 2014
OverviewPerformanceGovernanceAccountsAdditional information
06
FW Thorpe Plc
Annual Report and Accounts 2014
oUR offER
iRELAnD
Thorlux Lighting
Dublin
UniTED
KingDOm
Thorlux Lighting
TRT Lighting
Redditch
Philip Payne
Solihull
Solite Europe
manchester
Sugg Lighting
Horsham
Compact Lighting
Portsmouth
Portland Lighting
walsall
our products are sold throughout the world. The group
management team is passionate about developing the
business for the benefit of the shareholders, employees and
customers. with the energy and ability of our staff we look
forward to the future with enthusiasm. our aim is to create
shareholder value through market leadership in the design,
manufacture and supply of professional lighting systems.
Overview Annual Report and Accounts 2014 07
FW Thorpe Plc
gERmAny
Thorlux Lighting
Düsseldorf
UniTED ARAB
EmiRATES
Thorlux Lighting
Abu Dhabi
AUSTRALiA
Thorlux Lighting
Australasia
melbourne, brisbane
OverviewPerformanceGovernanceAccountsAdditional information 08
FW Thorpe Plc
Annual Report and Accounts 2014
oUR offER
ConTInUED
using your
smartphone, scan
this code to access
further content.
Key products
market sectors
• Recessed, surface and
• Commercial
suspended luminaires
• emergency lighting
systems
• hazardous area lighting
•
industrial
• education
• healthcare
• manufacturing
• high and low bay
luminaires
• Lighting controls
• exterior lighting
The Thorlux range of luminaires is designed, manufactured and distributed by Thorlux Lighting,
a division of fW Thorpe plc.
Thorlux luminaires have been manufactured continuously since 1936, the year frederick
William Thorpe founded the company.
The company now operates from the group’s modern 16,882m2 self-contained factory in
Redditch, Worcestershire, central england.
Thorlux is well known throughout the world and provides a comprehensive range of
professional lighting and control systems for a wide variety of applications.
Key products
• Recessed and surface
luminaires
• Track systems
• Retail
• Display
• hospitality
market sectors
Compact manufactures and supplies professional lighting systems to retailers. its focus
on this market enables it to produce cost-effective products designed specifically for today’s
retail environment.
its aim is to enable retailers to design and test new lighting concepts, control their
implementation and manage the roll-out to a budget. Compact employs both lighting
and project management professionals and already supplies lighting to many of the
uK’s top 100 retailers.
Key products
market sectors
• emergency exit signage
• Commercial
designed with the functional in mind.
philip payne recognises that most trade emergency exit signage products are generally
• hospitality
• healthcare
philip payne offers a backbone range of quality standard products but more importantly
encourage direct dialogue with architects and designers to ensure via product variation
or bespoke work aesthetic aspirations and requirements are fully met.
Key products
• Street lighting –
heritage
• Amenity lighting
market sectors
•
infrastructure
and heritage lighting.
established in 1837, Sugg Lighting is renowned as the leading name in decorative
Ornate Sugg Lighting columns and decorative lanterns are in use throughout the world,
with many nineteenth century installations still in excellent working order.
The historic skills and traditions behind this unique pedigree remain the cornerstone of the
Sugg Lighting success story.
Key products
market sectors
• Cleanroom luminaires
• pharmaceutical
Solite europe is a leading manufacturer and supplier of cleanroom lighting equipment
and luminaires within the uK and europe.
• healthcare
• education/Research
it provides luminaires for laboratories, pharmaceutical and semi-conductor manufacturing
areas including hospitals, kitchens and food preparation applications.
Key products
• Lighting for signs
market sectors
• Retail
• hospitality
portland Lighting design, manufacture and supply innovative lighting products to the
brewery, retail and sign lighting industries.
The company operates from a modern 1,300m2 facility in Walsall, that was purposely
designed to enable the fast turnaround of customer orders.
established in 1994, the product range has continually evolved to ensure that portland
remains one of the leading companies in their sector.
Key products
• Road and Tunnel
lighting
• Amenity lighting
market sectors
•
infrastructure
• facilities – car
parking
TRT (Thorlux Road and Tunnel) Lighting, an independent specialist division which has
evolved from Thorlux Lighting, is the latest venture within the fW Thorpe group.
Building on 76 years of lighting experience, TRT is dedicated to the design, manufacture and
supply of LeD road and tunnel luminaires. The target for TRT is to produce quality, efficient,
stylish, high performance LeD products that are manufactured in the uK.
Overview Annual Report and Accounts 2014 09
FW Thorpe Plc
Key products
• Recessed, surface and
suspended luminaires
• emergency lighting
systems
• hazardous area lighting
• high and low bay
luminaires
• Lighting controls
• exterior lighting
market sectors
• Commercial
industrial
•
• education
• healthcare
• manufacturing
The Thorlux range of luminaires is designed, manufactured and distributed by Thorlux Lighting,
a division of fW Thorpe plc.
Thorlux luminaires have been manufactured continuously since 1936, the year frederick
William Thorpe founded the company.
The company now operates from the group’s modern 16,882m2 self-contained factory in
Redditch, Worcestershire, central england.
Thorlux is well known throughout the world and provides a comprehensive range of
professional lighting and control systems for a wide variety of applications.
Key products
• Recessed and surface
luminaires
• Track systems
market sectors
• Retail
• Display
• hospitality
Compact manufactures and supplies professional lighting systems to retailers. its focus
on this market enables it to produce cost-effective products designed specifically for today’s
retail environment.
its aim is to enable retailers to design and test new lighting concepts, control their
implementation and manage the roll-out to a budget. Compact employs both lighting
and project management professionals and already supplies lighting to many of the
uK’s top 100 retailers.
Key products
• emergency exit signage
market sectors
• Commercial
• hospitality
• healthcare
philip payne recognises that most trade emergency exit signage products are generally
designed with the functional in mind.
philip payne offers a backbone range of quality standard products but more importantly
encourage direct dialogue with architects and designers to ensure via product variation
or bespoke work aesthetic aspirations and requirements are fully met.
Key products
• Street lighting –
heritage
• Amenity lighting
market sectors
infrastructure
•
established in 1837, Sugg Lighting is renowned as the leading name in decorative
and heritage lighting.
Ornate Sugg Lighting columns and decorative lanterns are in use throughout the world,
with many nineteenth century installations still in excellent working order.
The historic skills and traditions behind this unique pedigree remain the cornerstone of the
Sugg Lighting success story.
Key products
• Cleanroom luminaires
market sectors
• pharmaceutical
• healthcare
• education/Research
Solite europe is a leading manufacturer and supplier of cleanroom lighting equipment
and luminaires within the uK and europe.
it provides luminaires for laboratories, pharmaceutical and semi-conductor manufacturing
areas including hospitals, kitchens and food preparation applications.
Key products
• Lighting for signs
market sectors
• Retail
• hospitality
portland Lighting design, manufacture and supply innovative lighting products to the
brewery, retail and sign lighting industries.
The company operates from a modern 1,300m2 facility in Walsall, that was purposely
designed to enable the fast turnaround of customer orders.
established in 1994, the product range has continually evolved to ensure that portland
remains one of the leading companies in their sector.
Key products
• Road and Tunnel
lighting
market sectors
•
infrastructure
• facilities – car
• Amenity lighting
parking
TRT (Thorlux Road and Tunnel) Lighting, an independent specialist division which has
evolved from Thorlux Lighting, is the latest venture within the fW Thorpe group.
Building on 76 years of lighting experience, TRT is dedicated to the design, manufacture and
supply of LeD road and tunnel luminaires. The target for TRT is to produce quality, efficient,
stylish, high performance LeD products that are manufactured in the uK.
OverviewPerformanceGovernanceAccountsAdditional information 10
FW Thorpe Plc
Annual Report and Accounts 2014
ARoUnD THE gRoUP In 2014
FW Thorpe Plc consists of seven individual companies that
concentrate on particular market sectors. They have each faced
different challenges within their markets – particularly in the last
few years – but share product and technical expertise, with the
rapid development and adoption of LED technology.
The group has continued to move forward in many areas, such as new
product launches and securing new business, while maintaining a focus
on delivering outstanding customer service.
The following are the highlights from 2014 for each company.
Thorlux Lighting - G4
Amada, Kidderminster
Annual Report and Accounts 2014 11
FW Thorpe Plc
Development of emergency and controls
technology is also a key focus. The company
expects to launch new products in 2014/15.
Thorlux will concentrate on securing
business in new sectors and territories,
exploiting the increased manufacturing
capacity, as well as on continuing to develop
products that are both technologically
innovative and market leading.
During the year, Compact has retained
existing clients, but it has achieved its main
success with new business secured with
three high street multiples as well as a
significant project at the National indoor
Arena.
The coming year will see increased efforts
to promote the Compact brand to a wider
discerning audience.
Thorlux Lighting
Business at Thorlux is derived from a
variety of different sectors. Thorlux is the
powerhouse driving product development
for the rest of the group. The company
supplies by far the widest product range of
the fW Thorpe plc companies, covering
multiple market sectors from commercial,
industrial and retail through to the public and
private sectors.
Thorlux has achieved new levels of both
order income and output during 2013/14.
investment in sales and sales-support staff is
starting to yield benefits: the company has
secured new business with the likes of British
gas, as well as prestigious projects with
existing customers such as Jaguar Land
Rover (see page 20 for further details).
These are only a couple of examples of the
success stories during the year.
A new LeD printed circuit board facility has
been implemented that supplies all of the
group with LeD light engines and improves
capacity by 600%. (See page 18 of this annual
report for further details.) Not only does this
give Thorlux increased capacity to meet
demand, it also ensures that the group has a
high quality supply of a critical component.
Thorlux continues to introduce new LeD
products at a rapid pace. Revenues from LeD
products peaked at in excess of 50% of total
revenue during certain months of 2013/14.
Compact Lighting
Compact operates in the retail, display and
hospitality markets. These markets can be
demanding, because pricing is competitive
and customers have ever-changing delivery
requirements.
A reshaped sales team has concentrated on
securing new customers. Compact continues
to promote its enhanced products that are
less labour intensive; this has contributed to
Compact’s improved financial performance
for 2013/14. The improving retail climate has
been another factor in Compact’s positive
performance.
The retail lighting sector remains extremely
competitive; however, Compact’s reputation
as an LeD innovator coupled with investment
in product tooling continues to differentiate
the company from the competition.
Philip Payne - Arca
Birmingham Institute of
Art and Design, Birmingham
Compact Lighting - Scope Track Spot
Sky Media Reception, London
Philip Payne
The philip payne brand aligns alongside
those of the premier european lighting
brands, with business emanating from high
profile blue-chip projects. philip payne has
enjoyed improved performance in its
traditional high end architect-led market.
Despite reductions in the supply of general
signage to the hospital sector, the overall
result has been positive with revenue
increasing to a new record level.
Additions to the philip payne range include
new emergency floodlighting products that
have been designed to provide a
combination of LeD technology and superior
aesthetics. The products have proved
popular with the design fraternity, which
had become accustomed to a fairly bland
product offering from other suppliers.
philip payne has reinforced its brand
reputation throughout the year, providing
functional products that appeal to architects
and designers on projects as diverse as
Stonehenge and the ‘walkie-talkie’ building.
in retail, boutique business remains the
target, with clients such as Dolce & gabbana,
victoria’s Secret and Apple. hotels also
continue to be a popular destination for
philip payne products, and this year included
the Chancery Court and Dorchester hotels
in London.
philip payne’s target is to replicate the
successes of this year and move into the
emergency controls market with the launch
of an automatic testing and monitoring
system.
OverviewPerformanceGovernanceAccountsAdditional information 1212 FW Thorpe Plc
FW Thorpe Plc
Annual Report and Accounts 2014
Annual Report and Accounts 2014
Portland Lighting - Ecolux II
Screwfix, Walsall Wood
ARoUnD THE gRoUP In 2014 ConTInUED
Sugg Lighting
Sugg is the group’s heritage specialist, and
has been in business since 1836. The Royal
Warrant and the reputation of Sugg as one
of the country’s finest lighting refurbishment
companies has ensured that work from the
Royal household has continued alongside
continuing general demand for high quality
heritage lighting.
every year, the company produces a large
number of copper lanterns powered by gas
and conventional lamp technology, but new
LeD developments that offer the benefits of
long life and low maintenance are becoming
ever more popular. utilising technology
developed within the group, Sugg has
delivered a major export order to supply
LeD lanterns to a large municipal project
for a Canadian city.
in addition, this year has seen a number
of civic projects for bespoke designs
incorporating LeD technology coupled with
sophisticated lighting controls. These designs
are often bespoke solutions that require both
the established traditional Sugg skill set and
new technical capabilities to meet the
demands of lighting designers, who often
use the colour-changing abilities of LeDs
as a decorative tool to enrich urban spaces.
2014/15 will see further LeD upgrade projects
and a focus on securing a number of projects
with the London boroughs that Sugg
continues to service.
Solite Europe
A vast majority of Solite customers provide
a total cleanroom contracted solution of
which lighting forms a part.
pharmaceutical facilities are a major focus,
with the company targeting the wider
specification market and blue-chip end
user customer base. This year has included
a major cleanroom construction project
with a well-known pharmaceutical company
in ireland.
Solite’s previous reviews of resource and
market focus have proved successful, with
the company enjoying a significant increase
in revenue. An ongoing exercise to re-
engineer products to incorporate new
technology has demonstrated the products’
wider appeal and permitted sales to a more
diverse customer base.
During this next year, production will transfer
from its existing facility to a state-of-the-art
new-build only a few miles away. By keeping
the production facilities in the same local
area, a high percentage of the skilled labour
will migrate; this will ensure continuity and
minimise disruption to day-to-day activities.
The facility will offer new opportunities and
improvements in production, as well as
providing the ability to demonstrate the
latest products and systems to potential
customers in a purpose-built showroom
and demonstration area.
Portland Lighting
portland Lighting supplies products directly
to the sign lighting industry. The company
must be responsive to customer demand,
with rapid product development, efficient
production and fast order turnaround.
Any business dependent on activity in the
retail and hospitality sector is subject to
unpredictability; however, portland has built
on the successes it has previously enjoyed in
the late-night and convenience store sector
by adding more household names
to its client list. portland has achieved further
growth with a review of sales strategy and
the resultant capture of more of the uK
market share, as well as by embarking on
a new strategy in Western europe.
following the conception, rapid
development and launch of ecolux ii towards
the end of 2013, the range has quickly
become a uK best-seller, with LeD sales
now responsible for 60% of company sales.
in-house investments in the powder-coating
facility have further improved flexibility, a
pre-requisite to meet increasing demand
for the variety of colours that numerous
high street brands require.
in this next year, portland will focus on
establishing distribution of its products in
europe as well as building on the success
in the uK.
Annual Report and Accounts 2014 13
FW Thorpe Plc
Solite - Epsilon
Salford Royal, Salford
Sugg Lighting - Grosvenor
St Katherine’s Dock, London
TRT Lighting
TRT was conceived and created from within
Thorlux over the last few years to focus on
the street and tunnel lighting sectors by
offering solely LeD-based lighting solutions.
While the initial years of TRT were dedicated
to product development and establishing
production facilities, 2013/14 has been about
winning orders. TRT has secured business in
both the street lighting and tunnel lighting
sectors, with a reasonable level of orders to
start 2014/15.
TRT took advantage of the printed circuit
board facilities at Thorlux to design and build
its own bespoke LeD lighting solutions for
all its product ranges. This has resulted in a
new tunnel product being launched; orders
have been secured and delivered for
some prestigious London locations, one
of which was originally lit by Thorlux
30 years ago.
Street lighting projects have been hard
fought, but success has been achieved in
the company’s local area with installations
in Warwickshire and Worcestershire.
Amenity projects have also been secured in
conjunction with Thorlux, lighting car parks
for customers including food manufacturers
and railway stations.
TRT expects to build on the successes of
2013/14 with a number of street and tunnel
lighting projects to bid for and secure.
Work will also continue on expanding and
diversifying the street lighting product
portfolio into the amenity sector.
TRT Lighting - Aspect
Milton Keynes
OverviewPerformanceGovernanceAccountsAdditional information 14 FW Thorpe Plc
Annual Report and Accounts 2014
wHy bUy fRom THoRLUx?
Thorlux, from its technically sophisticated
facilities in the uK, designs and manufactures
a comprehensive range of professional
lighting and control systems, including
energy-efficient solutions. When choosing
Thorlux for architectural, commercial,
floodlighting, industrial, hazardous area
or tunnel applications, you can be confident
of receiving:
• Professional, competent advice from
a long-established UK company
• A choice of lighting and control systems
subject to stringent quality control
(BS En iSO 9001:2008)
• Excellent customer service and a
5-year warranty*
Thorlux, for nearly 80 years, has
manufactured increasingly sophisticated
luminaires in the Birmingham area. Over the
last 20 years, the company has focused on
high technology products, including the
development of its first electronic energy-
saving lighting control system in the
mid-1990s. huge investment in design and
testing facilities in Worcestershire has now put
Thorlux at the forefront of its market sector.
Thorlux luminaires are subject to stringent
quality control, as demonstrated by the
company’s BS En iSO 9001:2008
(Quality management systems)
accreditation. Additionally, accreditation
of Thorlux to BS En iSO 14001:2004
(Environmental management systems)
gives the customer assurance that the
company manufactures its products in
the most environmentally friendly manner.
* for all goods delivered from
1 January 2013 onwards.
Annual Report and Accounts 2014 15
Annual Report and Accounts 2014 15
FW Thorpe Plc
FW Thorpe Plc
made in Britain
5-year Warranty
Carbon Offsetting
Thorlux Lighting, the largest company
in the fW Thorpe plc group, is proud
that around 97% of its products are
manufactured in the uK.
The fW Thorpe plc group employs over
500 people. in 2013/14, the group paid over
£13 million in tax to the uK government –
an amount which supports uK local
authorities and jobs within them.
By manufacturing in the uK, Thorlux can
meet urgent customer demands without
the need to transport products by air to
the uK, which would involve additional
financial and environmental costs.
Thorlux designs and manufactures its
luminaires to the highest standards,
ensuring optimal performance and reliability.
All Thorlux LeD and conventional luminaires
delivered after the 1 January 2013 are
covered by a 5-year warranty (excluding
lamps and batteries). Customers can
therefore purchase Thorlux luminaires
with even more confidence.
A long and stable history reassures Thorlux
customers that its warranty is meaningful.
many companies offer a pre-sale warranty,
but post-sale claims require that the
company is still trading.
See terms and conditions for full details.
Thorlux is committed to minimising
the environmental impact of both its
manufacturing processes and its products.
however, even with the most responsible
approach, some carbon dioxide (CO2) will
be released into the atmosphere as an
indirect result of factory and selling
activities and customers’ use of luminaires.
in 2009, Thorlux established an ambitious
carbon-offsetting scheme to help
compensate for these emissions.
The company has chosen to plant trees.
Why trees? Trees and other plants absorb
CO2 during photosynthesis. One tree grown
to maturity in open space can absorb
approximately 1 tonne of CO2 over its
lifetime. A forest covering many acres
can effectively lock up CO2, creating a
“carbon sink”.
The scheme is now accredited under the
Woodland Carbon Code. On its own land
in monmouthshire, Wales, Thorlux has to
date planted 53,898 trees (Spring 2014).
OverviewPerformanceGovernanceAccountsAdditional information 16
FW Thorpe Plc
Annual Report and Accounts 2014
wHy bUy fRom THoRLUx? ConTInUED
Latest LED
Technology
Thorlux Product
Testing
investing for
the Future
Rigorous product testing is essential in
maintaining a reputation for reliability
and quality.
Thorlux has recently opened a new 2,400m²
warehouse and distribution centre at its
headquarters in Redditch, uK.
The Thorlux third-party accredited
photometric laboratory enables the
company to obtain the best optical
performance from its luminaires.
in addition, customers can be sure that
photometric data provided by Thorlux
is accurate.
in the photometric test laboratory,
a sophisticated goniophotometer gives fast
and reliable measurements of the light
distribution from luminaires. An integrating
sphere equipped with spectral analyser
accurately measures light quality, efficiency
and colour temperature.
Other in-house testing covers environmental
and electrical parameters including extreme
ambient temperatures, dust/water ingress,
electromagnetic compatibility and current
harmonics, in accordance with relevant
european standards.
All test equipment is subject to regular
in-house maintenance and calibration, with
external third party calibration at regular
intervals to ensure accuracy of data.
in line with the company’s environmental
policy, the building has clear roof lights to
benefit from natural light, and insulated
cladding to improve thermal efficiency.
A steel-fibre-reinforced super-flat floor
ensures that fork lift trucks can operate at full
speed in total safety. Lighting is achieved
with the latest Smart controlled Solow LeD
fittings. A passive infrared sensor detection
system, maintained illuminance and daylight
harvesting ensure that a minimum of energy
is consumed.
To allow efficient picking of finished goods,
two 1.5-tonne capacity “man-up” very
narrow aisle fork lift trucks will raise the
warehouse order pickers to the highest pallet
locations to pick individual fittings, without
the need to bring full pallets down to floor
level. for safety, a personal protection system
automatically stops the fork lift truck if a
person or object is detected nearby.
The new Thorlux warehouse enables core
product ranges to be stocked and made
available for speedy delivery using Thorlux
vehicles in the majority of cases.
Thorlux is able to exploit recent advances
in LeD technology to help meet customer
demand for energy-efficient solutions.
The company’s considerable technical
expertise and its ability to invest position
it to maximise the opportunities offered
by LeD technology.
Backed by the group’s modern facilities,
Thorlux designers and developers have
worked over recent years to create LeD
luminaires to meet customers’ operational
and aesthetic requirements. Thorlux has
made a huge investment in LeD technology,
including in circuit-board design, software
development, thermal modelling and
optical lens design.
To increase the range and performance
of its LeD luminaires, Thorlux both designs
dedicated LeD luminaires from scratch, to
optimise optical and thermal performance,
and adapts existing conventional products
to offer an LeD option.
unlike a traditional light source, a bare LeD
is a very intense point-source of light which
has high glare and emits light in one
direction only; therefore optical design is
very important. Thorlux takes different
approaches to optical design, according
to the desired outcome:
• LeDs, as with lamps, can sit behind a
controller or diffuser which will help to
spread the light over a wider area,
providing a uniform light (viva)
• having multiple LeDs on a luminaire
provides the option of having individual
optics for each LeD (folio)
• Blue light LeDs in combination with a
remote phosphor disc and a mixing
chamber made from highly reflective
material can maximise efficiency, with the
added benefit of diffusing the light over a
wider area, thus reducing glare from the
LeD itself (XL20)
Almost all Thorlux LeD products benefit from
bespoke LeD printed circuit boards (pCBs)
designed by the Thorlux electronics team.
These pCBs ensure that Thorlux luminaires
deliver maximum performance.
Annual Report and Accounts 2014 17
FW Thorpe Plc
ISO
9001
Quality
Management
FM 10913
ISO
14001
Environmental
Management
EMS 532104
Thorlux Company
Accreditations
Thorlux iSO 9001:2008
Certification
Thorlux iSO 14001:2004
Certification
iSO 9001:2008 specifies the criteria for
a company-wide quality management
system. using iSO 9001:2008 helps Thorlux
ensure that its customers get consistently
good quality products and services.
Thorlux has implemented procedures for
designing and developing products using
process control, to ensure consistency of
manufacturing. All manufactured products
are subject to full testing procedures
covering both functional and, very
importantly, electrical safety. Records
of all production tests as well as all design
and development tests are kept for
future reference.
internal auditing ensures that quality
management procedures are appropriate
and maintained. Any issues can be dealt with
through continual improvement.
Corrective action is also followed with
preventative action to improve the process
and eliminate any chance of a reoccurrence.
Compliance with iSO 9001 is externally
audited by a third party.
iSO 14001:2004 sets out the criteria for
an effective environmental management
system. Being accredited to iSO 14001:2004
assures customers that Thorlux measures
and reduces its environmental impacts and
complies with environmental legislation.
Compliance with iSO 14001 has put a focus
on product design. Thorlux uses the most
efficient materials and components, reducing
the environmental impact through the life of
each luminaire.
The manufacturing process is constantly
monitored to improve resource efficiency
and reduce waste. Any waste generated,
including end-of-life components, is subject
to ethical disposal or recycling.
Thorlux’s uK operation is carbon offset via
an independently endorsed, government
approved, company controlled scheme.
Thorlux products are manufactured to the
most stringent quality control standards in
the most environmentally friendly manner.
Certificates of Conformity are available
stating that Thorlux luminaires have been
tested to and comply with the relevant
international standards for the manufacture
and testing of luminaires and related
products. The standards used are:
En 55015
Limits and measurement of radio
disturbance
En 61547
Electromagnetic compatibility immunity
requirements
En 61000-3-2
Limits for harmonic current emissions
En 60598-1
Luminaires: general requirements and tests
En 60598-2-1
Fixed general purpose luminaires
En 60598-2-22
Luminaires for emergency lighting
each certificate also confirms that products
are manufactured to an approved iSO 9001
quality system, and that products are fully
tested before despatch. Tests include those
for safety earth circuit continuity, high
voltage electrical strength, full circuit
functionality including dimming, and current
drawn. Specialist in-house protection
circuitry is employed to prevent damage
to equipment under test conditions.
The accreditations to iSO 9001 and iSO 14001,
coupled with the in-house testing to BS
standards, are clear statements that Thorlux
cares about the quality of its products and
about the environment.
OverviewPerformanceGovernanceAccountsAdditional information 18
FW Thorpe Plc
Annual Report and Accounts 2014
SURfACE moUnT TECHnoLogy InvESTmEnT
The rapid rise in demand for LeD products
over the last few years has naturally caused
an increased requirement for printed
circuit board production and assembly.
Consequently, fW Thorpe plc made a
significant investment in 2014 to increase
the overall capacity of the electronic
assembly function.
in the past, machine constraints have
resulted in multiple boards with
interconnection features being required for
the standard range of products. This not only
added components, and hence cost, but also
increased cycle times and raised potential
reliability issues. equipment selection was
therefore driven by the need for flexibility,
due to the wide variety of products required
in relatively small batch sizes, and the ability
to process the largest sizes of board possible.
following a detailed evaluation of
equipment, a decision was made to purchase
a line from multiple vendors, consisting of a
solder paste printer with automated optical
inspection, flexible placement machine and
ten-stage oven, all linked together via an
edge-belt conveyor system.
The driving force behind this line is a
six-headed placement machine that rapidly
picks components as small as 0.4mm x
0.2mm from multiple part feeders. A
multi-scan camera then precisely orientates
the component to allow placement on the
circuit board to an accuracy of 0.025mm, at
rates as high as 23,000 components per hour.
The 18-metre-long line allows bare printed
circuit boards to be loaded at one end of the
process and removed as fully populated
boards at the other end. All boards are
then fully tested in the adjacent in-house
designed and manufactured test station.
The entire process is housed in a custom-
built 300m2 cleanroom. This air-conditioned
facility provides full electro-static discharge
protection and ensures that placement
failures are reduced to a minimum and
boards of the highest quality are produced.
With the ever changing performance
improvements in LeD technology and the
increasing demand from customers for
LeD products, this new equipment is
undoubtedly a key investment for the
future development of the company.
Annual Report and Accounts 2014 19
FW Thorpe Plc
A multi-scan camera then precisely
orientates the component to allow
placement on the circuit board to an
accuracy of 0.025mm, at rates as high
as 23,000 components per hour.
OverviewPerformanceGovernanceAccountsAdditional information 20
FW Thorpe Plc
Annual Report and Accounts 2014
JLR CASE STUDy
Jaguar Land Rover Engine
Manufacturing Centre at i54
Solow XL
the luminaire monitors ambient light
and the presence of people in the area,
controlling output (and power consumed
by the luminaire) to the correct level and
ensuring that the area is illuminated only
when occupied. The north-light roof design
allows the Smart system to capitalise on
significant natural light penetration; the
Smart system dims or switches lamps off
during daylight hours.
All aspects of the efficient luminaire and
control system design will be utilised to the
full. energy savings are expected to be in
excess of 70% compared with energy use in
conventionally designed lighting schemes.
Thorlux Lighting is proud to be a top tier
supplier providing the majority of the
lighting and lighting control systems for
the new Jaguar Land Rover engine
manufacturing Centre at i54, in South
Staffordshire. Thorlux is also pleased to
be supplying lighting for the first extension
to the new site, due for completion in
October 2014.
The new engine manufacturing Centre is the
most advanced facility of its kind in the uK,
building the latest generation of high-
performance, lightweight, four-cylinder
petrol and diesel engines. Jaguar Land Rover
employs 30,000 people globally, and
invested £2.75bn in product development
and assets in 2013 alone. The new facility,
costing £500m, encompasses 72,500m2
of floor space, which is enough to house
14 full-size football pitches, and will provide
1,400 jobs when fully operational.
Key to the new building is sustainability; from
the outset Jaguar Land Rover was keen to
employ the very latest technology to reduce
energy use. in fact, the design stage of the
project has received a BReeAm (the world’s
leading design and assessment method for
sustainable buildings) ‘excellent’ award.
The complex includes features such as
insulated cladding to minimise heat loss,
automatic louvres to provide natural
ventilation, and a gigantic north-light roof
design that maximises daylight ingress into
the building and also supports the uK’s
largest rooftop solar panel array, which
generates more than 30% of the energy
needed to power the engine
manufacturing Centre.
Jaguar Land Rover has a policy of procuring
locally whenever practical; in the 2013/14
financial year alone, the company bought
approximately 5,700 luminaires from
Thorlux at its manufacturing site in
Redditch, just 40 miles away by road.
At full power, these very efficient market-
leading Thorlux luminaires can still consume
almost 1m watts of power, hence Jaguar
Land Rover was keen to reduce this load
using energy-saving lighting controls.
The majority of luminaires are therefore
fitted with the Thorlux Smart system,
exploiting the latest digital technology
to provide a simple, effective method of
lighting control that minimises energy
consumption while still providing high levels
of user comfort. A discreet sensor integral to
The whole site benefits too from the
installation of Thorlux Scanlight AT LeD
luminaires and a control system for full
automatic testing of emergency lighting
and reporting. Scanlight AT is an innovative
system that addresses all the issues that arise
in providing an efficient, legislation-
compliant emergency lighting installation.
Scanlight AT testing and reporting is
thorough, regular and reliable. The system
constantly monitors the condition of not only
every connected luminaire or exit sign, but
also its own communications. if a luminaire
develops a fault or if communication is lost,
then an error is indicated locally at the
luminaire and centrally at the controlling
device. Jaguar Land Rover selected Scanlight
at its most sophisticated level, platform 3,
which automatically delivers all test
information to the cloud for review.
Annual Report and Accounts 2014 21
FW Thorpe Plc
The Scanlight AT website and email facility
keeps the user informed of system status.
The engineers at Jaguar Land Rover
demonstrate their passion both for
sustainability and for doing things properly
from an engineering perspective, which
also shows through in Jaguar Land Rover’s
excellent cars, renowned worldwide for their
quality and performance. Sustainability,
design and manufacturing quality are
priorities integral to Thorlux also.
for further information about Thorlux
lighting products and systems, please visit
www.thorlux.com
Scanlight AT web page and
Scanlight LED Downlighter
OverviewPerformanceGovernanceAccountsAdditional information 22
FW Thorpe Plc
Annual Report and Accounts 2014
board of
directors
Andrew Thorpe
Mike Allcock
Chairman and
Joint Group Chief Executive
Joint Group Chief Executive and
Managing Director, Thorlux Lighting
andrew is the grandson of the company founder,
frederick William thorpe. after serving an
apprenticeship with the company, he has worked in
various parts of the business, leading to the positions
of export sales director, Manufacturing director and
then Managing director of thorlux Lighting. in 2000,
he became Joint Group chief executive and in 2003
Group chairman.
Mike joined fW thorpe Plc in 1984 as an apprentice,
working his way to technical director for thorlux
Lighting in 1998, taking responsibility for the
company’s design programme. He was appointed
Group technical director in 2001, Managing director
of thorlux Lighting in 2003 and Joint Group chief
executive in 2010. Mike is a chartered electrical
engineer and a fellow of the institution of
engineering and technology. He is passionate about
developing innovative, high technology, market
leading products.
Craig Muncaster
Financial Director and
Company Secretary
Tony Cooper
Manufacturing Director,
Thorlux Lighting
after graduating in business administration, craig
qualified as a chartered Management accountant in
2000. He has spent time in the manufacturing and
engineering sectors, more recently as UK financial
director for durr, which included a number of overseas
ventures and projects for the wider group.
tony graduated from Loughborough University
with a b.tech in Production engineering and
Management in 1984 and became a chartered
engineer in 1988. He worked in various
manufacturing industries, including Mars electronics
and thomas & betts, before joining thorlux Lighting
as Manufacturing director in 1998.
David Taylor
Managing Director,
Philip Payne
david joined fW thorpe Plc in 1978 and on completion
of a commercial apprenticeship leading to an HNc in
business studies he worked in various roles at thorlux
Lighting and elsewhere within the group. in 1996, he
became Managing director of Philip Payne Limited.
Governance Annual Report and Accounts 2014 23
FW Thorpe Plc
Advisers
Auditors
PricewaterhouseCoopers LLP
Cornwall Court,
19 Cornwall Street,
Birmingham B3 2DT
Bankers
Lloyds
Church Green East, Redditch,
Worcestershire B98 8BZ
Solicitors
SGH Martineau
No 1 Colmore Square,
Birmingham B4 6AA
Nominated Adviser
N+1 Singer
12 Smithfield Street,
London EC1A 9BD
Registrars
Equiniti
Aspect House, Spencer Road,
Lancing BN99 6DA
Company information
Registered Office
Merse Road,
North Moons Moat,
Redditch,
Worcestershire B98 9HH
Registered No.
FW Thorpe Plc is registered in
England and Wales No. 317886
Websites
www.fwthorpe.co.uk
www.thorlux.com
www.thorlux.com.au
www.thorlux.de
www.thorlux.ie
www.thorlux.ae
www.compact-lighting.co.uk
www.philippayne.co.uk
www.solite-europe.com
www.sugglighting.co.uk
www.portlandlighting.co.uk
www.trtlighting.co.uk
Ian Thorpe
Non-executive director
ian, grandson of the company founder, was
Manufacturing director of thorlux Lighting from
1978 until 1993 when he became Personnel director.
He became a non-executive director on 1 october
1997 and is a member of the remuneration
committee.
Colin Brangwin
Non-executive director
after joining the company in 1963, colin was
appointed a director in 1969, later as joint Managing
director and in 1995, was appointed chairman.
He became non-executive chairman in 2000,
resigning from this role on 30 June 2003.
Peter Mason
Non-executive director
after studying electrical engineering at aberdeen
University, Peter qualified as a chartered accountant
with Price Waterhouse in 1976. He spent time with
Planet Group and ti Group before joining fW thorpe
Group in 1987 as finance director. He became Joint
chief executive in July 2000. He became a
non-executive director in June 2010, and is the
chairman of the remuneration committee.
OverviewPerformanceGovernanceAccountsAdditional information 24
FW Thorpe Plc
Annual Report and Accounts 2014
strateGic rePort
Business review
A review of the business and future developments is included
in the Chairman’s statement on pages 3 to 5.
Principal activity
The main activity of the group continues to be the design,
manufacture and supply of professional lighting equipment.
Each company within the group operates in a different market
of the lighting sector.
Key performance indicators
The directors consider the main financial key performance
indicators (KPIs) to be those disclosed on page 1 (financial
highlights). The two most important KPIs to the business are
turnover and operating profit.
The directors monitor non-financial areas of the business relating
to energy saving and environmental responsibility, market and
product development, customer service and product support
on a regular basis.
The group operates within a competitive environment with
threats from existing competitors, potential new entrants and the
continued evolution of existing technologies within the lighting
industry. The group seeks to minimise these risks by offering
innovative products and service solutions. We seek to manage
and mitigate these risks by offering technologically advanced
products to enable us to differentiate ourselves from our
competitors, investing in our research and development activities
to produce new and evolving product ranges for the future, to
maintain and enhance our market position. The financial risks
which impact the company are covered in the following
paragraphs.
Management reviews prices at least annually to take into account
fluctuations in costs in order to minimise the risk of reduction in
gross margin, or loss of market share from lack of competitiveness.
The group has financial risks and seeks to minimise and manage
these by incorporating controls into key functions as part of the
normal business operation.
Objectives are set for each company within the group
incorporating financial and non-financial targets which
have appropriate measurements that reflect their nature. These
are monitored regularly at local and group Board level, during
the year the majority of objectives were achieved or substantially
achieved.
The group offers credit terms to the majority of its customers and
this activity carries financial risks of default and slow payment.
There is a credit policy, which includes an assessment of the risk
of bad debt and management of higher risk customers. The group
has underwritten a significant part of its customer debt risk with
a credit insurance policy.
Principal risks and uncertainties
We have detailed below what we consider to be the principal risks
and uncertainties to the business, and how we seek to manage
and mitigate these risks.
The group’s revenue and profit could be affected by spending
reductions and inflationary pressures, particularly concerning
global economic challenges. Adverse economic conditions can
defer or reduce capital investment plans which our products are
supplied into and are key sources of revenue for the group. We
seek to manage and mitigate these risks by ensuring we have a
broad range of customers in differing sectors, and also ensuring
we offer high quality, technically advanced products, to
differentiate the group from competitors. In addition, we actively
seek to identify new opportunities to ensure we maximise our
potential of winning new business.
Changes in government policy, laws and regulation are constantly
evolving, with continuing pressures on government spending
plans. Reductions in spending and changing policy increases the
risk to our order book; we have sought and continue to seek to
diversify our customer portfolio to ensure we have an appropriate
spread, mitigating the risk of any industry or specific sector
spending issues.
Details of other risk management procedures are included within
the internal control section of this report and in the financial risk
section within the accounting policies (note 1).
Internal control
The Board of directors has overall responsibility for the
system of internal control and for reviewing its effectiveness
throughout the group. The internal control systems are designed
to meet the group’s particular needs and the risks to which it is
exposed, and by their nature can only provide reasonable but
not absolute assurance against misstatement or loss.
The directors have responsibility for maintaining a system of
internal control which provides reasonable assurance of the
effective and efficient operations, internal financial control
and compliance with laws and regulations.
Internal financial control
During the year, a member of the group finance department
has visited all operating sites to assess their compliance with a
selection of key control procedures and any non-compliance
reported to the group Board. Any areas of non-compliance noted
as part of this process have been addressed.
Governance Annual Report and Accounts 2014 25
FW Thorpe Plc
In addition, the executive directors regularly visit all operating
sites and review with local management financial and commercial
issues affecting the group’s operations. Regular financial
reporting includes rolling forecasts and monthly financial reports
comparing performance against plan. These reports are reviewed
locally with a group representative and monitored by the group
Board. Accordingly, the directors do not consider that an internal
audit department is required.
Other areas of control
During the year and continuing after the year end, the Board has
operated a formal risk identification and evaluation process as
part of a continuous review of the group’s internal controls.
This process considers financial, operational and compliance
risks and includes participation from senior executives from all
operating subsidiaries. The results of this process to date have
been utilised by the Board to focus the ongoing process for
identifying, evaluating and managing the group’s significant
risks. The programme is utilised to monitor the potential impact
of the risks identified and, where appropriate, actions are taken
to ensure they are effectively controlled. This process is extended
to include a detailed review of risk, as assessed by local senior
executives, and procedures have been established to ensure that
the group Board is made aware of any additional significant risks
identified and to consider appropriate action. This process
culminated in the provision of a certificate, by senior executives
at the operating sites, confirming that they have identified and
addressed the risks arising in their business and reported them
to the group Board accordingly.
By order of the Board
C Muncaster
Director
9 October 2014
Registered Office:
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
Company Registration Number: 317886
OverviewPerformanceGovernanceAccountsAdditional information
26
FW Thorpe Plc
Annual Report and Accounts 2014
directors’ rePort
Financial review
The directors have the pleasure in submitting their annual report
and the audited consolidated financial statements of the group
and the company for the year ended 30 June 2014.
Results and dividends
The results for the year are set out in detail on page 32.
Revenue increased by 13.8% to £62.9m. Operating profit also
showed an improvement of 8.2% to £11.6m, benefitting from
reduced losses at Sugg and Compact.
Net finance income declined during the year to £0.8m (2013:
£0.9m), with interest rates continuing at historic lows.
The taxation charge reflects a weighted average tax rate of 18.0%
(2013: 17.4%). This is higher than the rate in the previous year due
to a reduction in R&D expenditure and pension contributions, and
the resultant tax relief available.
On 30 May 2014, the company paid an interim dividend of
1.05p per share (2013: 1.0p) amounting to £1,228,000 (2013:
£1,172,000). A final dividend of 2.20p (2013: 2.0p) per ordinary
share is proposed amounting to £2,545,000 (2013: £2,340,000)
plus a special dividend of 1.50p (2013: nil) amounting to
£1,735,000 (2013: £nil), and, if approved, will be paid together
on 20 November 2014. Total dividends paid during the year
amounted to £3,568,000 in aggregate (2013: £2,884,000).
The final dividend for 2013 was paid on 21 November 2013.
Cash and liquidity management
The group’s cash is managed in accordance with the treasury
policy. Cash is managed centrally on a daily basis to ensure that
the group has sufficient funds available to meet its needs and
invests the remainder. The majority of cash is placed with
approved counterparties either on overnight deposit or time
deposit. There are a series of time deposits which are maturing on
a rolling cycle in order to meet regular business payments, with a
margin for larger regular and one-off payments as well as seasonal
variation in cash requirements.
The group primarily trades in sterling. There is an exposure
to foreign currency as the group buys and sells in foreign
currencies and maintains currency bank accounts in US Dollars,
Australian Dollars and Euros. The activities of buying and selling in
foreign currency are broadly matched with currencies bought and
sold as required in order to minimise currency exposures. Larger
exposures would be hedged in order to reduce the risk of adverse
exchange rate movement. There were no currency hedging
derivatives in place at 30 June 2014 or 30 June 2013.
Pension scheme position and funding
The pension scheme position as shown in the balance sheet
remains in surplus which has increased this year primarily due
to improved asset performance. A triennial actuarial valuation at
30 June 2012 has been completed and a funding level for the
future has been agreed between the trustees of the scheme and
the directors of the company. The directors consider it unlikely
that any changes to the present funding levels will have any
significant effect on the strength of the company’s balance sheet.
Group research and development activities
The group is committed to research and development activities
in order to maintain its market share in the industrial and
commercial lighting market. These activities encompass constant
development of both new and existing products to ensure that
a leading position in the lighting market is maintained.
During the year the group spent £1,428,000 (2013: £1,653,000)
on capitalised development costs which includes internal labour.
Property, plant and equipment
The directors are of the opinion that the market value of the
freehold land and buildings is in excess of their net book value.
Whilst it is considered that the market value is significantly greater
than the net book value for many of the group’s properties as a
result of being acquired between two and over twenty years ago,
management consider that undertaking formal valuation
exercises would be costly for limited value and consequently
no formal exercise has been undertaken.
Creditor payment policy
The group’s policy concerning the payment of its trade creditors
is to accept and follow the normal terms of payment amongst
suppliers to the lighting industry. Payments are made when they
fall due, which is usually on the day after the end of the calendar
month following the month in which delivery of goods or services
is made. Where reasonable settlement discount terms are offered
for early payment, these terms are usually taken up. The number
of days represented by the company’s year end trade payables
is 45 (2013: 42).
Corporate responsibility
The group has the responsibility for managing the challenges that
affect the business on a daily basis; this also includes our impact
on the environment, our workforce, and the community at large.
Environment
The group is committed to minimising the environmental impact
of both its manufacturing processes and its products. However,
even with the most responsible approach, some carbon dioxide
(CO2) will be released into the atmosphere as an indirect result
of factory and selling activities and customers’ use of luminaires.
In 2009, FW Thorpe designed an ambitious carbon-offsetting
scheme to help compensate for these emissions. The scheme
is now accredited under the Woodland Carbon Code and
now has 53,898 trees planted. The group requires some
8,000 or so plantings per annum to offset the CO2 produced
by our operations.
Employee policies
Employees are kept informed of matters of concern to
them as employees by publication and distribution of a company
newsletter and other notices, or by specially convened meetings.
Committees representing the different groups of employees meet
regularly to ensure the views of employees are taken into account
in making decisions that are likely to affect their interests.
Governance
Annual Report and Accounts 2014 27
FW Thorpe Plc
The involvement of employees in the group’s performance is
encouraged by various incentive schemes including a profit
related bonus scheme.
Information on the financial and economic factors affecting the
performance of the group is made available twice yearly at the
time of publication of the interim and annual statements to
shareholders.
The group is committed to developing a safe and healthy working
environment for all employees consistent with the requirements
of the Health and Safety at Work Act. Within the constraints of
health and safety, disabled people are given full and fair
consideration for job vacancies. Depending on their skills and
abilities, disabled people enjoy the same career prospects as other
employees, and if employees become disabled every effort is
made to ensure their continued employment, with appropriate
training where necessary.
Policies for recruiting employees are designed to ensure equal
opportunities irrespective of colour, ethnic or national origin,
nationality, sex or marital status.
Charitable gifts
During the year the group gave £7,283 (2013: £6,400) for
charitable purposes. This is made up of donations to UK charities
for children’s welfare of £300, cancer care of £180, healthcare
of £210, educational schemes of £2,550, armed forces welfare
of £250 and local causes of £3,793.
Directors
The directors of the company during the year and at the date
of this report are set out on page 22 and 23.
The directors retiring by rotation are M Allcock, D Taylor and
P D Mason who, being eligible, offer themselves for re-election.
The contracts for M Allcock and D Taylor are terminable on twenty
four and twelve months’ notice respectively. P D Mason does not
have a service contract with the company.
Directors’ share interests
The details of the directors’ share interests are set out in the
directors’ remuneration report on pages 69 to 71.
Directors’ indemnities
As permitted by the Articles of Association, the directors have the
benefit of an indemnity which is a qualifying third party indemnity
provision as defined by section 234 of the Companies Act 2006.
The indemnity was in force throughout the last financial year and
is currently in force. The company also purchased and maintained
throughout the financial year Directors’ and Officers’ liability
insurance in respect of itself and its directors.
Board constitution
The company continues to be proprietorial in nature and the
directors act as a unitary Board and as a consequence are unable
to see the benefits of splitting the Board into sub-committees and
in particular of constituting audit and nomination committees as
matters that would normally be considered by an audit or
nomination committee are addressed by the full Board with the
non-executive directors present and the auditors attending as
appropriate.
A remuneration committee has been established with
the following people serving on it:
P D Mason
Non-executive director and Chairman of the committee.
I A Thorpe
Non-executive director.
Terms and conditions for the operation of this committee are in
place and it meets as and when required. The committee’s report
is presented on pages 69 to 71.
Where there is a requirement for a senior personnel or subsidiary
board appointment a sub-committee is formed. Any appointment
to the group Board would involve all Board members in the
selection process.
The Board meets regularly during the year and has a schedule
of matters reserved for its approval, which only the Board
may change.
Substantial shareholdings
At 9 October 2014, the company had received notification
of the following interests in 3% or more of the issued share
capital, excluding holdings of directors:
6,278,700 shares (5.3%)
6,556,980 shares (5.5%)
FMR LLC
E G Thorpe
Relations with shareholders
Directors are kept informed of the views of shareholders by
face-to-face contact at the company’s premises on the day of
the Annual General Meeting and, if appropriate, by meeting
with major shareholders at other times during the year.
Directors’ authority to issue shares
There is no longer a requirement to obtain the consent of
shareholders to each issue by the company of equity share capital
for cash made otherwise than to existing shareholders in
proportion to their existing shareholdings. This relaxation
is subject to the company obtaining the authority of shareholders
under section 571 of the Companies Act 2006 to disapply
generally the statutory pre-emption rights conferred by section
561 of the Companies Act 2006. Ordinary resolution number 8
would give the directors the authority to allot shares in the
company or to grant rights to subscribe for, or to convert any
security into, shares in the company up to an aggregate nominal
amount of £310,644 (which represents approximately 26% of the
company’s issued ordinary shares as at 9 October 2014). Special
resolution number 9 would further allow the directors to allot
equity securities or sell treasury shares for cash without first
offering them to existing shareholders, in proportion to existing
holdings, up to the same maximum nominal amount of £310,644
(which represents approximately 26% of the company’s issued
ordinary shares as at 9 October 2014).
This authority would, however, only allow the directors to do so in
connection with a pre-emptive rights issue and, in any other case,
the maximum nominal amount of equity securities which may be
so allotted is £58,618 (which represents approximately 5% of the
company’s issued ordinary shares as at 9 October 2014).
OverviewPerformanceGovernanceAccountsAdditional information
28
FW Thorpe Plc
Annual Report and Accounts 2014
Governance
directors’ rePort coNtiNUed
The directors believe that the exceptions, which are more fully
explained in the sections relating to the Board constitution and
the directors’ remuneration report, are appropriate for the size
and context of the group’s business.
Statement on the provision of information
to auditors
Each of the directors confirms that, as far as he is aware, there is
no relevant audit information of which the company’s auditors are
unaware, and that he has taken all the steps he ought to have as a
director to make himself aware of any relevant audit information,
and to establish that the auditors are aware of that information.
The above is in accordance with the provisions of section 418 of
the Companies Act 2006. The auditors have direct access to all
members of the Board and attend and present their reports at
appropriate Board meetings. The Board considers, at least
annually, the relationships and fees in place with the auditors
to confirm their independence is maintained.
Independent auditors
The auditors, PricewaterhouseCoopers LLP, have expressed
their willingness to continue in office and a resolution for
their reappointment will be proposed at the next Annual
General Meeting.
Going concern
The directors confirm that they are satisfied that the group and
company have adequate resources, with £17.9m cash and £15.6m
short-term deposits, to continue in business for the foreseeable
future, and for this reason, they continue to adopt the going
concern basis in preparing the accounts.
By order of the Board
C Muncaster
Director
9 October 2014
Registered Office:
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
Company Registration Number: 317886
These authorities, if approved, would expire at the conclusion of
the next Annual General Meeting, save that the authority relating
to section 561 would expire 15 months after being passed,
if earlier.
Purchase of own shares
Resolution number 10 set out in the notice of the Annual General
Meeting will, if it is approved, allow the company to exercise the
authority contained in the Articles of Association to purchase its
own shares. The Board has no firm intention that the company
should make purchases of its own shares if the proposed authority
becomes effective, but would like to be able to act quickly if
circumstances arise in which such a purchase would be desirable.
Purchases will only be made on the Alternative Investment Market
and only in circumstances where the directors believe that they
are in the best interests of the shareholders generally.
Furthermore, purchases will only be made if the directors believe
that they would result in an increase in earnings per share.
The proposed authority will be limited by the terms of the special
resolution to the purchase of 11,893,559 ordinary shares
representing 10% of the company’s issued ordinary share capital
at 9 October 2014 and a nominal value of £118,936.
The minimum price per ordinary share payable by the company
(exclusive of expenses) will be 1p. The maximum to be paid will
be an amount not more than 5% above the average of the middle
market quotations for ordinary shares of the company as derived
from the Alternative Investment Market on the five business days’
immediately preceding the date of each purchase. The company
may either cancel any shares which it purchases under this
authority or transfer them into treasury, and subsequently sell or
transfer them out of treasury or cancel them. The maximum
number of shares and the permitted price range are stated in
order to comply with statutory and Stock Exchange requirements
and should not be taken as representative of the number of
shares (if any) which may be purchased, or the terms of such
a purchase.
The authority will lapse on the date of the Annual General
Meeting of the company in 2015. However, in order to maintain
the Board’s flexibility of action it is envisaged that it will be
renewed at future Annual General Meetings.
Corporate governance
As a company whose shares are traded on the Alternative
Investment Market of the London Stock Exchange Plc,
the company is not required to comply with the Principles
of Good Governance and Code of Best Practice (“The UK
Corporate Governance Code”, or the “Code”). However, the Board
considers the Quoted Companies Alliance’s “Corporate
Governance Guidelines for Smaller Quoted Companies” (the QCA
Guidelines) relevant due to the size and complexity of the
company. The QCA Guidelines apply key elements from the Code
and other relevant guidance to the needs of small and mid-size
quoted companies for which the Code may not be entirely or
directly relevant.
The directors consider that the company applies the principles
of best practice with the exception of the matters listed below.
• There are no independent Board members.
• The Board does not have an independent audit committee.
Annual Report and Accounts 2014 29
FW Thorpe Plc
Governance
stateMeNt of directors’ resPoNsibiLities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law
and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared
the group and company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the
European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a
true and fair view of the state of the affairs of the group and the company and of the profit or loss of the group for that period.
In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether applicable IFRS’s as adopted by the European Union have been followed, subject to any material departures disclosed
and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company and the group
will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s
transactions and 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
By order of the Board
C Muncaster
Director
9 October 2014
OverviewPerformanceGovernanceAccountsAdditional information
30
FW Thorpe Plc
Annual Report and Accounts 2014
iNdePeNdeNt aUditors’ rePort
to tHe MeMbers of fW tHorPe PLc
Report on the financial statements
Our opinion
In our opinion:
• the financial statements, defined below, give a true and fair view of the state of the group’s and of the company’s affairs as at 30 June
2014 and of the group’s profit and the group’s and the company’s cash flows for the year then ended;
• the group financial statements have been properly prepared in accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union;
• the company financial statements have been properly prepared in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
This opinion is to be read in the context of what we say in the remainder of this report.
What we have audited
The group financial statements and company financial statements (the “financial statements”), which are prepared by FW Thorpe Plc,
comprise:
• the Consolidated and Company Balance Sheets as at 30 June 2014;
• the Consolidated Income Statement and Consolidated Statement of Comprehensive Income for the year then ended;
• the Consolidated and Company Statements of Cash Flows for the year then ended;
• the Consolidated Statement of Changes in Equity and Company Statement of Changes in Equity for the year then ended; and
• the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.
The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the European
Union and, as regards the company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect
of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.
What an audit of financial statements involves
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”). 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 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 Annual Report and Accounts 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 other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements.
Governance Annual Report and Accounts 2014 31
FW Thorpe Plc
Other matters on which we are required to report by exception
Adequacy of accounting records and information and explanations received
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Directors’ remuneration
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors’ remuneration
specified by law are not made. We have no exceptions to report arising from this responsibility.
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 29, 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 ISAs (UK &
Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
Andrew Hammond (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Birmingham
9 October 2014
OverviewPerformanceGovernanceAccountsAdditional information
32
FW Thorpe Plc
Annual Report and Accounts 2014
Accounts
CONSOLIDATED INCOME STATEMENT
For the year ended 30 June 2014
Continuing operations
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Operating profit
Finance income
Share of profit/(loss) of joint ventures
Profit before income tax
Income tax expense
Profit for the year
Notes
2
3
6
32
7
2014
£’000
62,947
(35,566)
27,381
(5,232)
(10,516)
11,633
753
37
12,423
(2,234)
Restated
2013
£’000
55,332
(31,036)
24,296
(4,527)
(9,019)
10,750
856
(80)
11,526
(2,008)
10,189
9,518
Restated 2013 – Finance income reduced by £47,000 due to the adoption of the amendments to IAS 19 "Employee Benefits" (see note 1)
All income derives from continuing operations.
Earnings per share from continuing operations attributable to the equity holders of the company during the year
(expressed in pence per share)
Basic and diluted earnings per share
– Basic and diluted
Notes
23
2014
pence
8.72
Restated
2013
pence
8.12
All share calculations have been rebased and/or restated following the sub-division of shares (10 for 1), which became effective on
19 August 2013, and for the impact of adopting IAS 19 revised (see note 1).
The notes on pages 38 to 68 form part of these financial statements.
The company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the company
income statement.
The profit for the company for the year was £9,995,000 (2013 restated: £9,813,000).
Accounts
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
For the year ended 30 June 2014
Profit for the year:
Other comprehensive income/(expenses)
Items that may be reclassified to profit or loss
Revaluation of available-for-sale financial assets
– Arising in year
– Reclassified in year
Exchange rate movement on investment in joint venture
– Arising in year
– Reclassified in year
Taxation
Items that will not be reclassified to profit or loss
Actuarial gain on pension scheme
Movement on unrecognised pension scheme surplus
Other comprehensive expense for the year, net of tax
Total comprehensive income attributable to equity shareholders
Annual Report and Accounts 2014 33
FW Thorpe Plc
Notes
2014
£’000
10,189
14
32
22
30
30
276
---
(2)
---
72
346
624
(1,216)
(592)
(246)
9,943
Restated
2013
£’000
9,518
201
–
(9)
–
(18)
174
861
(1,667)
(806)
(632)
8,886
All comprehensive income is attributable to the owners of the company, and derives from continuing operations.
The notes on pages 38 to 68 form part of these financial statements.
OverviewPerformanceGovernanceAccountsAdditional information
34
FW Thorpe Plc
Annual Report and Accounts 2014
Accounts
CONSOLIDATED AND COMPANY BALANCE SHEETS
As at 30 June 2014
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investment in subsidiaries
Investment property
Loans and receivables
Investment in joint ventures
Available-for-sale financial assets
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Other financial assets at fair value through profit or loss
Short-term financial assets
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Current income tax liabilities
Total current liabilities
Net current assets
Non-current liabilities
Retirement benefit deficit
Provisions for liabilities and charges
Deferred income tax liabilities
Total liabilities
Net assets
Equity attributable to owners of the company
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Total equity
Group
2014
£’000
2013
£’000
Company
2014
£’000
2013
£’000
Notes
10
9
31
13
29
32
14
22
17
18
19
15
16
20
30
21
22
24
25
25
13,088
6,722
---
2,135
1,340
57
3,441
36
26,819
14,404
14,882
388
15,638
17,911
63,223
90,042
(11,012)
(718)
(11,730)
51,493
---
(102)
(923)
(12,755)
77,287
1,189
656
137
75,305
77,287
12,380
6,686
–
2,102
1,728
22
2,458
32
25,408
11,942
12,099
388
20,148
13,240
57,817
83,225
(9,099)
(540)
(9,639)
48,178
–
(102)
(944)
(10,685)
72,540
1,189
656
137
70,558
72,540
12,301
3,418
4,140
2,135
1,340
141
3,441
---
26,916
11,684
15,103
388
15,638
17,896
60,709
87,625
(11,179)
(638)
(11,817)
48,892
---
(102)
(842)
(12,761)
74,864
1,189
656
137
72,882
74,864
11,784
3,176
4,140
2,102
1,728
154
2,458
–
25,542
10,097
11,593
388
20,148
13,238
55,464
81,006
(9,076)
(637)
(9,713)
45,751
–
(102)
(862)
(10,677)
70,329
1,189
656
137
68,347
70,329
The notes on pages 38 to 68 form part of these financial statements.
The financial statements on pages 32 to 68 were approved by the Board on 9 October 2014 and signed on its behalf by
A B Thorpe
C Muncaster
Company Registration Number: 317886
Annual Report and Accounts 2014 35
FW Thorpe Plc
Accounts
CONSOLIDATED STATEMENT
OF CHANgES IN EquITY
For the year ended 30 June 2014
Balance at 1 July 2012
Comprehensive income
Profit for the year to 30 June 2013 (restated)
Actuarial gain on pension scheme (restated)
Movement on unrecognised pension scheme surplus
Revaluation of available-for-sale financial assets
Movement on associated deferred tax
Impact of deferred tax rate change
Exchange rate movement on joint venture
Total comprehensive income
Transactions with owners
Dividends paid to shareholders
Purchase of shares
Total transactions with owners
Balance at 30 June 2013
Comprehensive income
Profit for the year to 30 June 2014
Actuarial gain on pension scheme
Movement on unrecognised pension scheme surplus
Revaluation of available-for-sale financial assets
Movement on associated deferred tax
Impact of deferred tax rate change
Exchange rate movement on joint venture
Total comprehensive income
Transactions with owners
Dividends paid to shareholders
Purchase of shares
Total transactions with owners
Balance at 30 June 2014
The notes on pages 38 to 68 form part of these financial statements.
Share
capital
£’000
1,189
Share
premium
account
£’000
656
Capital
redemption
reserve
£’000
137
Notes
30
30
14
22
22
32
8
30
30
14
22
22
32
8
–
–
–
–
–
–
–
–
–
–
–
1,189
–
–
–
–
–
–
–
–
–
–
–
1,189
–
–
–
–
–
–
–
–
–
–
–
656
–
–
–
–
–
–
–
–
–
–
–
656
–
–
–
–
–
–
–
–
–
–
–
137
–
–
–
–
–
–
–
–
–
–
–
137
Retained
earnings
£’000
64,831
9,518
861
(1,667)
201
(48)
30
(9)
8,886
(2,884)
(275)
(3,159)
70,558
10,189
624
(1,216)
276
(47)
119
(2)
9,943
(3,568)
(1,628)
(5,196)
75,305
Total
equity
£’000
66,813
9,518
861
(1,667)
201
(48)
30
(9)
8,886
(2,884)
(275)
(3,159)
72,540
10,189
624
(1,216)
276
(47)
119
(2)
9,943
(3,568)
(1,628)
(5,196)
77,287
OverviewPerformanceGovernanceAccountsAdditional information
36
FW Thorpe Plc
Annual Report and Accounts 2014
Accounts
COMPANY STATEMENT OF CHANgES IN EquITY
For the year ended 30 June 2014
Share
capital
£’000
1,189
Share
premium
account
£’000
656
Capital
redemption
reserve
£’000
137
Notes
Balance at 1 July 2012
Comprehensive income
Profit for the year to 30 June 2013 (restated)
Actuarial gain on pension scheme (restated)
Movement on unrecognised pension scheme surplus
Revaluation of available-for-sale financial assets
Movement on associated deferred tax
Impact of deferred tax rate change
Exchange rate movement on joint venture
Total comprehensive income
Transactions with owners
Dividends paid to shareholders
Purchase of shares
Total transactions with owners
Balance at 30 June 2013
Comprehensive income
Profit for the year to 30 June 2014
Actuarial gain on pension scheme
Movement on unrecognised pension scheme surplus
Revaluation of available-for-sale financial assets
Movement on associated deferred tax
Impact of deferred tax rate change
Exchange rate movement on joint venture
Total comprehensive income
Transactions with owners
Dividends paid to shareholders
Purchase of shares
Total transactions with owners
Balance at 30 June 2014
The notes on pages 38 to 68 form part of these financial statements.
30
30
14
22
22
32
8
30
30
14
22
22
32
8
–
–
–
–
–
–
–
–
–
–
1,189
–
–
–
–
–
–
–
–
–
–
1,189
–
–
–
–
–
–
–
–
–
–
656
–
–
–
–
–
–
–
–
–
–
656
Retained
earnings
£’000
62,318
9,813
861
(1,667)
201
(48)
30
(2)
9,188
Total
equity
£’000
64,300
9,813
861
(1,667)
201
(48)
30
(2)
9,188
–
–
–
–
–
–
–
–
–
–
137
(2,884)
(275)
(3,159)
68,347
(2,884)
(275)
(3,159)
70,329
–
–
–
–
–
–
–
9,995
624
(1,216)
276
(47)
112
(13)
9,731
9,995
624
(1,216)
276
(47)
112
(13)
9,731
–
–
–
137
(3,568)
(1,628)
(5,196)
72,882
(3,568)
(1,628)
(5,196)
74,864
Annual Report and Accounts 2014 37
FW Thorpe Plc
Accounts
CONSOLIDATED AND COMPANY
STATEMENTS OF CASH FLOWS
For the year ended 30 June 2014
Cash flows from operating activities
Cash generated from operations
Tax paid
Net cash generated from operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangibles
Purchase of subsidiary (net of cash acquired)
Purchase of investment property
Purchase of available-for-sale financial assets
Property rental and similar income
Dividend income
Net sale/(purchase) of deposits
Interest received
Receipt of loan notes
Net cash generated from/(used in) investing activities
Cash flows from financing activities
Dividends paid to company’s shareholders
Purchase of own shares
Net cash used in financing activities
Net Increase/(decrease) in cash in the year
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The notes on pages 38 to 68 form part of these financial statements.
Group
2014
£’000
10,762
(2,009)
8,753
(2,087)
153
(1,473)
(390)
(33)
(707)
157
169
4,510
365
450
1,114
(3,568)
(1,628)
(5,196)
4,671
13,240
17,911
2013
£’000
11,846
(2,737)
9,109
(2,281)
93
(1,771)
(383)
(21)
(416)
188
130
(3,040)
571
100
(6,830)
(2,884)
(275)
(3,159)
(880)
14,120
13,240
Company
2014
£’000
2013
£’000
9,031
(2,099)
6,932
10,004
(2,409)
7,595
(1,632)
114
(1,324)
(390)
(33)
(707)
378
1,184
4,510
372
450
2,922
(3,568)
(1,628)
(5,196)
4,658
13,238
17,896
(2,144)
68
(1,531)
(383)
(21)
(416)
369
1,144
(3,040)
575
100
(5,279)
(2,884)
(275)
(3,159)
(843)
14,081
13,238
Notes
26
8
16
16
OverviewPerformanceGovernanceAccountsAdditional information
38
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
For the year ended 30 June 2014
1 Accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements and company financial
statements (the “financial statements”) are set out below. These policies have been consistently applied to all years presented,
unless otherwise stated.
FW Thorpe Plc is incorporated in England and Wales. The company is domiciled in the UK. The company is a public limited company
which is listed on the Alternative Investment Market. The address of its registered office is Merse Road, North Moons Moat, Redditch,
Worcestershire B98 9HH.
Basis of preparation
The consolidated financial statements of FW Thorpe Plc have been prepared in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRIC interpretations and the Companies Act 2006
applicable to Companies reporting under IFRS. The financial statements have been prepared on a going concern basis, under the
historical cost convention, as modified by available-for-sale financial assets, financial assets and financial liabilities (including derivative
instruments) at fair value through the profit and loss.
The company and group has adopted all IAS and IFRS adopted in the EU except for IAS 34, as AIM-listed companies are not required
to adopt IAS 34. The company and group has not early adopted any other standards or interpretations not yet endorsed by the EU.
The group has not yet adopted certain new standards, amendments and interpretations to existing standards, which have
been published but are only effective for our accounting periods beginning on or after 1 January 2014 or later periods. These new
pronouncements are listed below:
Amendments to IAS 32 “Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities”
(effective 1 January 2014)
Amendments to IAS 36 “Impairment of assets on recoverable amount disclosures” (effective 1 January 2014)
Amendments to IAS 39 “Financial instruments: Recognition and measurement” (effective 1 January 2014)
Amendments to IFRS 10 “Consolidated financial statements” IFRS 12 and IAS 27 for investment entities (effective date 1 January 2014)
Annual Improvements 2012 (effective 1 July 2014)
Annual Improvements 2013 (effective 1 July 2014)
Amendments to IFRS 11 “Joint Arrangements on acquisition of an interest in a joint operation” (effective 1 January 2016)
IFRS 15 “Revenue from contracts with customers” (effective 1 January 2017)
IFRS 9 “Financial Instruments” (effective 1 January 2018)
The directors are currently evaluating the impact of the adoption of these standards, amendments and interpretations in future periods,
although it is anticipated that the impact will be immaterial.
The company has adopted the following new and amended standards as of 1 July 2013.
Amendments to IAS 12 “Income Taxes on Deferred Tax – Recovery of Underlying Assets” (EU endorsed 1 January 2013)
Amendments to IAS 19 “Employee Benefits” (effective 1 January 2013)
IFRS 10 “Consolidated Financial Statements” (effective 1 January 2013)
IFRS 11 “Joint Arrangements” (effective 1 January 2013)
IFRS 12 “Disclosure of Interests in Other Entities” (effective 1 January 2013)
Amendments to IFRS 10, 11 and 12 on transition guidance (effective 1 January 2013)
IFRS 13 “Fair Value Measurement” (effective 1 January 2013)
Amendment to IAS 27 “Separate Financial Statements” (effective 1 January 2013)
Amendment to IAS 28 “Investments in Associates and Joint Ventures” (effective 1 January 2013)
Amendment to IFRS 7 “Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities”
(effective 1 January 2013)
Annual Improvements 2011 (effective 1 January 2013)
The adoption of these accounting standards did not have a material impact on the company’s financial statements.
The group adopted IAS 19 (revised) “Employee Benefits” on 1 July 2013 consistent with the standard's effective date. The group has
applied the standard retrospectively in accordance with the transition provisions. The new standard replaces the interest cost of
post-employment obligations and the expected return on post-employment scheme assets with a net interest cost based on the net
post-employment obligation and the discount rate, measured at the beginning of the year. This has decreased the “net interest on
pension scheme assets and liabilities” in the consolidated income statement. This has had no effect on total comprehensive income as
the increased charge in the income statement is offset by a credit in "actuarial gain on pension scheme" in the consolidated statement
of comprehensive income. The 2013 consolidated income statement has been restated accordingly to reflect the charge of £47,000.
There has been no impact of the change in accounting policy on the consolidated balance sheet or consolidated cash flow statement as
a result of reflecting the above changes.
Accounts
Annual Report and Accounts 2014 39
FW Thorpe Plc
1 Accounting policies continued
The preparation of financial information in conformity with the basis of preparation described above requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of applying the company’s and group’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are
significant to the consolidated financial information are disclosed in the critical accounting estimates and judgements section.
Basis of consolidation
The financial statements for FW Thorpe Plc incorporate the financial statements of the company and its subsidiary undertakings.
A subsidiary is a company controlled directly by the group and all the subsidiaries are wholly-owned by the group. The group achieves
control over the subsidiaries by being able to influence financial and operating policies so as to obtain benefits from their activities.
Intra-group transactions, balances, income and expenses are eliminated in preparing consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.
The group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the group.
The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration agreement.
Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed on
a business combination are measured initially at their fair values at the acquisition date. The group recognises any non-controlling
interest in the acquiree on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share
of the recognised amounts of the acquiree’s identifiable net assets.
Joint ventures
Joint ventures are all entities over which the group exercised joint control. Investments in joint ventures are accounted for by the equity
method of accounting and are initially recognised at cost.
The group discloses its share of the result of the joint venture on the face of the income statement. The group also discloses its share
of the net assets on the face of the balance sheet.
Unrealised gains on transactions between the group and its joint venture are eliminated to the extent of the group’s interest in
the joint venture and that unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred.
The carrying amount of an investment in a joint venture is tested for impairment by comparing its recoverable amount with its
carrying amount whenever there is an indication that the investment may be impaired.
Revenue recognition
The group recognises revenue when the amount of revenue can be reliably measured; it is probable that future economic benefits will
flow to the entity and when specific criteria have been met for each of the group’s activities. The amount of revenue is not considered
to be reliably measurable until all contingencies relating to the sale have been resolved. Revenue comprises the fair value of the
consideration received or receivable for the sale of goods and services. The group basis its estimates on historical results, taking into
consideration the type of customer, the type of transaction and the specifics of each arrangement. Revenue is subsequently recognised
based upon the goods and services provided, when these goods have been delivered to the customer or the service performed,
excluding VAT and trade discounts.
Interest income
Interest income is recognised on a time proportion basis using the effective interest method. When a receivable is impaired the group
reduces the carrying amount to its recoverable amount, being the estimated cash flow discounted at the original effective interest rate
of the instrument and continues unwinding the discount as interest income.
Interest on impaired loans is recognised using the original effective interest rate.
Dividend income
Dividend income is recognised when the right to receive payment is established.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments,
it is identified as the group Board that makes strategic decisions.
The group is organised into seven operating segments based on the products and customer base in the lighting market. The largest
business is Thorlux. The six remaining operating segments have been aggregated into the “other companies” reportable segment
based upon their size, comprising the entities Compact Lighting Limited, Philip Payne Limited, Sugg Lighting Limited, Solite Europe
Limited, Portland Lighting Limited and TRT Lighting Limited.
OverviewPerformanceGovernanceAccountsAdditional information
40
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
1 Accounting policies continued
Pension costs
The group operates a hybrid defined benefit and defined contribution pension scheme. The basis of the groups’ hybrid pension scheme
provides benefits to members based upon the following:
• Service before 1 October 1995, benefits provided are defined benefit in nature (the ”pure“ defined benefit element);
• Service after 1 October 1995, has two elements;
• For members joining pre-1 October 1995, benefits provided are the maximum of their defined contribution pension and their defined
benefit pension (the ”defined benefit underpin“ element);
• For members joining post-1 October 1995, benefits provided are defined contribution in nature (the “pure defined contribution”
element).
The contributions of all three elements are paid into one pension scheme, where the contributions and assets are segregated and ring-
fenced from each other. The assets of the scheme are invested and managed independently of the finances of the group. Pension costs
are assessed in accordance with the advice of an independent qualified actuary. Costs include the regular cost of providing benefits
which it is intended should remain at a substantially level percentage of current and expected future earnings of the employees
covered. Variations from the regular pensions cost are spread evenly through the income over the remaining service lives of current
employees. Contributions made to the defined benefit scheme are charged to the income statement in the period in which they
are made.
The liability or surplus recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined
benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised past-service
costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. In the
defined benefit underpin element of the scheme the liabilities reflect the greater of the defined contribution or defined benefit
liabilities.
For the defined benefit underpin element of the scheme each member is tested to see whether the pension on a defined contribution
or defined benefit basis is higher. The liabilities shown in the pensions note are based on the greater of the two liabilities for each
member, which in almost all cases is the defined benefit liability. For the service cost, again tests are performed to see which is the
higher for each member out of the company’s share of the defined contribution payments or the company’s share of accruing benefits
on a defined benefit basis. The higher of these two figures for each member is then used to give the total service cost; again the defined
benefit cost is the higher for the vast majority of members.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest
rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms
to maturity approximating to the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity
in the statement of comprehensive income in the period in which they arise.
Past service costs are recognised immediately in income, unless the changes to the pension plan are conditional on the employees
remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-
line basis over the vesting period.
For defined contribution plans and pure defined contribution elements, the group pays contributions to publicly or privately
administered pension insurance plans on a mandatory, contractual or voluntary basis. The group has no further payment obligations
once the contributions have been paid. The contributions are recognised as employee benefit expense in the income statement as they
fall due, or as an accrued or prepaid expense. Prepaid contributions are recognised as an asset to the extent that a cash refund or a
reduction in the future payments is available. A defined benefit surplus is only recognised if it meets the following criteria; if the group
has an unconditional right to a refund; or if the group can realise it at some point during the life of the plan or when the plan liabilities
are settled. If the criteria are not met then a defined benefit surplus is not recognised.
Foreign currencies
Transactions in foreign currency are converted to sterling using the exchange rate applicable to the date of the transaction. Foreign
currency gains and losses resulting from the settlement of foreign currency transactions at a different time are recognised in the income
statement. Currency exchange differences arising from holding monetary assets or liabilities in a foreign currency are fair valued at the
balance sheet date in accordance with prevailing exchange rates and resulting gains or losses are recognised in the income statement.
Accounts
Annual Report and Accounts 2014 41
FW Thorpe Plc
1 Accounting policies continued
Taxation
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in
the countries where the company’s subsidiaries operate and generate taxable income. Management periodically evaluates positions
taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted
for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset
is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and joint ventures, except where the
timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not
reverse in the foreseeable future.
Dividend distribution
Final dividend distribution to the company’s shareholders is recognised as a liability in the group’s financial statements in the period
in which the dividends are approved by the company’s shareholders.
Interim dividends are recognised as a liability in the group’s financial statements when approved by the directors.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses where applicable. Cost includes
the original purchase price together with the costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is calculated on a straight-line basis to write down the cost less estimated residual value of all plant and equipment assets
by equal instalments over their expected useful life. The rates generally applicable are:
Freehold land
Buildings
Plant and equipment
Nil
2%–4%
7%–33%
The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance sheet date.
Assets are reviewed for impairment where there is an indication that the carrying value may not be recoverable.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within
administrative expenses in the income statement.
Leases
Operating leases, and payments made under them are charged to the income statement on a straight-line basis over the term
of the lease.
OverviewPerformanceGovernanceAccountsAdditional information
42
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
1 Accounting policies continued
Intangible assets
Development costs
The group undertakes development activities on an ongoing basis. Part of these costs relate to projects where the benefit is received in
the short term (less than one year) and part relates to longer term projects where the benefit is expected to be received for several years
to come. Costs associated with the shorter term activities are expensed as and when they are incurred. Costs associated with the longer
term projects are capitalised as an intangible asset and amortised over the expected life of the benefit, generally at 33.33% per annum,
commencing when the asset is available for use within the business. Development assets are recognised as intangible assets when the
following criteria are met:
• It is technically feasible to complete the intangible asset so that it will be available for use;
• Management intends to complete the intangible asset and use or sell it;
• There is an ability to use or sell the intangible asset;
• It can be demonstrated how the intangible asset will generate probable future economic benefits;
• Adequate technical, financial and other resources to complete the development and to use or sell the intangible asset are available;
and
• The expenditure attributable to the intangible asset during its development can be reliably measured.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
The economic success for development activities is uncertain and carrying amounts are reviewed at each balance sheet date
for impairment in accordance with IAS 36.
Development assets are valued at cost less accumulated amortisation and any impairment losses.
Fishing rights
Fishing rights are stated at cost less accumulated impairment where applicable. The rights are not amortised, but assessed annually
for impairment.
Goodwill
Goodwill is stated at cost less accumulated impairment where applicable. Goodwill represents the excess of the cost of an acquisition
over the fair value of the group’s share of the net assets of the acquired subsidiary undertaking at the date of acquisition. Goodwill is
reviewed for impairment at least annually or more frequently if events or changes in circumstances indicate a potential impairment.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating
units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.
Software costs
Software costs are stated at cost less accumulated amortisation and impairment where applicable. Amortisation is calculated on a
straight-line basis to write down the cost less estimated residual value over its useful life. The amortisation rates are between 20%
and 50% per annum.
Patent costs
Patents are stated at cost less accumulated amortisation. Amortisation is calculated on a straight-line basis to write down the cost less
estimated residual value over its useful life. The amortisation rate is 20%.
Other intangible assets
An intangible asset acquired in a business combination is recognised at fair value to the extent it is probable that the expected future
economic benefits attributable to the asset will flow to the group and that its cost can be measured reliably. Intangible assets
principally relate to brand names and technology which were valued discounting estimated future net cash flow from the asset.
The cost of intangible assets is amortised through the income statement on a straight-line basis over their estimated economic life.
Accounts Annual Report and Accounts 2014 43
FW Thorpe Plc
1 Accounting policies continued
Investment properties
Investment properties are recognised at cost, and then subsequently cost less accumulated depreciation and (if applicable) any
accumulated impairment losses. Freehold land is not depreciated.
Investments in subsidiaries and joint ventures
Investments in subsidiaries are held at cost less impairment. Cost includes directly attributable costs of investment. The group has
applied the equity method of accounting to recognise the interest in the joint venture.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined by the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production
overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business,
less the costs of completion and selling expenses. Provision is made against the cost of slow-moving, obsolete and other stock lines
based on their net realisable value.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, using the effective interest
method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence
that the group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial
difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in
payments (more than 30 days’ overdue) are considered indicators that the trade receivable is impaired. The amount of the provision
is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original
effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, the amount of the loss
is recognised in the income statement within “distribution costs”. When a trade receivable is uncollectable, it is written off against the
allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against “distribution
costs” in the income statement.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit and loss are financial assets held for trading and are measured at their fair values.
Non-current assets and disposal groups held for sale
Non-current assets and disposal groups are classified as assets held for sale when their carrying amount is to be recovered principally
through a sale transaction and a sale is considered highly probable. They are stated at the lower of their carrying amount and fair value
less costs to sell if their carrying amount is to be recovered principally through a sale transaction rather than through continuing use
and a sale is considered highly probable.
Short-term financial assets
Short-term financial assets are defined as cash term deposits with banks with an original term of three months and over.
Cash and cash equivalents
Cash and cash equivalents are defined as cash in hand, on demand deposits and short-term deposits with banks with an original term
less than three months.
Current asset investments
Current asset investments are valued at fair value. Changes in fair value are recognised in the income statement.
Available-for-sale financial assets
The fair value of quoted investments is based on current bid prices. Changes to fair value are recognised in the statement
of comprehensive income.
Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
OverviewPerformanceGovernanceAccountsAdditional information
44
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
1 Accounting policies continued
Provisions
Provisions are recognised in the balance sheet when a group company has a present obligation (legal or constructive) as a result of
a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and
a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the
expenditure required to settle the present obligation at the balance sheet date.
If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, where appropriate, the risks specific to the liability. A provision for restructuring
is recognised when the group has approved a detailed and formal restructuring plan, and the restructuring has either commenced
or has been announced to those affected by it. In accordance with the group’s published environmental policy and applicable legal
requirements, a provision for site restoration in respect of contaminated land is recognised when land is contaminated.
A provision for onerous contracts is recognised when the expected benefits to be derived by the group from a contract are lower than
the unavoidable cost of meeting its obligations under the contract.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed below.
Retirement benefit obligations
The group recognises its obligations to employee retirement benefits. The quantification of these obligations is subject to significant
estimates and assumptions regarding life expectancy, discount and inflation rates and the rate of increase in pension payments.
In making these assumptions the group takes advice from an independent qualified actuary about which assumptions best reflect the
nature of the group’s obligations to employee retirement benefits. These assumptions are regularly reviewed by our actuaries
Capita Employee Benefits Ltd to ensure their appropriateness.
Warranty
The group makes provisions for the warranty provided with the terms and conditions of sale to the customer based on past experience
together with specific provisions for known issues. There are quality control procedures in place to ensure that products reaching
customers are of a high standard. The technical support areas record all warranty issues in order that problems can be identified that
may affect a wider customer base. Additionally, product failures are tested thoroughly to examine technical failures and strategies are
developed to minimise and correct issues arising from that examination. The group works closely with its suppliers to ensure a low
failure rate for components.
Intangible assets
IFRS 3 requires the identification of acquired intangible assets as part of a business combination. The methods used to value such
intangible assets require the use of estimates. Future results are impacted by the amortisation periods adopted and changes to the
estimated useful lives would result in different effects on the income statement and balance sheet.
Goodwill is not amortised but is tested annually for impairment. Tests for impairment are based on discounted cash flows and
assumptions (including discount rates, timing and growth prospects) which are inherently subjective.
Development costs
The group undertakes development activities and the commercial viability of these activities are assessed on a continual basis.
The group makes assumptions about the future value of the work based on past experience of similar development projects and the
feedback from the marketplace about future expectations for technological development. The group seeks to minimise the risk of
product development failure by engaging with others to overcome technological difficulties and by regularly assessing the expectation
of the market.
Financial risk factors
The group’s activities expose it to a variety of financial risks: market risk (including currency risk, commodity price risk and security price
risk), credit risk and liquidity risk. The group’s overall risk management programme focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the group’s financial performance. The group may use derivative financial
instruments to hedge certain risk exposures.
Accounts Annual Report and Accounts 2014 45
FW Thorpe Plc
1 Accounting policies continued
(a) Market risk
(i) Foreign exchange risk
The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with
respect to the Euro, US Dollar, UK Pound, Australian Dollar and Arab Emirate Dirham. Foreign exchange risk arises from future
commercial transactions denominated in a currency that is not the entity’s functional currency as well as bank account balances, trade
and other receivables as well as trade and other payables denominated in currencies other than sterling. The group has carried out an
exercise to evaluate the effect of a movement of 1% in each currency other than sterling, and the results are not significant. The risk is
managed by maintaining relatively low currency balances and selling or buying currency when required.
(ii) Price risk
The group is exposed to equity securities price risk because of investments held by the group and classified on the consolidated
balance sheet either as available-for-sale or at fair value through profit or loss.
The group has investments in UK listed securities of other entities and these are publicly traded on the London Stock Exchange.
The nature of the list of investments held means the investments can go up and down in value.
(iii) Commodity price risk
The group has an exposure to the risk of commodity price changes, in particular, metals. The group seeks to minimise the risk
by agreeing prices with major suppliers in advance.
(iv) Interest rate risk
The group is exposed to interest rate risk because it has cash investments and short-term financial assets which are mostly interest-
bearing. The effect of a reduction in interest rates is to reduce financial income. There are no borrowings and the group has no
exposure to the risk of increased interest cost other than pension scheme interest cost.
(b) Credit risk
Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits
with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables
and committed transactions. For banks and financial institutions, only independently rated parties with a minimum Fitch rating of F1
are accepted. If wholesale customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk
control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.
Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board. The utilisation of credit
limits is regularly monitored.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the ability to close out
market positions.
Management monitors rolling forecasts of the group’s liquidity reserve which comprises cash and cash equivalents together with
short-term financial assets (note 15) on the basis of expected cash flow.
All external current liabilities are expected to mature within four months.
Capital risk management
The group’s policy has been to maintain a strong capital basis in order to maintain investor, customer, creditor and market confidence.
This sustains future development of the business, safeguarding the group’s ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital
to shareholders or issue new shares. From time to time the group purchases its own shares in the market; the timing of these purchases
is dependent on market prices, to ensure such transactions are sufficiently beneficial for the company, its earnings per share and returns
to investors. The group continues to seek to maintain the balance of these returns, while strengthening the reserves and equity position
of the company, via continued profitability, and structured growth.
OverviewPerformanceGovernanceAccountsAdditional information 46
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
1 Accounting policies continued
The group has a long-standing policy not to utilise debt within the business, providing a robust capital structure even within the
toughest economic conditions. The group’s significant cash resources allow such a position, but also require close management,
to ensure that sufficient returns are being generated from these resources. The group’s policy with regards the cash resources are
to ensure they generate sufficient returns, whether by investment in business activities, such as plant and equipment, or assessing
suitable opportunities to grow the business, or the physical investment of these funds to ensure appropriate returns to investors.
The maintenance of the group’s cash position is also assessed against other assets of the business to allow investors the benefits of
obtaining business property relief from investing within the group, which will continue to be a focus of the group due to our
balance sheet position.
The group is able to maintain its current capital structure because there are no externally imposed capital requirements, and there were
no changes in the group’s approach to capital management during the year.
The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
Fair value estimation
Financial instruments
Financial instruments that are measured at fair value are disclosed in the consolidated financial statements in accordance with the
following fair value measurement hierarchy:
i) Quoted prices (unadjusted) in active markets for identical assets and liabilities (level 1).
ii)
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices,
or indirectly (that is, derived from prices) (level 2).
iii) Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques.
These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity
specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Other assets and liabilities
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair
value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market
interest rate that is available to the group for similar financial instruments.
Share capital
Ordinary shares are classified as equity.
Where any group company purchases the company’s equity share capital (treasury shares), the consideration paid, including any
directly attributable incremental costs (net of income taxes) is deducted from the equity attributable to the company’s equity holders
until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly
attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the company’s
equity holders.
Accounts
Annual Report and Accounts 2014 47
FW Thorpe Plc
2 Segmental analysis
(a) Business segments
The segmental analysis is presented on the same basis as that used for internal reporting purposes. For internal reporting FW Thorpe
is organised into seven operating segments based on the products and customer base in the lighting market – the largest business is
Thorlux, which manufactures professional lighting systems for industrial, commercial and controls markets. The six remaining operating
segments have been aggregated into the “other companies” reportable segment based upon their size, comprising the entities
Compact Lighting Limited, Philip Payne Limited, Sugg Lighting Limited, Solite Europe Limited, Portland Lighting Limited, and
TRT Lighting Limited.
FW Thorpe’s chief operating decision-maker (CODM) is the group Board. The group Board reviews the group’s internal reporting in
order to monitor and assess performance of the operating segments for the purpose of making decisions about resources to be
allocated. Performance is evaluated based on a combination of revenue and operating profit. Assets and liabilities have not been
segmented, which is consistent with the group’s internal reporting.
Year to 30 June 2014
Revenue to external customers
Revenue to other group companies
Total revenue
Operating profit
Net finance income
Share of profit of joint venture
Profit before income tax
Year to 30 June 2013 (restated)
Revenue to external customers
Revenue to other group companies
Total revenue
Operating profit
Net finance income (restated)
Share of loss of joint venture
Profit before income tax
Inter-
segment
adjustments
£’000
Total
continuing
operations
£’000
Thorlux
£’000
49,657
650
50,307
10,593
Other
companies
£’000
13,290
1,146
14,436
842
---
(1,796)
(1,796)
198
45,197
101
45,298
10,239
10,135
562
10,697
317
–
(663)
(663)
194
62,947
---
62,947
11,633
753
37
12,423
55,332
–
55,332
10,750
856
(80)
11,526
Inter segment adjustments to operating profit consist of property rentals on premises owned by FW Thorpe Plc, adjustments to profit
related to stocks held within the group that were supplied by another segment and adjustments to investment provisions relating to
group companies.
(b) Geographical analysis
The group’s business segments operate in three main areas, the UK, the rest of Europe and the Rest of the World.
The home country of the company, which is also the main operating company, is the UK.
The group’s revenue is generated mainly within the UK.
UK
Europe
Other countries
2014
£’000
55,080
5,357
2,510
62,947
2013
£’000
47,686
4,393
3,253
55,332
All assets and consequently capital expenditure are in the UK, and cannot be split geographically in relation to the group’s revenues.
OverviewPerformanceGovernanceAccountsAdditional information
48
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
3 Group operating profit
Group operating profit is stated after charging/(crediting):
Profit on sale of property, plant and equipment
Rental income from investment property
Depreciation of property, plant and equipment (note 10):
– owned assets
Operating lease rentals:
– plant and machinery
– other
Intangible amortisation/impairment (note 9)
Foreign exchange losses recognised in income statement
Services provided by the company’s auditors
During the year, the group obtained the following services from the company’s audit and its auditors:
Group
Fees payable to company’s auditors for the audit of the company and consolidated financial statements
Fee payable to the company’s auditor and its associates for other services:
– the audit of company’s subsidiaries pursuant to legislation
– taxation advisory services
2014
£’000
(75)
(120)
1,269
54
134
1,439
96
2014
£’000
46
50
43
139
2013
£’000
(62)
(116)
1,182
39
139
1,082
33
2013
£’000
43
36
–
79
It is the group’s practice to employ PricewaterhouseCoopers LLP on assignments additional to their statutory audit duties where their
expertise and experience with the group are important.
4 Other gains – net
Other financial assets at fair value through profit or loss (note 19).
Fair value gains
Other financial assets at fair value consist of units in a sterling cash fund.
2014
£’000
---
2013
£’000
1
Accounts
Annual Report and Accounts 2014 49
FW Thorpe Plc
5 Employee information
The average monthly number of employees employed by the group (including executive directors) during the year is analysed below:
Production
Sales and distribution
Administration
Total average headcount
Employment costs of all employees (including executive directors).
Wages and salaries
Social security costs
Other pension costs
2014
Number
247
112
155
514
2014
£’000
15,652
1,732
681
18,065
2013
Number
224
104
144
472
2013
£’000
14,108
1,542
661
16,311
Other pension costs include contributions to the pension scheme and other employers’ pension related charges comprising life
assurance of £73,000 (2013: £66,000), pension administration and professional charges of £81,000 (2013: £129,000), a pension paid
to a former director, contributions to Sugg Lighting Limited group personal pension plan and private pension schemes amounting
to £83,000 (2013: £87,000).
Contributions to the defined contribution section amounted to £251,000 (2013: £248,000).
From April 2014 the group introduced an auto enrolment pension scheme, administered independently of the FW Thorpe pension
schemes. Contributions to the auto enrolment scheme amounted to £48,000 (2013: £nil).
Directors’ emoluments
Aggregate emoluments
Contributions to money purchase pension schemes
Highest paid director
Total of emoluments and amounts receivable
2014
£’000
1,299
9
1,308
2014
£’000
336
2013
£’000
1,181
25
1,206
2013
£’000
311
The highest paid director is a pensioner of the retirement benefits scheme (2014 and 2013: accrued pension of £131,000).
At 30 June 2014 retirement benefits were accruing to M Allcock and D Taylor (2013: M Allcock and D Taylor) under the defined benefit
scheme and to A M Cooper (2013: A M Cooper) under the defined contribution scheme.
Further details are provided in the Directors’ remuneration report on pages 69 to 71.
OverviewPerformanceGovernanceAccountsAdditional information
50
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
6 Finance income
Finance income
Current assets
Interest receivable
Non-current assets
Fair value adjustment on loans
Dividend income on available-for-sale financial assets
Net rental income
7 Income tax expense
Analysis of income tax expense in the year:
Current tax
Current tax on profits for the year
Adjustments in respect of prior years
Total current tax
Deferred tax (note 22)
Origination and reversal of temporary differences
Total deferred tax
Income tax expense
2014
£’000
365
62
169
157
753
2014
£’000
2,162
25
2,187
47
47
2,234
The tax assessed for the year is lower (2013: lower) than the standard rate of corporation tax in the UK of 22.5% (2013: 23.75%).
The differences are explained below:
Profit before income tax
Profit on ordinary activities multiplied by the standard rate in the UK of 22.5% (2013: 23.75%)
Effects of:
Expenses not deductible for tax purposes
Accelerated tax allowances and other timing differences
Adjustments in respect of prior years
Profits taxed at small companies rate
Other
Tax charge
The weighted average applicable tax rate was 18.0% (2013: 17.4%).
2014
£’000
12,423
2,795
11
(445)
25
(2)
(150)
2,234
Restated
2013
£’000
595
–
121
140
856
Restated
2013
£’000
2,086
(209)
1,877
131
131
2,008
Restated
2013
£’000
11,526
2,737
16
(299)
(209)
–
(237)
2,008
The standard rate of corporation tax in the UK changed from 23% to 21% with effect from 1 April 2014. Accordingly the group’s profit
for this accounting year is taxed at an effective rate of 22.5%.
As a result of the change in the UK corporation tax rate to 20% from 1 April 2015, which was substantially enacted on 2 July 2013,
the relevant deferred tax balances have been re-measured at 20%.
Accounts
Annual Report and Accounts 2014 51
FW Thorpe Plc
8 Dividends
Dividends paid during the year are outlined in the tables below:
Dividends paid (pence per share)
Final dividend
Interim dividend
Total
2014
2.00
1.05
3.05
2013
1.46
1.00
2.46
The dividend per share is based on the rebased number of shares issues following the share split of 10 for 1 on 19 August 2013.
A final dividend in respect of the year ended 30 June 2014 of 2.20p per share, amounting to £2,545,000, and a special dividend of 1.50p
per share, amounting to £1,735,000, is to be proposed at the Annual General Meeting on 13 November 2014. These financial statements
do not reflect these dividends payable.
Dividends proposed (pence per share)
Final dividend
Special dividend
Dividends paid
Final dividend
Interim dividend
Total
Dividends proposed
Final dividend
Special dividend
2014
2.20
1.50
2014
£'000
2,340
1,228
3,568
2014
£'000
2,545
1,735
2013
2.00
–
2013
£'000
1,712
1,172
2,884
2013
£'000
2,340
–
OverviewPerformanceGovernanceAccountsAdditional information
52
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
9 Intangible assets
Group 2014
Cost
At 1 July 2013
Additions
Write-offs
At 30 June 2014
Accumulated amortisation
At 1 July 2013
Charge for the year
Impairment
Write-offs
At 30 June 2014
Net book amount
At 30 June 2014
Goodwill
£’000
Development
costs
£’000
Technology
£’000
Brand name
£’000
Software
£’000
Patents
£’000
Fishing rights
£’000
Total
£’000
3,503
–
–
3,503
600
–
–
–
600
4,364
1,428
(831)
4,961
1,282
1,040
–
(831)
1,491
2,903
3,470
311
–
–
311
124
62
125
–
311
---
174
–
–
174
116
58
–
–
174
---
860
47
–
907
676
124
–
–
800
107
150
–
–
150
60
30
–
–
90
60
182
–
–
182
–
–
–
–
---
9,544
1,475
(831)
10,188
2,858
1,314
125
(831)
3,466
182
6,722
Write-offs relate to development assets where no further economic benefits will be obtained.
Goodwill
£’000
Development
costs
£’000
Technology
£’000
Brand name
£’000
Software
£’000
Patents
£’000
Fishing rights
£’000
Group 2013
Cost
At 1 July 2012
Additions
Write-offs
At 30 June 2013
Accumulated amortisation
At 1 July 2012
Charge for the year
Write-offs
At 30 June 2013
Net book amount
At 30 June 2013
3,503
–
–
3,503
600
–
–
600
3,438
1,653
(727)
4,364
1,160
849
(727)
1,282
2,903
3,082
311
–
–
311
62
62
–
124
187
174
–
–
174
58
58
–
116
58
729
131
–
860
593
83
–
676
184
150
–
–
150
30
30
–
60
90
Total
£’000
8,487
1,784
(727)
9,544
2,503
1,082
(727)
2,858
182
–
182
–
–
–
–
182
6,686
The group tests intangible assets annually for impairment, or more frequently if there are indications of impairment. A discounted cash flow
analysis is computed to compare the discounted estimated future operating cash flows to the net carrying value of the goodwill and other
intangible assets for each operating segment or business as appropriate.
The tests are based on the following assumptions:
• Cash flows for the 12 months are based upon the group’s annual budget;
• Cash flows beyond the budget period, typically up to five years, are based on the annual budget cash flows with a growth rate of 2%;
• The estimated cash flows are discounted using a pre-tax discounted rate based upon the group’s estimated weighted average cost
of capital of 10%.
Any impairment identified as a result of the analysis are expensed to the income statement. The test is dependent on management
estimates and judgements, in particular in relation to the forecasting of future cash flows, and the discount rate applied to these
cash flows.
The group performed various sensitivity analyses which involved reducing future cash flows by up to 25%, reducing terminal growth
rates by up to five percentage points, or increasing pre-tax discount rates by up to 100 bps. The results of these analyses showed that,
despite significantly lower post-tax operating cash flows, or increased pre-tax discount rates, the carrying value of goodwill and other
intangible assets continued to exceed their value in use.
Accounts
Annual Report and Accounts 2014 53
FW Thorpe Plc
9 Intangible assets continued
Company 2014
Cost
At 1 July 2013
Additions
Write-offs
At 30 June 2014
Accumulated amortisation
At 1 July 2013
Charge for the year
Write-offs
At 30 June 2014
Net book amount
At 30 June 2014
Company 2013
Cost
At 1 July 2012
Additions
Write-offs
At 30 June 2013
Accumulated amortisation
At 1 July 2012
Charge for the year
Write-offs
At 30 June 2013
Net book amount
At 30 June 2013
Goodwill
£’000
Development
costs
£’000
Software
£’000
Patents
£’000
Fishing
£’000
600
–
–
600
600
–
–
600
---
3,891
1,281
(757)
4,415
1,164
935
(757)
1,342
3,073
706
45
751
529
119
–
648
103
150
–
–
150
60
30
–
90
60
Total
£’000
5,529
1,326
(757)
6,098
2,353
1,084
(757)
2,680
182
–
–
182
–
–
–
---
182
3,418
Goodwill
£’000
Development
costs
£’000
Software
£’000
Patents
£’000
Fishing
£’000
600
–
–
600
600
–
–
600
–
3,117
1,415
(641)
3,891
1,036
769
(641)
1,164
2,727
577
129
–
706
458
71
–
529
177
150
–
–
150
30
30
–
60
90
182
–
–
182
–
–
–
–
182
Total
£’000
4,626
1,544
(641)
5,529
2,124
870
(641)
2,353
3,176
Amortisation and impairment of £1,439,000 (2013: £1,082,000) is included in the administrative expenses.
For development costs, the group capitalises employee costs and directly attributable material costs necessary to design, construct
and test new and improved product ranges and technology. These costs are only capitalised where they meet all the criteria set out
in IAS 38.
Where development costs relate to products or technologies that are not expected to generate future economic benefits, do not meet
the requirements of IAS 38 or relate to research, they are charged to the income statement.
OverviewPerformanceGovernanceAccountsAdditional information
54
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
10 Property, plant and equipment
Freehold land
and buildings
£’000
Group
Plant and
equipment
£’000
Total
£’000
Freehold land
and buildings
£’000
Company
Plant and
equipment
£’000
Cost
At 1 July 2013
Additions
Disposals
At 30 June 2014
Accumulated depreciation
At 1 July 2013
Charge for the year
Disposals
At 30 June 2014
Net book amount
At 30 June 2014
10,491
419
–
10,910
2,113
193
–
2,306
8,604
14,711
1,636
(368)
15,979
10,709
1,076
(290)
11,495
25,202
2,055
(368)
26,889
12,822
1,269
(290)
13,801
10,491
419
–
10,910
2,113
193
–
2,306
11,761
1,181
(293)
12,649
8,355
830
(233)
8,952
Freehold land which was not depreciated at 30 June 2014 amounted to £947,000 (2013: £947,000) (group and company).
4,484
13,088
8,604
3,697
12,301
Cost
At 1 July 2012
Additions
Disposals
At 30 June 2013
Accumulated depreciation
At 1 July 2012
Charge for the year
Disposals
At 30 June 2013
Net book amount
At 30 June 2013
9,207
1,284
–
10,491
1,936
177
–
2,113
8,378
Freehold land
and buildings
£’000
Group
Plant and
equipment
£’000
Freehold land
and buildings
£’000
Company
Plant and
equipment
£’000
Total
£’000
23,107
2,388
(293)
25,202
11,903
1,182
(263)
12,822
13,900
1,104
(293)
14,711
9,967
1,005
(263)
10,709
11,034
970
(243)
11,761
7,814
763
(222)
8,355
9,207
1,284
–
10,491
1,936
177
–
2,113
8,378
4,002
12,380
3,406
11,784
Total
£’000
22,252
1,600
(293)
23,559
10,468
1,023
(233)
11,258
Total
£’000
20,241
2,254
(243)
22,252
9,750
940
(222)
10,468
Accounts
Annual Report and Accounts 2014 55
FW Thorpe Plc
11 Commitments
(a) Capital commitments
Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:
Property, plant and equipment
Group
2014
£’000
1,267
2013
£’000
462
Company
2014
£’000
1,267
2013
£’000
437
(b) Operating lease commitments
The group leases premises under non-cancellable operating lease agreements. The lease terms are between five and twenty years
(2013: five and twenty years), and the lease agreements are renewable at the end of the lease period at market rate.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Within one year
Within two to five years
Over five years
Group
Company
Land and
buildings
2014
£’000
110
198
---
308
Land and
buildings
2013
£’000
113
263
–
376
Land and
buildings
2014
£’000
21
24
---
45
Land and
buildings
2013
£’000
7
18
–
25
12 Financial instruments by category
All financial instruments measured at fair value are categorised as level 2 in the fair value measurement hierarchy, whereby the fair
value is determined by using valuation techniques, except for £3,829,000 (2013: £2,846,000) of fixed rate listed investments included in
available-for-sale and other financial assets at fair value through profit or loss that are classified as level 1. The valuation techniques for
level 2 instruments use observable market data where it is available, for example quoted market prices, and rely less on estimates.
The accounting policies for financial instruments have been applied to the line items below:
Group
30 June 2014
Assets as per balance sheet
Loans and other receivables
Available-for-sale financial assets
Other financial assets at fair value through profit or loss
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
Loans and
receivables
£’000
Available-
for-sale
£’000
Assets at
fair value
through the
profit and loss
£’000
1,340
---
---
14,145
15,638
17,911
49,034
---
3,441
---
---
---
---
3,441
---
---
388
---
---
---
388
Total
£’000
1,340
3,441
388
14,145
15,638
17,911
52,863
OverviewPerformanceGovernanceAccountsAdditional information
56
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
12 Financial instruments by category continued
Group
30 June 2013
Assets as per balance sheet
Loans and other receivables
Available-for-sale financial assets
Other financial assets at fair value through profit or loss
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
Company
30 June 2014
Assets as per balance sheet
Loans and other receivables
Available-for-sale financial assets
Other financial assets at fair value through profit or loss
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
Company
30 June 2013
Assets as per balance sheet
Loans and other receivables
Available-for-sale financial assets
Other financial assets at fair value through profit or loss
Trade and other receivables
Short-term financial assets
Cash and cash equivalents
Total
The above analysis excludes prepayments.
Liabilities as per balance sheet
Trade and other payables (excluding statutory liabilities)
Financial liabilities are measured at amortised cost.
Loans and
receivables
£’000
Available-
for-sale
£’000
Assets at
fair value
through the
profit and loss
£’000
1,728
–
–
11,396
20,148
13,240
46,512
–
2,458
–
–
–
–
2,458
–
–
388
–
–
–
388
Loans and
receivables
£’000
Available-
for-sale
£’000
Assets at
fair value
through the
profit and loss
£’000
1,340
---
---
14,587
15,638
17,896
49,461
---
3,441
---
---
---
---
3,441
---
---
388
---
---
---
388
Loans and
receivables
£’000
Available-
for-sale
£’000
Assets at
fair value
through the
profit and loss
£’000
1,728
–
–
11,062
20,148
13,238
46,176
Group
2014
£’000
9,551
9,551
–
2,458
–
–
–
–
2,458
2013
£’000
7,999
7,999
–
–
388
–
–
–
388
Company
2014
£’000
10,041
10,041
Total
£’000
1,728
2,458
388
11,396
20,148
13,240
49,358
Total
£’000
1,340
3,441
388
14,587
15,638
17,896
53,290
Total
£’000
1,728
2,458
388
11,062
20,148
13,238
49,022
2013
£’000
8,187
8,187
The group and company did not have derivative financial instruments at 30 June 2014 or 30 June 2013.
All assets and liabilities above are considered to be at fair value.
Accounts
Annual Report and Accounts 2014 57
FW Thorpe Plc
13 Investment property
Group and company
At 1 July
Addition
At 30 June
The following amounts have been recognised in the income statement:
Group and company
Rental income
Direct operating expenses arising from investment properties that generate rental income
2014
£’000
2,102
33
2,135
2014
£’000
120
(15)
2013
£’000
2,081
21
2,102
2013
£’000
116
(15)
The investment property and land consists of property held for investment purposes, a property with land and fishing rights by the river
Wye, and land designated for woodland in Monmouthshire.
Investment property of £1,288,000 (2013: £1,288,000) is freehold land and therefore not depreciated; the property element includes
accumulated depreciation of £269,000 (2013: £269,000) which relates to the property occupied by Mackwell Electronics Ltd up to the
date of disposal of this business. No further depreciation has been charged. The associated fishing rights for the property by the river
Wye are included in intangible assets.
A fair value exercise was undertaken in August 2014 of the land by the river Wye and the land in Monmouthshire which has resulted
in a valuation of £1.5m, which is greater than the carrying value of those specific investment properties.
Each investment property generates rental income.
14 Available-for-sale financial assets
Group and company
Beginning of year
Additions
Revaluation
End of year
2014
£’000
2,458
707
276
3,441
2013
£’000
1,841
416
201
2,458
Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the group commits to purchase
or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value
through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or
have been transferred and the group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets
are subsequently carried at fair value.
There were no impairment provisions on available-for-sale financial assets in 2014 or 2013.
Available-for-sale financial assets comprise listed equity in the UK, and are almost entirely denominated in UK Pounds.
None of these assets is either past due or impaired.
The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial
assets is impaired. For equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the
security below its cost is evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the
cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that
financial asset previously recognised in profit or loss – is removed from equity and recognised in the separate consolidated income
statement. Impairment losses recognised in the separate consolidated income statement on equity instruments are not reversed
through the separate consolidated income statement.
OverviewPerformanceGovernanceAccountsAdditional information
58
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
15 Short-term financial assets
Group and company
Beginning of year
Net (disposals)/additions
End of year
2014
£’000
20,148
(4,510)
15,638
2013
£’000
17,108
3,040
20,148
The short-term financial assets consist of term cash deposits in sterling with an original term in excess of three months.
The banks where the deposits are held are rated “A” by Fitch, with a specific rating of F1 for short-term funds.
16 Cash and cash equivalents
Cash at bank and on hand
Group
2014
£’000
17,911
2013
£’000
13,240
Company
2014
£’000
17,896
2013
£’000
13,238
The banks where the funds are held are rated “A” by Fitch, with a specific rating of F1 for short-term funds.
17 Inventories
Raw materials
Work in progress
Finished goods
Group
2014
£’000
7,644
2,894
3,866
14,404
2013
£’000
6,694
2,404
2,844
11,942
Company
2014
£’000
5,244
2,702
3,738
11,684
The cost of inventories recognised as an expense and included in cost of sales amounted to £25,027,000 (2013: £21,678,000).
18 Trade and other receivables
Current
Trade receivables
Other receivables
Prepayments and accrued income
Amounts owed by subsidiaries
Group
2014
£’000
13,556
589
737
---
14,882
Amounts owed by subsidiaries are unsecured, interest free and have no fixed date for repayment.
Trade receivables past due date not provided
Group
2014
£’000
717
2013
£’000
11,004
392
703
–
12,099
2013
£’000
527
Company
2014
£’000
10,395
588
516
3,604
15,103
Company
2014
£’000
169
2013
£’000
5,218
2,143
2,736
10,097
2013
£’000
9,017
357
531
1,688
11,593
2013
£’000
322
A significant proportion of the amounts past due date were settled shortly after the end of the financial year, and taken together with
the credit insurance policy and good credit history, the directors considered that there is no impairment and the trade receivables are
therefore stated at their fair value, which equals their book value.
Provisions are made for bad debt when an undisputed debt is three months past due date or earlier if an adverse event occurs.
A significant proportion of the trade receivables are insured. The policy covers 90% of the debt in the event of a claim for default.
The bad debt provision includes the remaining 10% of the default in the event of a potential claim. No bad debt provision is made
in respect of trade receivables from government departments or agencies. At 30 June 2014 the bad debt provision for the group
amounted to £27,000 (2013: £21,000) and for the company £3,000 (2013: £2,000).
Accounts
Annual Report and Accounts 2014 59
FW Thorpe Plc
18 Trade and other receivables continued
During the year the following amounts were written off:
Bad debts written off
Bad debts recovered
Net bad debt expense
Group
2014
£’000
19
(32)
(13)
2013
£’000
75
(1)
74
Company
2014
£’000
---
(8)
(8)
At 30 June 2014, trade receivables were due to the group and company in the following currency denominations.
Due in £ sterling
Due in € euro
Due in Australian dollars
Total trade receivables
Group
2014
£’000
12,551
594
411
13,556
2013
£’000
10,127
510
367
11,004
Company
2014
£’000
9,400
584
411
10,395
2013
£’000
56
(1)
55
2013
£’000
8,244
406
367
9,017
The other assets within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The group
does not hold any collateral as security.
19 Other financial assets at fair value through profit and loss
The group and company have units in a sterling cash fund. At 30 June 2014 this amounted to £388,000 (2013: £388,000).
20 Trade and other payables
Current
Trade payables
Social security and other taxes
Other payables
Accruals and deferred income
Amounts owed to subsidiaries
Group
2014
£’000
6,647
1,461
1,959
945
---
11,012
Amounts owed to subsidiaries are unsecured, interest free and have no fixed date of repayment.
21 Provisions for liabilities and charges
WEEE provision
Total
Analysis of total provisions:
Non-current
Total
Group
2014
£’000
102
102
Group
2014
£’000
102
102
2013
£’000
5,342
1,100
1,925
732
–
9,099
2013
£’000
102
102
2013
£’000
102
102
Company
2014
£’000
4,928
1,138
1,868
526
2,719
11,179
Company
2014
£’000
102
102
Company
2014
£’000
102
102
2013
£’000
3,645
889
1,882
484
2,176
9,076
2013
£’000
102
102
2013
£’000
102
102
WEEE provision
A potential liability exists for the future cost of disposal of products under the WEEE legislation for a transitional period between the
adoption of the WEEE legislation in the European Union in August 2005 and the effective date in the UK of 1 July 2007.
From 1 July 2007 the group has followed Regulation 9 of the Legislation and amended the terms of sale to its customers so that the
customer is responsible for the actual costs of WEEE at the time of disposal.
Although the time scale of the utilisation of this provision cannot be predicted with certainty, it is expected that it will not be utilised
before 30 June 2016.
OverviewPerformanceGovernanceAccountsAdditional information
60
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
22 Deferred income tax
Deferred income tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets against current
tax liabilities and when the deferred income taxes relate to the same fiscal authority. The offset amounts are as follows:
Deferred tax assets:
– Deferred tax assets to be recovered after more than 12 months
– Deferred tax asset to be recovered within 12 months
Deferred tax liabilities:
– Deferred tax liability to be recovered after more than 12 months
– Deferred tax liability to be recovered within 12 months
Net deferred tax liabilities
The net movement on the deferred income tax account is as follows:
Beginning of year
Income statement charge
Tax credited/(charged) directly to equity
End of year
Group
2014
£’000
36
---
36
(923)
---
(923)
(887)
Group
2014
£’000
(912)
(47)
72
(887)
2013
£’000
32
–
32
(944)
–
(944)
(912)
2013
£’000
(763)
(131)
(18)
(912)
Company
2014
£’000
---
---
---
(842)
---
(842)
(842)
Company
2014
£’000
(862)
(45)
65
(842)
The movement in group deferred income tax assets and liabilities during the year, without taking into consideration the offsetting
of balances within the same tax jurisdiction, is as follows:
Deferred tax assets
At 1 July 2012
Credited to the income statement
Charged directly to equity
At 1 July 2013
Credited to the income statement
Charged directly to equity
At 30 June 2014
Deferred tax liabilities
At 1 July 2012
Charged/(credited) to the income statement
Charged/(credited) directly to equity
At 1 July 2013
Charged/(credited) to the income statement
(Credited)/charged directly to equity
At 30 June 2014
Accelerated
tax
depreciation
£’000
15
17
–
32
4
–
36
Accelerated
tax
depreciation
£’000
150
(83)
45
112
(31)
(11)
70
Retirement
benefit
obligations
£’000
–
–
–
–
–
–
---
Fair value
gains and
losses
£’000
81
48
(6)
123
5
31
159
Other
£’000
–
–
–
–
–
–
---
Research &
development
£’000
547
183
(21)
709
77
(92)
694
2013
£’000
–
–
–
(862)
–
(862)
(862)
2013
£’000
(723)
(121)
(18)
(862)
Total
£’000
15
17
–
32
4
–
36
Total
£’000
778
148
18
944
51
(72)
923
Accounts
Annual Report and Accounts 2014 61
FW Thorpe Plc
22 Deferred income tax continued
The deferred income tax credited/(charged) to equity during the year is as follows:
Tax on revaluation of available-for-sale assets
Impact of deferred tax rate change
Group
2014
£’000
(47)
119
72
2013
£’000
(48)
30
(18)
Company
2014
£’000
(47)
112
65
2013
£’000
(48)
30
(18)
23 Earnings per share
Basic and diluted earnings per share for profit attributable to equity holders of the company
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average
number of ordinary shares in issue during the year, excluding ordinary shares purchased by the company and held as treasury shares.
There was an increase in the number of treasury shares held during the year following the purchase of 1,300,000 shares by the company
in May 2014.
The company does not have any dilutive potential ordinary shares; hence there is no difference between basic and diluted earnings
per share.
All share calculations have been rebased and/or restated following the sub-division of shares (10 for 1), which became effective
on 19 August 2013, and for the impact of adopting IAS 19 revised (see note 1).
Weighted average number of ordinary shares in issue
Profit attributable to equity holders of the company (£’000)
Basic earnings per share (pence per share)
24 Share capital
Allotted and fully paid
118,935,590 ordinary shares of 1p each (2013: 118,935,590 ordinary shares of 1p each)
The share capital has been rebased following the sub-division of the shares.
The ordinary shareholders each have one vote per share.
Movements in treasury shares included in share capital
Shares held in treasury at 1 July
Purchases
Share capital at 30 June
Number of shares held in treasury at 30 June
Continuing operations
2014
116,792,165
10,189
8.72
Restated
2013
117,192,140
9,518
8.12
Group and company
2014
£’000
1,189
2013
£’000
1,189
Group and company
2014
£’000
2013
£’000
20
13
33
3,260,000
17
3
20
1,960,000
There were no shares issued during the year (2013: nil). There are no share options outstanding at the year end (2013: nil).
OverviewPerformanceGovernanceAccountsAdditional information
62
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
25 Other reserves
Group and company
At 30 June 2013 and 30 June 2014
26 Cash generated from operations
Share
premium
account
£’000
656
Capital
redemption
reserves
£’000
137
Group
Company
Cash generated from continuing operations
Profit before income tax
Depreciation charge
Amortisation/impairment of intangibles
Profit on disposal of property, plant and equipment
Finance income
Retirement benefit contributions in excess of current and past service charge
Share of (profit)/loss from joint venture
Changes in working capital
– Inventories
– Trade and other receivables
– Trade and other payables
Cash generated from continuing operations
2014
£’000
12,423
1,269
1,439
(75)
(753)
(403)
(37)
(2,462)
(2,783)
2,144
10,762
27 Related party transactions
The following amounts relate to transactions between the company and its subsidiaries:
2014
Compact Lighting Limited
Philip Payne Limited
Sugg Lighting Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
2013
Compact Lighting Limited
Philip Payne Limited
Sugg Lighting Limited
Solite Europe Limited
Portland Lighting Limited
Purchases
of goods
£’000
34
405
---
148
2
555
Purchases
of goods
£’000
75
370
–
112
–
Restated
2013
£’000
11,526
1,182
1,082
(63)
(856)
(863)
80
(798)
(1,189)
1,745
11,846
Sales of
goods
£’000
30
43
21
136
---
420
Sales of
goods
£’000
30
29
14
28
–
2014
£’000
12,140
1,023
1,084
(54)
(1,996)
(403)
---
(1,587)
(3,510)
2,334
9,031
Restated
2013
£’000
11,869
940
870
(47)
(2,055)
(863)
–
(840)
(575)
705
10,004
Sales
of services
£’000
4
1
18
2
---
19
Sales
of services
£’000
4
1
18
2
–
Dividends paid
to company
£’000
---
500
---
15
500
---
Dividends paid
to company
£’000
–
500
–
14
500
Balances due to and from the company by related entities were as follows:
Compact Lighting Limited
Philip Payne Limited
Sugg Lighting Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Total
Amounts due to related
party at 30 June
Amounts due from related
party at 30 June
2014
£’000
(1)
(1,114)
---
(124)
(1,420)
(60)
(2,719)
2013
£’000
(17)
(1,351)
–
(13)
(795)
–
(2,176)
2014
£’000
1,977
15
4,324
40
---
1,532
7,888
2013
£’000
1,369
1
4,149
1
–
–
5,520
Trading balances arise from transactions of goods and services carried out under normal commercial terms.
Accounts
Annual Report and Accounts 2014 63
FW Thorpe Plc
27 Related party transactions continued
Cash resources are managed centrally by the company and result in balances owed to and from the company when cash is transferred.
In addition to the balances stated above, the company made a provision of £3,964,000 (2013: £3,832,000) against the Sugg Lighting
Limited inter-company balance, and a provision of £320,000 (2013: £nil) against the TRT Lighting Limited inter-company balance.
The key management personnel are the group Board directors; their interests are disclosed in the directors’ remuneration report on
pages 69 to 71. There are a number of employees who are related parties. Total remuneration for the period was £180,000.
Mackwell Electronics Limited is a related party because there is a connection between a director of the company C M Brangwin and
N A Brangwin who is a director of Mackwell Electronics Limited. During the year the company sold goods to Mackwell amounting to
£5,000 (2013: £4,000), purchased goods amounting to £2,385,000 (2013: £2,617,000), and sold services of £nil (2013: £nil). At the year
end there were trade balances due to Mackwell Electronics Limited of £238,000 (2013: £323,000) and £2,000 due from Mackwell
Electronics Limited (2013: £nil). The company is owed £1,450,000 (2013: £1,900,000) in respect of the loan notes issued to the company
as part of the sale agreement (note 29), plus accrued interest of £29,000 (2013: £39,000) at the balance sheet date. The company owns
the premises occupied by Mackwell Electronics Limited and rent is charged of £102,000 per annum (2013: £102,000). The rent is
comparable to commercial rents for similar buildings in the area.
N A Brangwin is a related party because there is a connection between a director of the company C M Brangwin and N A Brangwin.
The company is owed £300,000 in respect of a loan made to N A Brangwin at the same time as the sale of Mackwell Electronics. The loan
is secured with shares in FW Thorpe with a current value in excess of the loan amount. At 30 June 2014 there was accrued interest due
to the company of £3,000 (2013: £3,000).
28 Portland Lighting Limited
Following the acquisition of Portland Lighting Limited on 1 July 2011 the group made a final payment during the year of £390,000,
of which £371,000 was accrued at 30 June 2013. This payment is in accordance with the contingent consideration agreement which
expired on 1 July 2013.
29 Loan notes
Following the disposal of Mackwell Electronics Limited on 2 December 2011 the group acquired Loan notes of £2,000,000 as part
of the consideration.
The loan notes are repayable on 2 December 2016 and attract two different rates of interest; £1,625,000 at 1% over the Bank of England
base rate and £375,000 at 4% over the Bank of England base rate.
A repayment of £450,000 was received during the year, which has reduced the balance due at 1% over the Bank of England base rate
to £1,450,000 (2013: £1,625,000) and the balance due at the higher interest rate of 4% above the Bank of England base rate to £nil
(2013: £275,000).
The outstanding loan note tranche at 1% over the Bank of England base rate of £1,450,000 has been subject to a fair value adjustment
in respect to the interest rate. The carrying value has been adjusted to reflect a commercial interest rate of 4.2% over the Bank of
England base rate, which is considered to be a rate that Mackwell Electronics Limited would incur in the external market. The fair value
of that tranche of loan notes is considered to be £1,340,000.
30 Pension scheme
The group operates a funded hybrid pension scheme for employees in the UK. The scheme is approved by the Inland Revenue under
Chapter 1 Part XIV of the Income and Corporation Taxes Act 1988. Membership is contracted in to the second state pension.
The basis of the group’s hybrid pension scheme is to provide benefits to members based on the following:
• For service prior to 1 October 1995, the benefits provided are defined benefit in nature.
• For service from 1 October 1995, the benefits provided have two elements depending on the date that the member joined the
pension scheme.
• For members joining before 1 October 1995, benefits provided are the higher of their defined contribution pension and their defined
benefit pension.
• For members joining on or after 1 October 1995, benefits provided are defined contribution in nature.
OverviewPerformanceGovernanceAccountsAdditional information
64
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
30 Pension scheme continued
The contributions of the pure defined contribution, the defined benefit underpin and pure defined benefit elements are paid into one
pension scheme, where the contributions and assets are segregated and ring-fenced from each other.
For the defined benefit underpin element of the scheme, each member is tested to see whether the pension on a defined contribution
or defined benefit basis is higher. The liabilities shown in the pensions note are based on the greater of the two liabilities for each
member, which in almost all cases is the defined benefit liability. For the service cost, again, tests are performed to see which is the
higher for each member out of the company’s share of the defined contribution payments or the company’s share of accruing benefits
on a defined benefit basis. The higher of these two figures for each member is then used to give the total service cost; again the defined
benefit cost is the higher for the vast majority of members.
The assets of the scheme are held separately from the assets of the group, being invested in Managed Funds. Contributions by the
group to the scheme during the year ended 30 June 2014 amounted to £818,000 (2013: £1,258,000). Contributions are determined
by an independent qualified actuary on the basis of triennial valuations using the Project Unit Method.
The date of the most recent actuarial valuation was 1 July 2012, and at that date the value of the fund was £23,791,000. This was
sufficient to cover 93% of the value of the benefits accrued to members after allowing for future increases in earnings. In arriving
at the actuarial valuation, the following assumptions were adopted.
Price inflation
Salary increases
Discount rate
Revaluation for deferred pensioners
2.90%
4.65%
3.80%
2.40%
The figures at 1 July 2012 have been updated as at the balance sheet dates in order to assess the additional disclosures required under
IAS 19 as at 30 June 2014 by an independent qualified actuary using the following major assumptions.
Price inflation
Salary increases
Discount rate
Revaluation for deferred pensioners
Pension increases in payment of 5% pa or RPI if less
Pension increases in payment of 2.5% pa or RPI if less
Life expectancy at age 65 – men
Life expectancy at age 65 in 20 years – men
Life expectancy at age 65 – women
Life expectancy at age 65 in 20 years – women
The balance sheet figures required under IAS 19 are as follows:
2014
3.50%
3.50%
4.30%
2.50%
3.30%
2.20%
22.9 years
24.3 years
24.8 years
26.3 years
2013
3.40%
3.50%
4.60%
2.50%
3.30%
2.25%
24.2 years
26.2 years
26.6 years
28.5 years
2012
2.80%
4.55%
4.40%
2.05%
2.75%
2.10%
22.5 years
24.4 years
24.9 years
26.8 years
2011
3.70%
5.45%
5.50%
2.95%
3.55%
2.35%
22.4 years
24.4 years
24.8 years
26.7 years
2010
3.50%
5.25%
5.35%
3.50%
3.30%
2.20%
22.3 years
24.3 years
24.7 years
26.6 years
Equities
Bonds
Property
Other
Total market value of assets
Present value of scheme liabilities
Surplus/(deficit) in the scheme
30 June 2014
30 June 2013
30 June 2012
30 June 2011
30 June 2010
Expected
long-term
rate of
return
n/a
4.30%
---
n/a
Expected
long-term
rate of
return
6.20%
4.40%
–
0.50%
Expected
long-term
rate of
return
n/a
4.60%
–
0.50%
Value
£’000
12,796
14,707
---
1,448
28,951
(26,053)
2,898
Value
£’000
11,829
13,267
–
1,545
26,641
(24,959)
1,682
Value
£’000
9,744
12,484
–
1,596
23,824
(23,809)
15
Expected
long-term
rate of
return
7.75%
5.00%
–
0.50%
Expected
long-term
rate of
return
7.65%
4.84%
7.35%
0.50%
Value
£’000
11,166
10,982
–
1,328
23,476
(22,993)
483
Value
£’000
9,045
9,464
19
1,565
20,093
(21,472)
(1,379)
The property assets were amalgamated with equities for reporting purposes during the year ended 2011 due to their low value.
Accounts
30 Pension scheme continued
The amounts recognised in the balance sheet are determined as follows:
Present value of funded obligations
Fair value of plan assets
Surplus in the scheme
Less restriction of surplus recognised in the balance sheet
Liability recognised in the balance sheet
The movement in the defined benefit obligation over the year is as follows:
At 1 July
Current service cost
Interest cost
Contributions by plan participants
Actuarial losses
Benefits paid
At 30 June
The movement in the fair value of the plan assets of the year is as follows:
At 1 July
Expected return in plan assets
Actuarial gains
Employer contributions
Employee contributions
Benefits paid
At 30 June
The amounts recognised in the income statement are as follows:
Current service cost
Net interest cost
Total included within staff costs and finance income
Annual Report and Accounts 2014 65
FW Thorpe Plc
2014
£’000
(26,053)
28,951
2,898
(2,898)
---
2014
£’000
(24,959)
(415)
(1,146)
(311)
(41)
819
(26,053)
2014
£’000
26,641
1,233
767
818
311
(819)
28,951
2014
£’000
415
---
415
2013
£’000
(24,959)
26,641
1,682
(1,682)
–
2013
£’000
(23,809)
(452)
(1,045)
(295)
(247)
889
(24,959)
2013
£’000
23,824
1,092
1,061
1,258
295
(889)
26,641
Restated
2013
£’000
452
–
452
Of the total charge, £415,000 (2013: £452,000) and £nil (2013 restated: £nil) were included in “administrative expenses” and “finance
income” respectively.
OverviewPerformanceGovernanceAccountsAdditional information
66
FW Thorpe Plc
Annual Report and Accounts 2014
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
30 Pension scheme continued
Analysis of amount recognised in the statement of comprehensive income
Actual return less expected return on pension scheme assets
Experience (losses)/gains arising on the scheme liabilities
Changes in assumptions underlying the present value on the scheme liabilities
Movement in recovery plan liability
Net interest cost
Restriction of pension scheme surplus
Actuarial loss recognised in the statement of comprehensive income
Cumulative actuarial loss recognised in the statement of comprehensive income at 1 July
Actuarial gain recognised in the statement of comprehensive income for the year
Cumulative actuarial loss recognised in the statement of comprehensive income at 30 June
2014
£’000
767
(99)
58
(189)
87
(1,216)
(592)
2014
£’000
(3,413)
624
(2,789)
Restated
2013
£’000
1,061
(438)
191
–
47
(1,667)
(806)
Restated
2013
£’000
(4,274)
861
(3,413)
The restriction in the scheme surplus is excluded from the cumulative actuarial gain recognised in the statement of comprehensive
income. As as result of the most recent valuation, and in the light of the non-recognition of the pension scheme surplus, the recovery
plan liability of £189,000 (2013: £nil) is included in Other Payables.
The expected return on plan assets is determined by considering the expected returns available on the assets underlying the current
investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the balance sheet date.
Expected returns on equity and property investments reflect long-term real rates of return experienced in the respective markets.
The actual return on plan assets over the year ending 30 June 2014 was £2,000,000 (2013: £2,153,000) or 6.9% (2013: 8.1%).
The group expect to pay £727,000 contributions (2013: £1,259,000) into the pension scheme during the forthcoming year.
History of experience gains and losses recognised in the statement of comprehensive income
2014
Restated
2013
2012
2011
2010
£’000
%
£’000
%
£’000
%
£’000
%
£’000
%
Difference between the expected and
actual return
on scheme assets
Percentage of scheme assets
Experience loss on
scheme liabilities
Percentage of the present value
of scheme liabilities
Changes in assumptions underlying the
present value of scheme liabilities
Percentage of the present value
of scheme liabilities
Movement in recovery plan liability
Percentage of the present value
of scheme liabilities
Net interest income
Percentage of the present value
of scheme liabilities
Restriction of pension scheme surplus
Percentage of the present value
of scheme liabilities
Amount which has been recognised in
the SoCI
Percentage of the present value of the
scheme liabilities
767
1,061
(99)
58
(189)
87
---
624
3%
0%
0%
1%
0%
0%
2%
(438)
191
–
47
–
861
193
227
(1,830)
–
–
–
(1,410)
4%
2%
1%
0%
0%
0%
3%
1,335
1,713
(433)
6%
2%
(388)
152
(1,371)
–
–
(483)
571
0%
0%
0%
2%
2%
–
–
–
(46)
1%
1%
8%
0%
0%
0%
6%
9%
2%
6%
0%
0%
0%
0%
Accounts
Annual Report and Accounts 2014 67
FW Thorpe Plc
31 Group companies
The parent company has the following investments as at 30 June 2014 and 30 June 2013:
Name of undertaking
Compact Lighting Limited
Philip Payne Limited
Sugg Lighting Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
Country of incorporation
England
England
England
England
England
England
Description of shares held
Ordinary £1 shares
Ordinary £1 shares
Ordinary £1 shares
Ordinary £1 shares
Ordinary £1 shares
Ordinary £1 shares
Proportion of nominal value of
issued shares held by group and
company
100%
100%
100%
100%
100%
100%
The principal activities of these subsidiaries are:
Compact Lighting Limited
Philip Payne Limited
Sugg Lighting Limited
Solite Europe Limited
Portland Lighting Limited
TRT Lighting Limited
– design and manufacture of lighting solutions for retail applications
– design and manufacture of illuminated signs
– design and manufacture of traditional architectural lighting
– design and manufacture of cleanroom lighting equipment
– design and manufacture of lighting for signs
– design and manufacture of lighting for roads and tunnels
The cost of investment in subsidiaries is as follows:
Investment in subsidiaries – cost
Less provisions
The movement in the investment and provisions is as follows:
At 1 July 2013
Increase in provision
At 30 June 2014
There were no additions or disposals during the year.
Group
2014
£’000
---
---
---
2013
£’000
–
–
–
Company
2014
£’000
5,732
(1,592)
4,140
Cost
£’000
5,732
–
5,732
2013
£’000
5,732
(1,592)
4,140
Provisions
£’000
(1,592)
–
(1,592)
OverviewPerformanceGovernanceAccountsAdditional information
68
FW Thorpe Plc
Annual Report and Accounts 2014
Accounts
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS CONTINuED
32 Investment in joint ventures
The group has a joint venture in Australia with its local agent. The venture is jointly controlled with equal voting rights with the group
holding a 51% interest. Thorlux Lighting Pty Ltd is registered in Queensland and operates from a sales office in Melbourne. The group
has applied the equity method of accounting to recognise this interest.
The group has a joint venture in United Arab Emirates. Thorlux Lighting LLC is registered in United Arab Emirates and operates from a
sales office in Abu Dhabi.
At 1 July
Share of profit/(loss)
Exchange rate movement
At 30 June
33 Events after the balance sheet date
Executive Share Ownership Plan (ESOP)
Group
2014
£’000
22
37
(2)
57
2013
£’000
111
(80)
(9)
22
Company
2014
£’000
154
---
(13)
141
2013
£’000
156
–
(2)
154
At a General Meeting on 18 July 2014 the shareholders approved the establishment of an ESOP, created to motivate and retain those
employees responsible for the continued success of the group.
The plan allows the vesting of options subject to the achievement of performance targets, being annual growth of pre-tax Earnings Per
Share in excess of RPI plus 3% over a five year period.
Rather than issue new shares, the company will utilise shares that are already held in treasury to satisfy options.
The scheme will be offered to the company’s executive directors and certain directors of the subsidiary companies. Options over a total
of up to 1.8m shares will be granted, representing approximately 1.6% of shares with voting rights at 9 October 2014.
Accounts
DIRECTORS’ REMuNERATION REPORT
Annual Report and Accounts 2014 69
FW Thorpe Plc
Remuneration policy –
non-executive directors
The Board as a whole determines the remuneration of the
non-executive directors. The Board takes into account the
contribution made and the relative time spent on the company’s
affairs. The non-executive directors do not receive bonuses.
Their benefits in kind consist of the provision of health insurance.
Directors’ service contracts
A B Thorpe and M Allcock have service contracts terminable
on two years’ notice. A M Cooper, C Muncaster and D Taylor have
service contracts terminable on one year’s notice. P D Mason,
C M Brangwin and I A Thorpe do not have formal service contracts
with the company.
Performance graph
The graph below shows the comparative data for the FTSE AIM
share index and the FTSE Fledgling share index, rebased to 100,
as these are considered to be the most appropriate comparative
indices for the company’s business.
350
300
250
200
150
100
50
2009
F W Thorpe
AIM All Share
FTSE Fledgling
2010
2011
2012
2013
2014
The Board has prepared this report to the shareholders, taking
into account sections 420 to 422 of the Companies Act 2006 and
AIM Rule 19. The Board has delegated the responsibility for the
executive directors’ remuneration to the remuneration
committee. The scope of their responsibilities includes the
executive directors’ service contracts, salaries and other benefits,
which comprise their terms and conditions of employment.
Remuneration committee
The current members of the remuneration committee are the
non-executive directors P D Mason (Chairman of the committee)
and I A Thorpe. The committee has met as and when required
during the financial year. No member of the committee has any
personal financial interest in the matters to be decided other than
as shareholders. There are no conflicts of interest arising from
cross-directorships or day-to-day involvement in running the
business. The committee has access to market data when
considering the remuneration of the executive directors.
Remuneration policy – executive directors
The aim of the committee is to ensure that the executive directors
are fairly rewarded for their responsibilities and contribution to
the performance of the group. The committee seeks to achieve
this with a combination of performance and non-performance
related remuneration designed to attract, retain and motivate
the directors.
In establishing the salaries of the directors, the committee takes
into account the responsibilities and performance of the
individual together with data from comparable organisations
and indicative trends for the business and its economic sector.
The remuneration package consists of the following elements.
1. Basic salary, benefits in kind and other benefits. The salary
is determined in August each year, unless there has been a
change in responsibilities, where an adjustment will be made
at the same time. The benefits in kind mainly consist of the
provision of a car and health insurance. A director may
choose to take a cash allowance instead of a car. Other
benefits consist of pension arrangements and life assurance.
2. Annual bonus. The bonus is made up of two elements. The
first element relates to the operating profit of the business
unit for which the director has specific performance
responsibilities. The second element relates to the operating
profit of the group as a whole. The bonuses are paid in
September and relate to the period ending on 30 June in
the same year.
OverviewPerformanceGovernanceAccountsAdditional information
70
FW Thorpe Plc
Annual Report and Accounts 2014
DIRECTORS’ REMuNERATION REPORT CONTINuED
Directors’ emoluments (audited)
Executive directors
A B Thorpe
M Allcock
D Taylor
A M Cooper
C Muncaster
Non-executive directors
C M Brangwin
I A Thorpe
P D Mason
Total emoluments
2014
Salary/fees
£’000
2014
Bonus
£’000
2014
Benefits
£’000
195
195
96
107
107
25
25
25
775
115
115
45
66
71
---
---
---
412
26
20
15
11
11
11
14
4
112
2014
Total
£’000
336
330
156
184
189
36
39
29
1,299
2013
Total
£’000
311
306
139
162
163
35
37
28
1,181
The directors’ emoluments exclude contributions to the pension scheme.
Directors’ pension arrangements
M Allcock, A M Cooper and D Taylor are members of the defined
contribution section of the FW Thorpe Retirement Benefits
Scheme. M Allcock and D Taylor have a final salary guarantee as
they were previously members of the defined benefit section.
C Muncaster has a personal pension to which the company
contributes.
The defined benefit section aims to provide a maximum pension
of two-thirds of pensionable salary at normal retirement date.
M Allcock’s and D Taylor’s pensionable salary includes an average
of the previous three years’ profit bonus. Defined contribution
members contribute up to 5% of basic salary and the company
contributes up to 9.5%.
C M Brangwin, I A Thorpe, A B Thorpe and P D Mason are retired
members of the defined benefit section.
The FW Thorpe Retirement Benefits Scheme is a funded, Inland
Revenue approved occupational pension scheme. The scheme
is divided into two sections – a defined benefit scheme and a
defined contribution scheme. The defined benefit section was
closed to new members on 1 October 1995.
All the executive directors are covered by life assurance benefit
of four times pensionable salary. In addition, the defined benefit
scheme members are entitled to a spouse’s pension on death.
The following directors, excluding those classified as pensioners, had accrued entitlements under the defined benefit section of the
pension scheme.
M Allcock
D Taylor
Value of
accrued
pension at
30 June 2014
£pa
72,909
50,395
Director’s
contributions
during the
year
£
10,727
5,843
Change in
value of
accrued
pension since
30 June 2013
£pa
5,138
5,547
Age at
year end
46
52
Normal
pension age
65
65
The following table shows the contributions paid by the company in respect of those directors participating in the defined contribution
section of the pension scheme.
A M Cooper
2014
£’000
8,665
2013
£’000
24,930
Accounts
Annual Report and Accounts 2014 71
FW Thorpe Plc
C Muncaster has a personal pension which is not part of the company scheme, and the following contributions have been made during
the year.
C Muncaster
2014
£
8,665
2013
£
8,495
Directors’ shareholdings
The directors listed below were in office during the year. Directors’ interests in the share capital of the company at 30 June 2014 and
1 July 2013 were as follows:
Executive directors
A B Thorpe
M Allcock
D Taylor
A M Cooper
C Muncaster
Non-executive directors
C M Brangwin
I A Thorpe
P D Mason
Ordinary shares of 1p
Beneficial
2014
2013
27,899,840
114,000
55,913
84,000
---
7,731,550
25,047,120
1,626,370
27,899,840
114,000
50,220
84,000
–
7,731,550
25,047,120
1,626,370
In addition, C M Brangwin has a joint non-beneficial interest in 1,700,000 shares (2013: 1,700,000 shares).
On 5 August 2014 the beneficial holding of A B Thorpe decreased by 297,140 to 27,602,700.
The market price of the company’s shares at the beginning and end of the financial year was 109p and 131.5p respectively and the
range of market prices during the year was from 101.5p to 145p.
There have been no other changes in the interests of the directors in the share capital of any company in the group during the period
1 July 2014 to 9 October 2014.
Approved by the Board and signed on its behalf by:
C Muncaster
Director
9 October 2014
OverviewPerformanceGovernanceAccountsAdditional information
72
FW Thorpe Plc
Annual Report and Accounts 2014
NOTICE OF MEETINg
Notice is hereby given that the seventy-eighth Annual General
Meeting of FW Thorpe Plc will be held at Merse Road, North
Moons Moat, Redditch, Worcestershire B98 9HH on 13 November
2014 at 3.15 pm to transact the following business:
9.
Ordinary business
1.
To receive and adopt the Annual Report and Accounts for the
year ended 30 June 2014.
That, subject to the passing of resolution number 8, the
directors be and hereby are given the general power to allot
equity securities (as defined by section 560 of the Act) for
cash, either pursuant to the authority conferred by resolution
number 8 or by way of a sale of treasury shares, as if section
561(1) of the Act did not apply to any such allotment,
provided that this power shall be limited to the allotment
of equity securities;
2.
3.
4.
5.
6.
(a) To declare a final dividend.
(b) To declare a special dividend
To re-elect Mr M Allcock as a director.
To re-elect Mr D Taylor as a director.
To re-elect Mr P D Mason as a director.
To re-appoint PricewaterhouseCoopers LLP as auditors of
the company, to hold office until the conclusion of the next
General Meeting at which accounts are laid before the
company and to authorise the directors to fix the auditors’
remuneration.
Special business
To consider and, if thought fit, to pass the following resolutions
which will be proposed in the case of 7 and 8 as ordinary
resolutions and in the case of 9 and 10 as special resolutions.
7.
8.
That the directors’ remuneration report (as set out on pages
69 to 71 of the Annual Report and Accounts) for the year
ended 30 June 2014 be approved.
That the directors be and hereby are generally and
unconditionally authorised to allot shares in the company
or to grant rights to subscribe for, or to convert any security
into, shares in the company (“Rights”) comprising equity
securities (as defined by section 560 of the Companies
Act 2006 (“the Act”)) up to an aggregate nominal amount
of £310,644.
Provided that this authority shall, unless renewed, varied or
revoked by the company, expire on the date of the next Annual
General Meeting of the company, save that the company may,
before such expiry, make offers or agreements which would or
might require shares to be allotted or Rights to be granted and
the directors may allot shares or grant Rights in pursuance of such
offer or agreement notwithstanding that the authority conferred
by this resolution has expired.
This resolution revokes and replaces all unexercised authorities
previously granted to the directors to allot shares or to grant
Rights but without prejudice to any allotment of shares or grant
of Rights already made, offered or agreed to be made pursuant
to such authorities.
9.1
in connection with an offer by way of a rights issue:
(a)
to the holders of ordinary shares in proportion (as nearly
as may be practicable) to their respective holdings; and
(b) to holders of other equity securities as required by the rights
attaching to those securities or as the directors otherwise
consider necessary
but subject to such exclusions or other arrangements as the
directors may deem necessary or expedient in relation to treasury
shares, fractional entitlements, record dates, legal or practical
problems in or under the laws of any territory or the requirements
of any regulatory body or stock exchange; and
9.2 the allotment (otherwise than pursuant to paragraph 9.1)
of equity securities up to an aggregate nominal amount of
£58,618 representing no more than 5% of the issued ordinary
share capital at 9 October 2014.
The power granted by this resolution will (unless renewed, varied
or revoked by the company prior to or on such date) expire on the
earlier of the conclusion of the company’s next Annual General
Meeting and the expiry of the period of 15 months following the
passing of this resolution, save that the company may, before
such expiry, make offers or agreements which would or might
require equity securities to be allotted after such expiry and the
directors may allot equity securities in pursuance of any such offer
or agreement notwithstanding that the power conferred by this
resolution has expired.
This resolution revokes and replaces all unexercised powers
previously granted to the directors to allot equity securities as if
section 561(1) of the 2006 Act did not apply but without prejudice
to any allotment of equity securities already made or agreed to be
made pursuant to such powers.
Additional information
10. That the company be generally and unconditionally
authorised to make market purchases (within the meaning of
section 693(4) of the Companies Act 2006) of ordinary shares
of 1p each of the company provided that:
(a)
the maximum number of ordinary shares hereby authorised
to be acquired is 11,893,559;
(b) the minimum price which may be paid for any such share
is 1p;
(c)
the maximum price which may be paid for any such share
is an amount equal to 105% of the average of the middle
market quotations for an ordinary share in the company as
derived from the Alternative Investment Market for the five
business days immediately preceding the day on which such
share is contracted to be purchased;
(d) the authority hereby conferred shall expire on the date
of the Annual General Meeting of the company in 2015; and
(e)
the company may make a contract to purchase its ordinary
shares under the authority hereby conferred prior to the
expiry of such authority, which contract will or may be
executed wholly or partly after the expiry of such authority,
and may purchase its ordinary shares in pursuance of any
such contract.
Notes
1. Copies of the directors’ service contracts will be available for inspection during
usual business hours, at the registered office of the company on any weekday
(Saturdays and public holidays excepted) from the date of this notice until the date
of the meeting and also at the meeting for at least 15 minutes prior to, and until the
conclusion of, the meeting.
2. To be entitled to attend and vote at the meeting (and for the purposes of the
determination by the company of the votes they may cast), members must be
registered in the Register of Members of the company at 6.00 pm on 11 November
2014 (or, in the event of any adjournment, 6.00 pm on the date which is two days
before the time of the adjourned meeting). Changes to the Register of Members
of the company after the relevant deadline shall be disregarded in determining
the rights of any person to attend and vote at the meeting.
3. A member entitled to attend and vote at the meeting is entitled to appoint a proxy
or proxies to attend, speak and vote on his or her behalf. A proxy need not also be a
member but must attend the meeting to represent you. Details of how to appoint
the chairman of the meeting or another person as your proxy using the form of proxy
are set out in the notes on the form of proxy. If you wish your proxy to speak on your
behalf at the meeting you will need to appoint your own choice of proxy (not the
chairman) and give your instructions directly to them.
4. To appoint more than one proxy, an additional proxy form(s) may be obtained by
contacting the company’s registrars, Equiniti, Aspect House, Spencer Road, Lancing,
West Sussex BN99 6DA, or you may photocopy the proxy form. Please indicate in the
box next to the proxy holder’s name the number of shares in relation to which they
are authorised to act as your proxy. Please also indicate by ticking the box provided
if the proxy instruction is one of multiple instructions being given.
Annual Report and Accounts 2014 73
FW Thorpe Plc
5. A reply paid form of proxy is enclosed with shareholders’ copies of this document.
To be valid, it should be lodged with the company’s registrars, Equiniti, Aspect
House, Spencer Road, Lancing, West Sussex BN99 6DA, so as to be received not later
than 3.15 pm on 11 November 2014 or 48 hours before the time appointed for any
adjourned meeting or, in the case of a poll taken subsequent to the date of the
meeting or adjourned meeting, so as to be received no later than 24 hours before
the time appointed for taking the poll.
6. CREST members who wish to appoint a proxy or proxies by utilising the CREST
electronic proxy appointment service may do so for the Annual General Meeting
and any adjournment(s) thereof by utilising the procedures described in the CREST
Manual. CREST personal members or other CREST sponsored members,
(www.euroclear.com) and those CREST members who have appointed (a) voting
service provider(s), should refer to their CREST sponsor or voting service provider(s),
who will be able to take the appropriate action on their behalf.
In order for a proxy appointment made by means of CREST to be valid, the
appropriate CREST message (a “CREST Proxy Instruction”) must be properly
authenticated in accordance with Euroclear UK & Ireland’s specifications and must
contain the information required for such instructions, as described in the CREST
Manual. The message must be transmitted so as to be received by the issuer’s agent
ID RA19, by 3.15 pm on 11 November 2014 (or, in the case of an adjournment of the
Annual General Meeting, not later than 48 hours before the time fixed for the holding
of the adjourned meeting). For this purpose, the time of receipt will be taken to be
the time (as determined by the timestamp applied to the message by the CREST
Applications Host) from which the issuer’s agent is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST.
CREST members and, where applicable, their CREST sponsors or voting service
providers should note that Euroclear UK & Ireland does not make available special
procedures in CREST for any particular messages. Normal system timings and
limitations will therefore apply in relation to the input of CREST Proxy Instructions.
It is the responsibility of the CREST member concerned to take (or, if the CREST
member is a CREST personal member or sponsored member or has appointed (a)
voting service provider(s), to procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be necessary to ensure that a message is
transmitted by means of the CREST system by any particular time. In this connection,
CREST members and, where applicable, their CREST sponsors or voting service
providers are referred, in particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system and timings.
The company may treat as invalid a CREST Proxy Instruction in the circumstances
set out in Regulation 35(5)(a) of the Uncertificated Securities 2001 (as amended).
7. As at 9 October 2014 (being the last practicable day prior to the publication of this
notice), the company’s issued share capital consists of ordinary shares of 1p each,
carrying one vote each. Excluding 3,260,000 shares held in treasury, the total voting
rights in the company as at 9 October 2014 are 115,675,590.
8. Appointment of a proxy will not preclude a member from subsequently attending
and voting at the meeting should he or she subsequently decide to do so. You can
only appoint a proxy using the procedures set out in these notes and the notes to
the form of proxy.
By order of the Board
C Muncaster
Director
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
9 October 2014
OverviewPerformanceGovernanceAccountsAdditional information
74
FW Thorpe Plc
Annual Report and Accounts 2014
SHAREHOLDER NOTES
Additional information
Annual Report and Accounts 2014 75
FW Thorpe Plc
OverviewPerformanceGovernanceAccountsAdditional information 76
FW Thorpe Plc
Annual Report and Accounts 2014
SHAREHOLDER NOTES CONTINuED
Additional information FW Thorpe Plc
Annual Report and Accounts 2014
Additional information
FINANCIAL CALENDAR
2014
17 October
13 November
20 November
2015
March
May
September
Posting of the Annual Report and Accounts
Annual General Meeting
Payment of final dividend and special dividend
Announcement of interim results
Payment of interim dividend
Announcement of results for the year
Designed and produced by Radley Yeldar www.ry.com using the paperless proofing system Wizardry.
This material used in the publication of this document is carbon balanced.
Printed on FSC certified paper.
This document is printed on material manufactured at a mill which is ISO14001 accredited.
FSC logo
FW Thorpe Plc
Merse Road
North Moons Moat
Redditch
Worcestershire
B98 9HH
England
Tel: + 44 (0)1527 583200
Fax: + 44 (0)1527 584177
Incorporating:
Thorlux Lighting
Compact Lighting
Philip Payne
Sugg Lighting
Solite Europe
Portland Lighting
TRT Lighting
www.fwthorpe.co.uk