459559_2020 Annual Report A4
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INDEX
Notice of Annual General Meeting
Notes to Notice of Annual General Meeting
GROUP STRATEGIC REPORT
Chairman’s Statement
Summary of Consolidated Statement of Profit or Loss
and Statement of Comprehensive Income
Objectives, Strategy and Business Model
Principal Risks and Uncertainties
Corporate Social Responsibility
DIRECTORS’ REPORTS
Report of the Directors
Corporate Governance Report
Audit Committee Report
Directors’ Remuneration Policy and Report
Statement of Directors’ responsibilities in respect of the
Annual Report and the Financial Statements
AUDITOR’S REPORT
Independent Auditor’s Report to the Members of Goodwin PLC
FINANCIAL STATEMENTS
Consolidated Statement of Profit or Loss
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
FIVE YEAR FINANCIAL SUMMARY
1
2
3
6
7
11
14
17
20
22
25
31
32
42
43
44
46
47
98
FINANCIAL HIGHLIGHTS
Accounting policies 48
Earnings per share 62
Related parties 84
Alternative performance measures 86
Estimates and judgements 55
Revenue 60
Capital and reserves 75
Financial expenses 61
Right-of-use assets 64
Capital commitments 83
Financial risk management 75
Subsequent events 83
Cash and cash equivalents 72
Guarantees and contingencies 83
Segmental information 58
Changes in accounting policies 56
Intangible assets 70
Staff numbers and costs 61
Company statements 87
Interest bearing loans 72
Taxation 62
Deferred consideration 74
Investment in subsidiaries 66
Trade assets 72
Deferred tax 74
Inventories 72
Trade liabilities 73
Dividend policy 10
Property, plant and equipment 63
Warranty provision 74
59585 Goodwin Directors Report 2020.qxp_Layout 1 19/08/2020 13:55 Page 3
GOODWIN PLC
www.goodwin.co.uk
Registered in England and Wales, Number 305907
Established 1883
T. J. W. Goodwin
(Chairman)
Directors:
M. S. Goodwin
(Managing Director)
Mechanical
Engineeering Division
S. R. Goodwin
(Managing Director)
Refractory
Engineering Division
J. Connolly S. C. Birks B. R. E. Goodwin J. E. Kelly (Non-Executive Director)
Secretary and registered office:
Mrs. J. L. Martin, L.L.B., A.C.I.S.
Ivy House Foundry, Hanley,
Stoke-on-Trent, ST1 3NR
Registrar and share transfer office:
Computershare Investor Services PLC,
The Pavilions, Bridgwater Road,
Bristol, BS99 6ZZ
Auditor:
KPMG LLP,
One Snowhill, Snow Hill Queensway, Birmingham, B4 6GH
NOTICE IS HEREBY GIVEN that the EIGHTY-FIFTH ANNUAL GENERAL MEETING of the
Company will be held at 10.30am on Wednesday, 7th October, 2020 at Crewe Hall, Weston
Road, Crewe, Cheshire CW1 6UZ, for the purpose of considering and, if thought fit,
passing the following resolutions which are proposed as ordinary resolutions.
1.
2.
3.
4.
To receive the Directors’ Reports and the audited financial statements for the year
ended 30th April, 2020.
To approve the payment of the proposed ordinary dividend on the ordinary shares.
To approve the Directors' Remuneration Report (excluding the Directors’ Remuneration
Policy) for the year ended 30th April, 2020, as stated on pages 27 to 30 of the Directors'
Report.
To approve the appointment of RSM UK Group LLP as auditor and to authorise the
Directors to determine their remuneration.
By Order of the Board
J. L. Martin
Secretary
Registered Office:
Ivy House Foundry,
Hanley, Stoke-on-Trent
13th August, 2020
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NOTES TO NOTICE OF ANNUAL GENERAL MEETING:
1. Members are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on
their behalf at the meeting. A shareholder may appoint more than one proxy in relation to the Annual General
Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held
by that shareholder. A proxy need not be a shareholder of the Company. A proxy form which may be used to
make such appointment and give proxy instructions accompanies this notice.
2. To be valid any proxy form or other instrument appointing a proxy must be received by post, by scanned copy
sent to proxies@goodwingroup.com or (during normal business hours only) by hand at Ivy House Foundry,
Hanley, Stoke-on-Trent, ST1 3NR no later than 10.30am on 5th October, 2020.
3. The return of a completed proxy form or other such instrument will not prevent a shareholder attending the
Annual General Meeting and voting in person if he/she wishes to do so.
4. Any person to whom this notice is sent, who is a person nominated under section 146 of the Companies Act
2006 to enjoy information rights (a “Nominated Person”) may, under an agreement between him/her and the
shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed)
as a proxy for the Annual General Meeting. If a Nominated Person has no such proxy appointment right or does
not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder
as to the exercise of voting rights.
5. The statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 1 and 2
above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by
shareholders of the Company.
6. To be entitled to attend and vote at the Annual General Meeting (and for the purpose of the determination by
the Company of the votes they may cast), shareholders must be registered in the Register of Members of the
Company at 10.30am on 5th October, 2020 (or, in the event of any adjournment, 10.30am on the date which is
two days before the time of the adjourned meeting). Changes to the Register of Members after the relevant
deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting.
7. As at 12th August, 2020 (being the last business day prior to the publication of this Notice) the Company’s issued
share capital consists of 7,363,200 ordinary shares, carrying one vote each. Therefore, the total voting rights in
the Company as at 13th August, 2020 are 7,363,200.
8. Shareholders should note that it is possible that, pursuant to requests made by shareholders of the Company
under section 527 of the Companies Act 2006, the Company may be required to publish on a website a statement
setting out any matter relating to: (i) the audit of the Company’s accounts (including the auditor’s report and the
conduct of the audit) that are to be laid before the Annual General Meeting; or (ii) any circumstance connected
with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and
reports were laid in accordance with section 437 of the Companies Act 2006. The Company may not require the
shareholders requesting any such website publication to pay its expenses in complying with sections 527 or 528
of the Companies Act 2006. Where the Company is required to place a statement on a website under section
527 of the Companies Act 2006, it must forward the statement to the Company’s auditor not later than the time
when it makes the statement available on the website. The business which may be dealt with at the Annual
General Meeting includes any statement that the Company has been required under section 527 of the
Companies Act 2006 to publish on a website.
9.
In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at
the meeting so that (i) if a corporate shareholder has appointed the chairman of the meeting as its corporate
representative with instructions to vote on a poll in accordance with the directions of all of the other corporate
representatives for that shareholder at the meeting, then on a poll those corporate representatives will give
voting directions to the chairman and the chairman will vote (or withhold a vote) as corporate representative in
accordance with those directions; and (ii) if more than one corporate representative for the same corporate
shareholder attends the meeting but the corporate shareholder has not appointed the chairman of the meeting
as its corporate representative, a designated corporate representative will be nominated, from those corporate
representatives who attend, who will vote on a poll and the other corporate representatives will give voting
directions to that designated corporate representative. Corporate shareholders are referred to the guidance issued
by The Chartered Governance Institute on proxies and corporate representatives (www.icsa.org.uk) for further
details of this procedure. The guidance includes a sample form of representation letter if the chairman is being
appointed as described in (i) above.
10. None of the Directors has a service contract with the Company.
11. If approved by shareholders the ordinary dividends will be paid to shareholders on 9th October, 2020.
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GROUP STRATEGIC REPORT
GOODWIN PLC
CHAIRMAN’S STATEMENT
The pre-tax profit for the Group for the twelve month period ending 30th April 2020, was
£12.1 million (2019: £16.4 million), a decrease of 26% on a revenue of £145 million (2019:
£127 million) which is 14% up on the figures reported for the same period last financial year.
The Directors propose a reduced dividend of 81.71p (2019: 96.21p). As with the majority of
companies around the world, Covid-19 has stalled our progress in the last quarter of the
financial year, and we have seen a slower start to the new financial year than we would
have expected without the pandemic. Despite this and the disruption due to trade frictions
between the USA and China, the underlying progression of the business remains robust
and resilient.
At the time of writing, the Group’s current workload stands at £183 million which is 11%
ahead of last year’s Group record figure of £165 million (2019: £165 million, 2018: £82 million,
2017: £76 million). Whilst the current workload figure contains the first element of the
supply agreement announced to the London Stock Exchange on 22nd June, 2020, this supply
agreement for the manufacture and machining of storage boxes to assist with nuclear waste
clean-up accounts for less than 2% of the £183 million and excludes the amount of orders
that are expected to be placed in the future once the mobilisation phase is complete.
Armed with this workload, the Group retains a high degree of confidence in the future
versus the looming uncertainty for many businesses this coming year.
Within the Mechanical Engineering Division, margins continue to be squeezed on our
petrochemical work and this is likely to persist during the current financial year given the
low oil price. In order to counteract this I am able to give the assurance that our diligently
fostered and growing workload contains substantial amounts of non-petrochemical work
commanding respectable margins in areas such as national defence capability and projects
of national importance. The critical nature of this ongoing work was highlighted by
‘key worker’ notices being issued to certain of the Group’s operations immediately upon the
onset of the pandemic. Whilst these projects are in their infancy, they will start to ramp up
over the next six to twelve months.
Goodwin Steel Castings has had another difficult year. This is largely attributable to the
performance of two contracts where we are currently in dispute with our customers.
Any favourable resolution will be booked in the current financial year once resolved.
Going forward the casting of nuclear waste containment boxes in relation to Goodwin
International’s supply agreement will provide a significant base load for our foundry.
However, with projects of this nature they take time to get mobilised, so in this current
financial year it is unlikely this contract alone will be transformational, but it will be
beneficial in future years. This with their other work for shipbuilding components in
specialist alloys for the USA, that only a few alloy steel foundries in the world are qualified
to produce, along with specialist nuclear power generation application castings means that
our foundry has transitioned away from what used to be business reliant on the
petrochemical industries. The business key market re-alignment is still transitional, but the
Directors can see that with the markets it is addressing and the projects it is working on
that there is a long-term, bright and profitable future for Goodwin Steel Castings.
Similarly Easat Radar Systems is now focusing on complete radar system supply contracts,
with a product suite and an offering that is competitive internationally. Two complete systems
will be sent to Thailand during this year, and there is a requirement for significant airport
infrastructure in developing countries over the coming years, which our competitive
product offering is tailored to meet. Over the past twelve months, Easat completed a
substantial amount of business, such that it reduced its unacceptable working capital
investment by some £4 million which has helped with the Group cash flow.
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GROUP STRATEGIC REPORT
CHAIRMAN’S STATEMENT (continued)
The Refractory Engineering Division achieved operating profits of £7 million in the year,
(2019: £8 million), representing 47% of the Group’s operating profit despite its customers’
consumer products being affected most by Covid-19 in the last quarter. Moving forward,
although the construction and industrial customers’ activity is returning, uncertainty
remains with regard to the medium term outlook especially for our customers’ luxury
products, for which they use our investment powders, waxes and silicone rubbers.
During the financial year, the Group successfully acquired the globally recognised Castaldo
silicone rubber and wax division, including the trade name and associated trademarks.
For the past 75 years, Castaldo has been at the centre of the worldwide jewellery casting
industry and this acquisition will further increase the Group’s global market share within
the moulding rubber and injection wax business by aligning higher value complementary
sales activities with the existing business activities. By utilising the distribution network and
global presence within our Refractory Engineering Division it is forecast that significant
revenue growth can be achieved over and above the Castaldo division sales levels seen
pre-acquisition. The manufacturing of the product lines is being relocated to Thailand
which will also increase the gross margin of the acquired product lines.
Post year end the Group has also seized the opportunity to purchase a 2.5 acre manufacturing
site and mineral processing assets for £770,000 that is complementary to our existing
minerals processing business that is running at near full capacity. The purchase was
concluded within seven days, and the Directors believe that the site was acquired at
substantially less than its true market value. In addition, we believe that within a few
months we will be able to start to generate profits by utilising the assets acquired.
Across both Divisions, our intangibles have grown in recent years due to multiple product
development activities and acquisitions. A number of these major activities will be
completed and taken to market within the current financial year leaving us with products
that can be sold for many years to come; many of these new products are covered by
international patent protection. This is not to say that there will be no new product
development programmes as activities here have just been scaled back, focusing as always
on areas that we anticipate may yield good future prospects.
In line with the Group’s strategy the Board has worked hard to control its working capital
and ensure a safe level of gearing. This is transparently seen at an operational level
delivering strong cash generation in the year of £22.5 million, up £7.6 million from the
previous year. As a result of a reduced level of investment in the year, I am pleased to
report the Group’s net debt stands at a modest £19 million, equating to a gearing percentage
of 18% versus 20% last year.
Following a productive ten year relationship with Lloyds Bank PLC, and with our five year
facility set to mature in December 2020, we put the facilities out for competitive tender.
On a like-for-like basis, in terms of available facility and once all costs in relation to the
facility had been evaluated, Lloyds were no longer as competitive in relation to other offers
we received. I can confirm that the Board has now signed a new facility agreement with
Santander UK plc for the same quantum but on improved terms, including a higher
proportion that will be committed for a five year period. In addition, a £10 million revolving
credit facility (RCF) set to expire in October 2020 is also in the final stages of being
renegotiated ultimately providing the Group with long-term facilities totalling over
£50 million, in addition to the £30 million secured as an additional committed credit line
through the Bank of England Covid Corporate Financing Facility (CCFF), which was taken
out as an insurance policy should any possible extreme Covid-19 event occur and is
repayable in April 2021.
Auditor rotation is now mandated by regulation meaning that the year ended 30th April,
2020 will be KPMG’s last year performing the Group audit having worked with us for the
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GROUP STRATEGIC REPORT
CHAIRMAN’S STATEMENT (continued)
prior 56 years (Peat, Marwick, Mitchell & Co. in the earlier years). The Board would like to
express its gratitude for the work performed over this period. Following a competitive
tender process, the Audit Committee and the Board propose that RSM UK Group LLP be
appointed as the new Group auditor, commencing responsibility for auditing the Group for
the financial year beginning 1st May, 2020.
Despite my optimism, at the time of writing, it is necessary that we remain acutely aware of
the external environment with Covid-19, as until an effective vaccination programme is
rolled out, the likelihood of more flare-ups and lockdowns across the globe seems
inevitable. However, with the Group’s underpinnings, in terms of its order book, its cash flow
and excellent workforce from a business point of view, Covid-19 will likely be nothing more
than a bump in the road of the Group’s progression when we look back at it in a few
years’ time.
Since the start of the pandemic our workforce has been outstanding. The Group immediately
set out a policy to protect its employees, and they in turn have responded and looked after
the Group’s interests. This has involved working in many cases even harder in order to
achieve the same outcomes due to the restrictive and new working practices that were
necessarily imposed for everyone’s wellbeing.
The Board is once again indebted to our Directors, managers and employees around the
world for their efforts in keeping the Group operational during this difficult Covid-19 period
and for their devotion to the Group’s long-term performance. Had the Group not kept on
manufacturing over the four month period between March and the end of June, the
Group’s profitability and cash flow would have deteriorated substantially. We have all
been working in uncharted territory because of this, and I am immensely proud of how
every single employee within the Group has adapted and worked within this challenging
new environment.
13th August, 2020
T. J. W. Goodwin
Chairman
Alternative performance measures mentioned above are defined in note 36 on page 86.
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GROUP STRATEGIC REPORT
GOODWIN PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
for the year ended 30th April, 2020
CONTINUING OPERATIONS
Revenue … … … … … … … … … …
… … … … … … … … …
Cost of sales
GROSS PROFIT… … … … … … … … … …
Other income
… … … … … … … … …
Distribution expenses … … … … … … … …
… … … … … … …
Administrative expenses
OPERATING PROFIT … … … … … … … … …
… … … … … … … …
Financial expenses
Share of profit of associate companies … … … … …
PROFIT BEFORE TAXATION
… … … … … … …
Tax on profit
… … … … … … … … …
PROFIT AFTER TAXATION… … … … … … … …
ATTRIBUTABLE TO:
Equity holders of the parent … … … … … … …
… … … … … … …
Non-controlling interests
PROFIT FOR THE YEAR … … … … … … … …
BASIC EARNINGS PER ORDINARY SHARE
… … … …
DILUTED EARNINGS PER ORDINARY SHARE … … … …
Notes
4, 5
6
8
15
6
9
10
10
2020
£’000
144,512
(109,743)
34,769
690
(2,792)
(19,809)
2019
£’000
127,046
(86,414)
40,632
-
(3,016)
(21,205)
12,858
16,411
(809)
66
12,115
(3,775)
8,340
7,866
474
8,340
(234)
233
16,410
(3,963)
12,447
11,505
942
12,447
107.93p
159.79p
103.31p
149.65p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30th April, 2020
PROFIT FOR THE YEAR … … … … … … … … …
OTHER COMPREHENSIVE EXPENSE ITEMS THAT MAY BE
RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS:
Foreign exchange translation differences … … … … … …
…
Goodwill arising from purchase of minority interest in subsidiaries
… …
Effective portion of changes in fair value of cash flow hedges
…
Change in fair value of cash flow hedges transferred to profit or loss
… …
Effective portion of changes in fair value of cost of hedging
Change in fair value of cost of hedging transferred to profit or loss … …
Tax credit / (charge) on items that may be reclassified subsequently to
profit or loss … … … … … … … … … …
2020
£’000
8,340
2019
£’000
12,447
(1,007)
(72)
(355)
522
(843)
395
77
(383)
(772)
(644)
180
(489)
49
154
OTHER COMPREHENSIVE EXPENSE FOR THE YEAR,
NET OF INCOME TAX… … … … … … … … … …
(1,283)
(1,905)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR … … … …
7,057
10,542
ATTRIBUTABLE TO:
Equity holders of the parent … … … … … … … …
… … … … … … … …
Non-controlling interests
6,587
470
7,057
9,528
1,014
10,542
The full financial statements and accompanying notes are on pages 42 to 98.
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GROUP STRATEGIC REPORT
OBJECTIVES, STRATEGY AND BUSINESS MODEL
The Group’s main OBJECTIVE is to have a sustainable long-term engineering based business
with good potential for profitable growth while providing a fair return to our shareholders.
The Board’s STRATEGY to achieve this is:
• to supply a range of technically advanced products to growth markets in the mechanical
engineering and refractory engineering segments in which we have built up a global reputation
for engineering excellence, quality, efficiency, reliability, price and delivery;
• to manufacture advanced technical products profitably, efficiently and economically;
• to maintain an ongoing programme of investment in plant, facilities, sales and marketing,
research and development with a view to increasing efficiency, reducing costs, increasing
performance, delivering better products for our customers, expanding our global customer base
and keeping us at the forefront of technology within our markets, whilst at all times taking
appropriate steps to ensure the health and safety of our employees and customers;
• to control our working capital and investment programme to ensure a safe level of gearing;
• to maintain a strong capital base to retain investor, customer, creditor and market confidence
and so help sustain future development of the business;
• to support a local presence and a local workforce in order to stay close to our customers;
• to invest in training and development of skills for the Group’s future.
• to manage the environmental and social impacts of our business to support its long-term
sustainability.
BUSINESS MODEL
The Group’s focus is on manufacturing within two sectors, mechanical engineering and refractory
engineering, and through this division of our manufacturing activities, our overseas business
facilities and our global sales and marketing activities, the Group benefits from market diversity.
Further details of our business and products are shown on our website www.goodwin.co.uk.
Mechanical Engineering
The Group specialises in supplying industrial goods, generally on a project basis, more often than
not involving the complementary skillset of other Group companies to deliver the requirement.
The projects normally involve international procurement, high integrity castings, forgings or
wrought high alloy steels, precision CNC machining, complex welding and fabrication, and other
operations as are required. In addition to specialist projects, the Group manufactures and sells
a wide range of dual plate check valves, axial nozzle check valves and axial piston control and
isolation valves to serve the oil, petrochemical, gas, liquefied natural gas (LNG), mining, nuclear
power generation, nuclear waste treatment and water markets. We generate value by creating
leading edge technology designs, globally sourcing the best quality raw material at good prices,
manufacturing in highly efficient facilities using up to date technology to provide very reliable
products to the required specification, at competitive prices and with timely deliveries.
Our mechanical engineering markets also include high alloy castings, machining and general
engineering products which typically form part of large construction projects such as power
generation plants, oil refineries, chemical plants, nuclear waste treatment plants, high integrity
offshore structural components and bridges. The Group through its foundry, Goodwin Steel
Castings, has the capability to pour high performance alloy castings up to 35 tonnes, radiograph
and also finish CNC machine and fabricate them at the foundry’s sister company, Goodwin
International. This capability is targeting the defence industry and nuclear decommissioning, the
oil and gas industry, as well as large, global projects requiring high integrity machined castings.
Goodwin International, the largest company in the Mechanical Engineering Division, not only
designs and manufactures dual plate check valves, axial nozzle check valves and axial piston
control and isolation valves but also undertakes specialised CNC machining and fabrication
work for nuclear decommissioning projects. Goodwin International also has a division that is
focused on manufacturing / machining high precision, high integrity components for naval
marine vessels. Noreva GmbH also designs, manufactures and sells axial nozzle check valves.
Both Goodwin International and Noreva purchase the majority of the value of their sand mould
castings from Goodwin Steel Castings for their ranges of check valves and this vertical
integration gives rise to competitive benefits, increased efficiencies and timely deliveries.
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GROUP STRATEGIC REPORT
OBJECTIVES, STRATEGY AND BUSINESS MODEL (continued)
At Goodwin Pumps India we manufacture a superior range of submersible slurry pumps for
end users in India, Brazil, Australia and Africa. Easat Radar Systems (Easat) and its subsidiary,
NRPL, design and build bespoke high-performance radar antenna systems for the global market
of major defence contractors, civil aviation authorities and border security agencies. Easat has a
sister company, Easat Radar Systems India, that also manufactures, sells and maintains radar
systems for air traffic control. We create value on these by innovative design, assembly and
testing in our own facilities using bought in or engineered in-house components.
Refractory Engineering
Within the Refractory Engineering Division, Goodwin Refractory Services (GRS) primarily
generates value from designing, manufacturing and selling investment casting powders and
waxes to the jewellery casting industry. GRS also manufactures and sells investment casting
powders to the tyre mould and aerospace industries. The Refractory Engineering Division has
five other investment powder manufacturing companies located in China, India and Thailand
which sell the casting powders directly and through distributors to the jewellery casting industry
and also directly to tyre mould and aerospace industries.
These companies are vertically integrated with another of our UK companies, Hoben International,
which manufactures cristobalite, which it sells to the six casting powder manufacturing
companies as well as producing ground silica that also goes into casting powders and other
UK uses of silica such as wind turbine blade manufacture. Hoben International now also
manufactures different grades of perlite.
The other UK refractory company is Dupré Minerals which focuses on producing exfoliated
vermiculite that is used in insulation, brake linings and fire protection products, including
technical textiles that can withstand exposure to high temperatures and for lithium battery fire
extinguishers. Dupré also sells consumable refractories to the shell moulding precision casting
industry. Dupré has designed, patented and is now selling a range of fire extinguishers and an
extinguishing agent for lithium battery fires that utilises a vermiculite dispersion as the fire
extinguishing agent.
BUSINESS DIVERSITY AND PERFORMANCE
As can be seen in note 4 to these financial statements, in the year to 30th April, 2020 the
Mechanical Engineering Division generated 53% of the Group’s operating profit and the Refractory
Engineering Division generated 47%. The split between the divisions remains largely unchanged
due to the Refractory Engineering Division having been impacted by Covid-19 especially in our
Indian, Thai and Chinese factories in the last quarter where there were mandatory shut downs,
thus generating a similar performance as last year, rather than the division outperforming its
previous performance as originally expected. Furthermore whilst the Mechanical Engineering
Division revenue increased by 21%, its operating profits reduced by 32% which is a feature of
the difficult contracts encountered in the year, as covered in the Chairman’s Statement. As a
result and with parts of the global economy continuing to be put in lockdown we expect the
diversification to change to a 65:35 split in favour of the Mechanical Engineering Division.
During the course of the year the Group supplied goods to over 90 countries and from the
geographical segmentation report on page 59 of these Accounts it can be seen that the revenue
is fairly evenly spread between the Pacific Basin Countries, UK and Rest of World. The Group
turnover to the rest of Europe equates to 14% of overall turnover and less than 10% relates to
trade between the UK and the EU.
The Board is of the opinion that the Mechanical Engineering and Refractory Engineering
products that we sell from the UK to Europe will not be significantly affected by any increases
in transit delays of even up to two weeks. As the shipments are generally only once or twice
per month and, be it by our customers carrying slightly more stock and / or by extending the lead
time of the assembling and testing, the finished products takes weeks not days to manufacture.
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GROUP STRATEGIC REPORT
OBJECTIVES, STRATEGY AND BUSINESS MODEL (continued)
KEY PERFORMANCE INDICATORS
The key performance indicators for the business are listed below:
Gross profit as a %
of turnover
Profit before
tax (in £ millions)
Gearing % (excluding
deferred consideration)
Sales per employee
per year (in £’000)
Dividends proposed
(in £ millions)
* See note 36
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019 2020
29.9
27.3
28.5
31.9
34.3
32.5
27.8
25.6
28.6
32.0 24.1
13.3
8.1
12.3
20.3
24.1
20.1
12.3
9.2
13.3
14.7* 12.1
2%
22% 26%
23%
5%
12%
26%
31%
11% 20% 18%
112.4
105.5 113.7
125.7
124.1
111.8
105.4
114.0
119.8
117.4 121.4
2.0
2.1
2.3
3.8
3.0
3.0
3.0
3.0
6.0
6.9
6.0
Alternative performance measures mentioned above are defined in note 36 on page 86.
The alternative performance measures are important to management and the readers of the
Annual Report in assessing the Group’s performance and benchmarking it within its respective
industries.
IFRS 16 has not had a significant impact on either the profit or loss or the net assets of the
Group. For this reason, the Alternative Performance Measures in note 36 are considered to have
been prepared on a consistent basis.
9
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GROUP STRATEGIC REPORT
OBJECTIVES, STRATEGY AND BUSINESS MODEL (continued)
DIVIDEND POLICY
Covid-19 has stalled the progress of our Group, but with our agreed targeted limits of gearing
at 30%, capital expenditure limited to a maximum of 55% of post tax profits plus depreciation
and amortisation on a three year rolling annual average and dividends limited to 38% of (post tax
profits + depreciation + amortisation) in place, the cash flow currently remains good. The dividend
is automatically reduced by £911,000 to 81.71 pence per share (2019: 96.21 pence). This self
adjusting system results in a reduction in dividend of 15% per share.
As illustrated in the Chairman’s Statement and the Stategic Report, there are many positives
occuring in the Group to counter balance Covid-19 and it is not considered necessary to have
a dramatic modification to the Dividend Policy.
10
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GROUP STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
The Group's operations expose it to a variety of risks and uncertainties. The Directors confirm that they have carried
out a robust assessment of the principal risks facing the Group, including those that would threaten its business
model, future performance, solvency or liquidity. Whilst the risk of a health crisis and black swan events are not
new risks, Covid-19 has been identified as a new principal risk to the Group, as discussed below.
Covid-19 risk: The Covid-19 pandemic has already had an unprecedented bearing on businesses and economic
activity across the world. The Group very early on (1st March, 2020) in advance of any UK government guidelines
coming out developed a policy of paying any employee or one whose household member exhibits Covid-19
symptoms to isolate at home for 14 days and at the same time set up all manufacturing and office working
activities such that 2 metre social distancing was maintained. Hand sanitisers and warning labels were positioned
by all opening doors and many had, where possible self-disinfecting handles fitted. Daily reporting by location was
introduced with any persons, who came into contact with a symptomatic person, being mandated to take two
weeks paid isolation. Amongst our UK work force of 775 people we had 7 confirmed cases of Covid-19, two of
whom were hospitalised, but both have recovered and are now back at work.
In the UK, all factories have continuously run since the 6th January, 2020 and, as has been seen dispatch and revenue
levels increased for the year ending 30th April, 2020. Three overseas factories in China and India were subject to
mandatory lockdown for six to eight weeks, but these factories are all now back up and running.
The enduring principal risk of Covid-19 is that the consumption of jewellery in the retail shops has been very much
affected world-wide with our sales volumes of our investment jewellery casting powders being down in all parts of
the world. With retail shops and airports now starting to reopen there is evidence that the drop in luxury goods
being purchased from our customers is starting to recover, but it is difficult to predict the 12 month effect to 30th
April, 2021.
The workload in our Mechanical Engineering companies is good and we expect them to remain busy through to
the end of April 2021. As mentioned in the Chairman’s Statement, much of this work is for naval vessels, and for
nuclear waste reprocessing along with delivering four radar systems and large valves for the potable water
industry.
Market risk: The Group provides a range of products and services, and there is a risk that the demand for these
products and services will vary from time to time because of competitor action or economic cycles or international
trade friction or even wars. As shown in note 4 to the financial statements, the Group operates across a range
of geographical regions, and its turnover is split across the UK, Europe, USA, the Pacific Basin and the Rest of
the World.
This spread reduces risk in any one territory. Similarly, the Group operates in both mechanical engineering and
refractory engineering sectors, mitigating the risk of a downturn in any one product area as was seen over the
past three financial years. The potential risk of the loss of any key customer is limited as, typically, no single customer
accounts for more than 10% of turnover.
As described in the Business Model, the Group generates significant sales not only from the worldwide energy
markets but also from naval marine applications, military ship building, vermiculite and perlite to the insulating and
fire prevention industry and the jewellery consumer market that our investment casting powder companies indirectly
supply through the supply of investment casting moulding powders, waxes, silicone rubber and air traffic control
systems.
Technical risk: The Group develops and launches new products as part of its strategy to enhance the long-term
value of the Group. Such development projects carry business risks, including reputational risk, abortive expenditure
and potential customer claims which may have a material impact on the Group. The potential risk here is seen as
manageable given the Group is developing products in areas in which it is knowledgeable and new products are
tested prior to their release into the market.
Product failure/Contractual risk: The risks that the Group supplies products that fail or are not manufactured to
specification are risks that all manufacturing companies are exposed to but we try to minimise these risks through
the use of highly skilled personnel operating within robust quality control system environments, using third party
accreditations where appropriate. With regard to the risk of failure in relation to new products coming on line, the
additional risks here are minimised at the research and development stage, where prototype testing and the
deployment of a robust closed loop product performance quality control system provides feed back to the design
department for the products we manufacture and sell. The risk of not meeting safety expectations, or causing
significant adverse impacts to customers or the environment, is countered by the combination of the controls
mentioned within this section and the purchase of product liability insurance. The risk of product obsolescence
is countered by research and development investment.
Supply chain and equipment risk: Failure of a major supplier or essential item of equipment presents a constant
risk of disruption to the manufacturing in progress. Where reasonably possible, management mitigates and controls
the risk with the use of dual sourcing, continual maintenance programmes, and by carrying adequate levels of stocks
and spares to reduce any disruption.
Health and safety: The Group’s operations involve the typical health and safety hazards inherent in manufacturing
and business operations. The Group is subject to numerous laws and regulations relating to health and safety
around the world. Hazards are managed by carrying out risk assessments and introducing appropriate controls,
as well as attending safety training courses.
11
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GROUP STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Acquisitions: The Group’s growth plan over recent years has included a number of acquisitions. There is the risk
that these, or future acquisitions, fail to provide the planned value. This risk is mitigated through financial and
technical due diligence during the acquisition process and the Group’s inherent knowledge of the markets they
operate in.
Financial risk: The principal financial risks faced by the Group are changes in market prices (interest rates, foreign
exchange rates and commodity prices). Detailed information on the financial risk management objectives and
policies is set out in note 28 to the financial statements. The Group has in place risk management policies that
seek to limit the adverse effects on the financial performance of the Group by using various instruments and
techniques, including credit insurance, stage payments, forward foreign exchange contracts, secured and
unsecured credit lines.
Regulatory compliance: The Group’s operations are subject to a wide range of laws and regulations. Both within
Goodwin PLC and its subsidiaries, the Directors and Senior Managers within the companies make best endeavours
to ensure we comply with the relevant laws and regulations.
Assessment of principal risks: Changes and likely impact: As part of the Board’s risk management and
control of principal risks, areas of monitoring and expert advice undertaken are reported upon by the Audit
Committee on pages 22 to 24.
The Board’s assessment of the impact of Brexit on the Group
Brexit is not seen as a significant issue to the Group. We envisage minimal overall effect in the long-term
within our trading companies, as the majority of our trade has little direct interaction within Europe. A significant
proportion of our reported revenue to Europe, as set out within note 4, relates to bespoke capital contracts that
typically are installed into projects not within the EU, despite the customer being resident in the EU. Our UK
imports are not required on a just in time basis nor are they reliant on EU suppliers. Raw materials are primarily
sourced from vendors outside of the EU due to cost-effectiveness, with EU suppliers being a dual source for the
supply of critical items.
The Brexit related sensitivity or scenario testing has not indicated that there are any impairment, viability or going
concern issues.
Furthermore, the Group remains focused on and has a growing proportion of its workload consisting of the supply
of niche UK-based capabilities into long-term, strategically critical programmes located in the UK and the US
where both countries remain committed to playing a key role in domestic and global security.
Nonetheless, the Board continually monitors and assesses the potential risks of Brexit, by regularly consulting
on the matter with the Group’s management, suppliers, customers and reviewing and considering the diverse
opinions, written by many commentators.
Specific Risks
Potential Risks
Supply Chain
Friction
Explanation of the Board’s assessment
of the potential impact
Mitigation / Management
The majority of products supplied into Europe are
consumables. Whilst customs issues may cause some
delays the goods supplied are relatively low value and
customers would build up stocks. We also have the ability
to supply these products from Thailand, China, India or
Brazil should the need arise to circumnavigate any possible
issues.
For products supplied from Europe to our UK subsidiaries,
in all cases we have a viable non-EU dual source option.
Effect of changes
in import / export
taxes
With the Group’s widespread customer base and local
manufacturing structure, if World Trade Organisation
(WTO) tariffs are imposed the impact is not anticipated to
be material to the Group’s results. We expect that any
increased costs will likely be offset by the further devaluation
of the pound Sterling (the positive impact on sales prices
would exceed the impact of adverse movements in the cost
base), where our imports generally represent 35% of our
total costs to manufacture in the UK.
12
The Group has built flexibility
to respond to changes in the
operating environment by
assessing supplier readiness,
investigating alternative
domestic supply, globally dual
sourcing and increasing logistics
options. Most products are only
supplied / delivered once or twice
per month to each customer.
Management of customers’
expectations and contract
negotiation to protect against
incremental costs and potential
contractual delays. Over the next
seven years we expect that the
UK / US trading relationship
tariffs will be a far higher
agenda item than the UK’s rela-
tionship with Europe.
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GROUP STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
The Board’s assessment of the impact of Brexit on the Group (continued)
General Risks
Potential Risks
Macro Economic
Explanation of the Board’s assessment
of the potential impact
Mitigation / Management
In the event of a no deal Brexit, further currency devaluation
will only aid the Group’s global competiveness and increase
the reported net worth and the Sterling value of dividend
receivables from the overseas companies.
It is the Group’s policy to hedge
material transaction based
currency exchange exposures.
Movement of
Labour
The Group is not dependent on low skilled labour and it
will not be affected by its shortage in the event that the
movement of EU citizens is restricted.
We continue with our 25 per year
apprentice hiring programme,
which has local accolade.
Regulatory and
Policy
With the Group’s product offerings and the commencement
of major UK and US programmes, the Board considers the
Group is well protected against regulatory change and the
loss of market access upon which other businesses may be
reliant.
N/A
Tax
Financing
The Group does not rely on double taxation treaties and
cash flow impacts as a result of potential changes in VAT
are insignificant.
Regular assessment and
sensitivity testing.
Liquidity risks are mitigated with the use of three
independent banks, committed facilities, and staggered
renewal dates (see note 28).
The Board has assessed the
Company’s banks’ health and
continually monitors their
Brexit exposure and strategy.
The Brexit related sensitivity or scenario testing has not indicated that there are any impairment, viability or
going concern issues.
13
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GROUP STRATEGIC REPORT
Environment
CORPORATE SOCIAL RESPONSIBILITY
The Group continues to seek to achieve high standards in the management of environmental matters.
We recognise the impact our operations may have on the environment and seek to minimise or eliminate
adverse effects.
In the year the Board has commenced an initiative to “Balance and Reduce” the CO2 generated by the Group’s
activities. To help generate a sustainable plan, third party assistance is being sought that will provide a framework
as to how the Group will grow in a carbon neutral manner and set targets for the forthcoming years to reduce
our current emissions. The initiative is likely to include:
- the transition of company vehicles to electric
- incentivising the workforce to use electric vehicles
- a mandate that all future investments are to be carbon balanced, where appropriate.
Greenhouse Gas (“GHG”) emissions
In line with the latest UK reporting requirements, the sites reporting GHG data are the same as those consolidated
in the Group’s financial statements, and we have included all material qualifying emissions around the Group for
the years to 30th April, 2020 and 30th April, 2019. We have used the reporting guidance set out by the new
SECR (Streamlined Energy and Carbon Reporting) requirements and used the methodology set out therein,
to report our Scope 1 and Scope 2 emissions. Overseas electricity factors have been taken from the latest
IEA ©OECD/IEA documentation, covering both OECD and non OECD countries.
The reported CO2 emissions are detailed below:
Scope 1 – direct emissions (from Company facilities and vehicles)
Scope 2 – indirect emissions (from electricity purchased for own use)
Total Scope 1 and Scope 2 emissions
Intensity – emissions of total CO2 equivalent reported above per £1 million
of Group revenue
2020
Tonnes of CO2e
2019
Tonnes of CO2e
38,494
6,882
45,376
313
39,351
7,144
46,495
372
Energy Consumption (kWh) resulting in the above reported emissions
76,786,289
Not reported
Proportion of emissions arising from UK operations %
97%
Not reported
Our overall emissions have marginally reduced in the year, which will partly be as a result of the Covid-19 impacting
our activity in the latter months of the reported period. In the year the Group met its target to reduce all space
heating and lighting by 5% by 2020, new metrics and targets will be set in the current year as a result of the new
“Balance and Reduce” initiative.
Donations
The Company made no political donations during the year (2019: £nil).
Donations by the Group for charitable purposes amounted to £54,262 (2019: £65,015). The majority of these were
made to local communities within the Group’s operating environments.
Employee consultation
The Group takes seriously its responsibilities to employees and, as a policy, provides employees systematically
with information on matters of concern to them. It is also the policy of the Group to consult where appropriate, on
an annual basis, with employees or their representatives so that their views may be taken into account in making
decisions likely to affect their interests.
Employment of disabled persons
The policy of the Group is to offer the same opportunity to disabled people, and those who become disabled, as to
all others in respect of recruitment and career advancement, provided their disability does not prevent them from
carrying out the duties required of them in accordance with the requirements of the Equality Act 2010.
Health and Safety
The Group acknowledges that many of its manufacturing processes and some materials that it handles and sells
are hazardous.
We have a total of 18 people whose full time efforts are dedicated to :
A) Risk analyses
B) Writing safe operating and maintenance procedures
C) Ensuring our packing, material handling, customer safety data we provide to customers is fit for purpose.
D) Analysing near misses, accidents and failures to ensure appropriate action is taken to make the operating
environment at our factories and offices become safer.
E) Training within the subsidiaries.
14
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GROUP STRATEGIC REPORT
CORPORATE SOCIAL RESPONSIBILITY (continued)
Community issues
During the year the Company has continued to communicate to all employees our culture of responsibility and
support for local communities where possible.
Ethics and Sustainability
We are committed to conducting business responsibly and ethically. We endeavour to ensure that our staff, suppliers
and business partners adopt the same or similar high ethical standards and values. This applies, but is not limited
to human rights, modern slavery, ant-bribery and corruption.
Continual training is carried out to all relevant staff and a variety of third party evaluation services are used on an
ongoing basis for agents and other business relationships. We visit major suppliers and write letters in line with
the United Nations Global Compact voluntary initiative. The letters invite our major suppliers to adopt, implement
and evidence adequate compliance policies. This is all enhanced by an anonymous whistle-blowing system.
Diversity Policy
The Group is committed to ensuring that everyone should have the same opportunities for employment and
promotion based on ability, qualifications and suitability for the work in question. The Group invests in training
and development of skills for the Group’s future and has a long-term aim that the composition of our
workforce should reflect that of the community it serves. Our Diversity Policy is implemented through training
and development, recruitment, our business culture and the Board’s Strategy.
The following tables set out the breakdown of our average number of employees and Board members by
gender and age:
Breakdown by gender
Year ended 30th April, 2020
Main Board and Company Secretary
Senior Management
Employees
Total
Breakdown by age
Year ended 30th
April, 2020
Main Board and
Company Secretary
Senior Management
Employees
Total
Age
16 to
21
0
0
94
94
%
0
0
8
8
Male
6
71
893
970
Age
22 to
40
6
12
530
548
%
75
92
81
82
Female
2
6
212
220
%
25
8
19
18
Age
41 to
65
1
63
461
525
%
75
16
48
46
%
13
82
42
44
Age
Over 65
1
2
20
23
%
12
2
2
2
Total
8
77
1,105
1,190
Total
8
77
1,105
1,190
S.172 Statement
Duty to promote the long-term sustainability through stakeholder engagement
Under Section 172 of the Companies Act 2006, the Directors have a duty to promote the success of the Company
over the long-term for the benefit of shareholders as a whole, having regard to a range of other key stakeholders
and interests. The Directors must have regard (amongst other matters) to:
The likely consequence of any decision in the long-term
The Board considers the long-term consequences of the decisions it makes, focusing on the interests of relevant
stakeholders as appropriate. Strategy considerations include commercial decisions (bidding for new business),
reviewing current and future geographical and technology markets and investment into the workforce. The primary
capital allocations decisions include R&D and dividend payments.
The interests of the Group’s employees
The Board considers the most effective form of engagement and communication with its employees for its size and
complexity is by way of informal daily discussions between the employees, the Senior Management and Board
members who walk the floor. This is further supported by team meetings, training, and an honest and open culture.
The need to foster the Group’s business relationships with suppliers, customers and others
The Board considers market trends regularly and reviews their likely long-term implications. Through regular site
visits and discussions with the procurement departments the Board acquires a first-hand understanding of its
business relationships.
15
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GROUP STRATEGIC REPORT
CORPORATE SOCIAL RESPONSIBILITY (continued)
S.172 Statement (continued)
The need to foster the Group’s business relationships with suppliers, customers and others (continued)
Engagement is ensured from the initial tender processes to embedded sales and engineering project meetings
and reinforced by an open door culture, whilst actively seeking feedback.
The Board is made up of six Executive Directors who are actively involved with the day to day business and
management of the subsidiaries thereby allowing a good understanding of key members of the supply chain
and also ensuring a fair purchase culture.
The impact of the Groups’s operations on the community and the environment
The Board encourages its sites to support their local communities through charitable activities and initiatives to
support the local area within which they operate. An environmental initiative was commenced in the year to
obtain the necessary knowledge and resource to help balance and reduce the CO2 emitted as a result of the
Group’s activities.
Engagement occurs through collaboration with local schools where engineering and ’Women in Engineering’ is
promoted. Furthermore, regular dialogue is maintained with the local councils and charities.
The desirability of the Group maintaining a reputation for high standards of business conduct
The Board takes seriously the Group’s obligation to maintain high standards of business conduct and assessed
compliance. During the year the Board has commenced a review of its code of conduct and how it can be
implemented in a more effective manner.
The need to act fairly as between members of the Company
The Company has one class of ordinary shares, which have the same rights as regards voting, distributions and
on a liquidation. Management are also significant shareholders in the Company, holding approximately 52.95%
of the register. In accordance with LR6.5.4R, there is a controlling shareholder agreement in place. On this basis
the Board feels that the Executive Directors are fully aligned with shareholders.
Shareholders engagement occurs through the Annual Report, regulatory disclosures, our website and the Annual
General Meeting.
FORWARD-LOOKING STATEMENTS
The Group Strategic Report contains forward-looking type statements and information based on current
expectations, and assumptions and forecasts made by the Group. These expectations and assumptions are
subject to various known and unknown risks, uncertainties and other factors, which could lead to substantial
differences between the actual future results, financial performance and the estimates and historical results
given in this report. Many of these factors are outside the Group’s control. The Group accepts no liability to
publicly revise or update these forward-looking statements or adjust them for future events or developments,
whether as a result of new information, future events or otherwise, except to the extent legally required.
The Group Strategic Report was approved by the Board on 13th August, 2020 and is signed on its behalf by:
T. J. W. Goodwin
Director
M. S. Goodwin
Director
S. R. Goodwin
Director
16
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DIRECTORS’ REPORTS
REPORT OF THE DIRECTORS
The Directors have pleasure in presenting their reports and audited financial statements for the year ended
30th April, 2020.
The Directors have presented their Group Strategic Report on pages 3 to 16. The Group Strategic Report is
intended to be an analysis of the development and performance of Goodwin PLC and contains a description of the
principal risks and uncertainties facing the Group and an indication of likely future developments. The Chairman’s
Statement is part of the Group Strategic Report of the Directors for the year and provides the financial review,
including some of the key performance indicators and future trends of the business. Also included in the Group
Strategic Report for the year are the Group’s Objectives, Strategy and Business Model on page 7, the Principal
Risks and Uncertainties on page 11, and the Corporate Social Responsibility Report on pages 14 to 16.
The Board considers that the Chairman’s Statement, the Group Strategic Report, the Directors’ Reports and the
Financial Statements, taken as a whole, are fair, balanced and understandable and that they provide the
information considered appropriate for shareholders to assess the Group’s position and performance during the
financial year and at the year end, and to assess the business model and strategy.
Proposed ordinary dividends
The Directors recommend that an ordinary dividend of 81.71p per share (2019: 96.21p) be paid to shareholders on
the register at the close of business on 11th September, 2020. If approved by shareholders, the ordinary dividend
will be paid to shareholders on 9th October, 2020.
See comments on page 10 regarding the Dividend Policy.
Directors
The Directors of the Company who have served during the year are set out below.
M. S. Goodwin
S. R. Goodwin
T. J. W. Goodwin
J. Connolly
S. C. Birks
B. R. E. Goodwin
J. E. Kelly (Non-Executive Director)
The Chairman and the Managing Directors do not retire by rotation.
No Director has a service agreement with the Company, nor any beneficial interest in the share capital of any
subsidiary undertaking. The Chairman does not have any other significant external appointments.
Shareholdings
The Company has been notified that as at 10th August, 2020, the following had an interest in 3% or more of the
issued share capital of the Company:
J. W. and R. S. Goodwin 2,129,153 shares (28.92%), J. W. and R. S. Goodwin 1,393,562 shares (18.93%). These shares
are registered in the names of J. M. Securities Limited and J. M. Securities (No. 3) Limited respectively. J. H. Ridley
501,709 shares (6.81%), Rulegale Nominees (JAMSCLT) 416,915 shares (5.66%).
In line with LR 9.2.2AB R, relating to Controlling Shareholders, the Company confirms that a written and legally
binding agreement is in place, which complies with the provisions set out in LR 6.5.4 R.
Share capital
The Company’s issued share capital comprises a single class of share capital which is divided into ordinary shares
of 10p each. Information concerning the issued share capital in the Company is set out in note 27 to the financial
statements on page 75.
All of the Company’s shares are ranked equally and the rights and obligations attaching to the Company’s shares are
set out in the Company's Articles of Association, copies of which can be obtained from Companies House in England
and Wales or by writing to the Company Secretary.
There are no restrictions on the voting rights of shares and there are no restrictions in their transfer other than:
• certain restrictions as may from time to time be imposed by laws and regulations (for example, insider trading
laws); and
• pursuant to the Market Abuse Regulation whereby Directors of the Company require approval to deal in the
Company’s shares.
Additionally, the Company is not aware of any agreements between shareholders of the Company that may result
in restrictions on the transfer of ordinary shares or voting rights.
Following the passing of a Resolution at the Company’s Annual General Meeting on 5th October, 2016 to approve
an Equity Long Term Incentive Plan (“LTIP”) for the Executive Directors, the Directors have statutory authority to
issue shares in connection with the exercise of options granted under the LTIP. The Directors have not been given
authority to issue any shares of the Company other than in respect of the LTIP nor have they been given authority
to buy back any shares. The LTIP earn-out for each of the eight Directors, who were eligible under the scheme, when
it was approved, is 61,200 shares each and these are exercisable within five years from 1st May, 2019. Details of the
options exercised during the year are reported in the Annual Directors’ Remuneration Report on page 30.
17
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DIRECTORS’ REPORTS
REPORT OF THE DIRECTORS (continued)
Research and development
The Group invests significantly in research and development. The more material investments during the year
included the development of high yield steels for high integrity boat hull manufacturers and axial flow control
valve designs.
Change in control
The Group’s committed loan facilities include a change of control clause, which states that a change of control of
the parent Company will be classed as an event of default and would enable the providers at their discretion to
withdraw the facilities.
Shareholder relations
All shareholders are encouraged to participate in the Company’s Annual General Meeting. No shareholder meeting
has been called to discuss any business other than ordinary business at the Annual General Meeting.
The Board complies with the recommendations of the UK Corporate Governance Code that the notice of the Annual
General Meeting and related papers should be sent to shareholders at least twenty working days before the meeting.
The Directors attend the Annual General Meeting. The Chairman and other members of the Board and the Chair of
the Audit Committee and Audit Committee members will be available to answer questions at the forthcoming
Annual General Meeting. In addition, proxy votes will be counted and the results announced after any vote on a
show of hands.
The Chairman ensures that the views of shareholders are communicated to the Board as a whole, ensuring that
Directors develop an understanding of the views of shareholders. Any individual requests for information from
shareholders are dealt with by the Chairman, and where any such requests are subject to restraint in that any
disclosure would give rise to share price sensitive information, then the requests would be declined, or referred
to the Board for release to all shareholders through the Stock Exchange.
Going concern
The Directors, after having reviewed the projections and possible challenges that may lie ahead, believe that,
armed at the time of writing with £74.5 million of committed facility (including £30 million CCFF funds, which are
repayable within one year (see notes 28 and 31), there is a reasonable expectation that the Group has adequate
resources to continue in operational existence for at least twelve months from the date of approval of these
financial statements, and have continued to adopt the going concern basis in preparing the financial statements.
Furthermore, we are pleased to report that the Group has recently completed the refinancing of one of its
significant facilities which was due to retire by 31st December, 2020. In terms of total debt quantum, the refinancing
has given the Group the same funding availability but with proportionally more of the facility moving to committed
five year funding. The Group is also in the final stages of renegotiating a £10 million revolving credit facility which
expires in October 2020. The Directors do not see an issue in renewing these facilities.
The Directors have, as part of this going concern assessment, specifically considered the impact of Covid-19 on
the Group’s operations and in particular have developed a series of in-depth financial models covering at least
twelve months following the approval of the financial statements. The models show the base case (our reasonable
expectation in light of Covid-19), with an alternative scenario that stress tests this base case model for severe
but plausible downside outcomes. Within the base case model, the Directors have considered the current trading
conditions and assumed similar activity levels within the Mechanical Engineering Division as a result of its
workload and assumed the Refractory activity levels may be reduced due to it being more exposed to the global
downturn. We forecast that after 30th April, 2021 activity levels will return to those seen prior to Covid-19 and
growth will return.
Within our severe but plausible downside model, it is demonstrable that the Group has sufficient funds to cover
the Group’s and the Company’s commitments during the forecast period and is forecast to be within its financial
covenants. The model also incorporates various assumptions including the assumption of a series of customer
failures and the failure of a major supplier within the refractory division, the inability to achieve Covid-19 cost
reduction targets and the impact of further lockdowns that last three to six months in Europe, China, India and
Brazil. The failure of a major supplier is modelled to result in three months of business interruption. These
assumptions, whilst plausible, are considered extreme in the Board’s view.
As referred to elsewhere in these financial statements, the Mechanical Engineering Division currently has a record
order book and whilst we have down rated our expectations within this division in our forecasts we would emphasise
that our factories largely remained open during the height of the first phase lockdown and we are not seeing any
issues regarding the suspension of works on these orders. Whilst the Refractory Engineering Division would be
exposed to events such as a second lockdown, as a well-diversified Group, our severe but plausible downside
model clearly demonstrates we are well set to absorb the impact of a protracted Covid-19 resolution.
Consequently, the Directors are confident that the Group and the Company will have sufficient funds to continue
to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial
statements and therefore have prepared the financial statements on a going concern basis.
Viability Statement
In accordance with provision 31 of the Governance Code the Directors have assessed the Group’s viability over
a three year period to 30th April, 2023.
18
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DIRECTORS’ REPORTS
REPORT OF THE DIRECTORS (continued)
Viability Statement (continued)
While the Board has no reason to believe that the Group will not be viable over a longer period, the Board
believes that a three year review period is prudent, and provides the readers of the report with a sensible degree
of confidence.
Following the severe but plausible modelling, disclosed in the above Going Concern note, and given the Group’s
current financial position, and specifically its modest gearing levels allied to committed long-term financing lines
with unutilised headroom, we see ourselves as well placed to deal with adverse events – Covid-19 or otherwise.
With the significant operational workload within the Mechanical Engineering segment underpinning performance
in the short to medium term, the Directors’ are therefore able to confirm that they have a reasonable expectation
that the Group will be able to continue in operation and remain viable over this extended three year period.
Auditor
In accordance with Section 489 of the Companies Act 2006 and the recommendation of the Board of Directors,
a resolution is to be proposed at the Annual General Meeting for the appointment of RSM UK Group LLP as
auditor of the Company.
Approved by the Board of Directors and signed on its behalf by:
T. J. W. Goodwin
Chairman
13th August, 2020
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DIRECTORS’ REPORTS
CORPORATE GOVERNANCE REPORT
Introduction
The Board comprises six Directors and an independent Non-Executive Director; the Audit Committee comprises
the Non-Executive Director, who is the Audit Committee Chair, and three other members, the previous Chairman,
the previous Managing Director and the previous Company Secretary, all of whom had held these positions for
twenty-seven years and have very substantial knowledge and experience of the diversified Group’s people, product
ranges and the very diversified overseas markets in which the Group operates. The Board and the Audit Committee
fulfil the roles required for effective corporate governance and the Board considers that it has the right governance
to execute its strategy to achieve its objectives.
The Board has always felt that it should be recognised that what may be appropriate for the larger company may
not necessarily be so for the smaller company, a point raised previously in the Cadbury Code of Best Practice. Whilst
conscious of its non-compliance with certain aspects of the revised Code as detailed below, we do not believe that
at this stage in the Group’s development and circumstances it is appropriate to change its own operational or
governance structure with the sole objective of achieving compliance with the revised Code given that the Board’s
current corporate governance strategy has been accepted by a large majority of its shareholders.
For the past five years the Company has had one Non-Executive Director who is also the Chair of the Audit
Committee, which has three other members as described above. This is not in full compliance with the revised Code,
but for a small company, due to the limits of time, availability and cost, the Board considers this as an optimum
compromise that is beneficial to shareholders and the Group’s long-term interests. For specific independent expertise
the Board engages independent consultants.
Compliance statement under the UK Corporate Governance Code 2018
The Company is required to report on compliance throughout the year. In relation to all of the provisions except
those mentioned below, the Company complied throughout the period.
As noted in the introduction above, the Group does not comply with aspects of the Code’s requirements under
provisions 11 and 13 and provision 12 in terms of having a senior independent Director. Since 14th April, 2015 a
Non-Executive Director with the role of Chair of the Audit Committee has been appointed. The Group does not
have a Remuneration Committee or a Nominations Committee as required under provisions 32 and 33 and 17.
The roles of the Chairman in running the Board and the Managing Directors in running the Group’s businesses are
well understood. It is not considered necessary to have written job descriptions. This is contrary to provision 14.
The Chairman and Managing Directors do not retire by rotation, which is contrary to provision 18 of the Code.
The Board
During the year, the Board met formally twelve times, and details of attendees at these meetings are set out below:
M. S. Goodwin … … … … 12 out of 12 attended
S. R. Goodwin … … … … 12 out of 12 attended
T. J. W. Goodwin … … … … 12 out of 12 attended
J. Connolly … … … … … 12 out of 12 attended
S. C. Birks … … … … … 11 out of 12 attended
B. R. E. Goodwin … … … … 12 out of 12 attended
J. E. Kelly … … … … … 10 out of 12 attended
The Chairman and Managing Directors do not retire by rotation. With this exception, all Directors retire at the first
Annual General Meeting after their initial appointment and then by rotation at least every three years, which is
contrary to provision 18 of the Code.
The Board retains full responsibility for the direction and control of the Group and, whilst there is no formal schedule
of matters reserved for the Board, all acquisitions and disposals of assets, investments and material capital-related
projects are, as a matter of course, specifically reserved for Board decision.
The Board meets regularly with an agenda to discuss corporate strategy; to formulate and monitor the progress of
business plans for all subsidiaries and to identify, evaluate and manage the business risks faced. The management
philosophy of the Group is to operate its subsidiaries on an autonomous basis, subject to overall supervision and
evaluation by the Board, with formally defined areas of responsibility and delegation of authority. The Group has
formal lines of reporting in place with subsidiary management meeting with the Board on a regular basis.
Regular informal meetings are also held to enable all members of the Board to discuss relevant issues with local
management and staff at the business units.
The Audit Committee
The Audit Committee is made up of the following: J.E. Kelly (Chair), J.W. Goodwin, R.S. Goodwin and P. Ashley and
the Audit Committee reports to the Board. The Audit Committee has met formally eight times since the issue of
the Annual Report for the year ended 30th April, 2019, with all members attending each meeting. The responsibility
of the Audit Committee is explained in the Audit Committee Report on pages 22 to 24. The Audit Committee
takes into account the Company’s corporate Mission Statement, Objectives and Strategy, and reviews investor
correspondence and comments, regulatory changes, current issues and market trends. The Audit Committee uses
expert opinion where considered appropriate.
Board evaluation
The Managing Directors, Chairman and Audit Committee address the development and training needs of the Board
as a whole. An evaluation of the effectiveness and performance of the Board and the Directors of subsidiaries has
20
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DIRECTORS’ REPORTS
CORPORATE GOVERNANCE REPORT (continued)
been carried out by the Managing Directors, Chairman and Audit Committee, by way of personal discussions and
individual performance evaluation.
All Directors have reasonable access to the Company Secretary and to independent professional advice at the
Company’s expense.
External audit
The external auditor is appointed annually at the Annual General Meeting. The Board, following review and
recommendations received from the Audit Committee, considers the appointment of the auditor, and assesses on
an annual basis the qualification, expertise, cost, independence and objectivity of the external auditor. In addition,
the Audit Committee monitors the level of non-audit services provided to the Group by the external auditor to
ensure that their independence is not compromised.
Disclosure of information to auditor
The Directors who held office at the date of approval of this Corporate Governance Report confirm that, so far as
they are each aware, there is no relevant audit information of which the Company’s auditor is unaware; and each
Director has taken all the steps that he or she ought to have taken as a director to make himself or herself aware of
any relevant audit information and to establish that the Company’s auditor is aware of that information.
Internal control and risk management
The Board has overall responsibility for the Group’s systems of internal controls and risk management which are
designed to manage rather than eliminate risk and provide reasonable reassurance against material misstatement
or loss.
The Board has primary responsibility for controlling: operational risks; financial risks including funding and capital
spend; compliance risks; and political risks. The Audit Committee has been delegated responsibility for corporate
reporting, financial risk management and to regularly review the effectiveness of the Group’s internal controls
together with consideration of any reports from the external auditor. The Audit Committee Report is on pages 22
to 24. Except as noted within this Corporate Governance Report, the Board confirms that the internal control
systems comply with the UK Corporate Governance Code.
The Group’s main systems of internal controls includes regular visits and discussions between Board Directors and
subsidiary management, head of legal, health and safety committee and the Group internal auditor, on all aspects
of the business including financial reporting, risk reporting and compliance reporting. In addition, there is Board
representation with Goodwin PLC Directors on the boards of the subsidiaries. Any concerns are reported to the
members of the Audit Committee and to the Board. The Group maintains a risk register, has business continuity
programmes and has insurance programmes that are all regularly reviewed. These procedures have been in place
throughout the year and are ongoing to endeavour to ensure accordance with the FRC publication ‘Risk Management,
Internal Control and Related Financial and Business Reporting'. The Board considers that the close involvement of
Board Directors in all areas of the day to day operations of the Group’s business, including considering reports
from management and discussions with senior personnel throughout the Group, represents the most effective
control over its financial and business risks system, by providing an ongoing process for identifying, evaluating and
managing the principal risks faced by the Group. In particular, authority is limited to Board Directors in key risk
areas such as treasury management, capital expenditure and other investment decisions.
The close involvement of Board Directors in the day-to-day operations of the business ensures that the Board has
the financial and non-financial controls under constant review and so it is not currently considered that formal
Board reviews of these controls would provide any additional benefit in terms of the effectiveness of the Group’s
internal control systems.
The Board recognises the importance of an effective internal audit function to assist with the management and
review of internal controls and business risk. The Group internal auditor continues to make good progress
reviewing internal controls, procedures and accounting systems, though this became more difficult towards the
end of the financial year due to the worldwide Covid-19 pandemic. The Board of Directors and Senior Management
will continue to have close involvement on a day-to-day operational basis and the scope and results of internal
audit work to be performed will be kept under review in the coming year.
The Board considers that certain functions are best carried out by independent external bodies with specific
expertise, who then report to the Board directly or through the Audit Committee.
The Board confirms that it has not been advised of any material failures or weaknesses in the Group’s internal
control systems.
Approved by the Board of Directors and signed on its behalf by:
T. J. W. Goodwin
Chairman
13th August, 2020
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DIRECTORS’ REPORTS
AUDIT COMMITTEE REPORT
The key role of the Audit Committee is to provide confidence in the integrity of the Group’s financial risk management,
internal financial controls and corporate reporting. The Audit Committee, as empowered by the Group’s Board of
Directors, has responsibility for:
1. Reviewing and checking the Group’s full year and half year Accounts and the Annual Report, as presented to
the Audit Committee, to ensure that they are, in their view, fair, appropriate, representative of the Group’s
performance and that they provide the information necessary for shareholders to assess the Group's
performance.
2. Reviewing the Group’s financial and non-financial internal controls and risk management systems and
commenting on whether they are relevant and effective.
3. Making recommendations to the Group’s Board of Directors on the appointment and remuneration of the
Group’s external auditor; ensuring independence of the auditor; the effectiveness of the audit process; and
that the Group receives value for money from the audit.
4. Reviewing comments and feedback brought to its attention by Directors or other employees of the Group.
5. Reviewing the Group’s “whistle-blowing” procedures and reviewing any significant reports.
6. Reviewing the scope of work for the internal audit function and the resultant reports.
7. Reviewing significant accounting estimates and judgements relating to the financial statements with the
external auditor and members of the Board.
The Audit Committee discharges each of its above responsibilities as follows:
1. Examining the integrity of the Group’s Annual Report and half year Interim Report:
The Chair of the Audit Committee is an independent Non-Executive Director. The other members of the committee
either are persons with experience in the Group’s typical products and or markets or have historical knowledge
of the business and activities of the Group. Regular meetings are held between members of the Audit Committee,
Directors of Goodwin PLC and its subsidiaries, General Managers and Senior Management of the UK subsidiaries.
Members of the Audit Committee are involved in regular discussions with the Directors, General Managers and
Senior Management of each subsidiary where the positions taken on subjective financial matters are discussed.
Each overseas subsidiary is normally visited at least once during the year by a member of the Audit Committee,
and / or by a Main Board Director, for meetings with the General Managers and Senior Management with
reports sent back to the Audit Committee. However, in the current circumstances of flight and self-quarantining
restrictions, this has not been possible since March 2020 but extensive use of Zoom has enabled regular meetings
to continue with our overseas factories. Any areas where the Audit Committee feels that the positions taken
within any particular subsidiary are either inappropriate or merit further discussion are documented for further
discussion by the Board of Directors of Goodwin PLC.
For the half year Interim Report, the Audit Committee reviews the financial and non-financial content, including
the Chairman’s Statement, and reviews the financial statements and qualitative notes of the financial statements,
to help ensure that they are balanced, relevant, appropriately compliant with relevant accounting standards/
legislation, and are consistent and complete. The Audit Committee reports to the Board of Directors their views
as to whether the half year Interim Report, taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group’s half year performance. The figures in the
half year Interim Report are not audited, but the external auditor is given sight of these before publication.
For the full year Annual Report, the Audit Committee reviews the financial and non-financial content of the Group
Strategic Report, including the Chairman’s Statement; the Corporate Governance Report; the Directors’ Report;
the Directors’ Remuneration Policy and Report; and reviews the financial statements and the qualitative notes
to the financial statements to examine whether the content is balanced, relevant, appropriately compliant with
relevant accounting standards / legislation, and are consistent and complete. The Audit Committee has discussed
the full year Annual Report and their views with the Group external auditor. The Audit Committee confirmed
to the Board that in its opinion the proposed Annual Report for the year ended 30th April, 2020 appropriately
represents the Group’s trading position and, taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group’s full year performance, its position at the year
end, and its objectives, strategy and business model.
2. Helping to ensure the Group carries effective and relevant financial and non-financial internal
controls and financial risk management systems:
To assess the effectiveness of systems for internal financial controls, financial reporting and financial risk
management, the Audit Committee reviews reports from Main Board Directors on the Group’s subsidiaries;
reviews reports from the Group Chief Accountant; reviews reports from General Managers of the Group’s
subsidiaries; reviews quarterly financial reports; reviews reports from internal and external audit; requests
and reviews reports from independent external consultants; and reviews the Group’s risk register, business
continuity programmes and levels of insurance.
22
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DIRECTORS’ REPORTS
AUDIT COMMITTEE REPORT (continued)
2020 Audit Committee Risk Programme
The terms of reference for the Audit Committee and how it discharges its duties have been presented to the Board
and ratified.
Risk Management:
As a method of adding formality to the management of risk within all Group companies, Steven Birks, a Goodwin
PLC Director, continues to mentor each subsidiary in enhancing their risk analysis and controls, and reports to
the Audit Committee on this task. Having focussed initially on overseas companies, all subsidiaries in the
Group are now included in the mentoring and areas being scrutinised in detail, other than risks individual to
each company, are:
a) having appropriate limits of contract liability
b) having appropriate levels and types of insurance
c) ensuring appropriate control of cash flow
d) ensuring health and safety continues to be given priority and that there is a progressive plan for improvement
e) ensuring product development and life cycles are managed relative to the global market
f) ensuring that the provision of trained and skilled manpower is appropriately matched to the requirements of
each company
g) risk analysis and preventative measures associated with the installation and commissioning of new plant,
modified plant and new processes.
The Audit Committee continues to review the effectiveness of Know Your Customer (KYC), credit insurance,
political risk insurance and contract terms and conditions. Gallagher have carried out a review of insurance
policies in place at the overseas subsidiaries and it is an ongoing task to consider their comments on any areas
of concern.
Market risk
This remains as stated last year and, upon review, no customer accounts for more than 10% of the annual
Group turnover. The country and sector dependency for the year is shown by the charts on the Company website,
www.goodwin.co.uk.
Technical risk
The performance of new products issued to market always has a degree of risk until a multi-year track record
has been attained. This statement relates to all Group companies in both the Mechanical and Refractory
Engineering Divisions.
Product failure/contract risk
This has been reviewed and is unchanged from that previously stated.
Financial risk
This has been reviewed and is as stated last year with the perceived increased volatility in exchange rates and
the possibility of high foreign exchange hedging costs for forward long-term contracts.
Regulatory compliance
The Audit Committee continues to monitor regulatory compliance, training and competency. The Committee is
aware of the recently enacted Climate Change Act 2008 (2050 Target Amendment) Order 2019 and is reviewing
its impact on the Group.
Human Resources
The age profile of senior managers and perceived skill gaps within each Group company continue to be reviewed
by the Audit Committee. However, due to the current Covid-19 situation no major recruitment initiatives are
taking place.
During the year the Audit Committee continued to monitor the risks posed affecting information security and the
steps taken to minimise these.
The Audit Committee also reviews and comments to the Board on major capital purchases or company acquisi-
tions being proposed by the Board of a unit or linked value greater than £2 million. Gross proposed or actual
capital expenditure of all Group companies is also reviewed to help ensure the Board is aware of how such ex-
penditure will affect the limits agreed to be in place at the time.
The Audit Committee has confirmed its view to the Board that in its opinion, the Group carries relevant internal
controls and risk management systems appropriate to minimise the perceived risks of the Group’s business.
3. The Group’s external auditor
KPMG LLP has been the Group’s auditor for more than twenty years. In line with the recent changes in legislation
with regards to auditor appointments, the Company has now obtained competitive tenders for its audit
services, and has appointed RSM UK Group LLP as its Auditor for the year ending 30th April, 2021 and going
forward subject to shareholders’ approval at the Annual General Meeting. The Audit Committee followed the
guidance set out in the FRC notes on best practice when considering the tenders and recommended this
appointment.
23
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DIRECTORS’ REPORTS
AUDIT COMMITTEE REPORT (continued)
KPMG LLP did not provide non-audit services to the Group during the year. The Company has, for many years
now, used a different accountancy practice to that of the statutory auditor for its UK tax services, which further
enhances both objectivity and independence.
The Audit Committee has met formally with the Group’s external auditor, KPMG LLP, to discuss the full year
Annual Report, and has met with and discussed matters with them as part of the audit process during the
current financial year being reported on. No material concerns were raised during these meetings or
discussions. The Audit Committee was satisfied with the external auditor’s independence and the effectiveness
of the audit process.
As detailed above, the Audit Committee has recommended to the Board to propose a Resolution to confirm the
appointment of new Auditors, RSM UK Group LLP, as the external auditor at the Annual General Meeting on
7th October, 2020.
4. Reviewing comments and feedback
There is regular contact with Directors and employees where open and frank discussion is encouraged.
Shareholders who have asked to visit the Company have done so.
5. Whistle-blowing Procedures
The Group has a whistle-blowing policy in place whereby employees can report any suspected misconduct or
concerns, either anonymously on a dedicated telephone line, or to the Chairman, the Company Secretary or
the external auditor. Such calls are investigated and are reported to the Audit Committee. The Audit Committee
has confirmed to the Board that the Group’s whistle-blowing policy and procedures are appropriate.
6. Internal Audit
The scope of internal audit has been set by the Audit Committee and the results reviewed.
The internal audit function operates a random rotation policy which prioritises based on materiality and
endeavours to cover all Group subsidiaries at least once within a three year cycle either via the Group Internal
Auditor or by the respective Group Managing Directors. Due to Coronavirus, internal audits of our overseas
subsidiaries have been and are frustrated, but the larger profit earning overseas subsidiaries, Noreva, Gold Star
India and Goodwin Pumps India, have been subject to full statutory audit by KPMG Germany and India
respectively. KPMG UK have this year also commissioned KPMG Thailand to perform testing on key balances
at Siam Casting Powders as part of their overall Group coverage for the year end 30th April, 2020 audit. It is
intended that next year in country RSM UK Group LLP auditors will carry out similar audits and testing of the
larger overseas subsidiaries.
7. Covid-19
The Audit Committee considered the likely outcome as far as it could be determined of Covid-19, the measures
put in place in the first week of March 2020 both for our UK companies and also recommendations for our
overseas subsidiaries. The emphasis, other than keeping workers appropriately distanced as well as applying
hand washing/sterilising stations, sending people home should they or a family member in their household
exhibit Covid-19 symptoms, was to keep the factories producing, earning gross margin and conserving cash flow
thereby remaining well within the agreed banking facilities.
8. Accounting estimates and judgements relating to the Financial Statements
The Audit Committee reviewed what it considered to be the accounting estimates and judgement areas
within the Group Annual Report for the year ended 30th April, 2020.
The Audit Committee also took account of the findings of KPMG LLP in relation to their external audit work for
the year.
In particular, the Audit Committee considered the following principal risk area:
The requirements of IFRS 15, have been considered by the Audit Committee. This is seen as a key estimate
/ judgement area for the Audit Committee. Under certain circumstances, IFRS 15 mandates that revenue
and profit be recognised in the profit and loss account before the goods are actually shipped, which may
lead to corrections in subsequent periods. This impacts on companies within our Mechanical Engineering
segment where we have bespoke contracts which carry termination for convenience clauses inclusive of
profit in the event of a customer contract cancellation. The consequence here is that the Standard mandates
that we take profit on our work in progress and show the result as revenue despite the goods not being
shipped. The Audit Committee’s key concern here is the risk that estimates and judgements made in good
faith at the balance sheet date may lead to adjustments in subsequent periods.
J. E. Kelly
Chair of the Audit Committee
13th August, 2020
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DIRECTORS’ REPORTS
DIRECTORS’ REMUNERATION POLICY AND REPORT
This report includes the Group’s Remuneration Policy for Directors and sets out the Annual Directors’ Remuneration
Report.
Group’s Remuneration Policy for Directors
The Group’s policy in respect of Directors’ remuneration is to provide individual packages which are determined
having due regard to the Group’s current and projected profitability, the employee’s specific areas of responsibility
and performance, their related knowledge and experience in the Group’s specific fields of operation, the external
labour market and their personal circumstances whereby a package to remunerate and motivate the individual so
as to best serve the Group is set. Individual salaries are also indirectly linked up and down to the time allocated
and perceived effort by the Director to the Group’s business. Many Directors, as indeed employees, put in hours
of work way beyond what could be requested and such personal devotion to duty by a Director is rewarded
without formulae. All Board members have access to independent advice when considered appropriate.
In forming its policy, consideration has been given to the UK Corporate Governance Code best practice
provisions on remuneration policy, service contracts and compensation and has considered the remuneration
levels of Directors of comparative companies.
The remuneration policy for other employees is broadly based on principles consistent with the policy for
Directors. Salary reviews take into account Group performance as well as subsidiary performance, local pay and
market conditions.
Whilst being aware of the requirements to show in graph form the breakdown of base pay, bonus pay, pension and
long-term benefits, the Group is unable to comply with this requirement as Directors are not paid in accordance
with any specific performance criteria or KPIs. Directors are paid based on their level of activity within the Group,
their knowledge and experience of the Group’s activities or similar, the performance of the Group versus market
opportunity whilst also considering the Director’s personal circumstances and the salary needed to ensure
continuity of employment. This in itself may result in decreases or increases in Director salary within any year as
illustrated in the matrix below.
Operation
Maximum
Reviewed
annually at the
anniversary of the
previous salary
adjustment for
the individual
Director.
Generally in line
with inflation and
the wage/salary
increase awarded
to employees, but
this is not rigid.
Performance
Targets
The Group’s
performance,
good or bad, may
result in the salary
being flexed.
Changes for
2019/2020
The Managing
Director sets the
base increase in
salaries. For the
period May 2019
to April 2020,
the increase was
generally 2.4%.
Following
review of
the half year
and year end
results of the
Company.
60% of salary
N/A
No exceptional
bonuses were
paid this year.
Element of
Pay
Salary
Bonus
Purpose and
Link to Strategy
Reflects the
Directors’ level of
activity and
achievement
within the Group,
their knowledge
and experience of
the Company’s
activities or similar,
the performance
of the Group
versus market
opportunity, whilst
also considering
the salary needed
to ensure continuity
of employment.
No bonus strategy
or incentive is
agreed or
contractual with
any Director.
Should any be
awarded, it is
discretionary and
generally between
0% and 25%, but
with a maximum of
60%, as determined
by the Managing
Directors and audited
by the Chairman.
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DIRECTORS’ REPORTS
DIRECTORS’ REMUNERATION POLICY AND REPORT (continued)
Group’s Remuneration Policy for Directors (continued)
Element of
Pay
Pensions
Other benefits
Purpose and
Link to Strategy
All Directors have
3% added to their
gross remuneration
which, by nature
of salary sacrifice,
is put into a
pension scheme
where they have
direct dealings
with the selected
investment fund
provider.
Fully expensed car
or cash alternative,
health insurance
or other services.
Operation
Maximum
Performance
Targets
Changes for
2019/2020
Monthly
payments
Currently 3%
of gross
remuneration
N/A
N/A
N/A
N/A
No changes.
This policy
was adopted
in October 2013
for the Directors
and entire UK
workforce.
See details of the
Directors’
emoluments on
pages 29 and 30.
We believe the above meets the requirement of Schedule 8, Companies Act 2006, regarding the changes in 2019 /
2020. The Policy and Report is signed by the Chairman and the Managing Directors.
In any company there are specific individual circumstances that on occasions will merit special treatment in a given
year for a Director either to keep or look after the person, indeed no different than we may do for an employee.
In the matrix of remuneration for Directors you will note the Company has given itself flexibility to deal with
specific circumstances which may not even be able to be made public for confidentiality reasons of which there
are many. However, bearing in mind the performance of the Company over the past twenty years and more and
that the Directors’ salaries are anything but excessive versus the norm of other PLCs, this is the Board’s policy.
For reference the TSR of Goodwin PLC versus the FTSE 100 and the FTSE 350 is shown below for not only the last
five but also the last ten years and the last twenty years.
TSR for last 5 Years … … …
TSR for last 10 Years … … …
TSR for last 20 Years … … …
Goodwin
3.5%
137.8%
6,865%
FTSE 100
3.7%
55.4%
90.9%
FTSE 350
4.4%
62.2%
115.4%
The TSR achieved by the Company over the past five years is below the average of the FTSE 100 and FTSE 350.
This has been a feature of exceedingly high growth in the period more than five years ago and the effect of the
global contraction of capital expenditure in the oil, gas and mining industries over the past three years. Over the
past three years the Directors have worked hard to reduce our reliance on the oil and gas market, so in the next
three years the oil and gas market will have a less significant impact on the business. The TSR for the last ten
years and the last twenty years still far outstrips the performance of the FTSE 100 and the FTSE 350.
As is required by the Listing Rules, we show in graph form both the salary of the Managing Director of Goodwin
PLC and the TSR over the past ten years. We, however, do not list out the salary of the Financial Director of
Goodwin PLC versus the TSR as in Goodwin PLC we have a Group Chief Accountant (J. Connolly) who carries out
75% of the duties of a Financial Director and who is also a Director of Goodwin PLC, but we do not have what
would generally be known as a Financial Director. This is for the reason that certain decisions that outsiders might
consider are the sole responsibility of the Financial Director are not. In Goodwin PLC it is a team effort and such
decisions are made not only by the Group Chief Accountant but also by the Managing Directors and the Chairman.
The Company put the Remuneration Policy to the vote of the Annual General Meeting in 2019 when it was passed
by 93.68% of those who voted. The Company will be putting the Remuneration Policy to the vote again in 2022
which is three years from the last vote, as is required by the Listing Rules.
For confidentiality and flexibility reasons, the Board policy is not to disclose exit/termination payments to
Directors but the policy is to remain within the law, to fairly compensate good leavers and minimise payments to
bad leavers. In the last ten years, the Company has managed to avoid paying any termination payments to bad
leavers. It is, however, Board policy to limit termination payments to a maximum of 100% of gross annual salary
and should such amount be exceeded than it will be reported in the Annual Report giving the reason why.
The Company takes seriously its responsibility for ensuring a fair deal between employees, shareholders, customers
and the local community and maintaining an appropriate balance.
The Company does not use or pay any external advisors or consultants for remuneration or incentive policy.
Shareholder engagement is by nature of the Annual Report, the Annual General Meeting and the votes therein.
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DIRECTORS’ REPORTS
DIRECTORS REMUNERATION POLICY AND REPORT (continued)
Annual Directors’ Remuneration Report
This report is submitted in accordance with the Directors’ Remuneration Report Regulations.
Consideration by the Directors of matters relating to Directors’ remuneration
The Company’s Remuneration Policy for Directors is set by the Board as a whole and is described in pages 25 to 26.
The Policy has been followed in the financial year to 30th April, 2020 and will be followed in the next financial year.
The Board of Directors are also the key management personnel as defined in IAS 24.
Service contracts
None of the Directors has a service contract. A Director may resign at any time by notice in writing to the Board.
There are no set minimum notice periods but all Directors other than the Chairman and Managing Directors
are subject to retirement by rotation and as employees also have notice periods in accordance with law.
No compensation as of right is payable to Directors on leaving office.
Relative importance of spend on pay
The table below shows shareholder distributions and total employee expenditure, and the percentage change in both:
Ordinary dividends proposed in respect of the year … … … … …
Total employee costs
Average employee numbers … … … … … … … … …
2020
£’000
6,016
… … … … … … … … … 44,241
1,190
2019
£’000
6,927
41,189
1,082
%
(13.2)%
7.4%
10.0%
Approval of the Company’s Annual Directors’ Remuneration Report
An ordinary resolution for the approval of the Annual Directors’ Remuneration Report will be put to shareholders
at the forthcoming Annual General Meeting. The Annual Directors’ Remuneration Report presented in the accounts
to 30th April, 2019 was put to the shareholders at last year’s Annual General Meeting on 2nd October, 2019. The
Annual Directors’ Remuneration Report was accepted with 93.69% of proxy votes cast in favour.
Total shareholder return – unaudited
The following graphs compare the Group’s total shareholder return over the ten and twenty years ended
30th April, 2020 with various FTSE indices. The graphs also show the change in the earnings of the previous
Managing Director for the periods up to 30th April, 2019.
The base earnings figure used in the graphs for 30th April, 2020 is the amount each Managing Director earned in
the year.
2016
£’000
2017
£’000
2018
£’000
2019
£’000
2020
£’000
369
368
385
397
310
Total payroll costs have increased by 7.4% which is a reflection of the average employee numbers having
increased by 108 (10%) over the course of the year. During the year, the base increase awarded to employees in
the UK companies was 2.4%.
The following graphs have not been audited.
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DIRECTORS REMUNERATION POLICY AND REPORT (continued)
Annual Directors’ Remuneration Report (continued)
DIRECTORS’ REPORTS
The increase in the Goodwin PLC share price since 2000 plus dividends re-invested would mean that £1.00 invested
in 2000 by the 30th April, 2020 would be worth £69.65. The increase in the share price since 2010 plus dividends
re-invested would mean that £1.00 invested in 2010 would at 30th April, 2020 be worth £2.38.
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DIRECTORS’ REPORTS
DIRECTORS REMUNERATION POLICY AND REPORT (continued)
Annual Directors’ Remuneration Report (continued)
The auditors are required to report on the following information contained in this section of the Annual Directors’
Remuneration Report.
Directors’ interests in the share capital of the Company as well as Audit Committee members /
ex Directors – audited
The interests of the Directors in the share capital of the Company at the beginning and end of the financial year
were as follows:
Number of 10p ordinary shares
30th April
30th April
2019
2020
Beneficial
M. S. Goodwin … … … … …
S. R. Goodwin … … … … …
T. J . W. Goodwin… … … … …
J. Connolly
… … … … …
… … … … …
S. C. Birks
B. R. E. Goodwin … … … … …
J. W. Goodwin* … … … … …
R. S. Goodwin* … … … … …
J. W. Goodwin and R.S. Goodwin* … …
J. W. Goodwin and R.S. Goodwin* … …
…
…
…
…
…
…
…
…
…
…
64,034
82,247
112,868
7,622
200
42,501
40,986
11,656
2,129,153
1,393,592
62,653
80,866
118,487
1,222
200
30,120
31,586
2,256
2,129,153
1,361,486
Non-beneficial
J. W. Goodwin* and E. M. Goodwin
…
…
14,166
14,166
There have been no changes in the Directors’ interests between 30th April, 2020 and 13th August, 2020.
* Audit committee member but not Director
Details of individual emoluments and compensation – audited
The following parts of the Remuneration Report are subject to audit.
Single Total Figure Table
Year ended 30th April, 2020
Salary
M. S. Goodwin … … … … … … …
S. R. Goodwin … … … … … … …
T. J. W. Goodwin … … … … … … …
J. Connolly… … … … … … … …
S. C. Birks … … … … … … … …
B. R. E. Goodwin … … … … … … …
J. E. Kelly … … … … … … … …
2020
£’000
275
275
177
199
117
140
-
Benefits
Non-Exec
in kind Director’s
fees
2020
£‘000
-
-
-
-
-
-
63
2020
£’000
25
25
11
36
25
11
-
Pension
contrib-
utions
2020
£’000
10
10
6
6
4
5
-
Total
2020
£’000
310
310
194
241
146
156
63
Total … … … … … … … … 1,183
133
63
41
1,420
Single Total Figure Table
Year ended 30th April, 2019
Salary
Benefits
in kind
2019
£’000
J. W. Goodwin … … … … … 337
R. S. Goodwin … … … … … 339
J. Connolly … … … … … … 204
M. S. Goodwin … … … … … 219
S. R. Goodwin … … … … … 210
S. C. Birks … … … … … … 116
B. R. E. Goodwin … … … … … 123
T. J. W. Goodwin … … … … … 132
-
J. E. Kelly … … … … … …
Total
… … … … … … 1,680
2019
£’000
49
47
29
25
16
23
11
11
-
211
29
Non-Exec
Director’s
fees
2019
£’000
-
-
-
-
-
-
-
-
52
Pension
contrib-
utions
2019
£’000
11
11
6
7
7
4
4
4
-
Sub-
total
2019
£’000
397
397
239
251
233
143
138
147
52
LTIP*
Total
2019
£’000
1,940
1,940
1,940
1,940
1,940
1,940
1,940
1,940
-
2019
£’000
2,337
2,337
2,179
2,191
2,173
2,083
2,078
2,087
52
52
54
1,997
15,520
17,517
59585 Goodwin Directors Report 2020.qxp_Layout 1 19/08/2020 13:55 Page 32
DIRECTORS’ REPORTS
DIRECTORS REMUNERATION POLICY AND REPORT (continued)
Annual Directors’ Remuneration Report (continued)
Details of individual emoluments and compensation – audited (continued)
* The LTIP column relates to the vesting of the 2016 Equity Long Term Incentive Plan award on 1st May, 2019, based
on the ten year performance ended 30th April, 2019. As required by reporting rules, the values in the April 2019
column are calculated on the actual value of vesting of the performance award in April 2019, using the average share
price of £31.70 on the 30th April, 2019 and an opening share price on 1st May, 2019 of £32.38. The value attributed
for each Director cannot be taken all in year one, and by the rules of the LTIP scheme, any Director must take the
value over a three to five year period, with no more than one third of the value taken in any one calendar year.
Benefits in kind consist of the provision of a fully expensed car, a cash alternative scheme, healthcare insurance
or other services.
Equity Long Term Incentive plan (LTIP) – Vested Share Options – audited
Awarded
Under the Long-Term Incentive Plan (LTIP) for the Executive Directors, that was approved at the Annual General
Meeting on 5th October, 2016, the 2016 LTIP target was partially met, vesting 85% of the awards granted, entitling
each of the sitting eight Directors to 61,200 shares (17 x 3,600 = 61,200).
Exercised
In the year ending 30th April, 2020 each Director exercised 20,400 share options, increasing the total share capital
by 163,200 to 7,363,200. The value awarded for each Director cannot be taken all in year one, and by the rules of
the LTIP scheme, any Director must take the value over a three to five year period, with no more than one third
of the value taken in any one calendar year.
The aggregate share options remaining to be exercised amount to 326,400.
The Company has no follow-on LTIP incentive plans in place or proposed.
Pay Ratio of Managing Directors
This year, for the first time, in accordance with the Pay Ratio Regulations we are disclosing the comparison of our
Managing Directors’ pay with that of our average UK employees. It was felt appropriate that the Managing
Directors’ pay was used in the comparison as we do not have what is generally known as a Chief Executive Officer.
For the year ending 30th April, 2020 the pay for both the Managing Directors in the Single Total Pay Figure table is
the same. If the figures are different in any subsequent year, the higher of the two figures will be used in the ratio
pay comparison section.
We have opted for Option A of the pay ratio regulations as this is the preferred option under the regulations and also
provides the most accurate data. The table below shows our Managing Directors’ pay ratio at the 25th, median and
75th percentile of our UK employees as at 30th April, 2020:
Financial
Year
2020 ratios
MD
Mechanical
Engineering
M. S. Goodwin
MD
Refractory
Engineering
S. R. Goodwin
Method
25th
percentile
pay ratio
Median
pay ratio
75th
percentile
pay ratio
2020 total pay £’000
310
310
25
Option A
12:1
10:1
32
7:1
45
Notes:
1. Total pay has been calculated for each employee and, where applicable, prorated to calculate full-time
equivalent pay. It includes payments that are taxable plus any employer pension contributions.
2. We offer competitive and fair rates of pay for all our UK employees taking into account personal circumstances.
Total pension entitlements – unaudited
In line with the Government’s requirements the Group administers a pension scheme for all UK employees
including Directors. Under this Auto Enrolment Pension arrangement each Director has an amount of 3% of gross
remuneration paid into a pension scheme where they have direct dealings with the selected investment fund
provider. The employee also contributes a minimum of 4% of remuneration to his / her fund. The pension
contributions are to defined contribution pension schemes which are independent of the Company.
The Company has no obligations to make any payments in relation to pensions when a Director leaves service by
nature of removal from office, resignation or retirement.
The Annual Directors’ Remuneration Report was approved by the Board on 13th August, 2020 and is signed on
its behalf by:
T. J. W. Goodwin
Director
M. S. Goodwin
Director
S. R. Goodwin
Director
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DIRECTORS’ REPORTS
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE
ANNUAL REPORT AND THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report and the Group and parent Company financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company financial statements for each financial
year. Under that law they are required to prepare the Group financial statements in accordance with International
Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU) and applicable law
and have elected to prepare the parent Company financial statements in accordance with UK Accounting Standards,
including FRS 101 Reduced Disclosure Framework.
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 affairs of the Group and parent Company and of their profit or loss for that period.
In preparing each of the Group and parent Company financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant, reliable and prudent;
• for the Group financial statements, state whether they have been prepared in accordance with IFRSs as adopted
by the EU;
• for the parent Company financial statements, state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and explained in the parent Company financial statements;
• assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company
or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006.
They are responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error, and have general responsibility
for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that complies with that
law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the Directors’ Report and Accounts
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
• the Group Strategic Report includes a fair review of the development and performance of the business and the
position of the Issuer and the undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
We consider the Directors Report and Accounts, taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess the Group’s position and performance, business
model and strategy.
T. J. W. Goodwin
Director
M. S. Goodwin
Director
S. R. Goodwin
Director
13th August, 2020
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INDEPENDENT AUDITOR’S REPORT
to the members of
Goodwin PLC
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FINANCIAL STATEMENTS
GOODWIN PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
for the year ended 30th April, 2020
CONTINUING OPERATIONS
Revenue … … … … … … … … … …
4, 5
144,512
Cost of sales
… … … … … … … … …
(109,743)
Notes
2020
£’000
GROSS PROFIT… … … … … … … … … …
Other income
… … … … … … … … …
6
Distribution expenses … … … … … … … …
Administrative expenses
… … … … … … …
34,769
690
(2,792)
(19,809)
2019
£’000
127,046
(86,414)
40,632
-
(3,016)
(21,205)
OPERATING PROFIT … … … … … … … … …
12,858
16,411
Financial expenses
… … … … … … … …
Share of profit of associate companies … … … … …
PROFIT BEFORE TAXATION
… … … … … … …
Tax on profit
… … … … … … … … …
8
15
6
9
(809)
66
(234)
233
12,115
(3,775)
16,410
(3,963)
PROFIT AFTER TAXATION… … … … … … … …
8,340
12,447
ATTRIBUTABLE TO:
Equity holders of the parent … … … … … … …
Non-controlling interests
… … … … … … …
7,866
474
11,505
942
PROFIT FOR THE YEAR … … … … … … … …
8,340
12,447
BASIC EARNINGS PER ORDINARY SHARE
… … … …
DILUTED EARNINGS PER ORDINARY SHARE … … … …
10
10
107.93p
159.79p
103.31p
149.65p
The notes on pages 48 to 98 form part of these financial statements.
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FINANCIAL STATEMENTS
GOODWIN PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30th April, 2020
PROFIT FOR THE YEAR … … … … … … … … …
2020
£’000
8,340
2019
£’000
12,447
OTHER COMPREHENSIVE EXPENSE
ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS:
Foreign exchange translation differences … … … … … …
(1,007)
Goodwill arising from purchase of non-controlling interest in subsidiaries
Effective portion of changes in fair value of cash flow hedges
… …
Change in fair value of cash flow hedges transferred to profit or loss
…
Effective portion of changes in fair value of cost of hedging … … …
Change in fair value of cost of hedging transferred to profit or loss … …
Tax credit on items that may be reclassified subsequently to profit or loss
(72)
(355)
522
(843)
395
77
(383)
(772)
(644)
180
(489)
49
154
OTHER COMPREHENSIVE EXPENSE FOR THE YEAR, NET
OF INCOME TAX
… … … … … … … … … …
(1,283)
(1,905)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR … … … …
7,057
10,542
ATTRIBUTABLE TO:
Equity holders of the parent … … … … … … … …
Non-controlling interests
… … … … … … … …
6,587
470
7,057
9,528
1,014
10,542
The notes on pages 48 to 98 form part of these financial statements.
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FINANCIAL STATEMENTS
GOODWIN PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30th April, 2020
Share-
Trans-
based
lation payment
reserve
£’000
reserve
£’000
Share
capital
£’000
Cash
flow Cost of
hedge hedging Retained
reserve earnings
£’000
reserve
£’000
£’000
Total
attributable
to equity
Non-
holders of controlling
interests
the parent
£’000
£’000
Total
equity
£’000
YEAR ENDED
30TH APRIL, 2020
Balance at 1st May, 2019 …
720
1,044
4,991
(573)
(426) 99,409
105,165
4,126 109,291
Total comprehensive income:
Profit … … … …
Other comprehensive income:
Foreign exchange translation
differences … … …
Goodwill arising from purchase
of NCI interest in subsidiaries
Net movements on cash flow
hedges … … … …
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR
-
-
-
-
-
Issue of shares … … …
16
Tax on equity-settled share-based
payment transactions …
Dividends paid … … …
Acquisition of NCI without
a change of control … …
Disposal of subsidiary
…
Reclassification
… …
-
-
-
-
-
-
(964)
-
-
(964)
-
-
-
-
(77)
358
-
-
-
-
-
-
253
-
-
-
-
-
-
-
-
-
-
7,866
7,866
474
8,340
-
(964)
(43)
(1,007)
(72)
(72)
-
(72)
74
(317)
-
(243)
39
(204)
74
(317)
7,794
6,587
470
7,057
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16
253
(6,927)
(6,927)
-
-
-
16
253
(6,927)
-
-
(358)
-
(77)
-
(11)
-
-
(11)
(77)
-
BALANCE AT
30TH APRIL, 2020
736
361
5,244
(499)
(743) 99,918
105,017
4,585 109,602
The notes on pages 48 to 98 form part of these financial statements.
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FINANCIAL STATEMENTS
GOODWIN PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30th April, 2020
Share-
Trans-
based
lation payment
reserve
£’000
reserve
£’000
Share
capital
£’000
Cash
flow Cost of
hedge hedging Retained
reserve earnings
£’000
reserve
£’000
£’000
Total
attributable
to equity
Non-
holders of controlling
interests
the parent
£’000
£’000
Total
equity
£’000
YEAR ENDED
30TH APRIL, 2019
Balance at 1st May, 2018 …
720
1,879
1,625
(224)
-
95,568
99,568
5,259 104,827
Adjustment on initial application
of IFRS 9 (net of tax)
…
Adjustment on initial application
of IFRS 15 (net of tax) …
ADJUSTED BALANCE
AT 1ST MAY, 2018
Total comprehensive income:
Profit … … … …
Other comprehensive income:
Foreign exchange translation
differences … … …
Goodwill arising from purchase
of NCI interest in subsidiaries
Net movements on cash flow
hedges … … … …
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR
Equity-settled share-based
payment transactions …
Tax on equity-settled share-based
payment transactions …
Dividends paid … … …
Acquisition of NCI without
a change of control … …
Disposal of equity
investments
… …
Acquisition of subsidiary
with NCI
… … …
Capital contribution … …
BALANCE AT
30TH APRIL, 2019
-
-
-
-
-
-
52
-
(52)
-
-
-
-
-
(684)
(684)
(350)
(1,034)
720
1,879
1,625
(172)
(52) 94,884
98,884
4,909 103,793
-
-
-
-
-
-
-
-
-
-
-
-
-
(430)
(180)
-
(610)
-
-
-
(225)
-
-
-
-
-
-
1,220
2,146
-
-
-
-
-
11,505
11,505
942
12,447
-
-
-
-
-
-
-
(430)
(592)
(772)
47
-
25
(383)
(772)
(750)
(401)
(374)
-
(775)
(401)
(374) 10,913
9,528
1,014 10,542
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,126)
-
-
-
(262)
1,220
2,146
(6,126)
-
-
1,220
2,146
(451)
(6,577)
-
(1,750)
(1,750)
(225)
-
(262)
-
(225)
142
262
142
-
720
1,044
4,991
(573)
(426) 99,409
105,165
4,126 109,291
The notes on pages 48 to 98 form part of these financial statements.
45
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GOODWIN PLC
CONSOLIDATED BALANCE SHEET
at 30th April, 2020
NON-CURRENT ASSETS
… … … … … … …
Property, plant and equipment
… … … … … … … …
Right-of-use assets
Investment in associates
… … … … … … … …
Intangible assets… … … … … … … … … …
Derivative financial assets … … … … … … … …
Other financial assets at amortised cost … … … … … …
CURRENT ASSETS
Inventories… … … … … … … … … … …
Contract assets … … … … … … … … … …
Trade receivables and other financial assets … … … … …
… … … … … … … … …
Other receivables
Derivative financial assets … … … … … … … …
Cash and cash equivalents … … … … … … … …
FINANCIAL STATEMENTS
Notes
12
13
15
16
28
18
17
5
18
19
28
20
2020
£’000
69,626
5,343
816
24,695
749
252
101,481
44,887
6,558
24,486
4,566
456
9,840
90,793
2019
£’000
74,106
-
739
22,354
-
505
97,704
50,524
3,698
24,964
2,715
195
9,640
91,736
TOTAL ASSETS … … … … … … … … … …
192,274
189,440
CURRENT LIABILITIES
Bank overdrafts and interest-bearing loans
… … … … …
Lease liabilities … … … … … … … … … …
Contract liabilities
… … … … … … … … …
Trade payables and other financial liabilities … … … … …
Other payables … … … … … … … … … …
Deferred consideration… … … … … … … … …
Derivative financial liabilities … … … … … … … …
Liabilities for current tax
… … … … … … … …
Warranty provision … … … … … … … … …
NON-CURRENT LIABILITIES
Interest-bearing loans … … … … … … … … …
Lease liabilities … … … … … … … … … …
Derivative financial liabilities … … … … … … … …
Warranty provision … … … … … … … … …
Deferred tax liabilities … … … … … … … … …
TOTAL LIABILITIES… … … … … … … … … …
21
13
5
22
23
24
28
25
21
13
28
25
26
13,141
1,483
18,965
23,485
3,298
-
1,071
1,873
160
63,476
14,260
1,339
202
324
3,071
19,196
82,672
9,259
939
18,002
20,570
4,771
204
1,693
2,356
261
58,055
19,322
1,164
-
232
1,376
22,094
80,149
NET ASSETS … … … … … … … … … … …
109,602
109,291
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
Share capital … … … … … … … … … …
Translation reserve … … … … … … … … …
Share-based payments reserve … … … … … … …
… … … … … … … …
Cash flow hedge reserve
… … … … … … … …
Cost of hedging reserve
… … … … … … … … …
Retained earnings
27
736
361
5,244
(499)
(743)
99,918
720
1,044
4,991
(573)
(426)
99,409
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
105,017
105,165
NON-CONTROLLING INTERESTS … … … … … … …
4,585
4,126
TOTAL EQUITY
… … … … … … … … … …
109,602
109,291
These financial statements were approved by the Board of Directors on 13th August, 2020, and signed on its
behalf by:
T. J. W. Goodwin
Director
Company Registration Number: 305907
M. S. Goodwin
Director
S. R. Goodwin
Director
The notes on pages 48 to 98 form part of these financial statements.
46
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FINANCIAL STATEMENTS
GOODWIN PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30th April, 2020
2020
£’000
2020
£’000
2019
£’000
2019
£’000
CASH FLOW FROM OPERATING ACTIVITIES
Profit from continuing operations after tax
… … … …
Adjustments for:
Depreciation of property, plant and equipment … … …
Depreciation of right-of-use assets … … … … …
Amortisation and impairment of intangible assets
… …
… … … … … … …
Financial expenses
Foreign exchange losses
… … … … … …
Loss on sale of property, plant and equipment … … …
Profit on disposal of subsidiary
… … … … …
Share of profit of associate companies … … … …
Equity-settled share-based provision
… … … …
… … … … … … … …
Tax expense
OPERATING PROFIT BEFORE CHANGES IN WORKING
CAPITAL AND PROVISIONS
Decrease / (increase) in inventories … … … … …
(Increase) / decrease in contract assets … … … …
Increase in trade and other receivables … … … …
Increase in contract liabilities … … … … … …
Increase in trade and other payables… … … … …
Increase in unhedged derivative balances … … … …
CASH GENERATED FROM OPERATIONS
Interest paid
… … … … … … … …
Interest element of finance lease obligations … … …
Interest element of operating lease obligations … … …
Corporation tax paid … … … … … … …
NET CASH FROM OPERATING ACTIVITIES
… … …
8,340
5,874
827
1,328
809
203
52
(172)
(66)
-
3,775
20,970
4,748
(2,863)
(2,549)
874
2,310
(980)
22,510
(747)
(41)
(56)
(2,493)
19,173
12,447
5,571
248
1,312
234
66
13
-
(233)
1,220
3,963
24,841
(11,816)
1,361
(4,288)
3,401
1,965
(579)
14,885
(524)
(64)
-
(3,093)
11,204
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
…
Acquisition of property, plant and equipment … … …
Additional investment in existing subsidiaries … … …
Acquisition of controlling interest in associates net
of cash acquired… … … … … … … …
… … … … …
Acquisition of intangible asset
Development expenditure capitalised
… … … …
Dividends received from associate companies … … …
139
(6,062)
(83)
-
(1,855)
(1,105)
-
142
(11,451)
(2,668)
(425)
(315)
(1,500)
1,254
NET CASH OUTFLOW FROM INVESTING ACTIVITIES … …
(8,966)
(14,963)
CASH FLOWS FROM FINANCING ACTIVITIES
…
Payment of capital element of finance lease obligations
Payment of capital element of operating lease liabilities
…
Issue of shares … … … … … … … …
Proceeds from new finance leases … … … … …
Dividends paid … … … … … … … …
… … …
Dividends paid to non-controlling interests
… …
Net proceeds from loans and committed facilities
(954)
(509)
16
102
(6,927)
-
7,556
(911)
-
-
424
(6,126)
(451)
8,337
NET CASH (OUTFLOW) / INFLOW FROM FINANCING ACTIVITIES
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of year … … …
… …
Effect of exchange rate fluctuations on cash held
CASH AND CASH EQUIVALENTS AT END OF YEAR (see note 20)
The notes on pages 48 to 98 form part of these financial statements.
(716)
9,491
493
(535)
9,449
1,273
(2,486)
2,900
79
493
47
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NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies
Goodwin PLC (the “Company”) is incorporated in England and Wales.
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as
the “Group”) and equity account the Group’s interest in associates. The parent Company financial statements
present information about the Company as a separate entity and not about its Group.
The Group’s financial statements have been approved by the Directors and prepared in accordance with
International Financial Reporting Standards as adopted by the European Union (EU). The Company has elected
to prepare its financial statements in accordance with Financial Reporting Standard (FRS) 101 issued in the UK.
These are presented on pages 87 to 98.
The accounting policies set out below have been applied consistently to all periods presented in these Group
financial statements, with the exception of leases. The Group’s new policy for leases is outlined below and
the impact of the change is explained in note 3.
Judgements made by the Directors, in the application of these accounting policies that have significant effect on
the financial statements and estimates with a significant risk of material adjustment in the next year are discussed
in note 2.
With the current level of order input, the opportunity for continued profitability remains good for the next twelve
months. The impact of working capital requirements on our banking facilities given the expected level of activity
and capital spend commitments will continue to be monitored and managed. After reviewing the situation, the
Directors have a reasonable expectation that the Group has adequate resources to continue in operational
existence for twelve months from the date of approval of these financial statements and have continued to
adopt the going concern basis in preparing the financial statements. Going concern and viability of the Group
are discussed in detail within the Report of the Directors on pages 18 to 19 within these financial statements.
New IFRS standards and interpretations adopted during 2020
In 2020 the following amendments had been endorsed by the EU, became effective and were, therefore,
mandated to be adopted by the Group:
•
•
IFRS 16 - Leases (effective for annual periods beginning on or after 1st January, 2019)
Amendments to IFRS 9 – Prepayment Features with Negative Compensation (effective for annual periods
beginning on or after 1st January, 2019)
IFRIC Interpretation 23 – Uncertainty over Income Tax Treatments (effective for annual periods beginning
on or after 1st January, 2019)
Amendments to IAS 28 – Long-term Interests in Associates and Joint Ventures (effective for annual periods
beginning on or after 1st January, 2019)
Annual Improvements to IFRSs – 2015-2017 Cycle – minor amendments to IFRS 3, IFRS 11, IAS 12 and
IAS 23 (effective for annual periods beginning on or after 1st January, 2019)
•
•
•
The adoption of IFRS 16 is discussed in note 3. The implementation of all the other standards and amendments
has not had a material impact on the Group’s financial statements.
Measurement convention
The financial statements are rounded to the nearest thousand pounds. The financial statements are based on
the historical cost basis except where the measurement of balances at fair value is required as below.
Going concern
The Directors, after having reviewed the projections and possible challenges that may lie ahead, believe that,
armed at the time of writing with £74.5 million of committed facility (including £30 million CCFF funds, which are
repayable within one year (see notes 28 and 31), there is a reasonable expectation that the Group has adequate
resources to continue in operational existence for at least twelve months from the date of approval of these
financial statements, and have continued to adopt the going concern basis in preparing the financial statements.
Furthermore, we are pleased to report that the Group has recently completed the refinancing of one of its
significant facilities which was due to retire by 31st December, 2020. In terms of total debt quantum, the
refinancing has given the Group the same funding availability but with proportionally more of the facility moving
to committed five year funding. The Group is also in the final stages of renegotiating a £10 million revolving
credit facility which expires in October 2020. The Directors do not see an issue in renewing these facilities.
The Directors have, as part of this going concern assessment, specifically considered the impact of Covid-19 on
the Group’s operations and in particular have developed a series of in-depth financial models covering at least
twelve months following the approval of the financial statements. The models show the base case (our
reasonable expectation in light of Covid-19), with an alternative scenario that stress tests this base case model
for severe but plausible downside outcomes. Within the base case model, the Directors have considered the
current trading conditions and assumed similar activity levels within the Mechanical Division as a result of its
workload and assumed the Refractory activity levels may be reduced due to it being more exposed to the
global downturn. We forecast that after 30th April, 2021 activity levels will return to those seen prior to Covid-19
and growth will return.
Within our severe but plausible downside model, it is demonstrable that the Group has sufficient funds to
cover the Group’s and the Company’s commitments during the forecast period and is forecast to be within its
48
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NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies (continued)
Going concern (continued)
financial covenants. The model also incorporates various assumptions including the assumption of a series of
customer failures and the failure of a major supplier within the refractory division, the inability to achieve
Covid-19 cost reduction targets and the impact of further lockdowns that last three to six months in Europe, China,
India and Brazil. The failure of a major supplier is modelled to result in three months of business interruption.
These assumptions, whilst plausible, are considered extreme in the Board’s view.
As referred to elsewhere in these financial statements, the Mechanical Engineering Division currently has a record
order book and whilst we have down rated our expectations within this division in our forecasts we would
emphasise that our factories largely remained open during the height of the first phase lockdown and we are not
seeing any issues regarding the suspension of works on these orders. Whilst the Refractory Engineering Division
would be exposed to events such as a second lockdown, as a well-diversified Group, our severe but plausible
downside model clearly demonstrates we are well set to absorb the impact of a protracted Covid-19 resolution.
Consequently, the Directors are confident that the Group and the Company will have sufficient funds to continue
to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial statements
and therefore have prepared the financial statements on a going concern basis.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or
indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power over the entity. The financial statements
of subsidiaries are included in the consolidated financial statements from the date that control commences
until the date that control ceases.
Associates are those entities in which the Group has significant influence, but not control, over the financial and
operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent
of the voting power of another entity. Associates are accounted for using the equity method and are initially
recognised at cost. The Group's investment includes goodwill identified on acquisition, net of any accumulated
impairment losses. The consolidated financial statements include the Group's share of the total recognised
income and expense and equity movements of equity accounted investees, from the date that significant
influence commences until the date that significant influence ceases. When the Group's share of losses
exceeds its interest in an equity accounted investee, the Group's carrying amount is reduced to nil and
recognition of further losses is discontinued except to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf of an investee.
Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at
the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in
foreign currencies at the balance sheet date are translated at the foreign exchange rate ruling at that date. Foreign
exchange differences arising on translation are recognised in the statement of profit or loss within operating
profit.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling
at the dates the fair value was determined.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
consolidation, are translated to Sterling at foreign exchange rates ruling at the balance sheet date. The revenues
and expenses of foreign operations are translated at an average rate for the period where this rate approximates
to the foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from the translation of foreign operations are taken directly to the translation
reserve. They are released into the statement of profit or loss upon disposal of the foreign operation.
Financial instruments
Measurement
Trade receivables, which do not contain a significant financing component, are measured, initially, at the
transaction price. All other financial assets and liabilities are measured at fair value, on initial recognition.
Non-derivative financial assets are measured subsequently at amortised cost if the objective is to hold them
to collect contractual cash flows and their contractual terms include cash flows on specified dates, which are
payments of principal and interest.
Principal non-derivative financial assets and liabilities
Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary
course of business. They are recognised initially at the amount of consideration that is unconditional.
49
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NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies (continued)
Financial instruments (continued)
Principal non-derivative financial assets and liabilities (continued)
Trade receivables (continued)
Trade receivables are held with the intention of collecting the contractual cash flows and are measured
subsequently, therefore, at amortised cost.
Other receivables
Other receivables principally comprise short-term tax balances and a loan to an associate company. Interest
is charged at commercial rates on long-term balances. After being recognised initially at fair value, other
receivables are measured, subsequently, at amortised cost. The carrying amount of other receivables is
considered to be a reasonable approximation of their fair value.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, together with cash deposits with an original
maturity of three months or less. Included with cash and cash equivalents, for the cash flow statement
only, are bank overdrafts, which are repayable on demand and form an integral part of the Group’s cash
management.
Bank borrowings
Interest-bearing bank loans and overdrafts are measured initially at their fair value less attributable transaction
costs. They are carried, subsequently, at amortised cost and finance charges are recognised in the statement
of profit or loss over the contract term, using an effective rate of interest.
Trade and other payables
Trade and other payables are recognised initially at fair value, and are subsequently reported at amortised cost.
Impairment
The Group has elected to measure loss allowances for trade receivables and contract assets at an amount
equal to lifetime expected credit losses (ECLs). Specific impairments are made when there is a known
impairment need against trade receivables and contract assets. When estimating ECLs, the Group assesses
reasonable, relevant and supportable information, which does not require undue cost or effort to produce.
This includes quantitative and qualitative information and analysis, incorporating historical experience,
informed credit assessments and forward-looking information. Loss allowances are deducted from the
gross carrying amount of the assets. Where material, impairment losses related to trade and other
receivables, including contract assets, are disclosed separately in the statement of profit or loss.
Derivative financial assets and liabilities
Derivative financial assets and liabilities are recognised at fair value. The fair value of forward exchange
contracts is equal to the present value of the difference between the contractual forward price and the current
forward price for the residual maturity of the contract adjusted for counterparty credit risk. The recognition
of the gain or loss on re-measuring to fair value those forward exchange contracts, which are used for hedging,
is outlined below; for other forward exchange contracts, the gain or loss is recognised in the profit or loss.
Fair value derivation
IFRS 7 requires that the classification of financial instruments at fair value be determined by reference to the
source of inputs used to derive the fair value. This classification uses the following three-level hierarchy:
Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 — inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices);
Level 3 — inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair value of derivative financial assets and liabilities is derived using level 2 inputs.
Cash flow hedges
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised
asset or liability, or a highly probable forecast transaction, the effective part of any gain or loss on the derivative
financial instrument is recognised directly in the hedging reserve. Under the new general hedge accounting
model in IFRS 9, our hedge relationships are aligned with our risk management objectives and strategy, resulting
in a more qualitative and forward-looking approach in ensuring hedge effectiveness.
For cash flow hedges, the associated cumulative gain or loss on the relevant derivative financial instrument is
removed from equity and recognised in the statement of profit or loss in the same period or periods during which
the hedged forecast transaction affects the statement of profit or loss. Any identified ineffective portion of the
hedge is recognised immediately in the statement of profit or loss. Only the change in spot rate is designated
as the hedging instrument, with the change in fair value relating to forward points being reported separately as
deferred costs of hedging within other comprehensive income as permitted by IFRS 9. Given under IAS39 the
cash flow hedge accounting utilised the forward point inclusive rate, there is no significant impact on the accounts
resulting from adopting the IFRS 9 general hedge accounting model.
50
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NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies (continued)
Cash flow hedges (continued)
When a hedging instrument expires or is sold, terminated or exercised, or the entity revokes designation of
the hedge relationship but the hedged forecast transaction is still expected to occur, the cumulative gain or
loss at that point remains in equity and is recognised in accordance with the above policy when the transaction
occurs. If the cash flow hedge transaction is no longer expected to take place, the cumulative unrealised gain
or loss recognised in equity is recognised in the statement of profit or loss immediately.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items of property, plant and equipment.
Leases in which the Group assumes substantially all the risks and rewards of ownership of the leased asset are
classified as finance leases. Leased assets acquired by way of finance lease are stated at an amount equal to the
lower of their fair value and the present value of the minimum lease payments at inception of the lease, less
accumulated depreciation and impairment losses. Lease payments are accounted for as described below.
Depreciation is charged to the statement of profit or loss over the estimated useful lives of each part of an item
of property, plant and equipment on the following bases:
Freehold land … … … … …
Freehold buildings … … … …
Leasehold property … … … …
Plant and machinery … … … …
Motor vehicles … … … … …
Tooling … … … … … …
Fixtures and fittings … … … …
Assets in the course of construction are not depreciated.
Nil
2% to 4% on reducing balance or cost
over period of lease
5% to 25% on reducing balance or cost
15% or 25% on reducing balance
over estimated production life
15% to 25% on reducing balance or cost
Intangible assets and goodwill
All business combinations are accounted for by applying the purchase method. Goodwill represents amounts
arising on acquisition of businesses. In respect of business acquisitions that have occurred since 1st May, 2006,
goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable
assets and contingent liabilities acquired. For acquisitions prior to the adoption of Revised IFRS 3 “Business
Combinations” (1st May, 2010), cost includes directly attributable acquisition costs. For acquisitions after this
date, such costs are charged to the statement of profit or loss. Identifiable intangibles are those which can be
sold separately or which arise from legal rights regardless of whether those rights are separable.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating
units and is not amortised but is tested annually for impairment.
In respect of acquisitions prior to 1st May, 2006, goodwill is included at transition date on the basis of its
deemed cost, which represents the amount recorded under UK GAAP which was broadly comparable save
that only separable intangibles were recognised and goodwill was amortised. On transition, amortisation of
goodwill has ceased as required by IFRS 1.
Negative goodwill arising on an acquisition is recognised immediately in the statement of profit or loss.
Goodwill or negative goodwill resulting from increasing the percentage ownership of an existing subsidiary is
dealt with in other comprehensive income.
Expenditure on research activities is recognised in the statement of profit or loss as an expense as incurred.
Expenditure on development activities is capitalised if the product or process is technically and commercially
feasible and the Group has sufficient resources to complete development. The expenditure capitalised includes
the cost of materials, direct labour and an appropriate proportion of overheads. Other development expenditure
is recognised in the statement of profit or loss as an expense as incurred. Capitalised development expenditure
is stated at cost less accumulated amortisation and impairment losses.
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and
impairment losses.
Amortisation is charged to the statement of profit or loss on a straight-line basis over the estimated useful lives
of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill
are systematically tested for impairment at each balance sheet date. Other intangible assets are amortised
from the date they are available for use. The estimated useful lives are as follows:
• Capitalised development costs
Minimum expected order unit intake or minimum product life
• Manufacturing rights
6 - 15 years
• Brand names and intellectual property 3 - 15 years
• Customer lists
• Order book
• Distribution rights
• Software and licences
• Non-compete agreements
10 years
1 year
25 years
3 - 4 years
15 years
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NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies (continued)
Impairment of intangibles
The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether
there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
Recoverable amount is the greater of an asset’s or cash-generating unit’s fair value less costs to sell or value
in use.
For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the
recoverable amount is estimated at each balance sheet date.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds
its recoverable amount. Impairment losses are recognised in the statement of profit or loss.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of the other
assets in the unit on a pro-rata basis. A cash-generating unit is the smallest identifiable group of assets that
generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
Goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use were
tested for impairment as at 1st May, 2006, the date of transition to Adopted IFRSs, even though no indication of
impairment existed.
Reversals of impairment
An impairment loss in respect of goodwill is not reversed.
In respect of other assets, an impairment loss is reversed when there is an indication that the impairment loss
may no longer exist and there has been a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognised.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the first-in, first-out principle
and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and
condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of
overheads based on normal operating capacity.
Government grants
Government grants relating to income are recognised in the statement of profit or loss as a deduction from the
expenses that they are intended to compensate.
Government grants relating to assets are recognised in the balance sheet as a deduction in the carrying amount
of the asset. Depreciation is charged on the value of the asset less the associated grant. Amounts of grants
received are shown in note 6.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation
as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the
obligation. 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.
Warranty provisions
The Group carries a warranty provision where applicable. The warranties are committed at contract placement
stage and typically, where given to a customer, the warranty has a duration of between 1 and 3 years. At the
expiry of the warranty period, to the extent not utilised the warranty provision is then released back into the
statement of profit or loss. The warranties are generally passive in nature confirming that the goods comply
with contractual specifications and given the incidence of product failure is low, the warranties have no
tangible customer value.
Revenue
Revenue is recognised when a customer obtains control of the goods or services i.e. upon the satisfaction of a
performance obligation. Judgement is required to determine the timing of the transfer of control, and whether
it is at a point in time or over time. Where a contract contains several performance obligations then the contract
is unbundled and each performance obligation is dealt with separately.
Standard inventory product lines and consumables
Typically applies to the whole of the Group’s Refractory Engineering segment and the sale of slurry pumps within
the Mechanical Engineering segment. The revenue here relates to standard products manufactured for sale. The
performance obligation is satisfied and revenue taken at the point when customers obtain control
of the goods in accordance with the International Commercial (INCO) terms agreed or via a bill and hold
arrangement.
52
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NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies (continued)
Revenue (continued)
Minimum period contracts for the provision of goods and services
Predominantly the supply of broadband and related services under minimum term contracts. Performance
obligations are satisfied over time and revenue is recognised equally over the term of the contract
Engineered bespoke products – performance obligations satisfied over time
Typically applies to the Group’s Mechanical Engineering segment and covers sales orders which are customer
bespoke, but permit the Group subsidiary to claim profit earned to date if the customer were to trigger the
cancel for convenience clause within the contract. In such cases, the performance obligations are treated as
satisfied over time (i.e. as the contract progresses) and revenue is taken based on the percentage completion
of the contract by the creation of a contract asset. Work in progress is eliminated and replaced by a contract
asset. Measuring progress requires judgement as to the stage of completion of each job, and the production
of forecasts, which contain allowances for technical risks and inherent uncertainties.
Engineered bespoke products – performance obligations satisfied at a point in time
Typically applies to the Group’s Mechanical Engineering segment and covers sales orders which are customer
bespoke, but permit the Group subsidiary to claim only for costs in the event the customer triggers the cancel
for convenience clause within the contract. In such cases, the performance obligation is deemed to be met
and revenue taken as order lines are shipped in accordance with the relevant shipping terms or via a bill and
hold arrangement.
The incremental costs of obtaining a contract are recognised as an expense, as occurred, when the contract
period is less than one year.
Contract assets represent the Group’s rights to consideration for work completed but not invoiced at the
reporting date for bespoke products contracts. Contract assets are transferred to receivables when the rights
to consideration become unconditional, which is generally when the Group invoices the customer. Where
payments are received in advance and exceed the costs incurred in constructing the asset together with
forecast margin earned, the balances are disclosed as contract liabilities.
Leases
The Group’s accounting policy on leases up to April 2019 was as follows:
Operating lease payments
Payments made under operating leases are recognised in the statement of profit or loss on a straight-line basis
over the term of the lease. Lease incentives received are recognised in the statement of profit or loss as an
integral part of the total lease expense.
Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding
liability. The finance charge is allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability.
This policy has been amended in accordance with IFRS 16, and the new policy is outlined below.
Definition of a lease
A contract is a lease or contains a lease if it transfers the right to use an identified asset over the contract
term, in exchange for payment. In determining whether a contract gives the Group the right to use an asset,
the Group assesses whether:
•
•
•
Lease term
The lease term is the non-cancellable period of a lease, and options to extend the lease or terminate it, where it
is probable that the Group will exercise the available options. At the start of a lease, the Group makes a judgement
about whether it is reasonably certain to exercise the options, and reassesses this judgement at every reporting
period. Contracts, where the original lease term has expired, with assets continuing to be leased on a short-term
rolling basis of a few months, are treated as short-term leases.
Lease balances
A right-of-use asset and a lease liability are calculated at the beginning of a lease. The right-of-use asset is
measured initially at cost, being the opening lease liability, adjusted for any lease payments made by the start
of the lease, adjusted for any initial direct costs, which have been incurred.
The lease liability is measured initially at the present value of the lease payments, which are outstanding at the
start date, discounted at either the rate implicit in the lease or the Group’s incremental borrowing rate. With the
exception of leases containing an option to purchase, the Group uses its incremental borrowing rate as the
discount rate. Lease liabilities are measured at amortised cost, using the effective rate, and adjusted as
required for any subsequent change to the lease terms.
the contract involves the use of an identified asset;
the Group has the right to obtain substantially all of the economic benefit of using the asset; and
the Group has the right to direct the use of the asset by deciding how the asset is employed.
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NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies (continued)
Leases (continued)
Lease balances (continued)
The right-of-use asset is depreciated on a straight-line basis over the lease term, or from the start date of the
lease to the end of the useful life of the right-of-use asset as appropriate. The method of calculating the
estimated useful lives of the right-of-use assets and testing for impairment is the same as that for property,
plant and equipment.
Recognition exemptions
Payments for short-term leases, lasting twelve months or less, without a purchase option continue to be
reported an as operating expense on a straight-line basis over the term of the lease.
The cost of leasing low-value items will continue to be reported as an operating expense over the life of the lease.
Lease portfolios
The Group has leases for the following types of assets:
Land and buildings – the Group leases a number of factory buildings, warehouses and office buildings.
Plant and equipment – a number of significant items of plant, such as CNC machines, have been leased under
contracts with an option to buy the asset at the end of the lease term. The Group also leases a small number of
motor vehicles. For motor vehicles the Group has applied the practical expedient in paragraph 15 of IFRS 16,
whereby non-lease components have not been separated from lease components, such that lease costs and
service costs are treated as a single lease component.
Printers and photocopiers – the Group has applied the recognition exemption for low-value assets to these leases.
Financial expenses
Financial expenses comprise interest payable, interest on finance leases using the effective interest method and
the unwinding of the discount on provisions. Borrowing costs that are directly attributable to the acquisition,
construction or production of an asset that takes a substantial time to be prepared for use are capitalised as part
of the cost of that asset.
Interest income and interest payable is recognised in the statement of profit or loss as it accrues.
Employment costs
Pension costs
The Group contributes to a defined contribution pension scheme for UK employees under an Auto Enrolment
Pension arrangement as required by Government legislation. The assets of the scheme are held in independently
administered funds. Group pension costs are charged to the statement of profit or loss in the year for which
contributions are payable.
Contributions to the schemes are made on a monthly basis and at the end of the financial year there were one
month’s contributions outstanding, which were paid in the following month.
Termination costs
Employee termination costs are expended in the profit and loss figures in a year as soon as the expense is known
and is certain.
Share-based payment transactions
Share-based payments arrangements, in which the Group receives goods or services as consideration for its own
equity instruments, are accounted for as equity-settled share-based payment transactions regardless of how the
equity instruments are obtained by the Group.
The grant date fair value of share-based payment awards granted to employees is recognised as an expense,
with a corresponding increase in equity, over the period in which the employees become unconditionally
entitled to the awards. The fair value of the awards is measured using an option valuation model, taking into
account the terms and conditions upon which the awards were granted.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the statement of
profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised
in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The following temporary differences
are not provided for: the initial recognition of goodwill, the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a business combination, and differences relating to
investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The
amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying
amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised.
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1. Accounting policies (continued)
NOTES TO THE FINANCIAL STATEMENTS
New IFRS standards, amendments and interpretations not adopted
The IASB and IFRIC have issued additional standards and amendments which are effective for periods starting
after the date of these financial statements. The following standards and amendments have not yet been
adopted by the Group:
•
Amendments to IFRS 3 – Definition of a business (effective for annual periods beginning on or after
1st January, 2020)
Amendments to IAS 1 and IAS 8 – Definition of material (effective for annual periods beginning on or after
1st January, 2020)
Amendments to References to the Conceptual Framework in IFRS Standards (effective for annual periods
beginning on or after 1st January 2020)
•
•
The Group has considered the impact of these new standards and interpretations in future periods on profit,
earnings per share and net assets. None of the other standards or interpretations is expected to have a
material impact.
2. Accounting estimates and judgements
The Group makes judgements and estimates in applying the Group’s accounting policies, to prepare the
financial statements. The Directors do not believe there have been any key judgements exercised during the
period, but see the following as the key estimates considered.
Key estimates
IFRS 15 Revenue Recognition
The Directors consider that a key estimate, which may have a material impact on the financial statements, is in
relation to IFRS 15 and, in particular, where we are mandated to account on a revenue over time basis on some
of our mechanical engineering work in progress contracts. When reviewing the terms of contracts with customers,
judgement is required to assess the number of performance obligations within the contracts and when to
recognise contract provisions.
For contracts where revenue is recognised over time, there is a need to estimate the costs to complete on these
contracts. The costs to complete estimates can be complex, as they need to consider several variable factors
such as the impact of delays, cost overruns and also any variations to contract. Once complete, these estimates
then drive the amount of revenue recognised. The estimates are prepared and reviewed by management with
suitable experience and qualifications, and who endeavour to ensure the revenue mandated to be recognised
prior to the completion of the contract is not overstated, based on possible technical risks and inherent
uncertainties.
Whilst cost to complete estimates are based on management’s best knowledge at the time, it is clear, due to the
very nature of an estimate that the eventual outcomes may differ due to unforeseen events. The advanced stage
of completion of a number of contracts reduces the risk of unforeseen events arising, however, if a series of
unforeseen events did arise it could potentially lead to a materially different outcome on the contracts.
Determination of the basis for amortising capitalised development costs
The Group carries different classes of intangible assets on its balance sheet, which include goodwill, rights, brand
names and development costs. Development costs are amortised on a straight-line basis, which commences
when the Group benefits from the cash inflows. A key estimate is required in determining the useful economic
life for which each asset is to be fully amortised over, current timeframes range from 15 to 25 years. In accordance
with IAS 38, the basis on which development assets are amortised is assessed annually. Estimation uncertainty
lies within the anticipated market life and the estimated future revenue and margins. These estimates may
depend upon the outcome of future events and may need to be revised as circumstances change.
Apart from above, the Group does not have any key assumptions concerning the future, or other key sources of
estimation uncertainty in the reporting period that may have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year.
Key judgements
The Board does not consider there to be any key judgements.
Other estimates / judgements
Other than as reported above, the Directors do not consider there to be any key estimates or judgements in
preparing the financial statements. The estimates and judgements outlined below formed the main areas of
focus for the Directors throughout the year.
Inventory provisions
The Group's Directors in conjunction with senior management in the subsidiaries regularly review the
recoverability of their stated raw material and work in progress balances, paying particular attention to net
realisable value and stock obsolescence issues. The estimates are in relation to costs to complete and the
expected level of future sales orders for slow moving stocks. Where it is judged that a provision is deemed
necessary the appropriate adjustments are made in the relevant subsidiary's books at the time a shortfall is
identified.
55
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NOTES TO THE FINANCIAL STATEMENTS
2. Accounting estimates and judgements (continued)
Other estimates / judgements (continued)
Trade receivable provisions
Whilst trade debtors are insured wherever possible, the Directors are able to exercise judgement in relation to
non-credit insured contracts as set out in note 28 (a). The Group Directors, in conjunction with the subsidiary credit
controllers, closely monitor the adherence to payment terms across all accounts (whether insured or not) and
make provision for any losses that are likely to materialise. There is a requirement under IFRS 9 to consider the
statistical likelihood of a bad debt based off previous experience. Historically, the Group’s bad debt write offs have
been negligible and the Group results are not impacted by this requirement for a statistically based provision.
3. Changes in significant accounting policies
IFRS 16 Leases
Transition
IFRS 16 has been implemented using the modified retrospective approach, because it does not require a full
restatement of comparatives, but the cumulative opening impact is posted to reserves on the transition date.
For leases, which were previously classified as finance leases under IAS 17, the carrying amount of the
right-of-use asset and lease liability on transition is the same as the carrying amount of the lease asset and
lease liability calculated in accordance with IAS17.
A right-of-use asset and lease liability are now recognised for leases considered to be operating leases in
accordance with IAS 17. As it is not possible to calculate the rate implicit in these leases, the lease liabilities
are calculated as the present value of the remaining lease payments, discounted using the Group’s estimated
incremental borrowing rate (IBR). Right-of-use assets are reported as the same value as the lease liability,
adjusted for any lease prepayments or accruals, at the transition date.
Practical expedients
The following practical expedients have been applied at the IFRS application date.
•
•
•
There has been no re-assessment of leases treated as finance leases under IAS 17 as at 30th April, 2019.
A single discount rate has been applied for similar leases.
Long-term leases, which expire within twelve months of the transition date, have been treated as short-term
leases, with no right-of-use asset and lease liability being calculated.
Initial direct costs have been excluded when measuring the right-of-use asset at the transition date.
•
Reconciliation of lease liabilities
Operating lease commitments at 30th April, 2019 … … …
Impact of discounting minimum lease payments … … …
Short-term leases … … … … … … … …
Low value leases … … … … … … … …
Other reconciling items … … … … … … …
…
…
…
…
…
…
…
…
…
…
… …
… …
… …
… …
… …
…
…
…
…
…
Additional lease liability at 1st May, 2019
The IFRS 16 impact on the statement of profit or loss for the year ended 30th April, 2020 is as follows:
Under IFRS 16
Operating profit … … … … … … … …
Financial expenses… … … … … … … …
…
…
…
…
… …
… …
…
…
Impact on profit before tax
Previously, under IAS 17
Reported as operating lease expenses within operating profit
£’000
1,369
(58)
(188)
(51)
(30)
1,042
£’000
537
56
593
621
56
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NOTES TO THE FINANCIAL STATEMENTS
3. Changes in significant accounting policies (continued)
IFRS 16 Leases (continued)
The IFRS 16 impact on the balance sheet as at 30th April, 2020 is as follows:
Property, plant and equipment … … … … … …
Right-of-use assets … … … … … … … …
Lease liabilities
… … … … … … … …
IFRS 16
69,626
5,343
(2,822)
IFRS 16
adjustments
3,805
(5,343)
1,566
IAS 17
73,431
-
(1,256)
Total
72,147
28
72,175
As outlined above, IFRS 16 has not had a significant impact on either the profit or loss or the net assets of the
Company. For this reason, the Alternative Performance Measures in note 36 are considered to have been prepared
on a consistent basis.
Accounting estimates and judgments
The Group’s contracts are such that the terms are generally very clear in establishing whether they are or
contain leases, and consequently, significant judgements have not been required in assessing the contracts.
The Group’s incremental borrowing rates have been estimated separately for each country, in which leases are
held, with rates ranging from 2.0% to 9.0%.
57
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NOTES TO THE FINANCIAL STATEMENTS
4. Segmental information
Products and services from which reportable segments derive their revenues
For the purposes of management reporting to the chief operating decision maker, the Board of Directors, the
Group is organised into two reportable operating divisions: mechanical engineering and refractory engineering.
Segment assets and liabilities include items directly attributable to segments as well as those that can be
allocated on a reasonable basis. In accordance with the requirements of IFRS 8 the Group's reportable
segments, based on information reported to the Group's Board of Directors for the purposes of resource
allocation and assessment of segment performance are as follows:
• Mechanical Engineering
• Refractory Engineering
Information regarding the Group’s operating segments is reported below. Associates are included in Refractory
Engineering.
- casting, valve, antenna and pump manufacture and general engineering
- powder manufacture and mineral processing
Revenue
Year Ended 30th April
Revenue
Mechanical
Engineering
Refractory
Engineering
Sub Total
2020
£’000
2019
£’000
2020
£’000
2019
£’000
2020
£’000
2019
£’000
External sales … … … …
100,078
Inter-segment sales … … …
25,821
82,375
21,714
44,434
44,671
144,512
127,046
8,361
8,726
34,182
30,440
Total revenue … … … …
125,899
104,089
52,795
53,397
178,694
157,486
Reconciliation to consolidated revenue:
Inter-segment sales … … …
Consolidated revenue for the year
Year Ended 30th April
Profits
Operating profit including share
(34,182)
(30,440)
144,512
127,406
Mechanical
Engineering
Refractory
Engineering
Sub Total
2020
£’000
2019
£’000
2020
£’000
2019
£’000
2020
£’000
2019
£’000
of associates … … … …
8,065
11,932
7,034
8,070
15,099
20,002
% of total operating profit including
share of associates … … …
Group centre … … … …
LTIP – non cash provision … …
Group finance expenses … …
Consolidated profit before
tax for the year … … …
Tax
… … … … …
Consolidated profit after
tax for the year … … …
53%
60%
47%
40%
100%
100%
(2,175)
-
(809)
(2,138)
(1,220)
(234)
12,115
16,410
(3,775)
(3,963)
8,340
12,447
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NOTES TO THE FINANCIAL STATEMENTS
4. Segmental information (continued)
Year Ended 30th April
Segmental net assets
Segmental
total assets
2020
£’000
2019
£’000
Segmental
total liabilities
2020
£’000
2019
£’000
Segmental
net assets
2020
£’000
2019
£’000
Mechanical Engineering … …
Refractory Engineering
… …
95,193
41,962
97,862
43,950
72,207
22,850
72,520
25,541
22,986
19,112
25,342
18,409
Sub total reportable segment …
137,155
141,812
95,057
98,061
42,098
43,751
Goodwin PLC net assets … …
Elimination of Goodwin PLC investments
Goodwill
… … … …
Consolidated total net assets
…
Segmental property, plant and equipment (PPE) capital expenditure
Goodwin PLC … … … … … … … … … … … …
Mechanical Engineering … … … … … … … … … …
… … … … … … … … … …
Refractory Engineering
Segmental depreciation, amortisation and impairment
Goodwin PLC … … … … … … … … … … … …
Mechanical Engineering … … … … … … … … … …
… … … … … … … … … …
Refractory Engineering
83,415
(25,801)
9,890
81,249
(25,374)
9,665
109,602
109,291
2020
£’000
2,824
2,511
633
2019
£’000
3,602
6,461
616
5,968
10,679
2020
£’000
3,642
2,466
1,921
2019
£’000
2,367
3,175
1,589
8,029
7,131
For the purposes of monitoring segment performance and allocating resources between segments, the Group’s
Board of Directors monitors the tangible and financial assets attributable to each segment. All assets and liabilities
are allocated to reportable segments with the exception of those held by the parent Company, Goodwin PLC, and
those held as consolidation adjustments.
Geographical segments
The Group operates in the following principal locations.
In presenting the information on geographical segments, revenue is based on the location of its customers and
assets on the location of the assets.
Year ended 30th April, 2020
Year ended 30th April, 2019
Revenue
£’000
39,609
20,004
12,749
34,844
37,306
UK
Rest of Europe
USA
Pacific Basin
Rest of World
Opera-
tional
net
assets
£’000
Non-
PPE
Capital
current expendi-
ture
£’000
assets
£’000
76,467
84,198
8,346
3,439
-
13,513
11,276
-
7,132
6,712
5,148
173
-
81
566
Opera-
tional
net
assets
£’000
74,780
7,035
-
14,779
12,697
Non-
current
assets
£’000
80,300
3,605
-
6,855
6,944
Revenue
£’000
27,934
24,205
8,100
28,956
37,851
Total
144,512
109,602
101,481
5,968
127,046
109,291
97,704
PPE
Capital
expendi-
ture
£’000
6,044
2,300
-
84
2,251
10,679
Of the £20,004,000 (April 2019: £24,205,000) sales to the rest of Europe, £5,975,000 (April 2019: £6,721,000),
relate to the German-domiciled subsidiary, Noreva GmbH.
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NOTES TO THE FINANCIAL STATEMENTS
5. Revenue
The following tables provide an analysis of revenue by geographical market and by product line.
Geographical market
Year ended 30th April, 2020
Year ended 30th April, 2019
Mechanical
Refractory
Engineering Engineering
£’000
£’000
Mechanical
Refractory
Total Engineering Engineering
£’000
£’000
£’000
Total
£’000
27,934
24,205
8,100
28,956
37,851
Total
£’000
52,456
4,996
34,538
35,056
UK
Rest of Europe
USA
Pacific Basin
Rest of World
Total
Product lines
29,187
13,088
12,664
16,361
28,778
10,422
39,609
6,916
20,004
85
12,749
18,483
34,844
8,528
37,306
100,078
44,434 144,512
16,877
16,282
8,017
12,848
28,351
82,375
11,057
7,923
83
16,108
9,500
44,671
127,046
Year ended 30th April, 2020
Year ended 30th April, 2019
Mechanical
Refractory
Engineering Engineering
£’000
£’000
Mechanical
Refractory
Total Engineering Engineering
£’000
£’000
£’000
Standard products and consumables 9,545
4,143
Minimum period contracts
44,434
-
53,979
4,143
7,785
4,996
44,671
-
Bespoke products –
over time
Bespoke products –
point in time
Total
60,963
25,427
100,078
60,963
34,538
-
-
-
-
44,434 144,512
44,671
127,046
25,427
35,056
82,375
Contract balances
The following table presents information about receivables, contract assets and liabilities from contracts with
customers.
2020
£’000
2019
£’000
… … … …
Trade receivables (note 18) … … … … …
Contract assets
… … … … … … … … … … …
Contract liabilities … … … … … … … … … … …
23,589
6,558
(18,965)
23,279
3,698
(18,002)
Net book value at the end of the period … … … … … … … …
11,182
8,975
Of the contract liabilities recognised at the beginning of the period, revenue of £25,761,000 (2019: £4,124,000)
has been recognised.
Revenue of £Nil (2019: £Nil) has been recognised from performance obligations, which were satisfied (or partially
satisfied) in previous periods.
The Group has applied the practical expedient in IFRS 15, paragraph 121, and has not disclosed the remaining
performance obligations for contracts which have an original expected duration of one year or less. The
aggregate amount of the transaction price allocated to the performance obligations for longer-term contracts,
which are unsatisfied (or partially unsatisfied) as at the end of the reporting period is £65,171,000 (2019:
£72,914,000). The longest of these contracts is due to be completed in 2023.
Incremental costs of obtaining contracts lasting less than one year, are recognised as an expense, when incurred,
in accordance with the practical expedient in IFRS 15, paragraph 94. The impairment charge for contract assets
was £2,218,000 (2019: £846,000).
The Group’s revenue is not significantly impacted by seasonal or cyclical events.
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NOTES TO THE FINANCIAL STATEMENTS
6. Expenses and auditor’s remuneration
Included in profit before taxation are the following:
Charged / (credited) to the statement of profit or loss
Insurance claim proceeds
… … … … … … … … …
Write back of deferred consideration … … … … … … … …
Depreciation:
Owned assets … … … … … … … … … … …
Right-of-use assets – formerly finance leases
… … … … …
Right-of-use assets – formerly operating leases … … … … …
Amortisation of intangible assets … … … … … … … …
Loss on sale of other tangible fixed assets … … … … … … …
… … … … … … … …
Profit on disposal of subsidiary
… … … … …
Research and development expensed as incurred
Impairment of trade receivables charged to the statement of profit or loss
…
Foreign exchange losses / (gains) … … … … … … … …
Fees receivable by the auditor and the auditor’s associates in respect of:
Audit of these financial statements … … … … … … …
Audit of the financial statements of subsidiaries … … … … …
Other non–audit related services:
Other assurance services … … … … … … … … …
Share-based provisions … … … … … … … … … …
Government grants received against research and development,
2020
£’000
(690)
(204)
5,874
290
537
1,328
52
(172)
306
49
485
120
271
-
-
2019
£’000
-
-
5,571
248
-
1,312
13
-
823
38
(551)
120
222
4
1,220
infrastructure spend and training costs
… … … … … …
(14)
(1,323)
7. Staff numbers and costs
The average number of persons employed by the Group (including Directors) during the year, analysed by
category, was as follows:
Number of employees
2019
2020
Works personnel … … … … … … … … … … …
1,139
Administration staff
… … … … … … … … … …
The aggregate payroll costs of these persons were as follows:
Wages and salaries … … … … … … … … … …
Social security costs… … … … … … … … … …
Other pension costs … … … … … … … … … …
51
1,190
2020
£’000
38,633
4,027
1,581
44,241
1,032
50
1,082
2019
£’000
36,008
3,711
1,470
41,189
Details of the Directors’ remuneration can be found within the Directors Remuneration Report on page 29. The
emoluments of the highest paid Director were £310,000 (2019: £397,000). The number of Directors, who were mem-
bers of a defined contribution pension scheme, was 6 (2019: 8).
A charge of £Nil for the LTIP (2019: £1,220,000) has been recognised in the year, but not included in the above
table. Further information is contained in note 35.
8. Financial expenses
Interest expense on finance leases … … … … … … … …
Interest expense on right-of-use assets … … … … … … …
Net interest expense on bank loans and overdrafts
… … … … …
Capitalised interest on fixed asset projects … … … … … … …
Gain on previously held interest in equity associates (see note 14) … … …
Financial expenses
… … … … … … … … … …
2020
£’000
41
56
752
(40)
-
809
2019
£’000
64
-
527
(132)
(225)
234
61
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NOTES TO THE FINANCIAL STATEMENTS
9. Taxation
Recognised in the statement of profit or loss
Current tax expense
Current year … … … … … … … … … … …
Over provision in prior years … … … … … … … …
Deferred tax expense
Origination and reversal of temporary differences – current year
Origination and reversal of temporary differences – over provision
… …
in prior years … …
Origination and reversal of temporary differences – rate change to prior year
Total tax expense … … … … … … … … … … …
Reconciliation of effective tax rate
2020
£’000
1,985
(62)
1,923
1,531
(50)
371
1,852
3,775
2020
£’000
Profit before taxation … … … … … … … … … …
12,115
Tax using the UK corporation tax rate of 19.00% (2019: 19.00%) … … …
… … … … … … … … … …
Non-taxable income
… … … … … … … … …
Non-deductible expenses
Overseas intercompany profits
… … … … … … … …
Other permanent timing differences … … … … … … … …
Over provision in prior years … … … … … … … … …
Losses not recognised … … … … … … … … … …
Rate change to prior year
… … … … … … … … …
Withholding tax unrelieved … … … … … … … … …
Difference in overseas tax rates
… … … … … … … …
Difference between corporation and deferred tax rates … … … … …
Effect of equity accounting for associates … … … … … … …
2,302
(57)
116
-
214
(112)
114
371
36
805
-
(14)
Total tax expense … … … … … … … … … … …
3,775
2019
£’000
4,100
(55)
4,045
186
(268)
-
(82)
3,963
2019
£’000
16,410
3,118
(79)
55
163
198
(323)
114
-
177
606
9
(75)
3,963
Where subsidiary companies have incurred losses in the year, which are unlikely to be relieved against future
profits in the next twelve months, deferred tax assets are not recognised.
Withholding tax unrelieved represents withholding tax deducted on dividends from overseas subsidiaries and
associates.
Deferred tax recognised directly in equity
The following amounts are included in the consolidated statement of comprehensive income:
Cash flow hedge deferred tax credit … … … … … … … …
10. Earnings per share
2020
£’000
77
2019
£’000
154
The calculation of the basic earnings per ordinary share is based on the number of ordinary shares in issue. For
all periods up to and including 30th April, 2019 this amounted to 7,200,000 shares and with effect from the 16th
October, 2019 this has increased to 7,363,200 shares. The weighted average number of ordinary shares in issue
during the year ended 30th April, 2020 was 7,288,289. The relevant profits attributable to ordinary shareholders
were £7,866,000 (2019: £11,505,000).
There is a share option scheme in place for the Directors of the Company under the Company’s Equity Long
Term Incentive Plan (LTIP), based on the Company exceeding a target growth in the total shareholder return of
the Company over the period from 1st May, 2016 to 30th April, 2019. Under the scheme, a maximum of
489,600 share options vested at 1st May, 2019, of which 163,200 were exercised during the current period.
The total number of ordinary shares used as the denominator for the diluted earnings per share is 7,613,654
(2019: 7,688,056).
62
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NOTES TO THE FINANCIAL STATEMENTS
11. Dividends
Paid ordinary dividends during the year in respect of prior years
96.21p (2018: 83.473p) per qualifying ordinary share … … … … …
Dividends paid to minority shareholders in Noreva GmbH … … … …
Total dividends … … … … … … … … … … …
2020
£’000
6,927
-
6,927
2019
£’000
6,010
116
6,126
After the balance sheet date an ordinary dividend of 81.71p per qualifying ordinary share was proposed by the
Directors (2019: Ordinary dividend of 96.21p).
The proposed current year ordinary dividend of £6,016,000 has not been provided for within these financial
statements (2019: Proposed ordinary dividend of £6,927,000 was not provided for within the comparative figures).
Noreva had been an 87.5% owned subsidiary, which was treated as a 100% owned subsidiary, because there
were both put and call options in place for the remaining 12.5%. During the previous year, the Group paid for
the remaining 12.5% shareholding in Noreva.
12. Property, plant and equipment
Cost
Land and
Plant and
buildings equipment
£’000
£’000
Fixtures
and
fittings
£’000
Assets in
course of
construc-
tion
£’000
Balance at 1st May, 2018 … … …
Additions … … … … … …
Additions - company acquisitions … …
Reclassification … … … … …
Disposals … … … … … …
Exchange adjustment … … … …
30,417
4,467
411
6,638
(15)
(110)
71,832
3,834
285
2,223
(1,452)
(194)
3,819
213
62
(50)
(91)
(4)
11,397
2,165
-
(8,811)
-
16
Total
£’000
117,465
10,679
758
-
(1,558)
(292)
Balance at 30th April, 2019 … …
41,808
76,528
3,949
4,767
127,052
Balance at 1st May, 2019 … … …
Additions … … … … … …
Reclassification … … … … …
Disposals … … … … … …
Transfer of right-to-use assets on
transition to IFRS 16… … … …
Exchange adjustment … … … …
41,808
206
91
(34)
-
(400)
76,528
3,843
5,173
(1,632)
(4,648)
(305)
3,949
158
(744)
(68)
-
(17)
4,767
1,761
(4,520)
-
127,052
5,968
-
(1,734)
-
(2)
(4,648)
(724)
Balance at 30th April, 2020 … …
41,671
78,959
3,278
2,006
125,914
Depreciation
Balance at 1st May, 2018 … … …
Charged in year … … … … …
Depreciation - company acquisitions …
Reclassification … … … … …
Disposals … … … … … …
Exchange adjustment … … … …
5,821
1,088
195
(47)
-
(22)
39,956
4,410
122
76
(1,312)
(105)
2,534
321
32
(29)
(91)
(3)
Balance at 30th April, 2019 … …
7,035
43,147
2,764
Balance at 1st May, 2019 … … …
Charged in year … … … … …
Reclassification … … … … …
Disposals … … … … … …
Transfer of right-to-use assets on
transition to IFRS 16… … … …
Exchange adjustment … … … …
7,035
1,209
36
(2)
-
(128)
43,147
4,425
595
(1,498)
(693)
(177)
2,764
240
(631)
(43)
-
9
Balance at 30th April, 2020 … …
8,150
45,799
2,339
-
-
-
-
-
-
-
-
-
-
-
-
-
-
48,311
5,819
349
-
(1,403)
(130)
52,946
52,946
5,874
-
(1,543)
(693)
(296)
56,288
Net book value
At 1st May, 2018
… … … …
24,596
31,876
At 30th April, 2018 and 1st May, 2019 …
34,773
33,381
At 30th April, 2020
… … …
33,521
33,160
1,285
1,185
939
11,397
4,767
69,154
74,106
2,006
69,626
63
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NOTES TO THE FINANCIAL STATEMENTS
12. Property, plant and equipment (continued)
Plant and machinery
During the year the Group expended £5,968,000 on fixed assets. The focus here has been within the Mechanical
Engineering segment and to develop further the infrastructure and capabilities at both Goodwin International
and Goodwin Steel Castings to deal with their increased workloads.
Leased plant and machinery is reported within right-of-use assets in note 13.
Assets in the course of construction of £2,006,000 (2019: £4,767,000) comprise £1,345,000 (2019: £181,000) in
relation to land and buildings and £661,000 (2019: £4,586,000) for plant and machinery.
Government grants related to tangible fixed assets
Additions to fixed assets are after deducting grants receivable of £Nil (2019: £Nil).
Security
There is a charge over Noreva GmbH’s land and buildings of €1.6 million to secure a bank loan repayable by
instalments and a bank loan of £4.7 million is secured against three furnaces (see note 21).
13. Right-of-use assets and lease liabilities
Right-of-use assets
Land and
buildings
(formerly
operating
leases)
£’000
Plant and
equipment
(formerly
finance
leases)
£’000
Plant and
equipment
(formerly
operating
leases)
£’000
Total
£’000
Cost
Balance recognised on transition to IFRS 16
Opening balance transfer from property,
plant and equipment … … … …
Additions … … … … … …
Exchange adjustment … … … …
Balance at 30th April, 2020
Depreciation
Opening balance transfer from property,
plant and equipment … … … …
Charged in year … … … … …
Exchange adjustment … … … …
Balance at 30th April, 2020
942
-
1,013
(18)
1,937
-
506
(6)
500
-
100
1,042
4,648
144
(5)
4,787
693
290
(1)
982
-
32
-
4,648
1,189
(23)
132
6,856
-
31
-
31
693
827
(7)
1,513
Net book value at 30th April, 2020
1,437
3,805
101
5,343
Lease liabilities
Non-current liabilities … … … …
Current liabilities … … … … …
£’000
Formerly
finance
leases
264
992
2020
£’000
Formerly
operating
leases
1,075
491
Total
1,256
1,566
The right-of-use assets secure lease obligations (see note 21).
£’000
Total
1,339
1,483
2,822
2019
£’000
Total
1,164
939
2,103
64
59585 Goodwin Directors Report 2020.qxp_Layout 1 19/08/2020 13:56 Page 67
NOTES TO THE FINANCIAL STATEMENTS
13. Right-of-use assets and lease liabilities (continued)
Lease liabilities (continued)
Reconciliation of liabilities arising from leasing activities
Opening
balance
1st May
2019
£’000
2,103
-
IFRS 16
leases
£’000
-
2,087
Formerly finance leases
Formerly operating leases
Total
2,103
2,087
Cash flows Cash flows
– lease
Foreign
Closing
balance
exchange 30th April
2020
£’000
payments movement
£’000
£’000
– new
leases
£’000
102
-
102
(954)
(509)
(1,463)
5
(12)
(7)
1,256
1,566
2,822
Opening
balance Change in
bank
1st May
2018 overdrafts
£’000
£’000
Company
acquisition
£’000
Closing
balance
30th
Cash flows movement April 2019
£’000
Foreign
exchange
£’000
£’000
Finance leases … …
2,548
-
42
(487)
-
2,103
The contractual undiscounted cash flows are payable as follows:
2020
2019
Minimum
lease
payments
£’000
Interest Principal
£’000
£’000
Minimum
lease
payments
£’000
Interest
£’000
Principal
£’000
Formerly finance leases
Less than one year … … …
One to five years … … …
Formerly operating leases
Less than one year … … …
One to five years … … …
1,016
271
1,287
536
1,139
1,675
24
7
31
45
64
109
992
264
1,256
491
1,075
1,566
980
1,184
2,164
-
-
-
Amounts recognised in profit or loss
Interest on liabilities – formerly finance leases … … … … … …
Interest on liabilities – formerly operating leases… … … … … …
Expenses relating to short-term leases … … … … … … …
Expenses relating to leases of low-value assets … … … … … …
41
20
61
-
-
-
2020
£’000
41
56
121
20
238
939
1,164
2,103
-
-
-
2019
£’000
64
-
126
18
208
65
59585 Goodwin Directors Report 2020.qxp_Layout 1 19/08/2020 13:56 Page 68
NOTES TO THE FINANCIAL STATEMENTS
14. Investments in subsidiaries
The Group has the following principal subsidiaries. Non-principal subsidiaries are listed in note 32:
Registered Country of
address*
Incorporation
Class of
shares held
% held
Subsidiaries:
Mechanical Engineering:
Goodwin Steel Castings Limited
… … …
Goodwin International Limited … … … …
Easat Radar Systems Limited … … … …
Goodwin Korea Company Limited … … …
Goodwin Pumps India Private Limited
… …
Goodwin Shanghai Company Limited … … …
Noreva GmbH
… … … … … …
Goodwin (Shanxi) Pump Company Limited … …
Goodwin Indústria e Comércio de Bombas
8
Submersas Ltda … … … … … …
1
Internet Central Limited … … … … …
9
Goodwin Submersible Pumps Australia Pty. Limited
Metal Proving Services Limited … … … …
1
NRPL Aero Oy
… … … … … … 10
Goodwin Submersible Pumps Africa Pty. Limited … 15
1
1
1
3
4
5
6
7
Refractory Engineering:
1
Goodwin Refractory Services Limited … … …
1
Dupré Minerals Limited … … … … …
2
Hoben International Limited … … … …
Gold Star Powders Private Limited … … …
4
Siam Casting Powders Limited … … … … 11
Ultratec Jewelry Supplies Limited … … … 12
13
SRS (Qingdao) Casting Materials Company Limited
8
Gold Star Brazil Limited … … … … …
Jewelry Plaster Limited … … … … … 14
100
England and Wales Ordinary
100
England and Wales Ordinary
77
England and Wales Ordinary
95
Ordinary
South Korea
100
Ordinary
India
Ordinary
China
100
Ordinary 100
Germany
100
Ordinary
China
Brazil
Ordinary
England and Wales Ordinary
Australia
Ordinary
England and Wales Ordinary
Ordinary
Finland
Ordinary
South Africa
100
82
100
100
77
100
100
England and Wales Ordinary
100
England and Wales Ordinary
100
England and Wales Ordinary
100
Ordinary
India
58
Ordinary
Thailand
76
Ordinary
China
76
Ordinary
China
100
Ordinary
Brazil
Ordinary/Preference 75
Thailand
*The registered address for each company can be found in note 34.
All of the above companies are included as part of the consolidated accounts and are involved in mechanical and
refractory engineering.
Acquisition of subsidiaries
On 26th April, 2019, the Group acquired 25% of Asian Industrial Investment Casting Powders Private Limited
(Asian Industrial), increasing its interest from 50% to 75%, and increasing its control of the company. The Group
had an existing shareholding of 49% in Jewelry Plaster Limited (Jewelry Plaster), which owns 100% of Jewelry
Wax Limited, and by acquiring a further 26% shareholding, increased its total ownership to 75% and obtained
control of the company.
In the current year, the Group acquired the remaining 25% of Asian Industrial.
Consideration
The consideration in April 2019 for the Asian Industrial shares was £40,000 in cash. The remaining 25% was acquired
for £83,000.
For the Jewelry Plaster shares, the Group paid £777,000 in cash. The fair value of the contingent consideration
payable, based on the pre-tax profits of Jewelry Plaster for the financial year to 30th April, 2020, was £204,000.
The pre-tax profits of Jewelry Plaster for the financial year to 30th April, 2020 were £100,000. As the contingent
consideration is therefore not payable, £204,000 has been recognised as income in the profit and loss.
Acquisition-related costs
The legal fees incurred in the previous year in relation to the acquisition were £10,000, and have been reported
within administrative expenses.
66
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NOTES TO THE FINANCIAL STATEMENTS
14. Investments in subsidiaries (continued)
Identifiable assets acquired and liabilities assumed
The table below analyses the total identifiable net assets of Asian Industrial and Jewelry Plaster acquired in
April 2019. The net assets of Asian Industrial are not shown separately because the value is insignificant.
… … … … … … … … … … …
Property, plant and equipment
Investments
… … … … … … … … … … … … … …
Intangibles … … … … … … … … … … … … … … …
Inventories … … … … … … … … … … … … … … …
Trade and other financial assets
… … … … … … … … … … …
Non-financial assets … … … … … … … … … … … … …
Cash and cash equivalents … … … … … … … … … … … …
Short-term interest-bearing loans and borrowings … … … … … … … …
Trade and other financial liabilities … … … … … … … … … … …
Non-financial liabilities … … … … … … … … … … … … …
… … … … … … … …
Long-term interest-bearing loans and borrowings
Total identifiable net assets acquired
Goodwill
The goodwill arising from the acquisitions has been recognised as follows:
Asian Industrial cash consideration … … … … … … … … … … …
Jewelry Plaster cash consideration … … … … … … … … … … …
Jewelry Plaster contingent consideration … … … … … … … … … …
Fair value of pre-existing interest in Asian Industrial and Jewelry Plaster (note 15) … … …
Fair value of identifiable net assets … … … … … … … … … … …
… … … … … … … … … … … …
Non-controlling interests
Goodwill
£’000
409
354
803
803
1,339
91
392
(11)
(2,623)
(159)
(31)
1,367
£’000
40
777
204
279
(1,367)
142
75
The non-controlling interests have been calculated as the proportionate share of the identifiable net assets of Asian
Industrial and Jewelry Plaster.
The pre-existing equity interest in Asian Industrial and Jewelry Plaster was stated at fair value before the acquisition
of the additional shares. No further fair value adjustments have been made to the value of identifiable net assets,
and there has been no gain or loss on re-measuring to fair value the Group’s existing associate investments,
at the date of acquisition. However, the translation reserve at the date of acquisition has been realised and an
unrealised gain previously recognised in OCI has been reported within financial expenses (see note 8).
NCI – Non-controlling interests
The following subsidiaries each have non-controlling interests:
Registered Country of
address*
Incorporation
Class of
shares held
% held
by
NCI
Mechanical Engineering:
Easat Radar Systems Limited … … … … 1
Goodwin Korea Company Limited … … … 3
Internet Central Limited … … … … … 1
NRPL Aero Oy
… … … … … … 10
Refractory Engineering:
Jewelry Plaster Limited … … … … … 14
Jewelry Wax Limited
… … … … … 14
Siam Casting Powders Limited … … … … 11
SRS Guangzhou Limited … … … … … 12
SRS (Qingdao) Casting Materials Company Limited 13
Shenzhen King-Top Modern Hi-Tech Company Limited 16
Ultratec Jewelry Supplies Limited … … … 12
Ying Tai (UK) Limited
… … … … … 1
England and Wales Ordinary
South Korea
Ordinary
England and Wales Ordinary
Ordinary
Finland
Ordinary
Thailand
Ordinary
Thailand
Ordinary
Thailand
Ordinary
China
Ordinary
China
Ordinary
China
China
Ordinary
England and Wales Ordinary
23
5
18
23
25
25
42
25
25
25
25
25
67
59585 Goodwin Directors Report 2020.qxp_Layout 1 19/08/2020 13:56 Page 70
NOTES TO THE FINANCIAL STATEMENTS
14. Investments in subsidiaries (continued)
Acquisition of NCI
In April 2019, the Group acquired an additional 24.5% in Ultratec, which owns Shenzhen King-Top Modern
Hi-Tech Company, and a further shareholding of 24.5% in Ying Tai (UK), which owns SRS Guangzhou and SRS
(Qingdao) Casting Materials Company. Through its acquisition of additonal shares in Jewelery Plaster, the
Group acquired a further 2.3% stake in Siam Casting Powders.
Ultratec
Group
£’000
Carrying value of NCI acquired … … … … … 859
Ying Tai
(UK)
Group
£’000
800
Siam
Casting
Powders
£’000
91
Total
£’000
1,750
Consideration paid to NCI … … … … … … (1,765)
(403)
(354)
(2,522)
Goodwill arising from purchase of NCI in subsidiaries … (906)
397
(263)
(772)
The decrease in equity attributable to owners of the Company comprised a decrease in retained earnings of
£592,000 and a decrease of £180,000 in the translation reserve.
The financial information on subsidiaries with non-controlling interests has been aggregated, analysing the
data by segment, as the entities in each segment have similar characteristics and risk profiles.
Year Ended 30th April
Profit / (loss) allocation to non-controlling
interests … … … … …
Dividends paid to non-controlling
interests … … … … …
Accumulated reserves held by
non-controlling interests … …
Mechanical
Engineering
2020
£’000
2019
£’000
(262)
-
91
-
Refractory
Engineering
2020
£’000
2019
£’000
Total
2020
£’000
2019
£’000
736
-
851
451
474
-
942
451
458
678
4,127
3,448
4,585
4,126
The summarised financial information below represents the amounts in the financial statements of the
subsidiaries, before any intercompany eliminations, and does not reflect the Group’s share of those amounts.
The results for the year of both Jewelry Plaster and Asian Industrial are shown within share of profit of
associate companies, on the basis that the effective acquisition date was 26th April, 2019.
Year Ended 30th April
Non-current assets … … …
Mechanical
Engineering
2020
£’000
2,985
2019
£’000
2,291
Current assets
… … …
20,550
21,717
Refractory
Engineering
2020
£’000
12,236
12,671
2019
£’000
9,554
13,827
Total
2020
£’000
15,221
33,221
2019
£’000
11,845
35,544
Current liabilities
… … …
(17,170)
(17,723)
(7,082)
(8,079)
(24,252)
(25,802)
Non-current liabilities
… …
(2,939)
(1,874)
(728)
(29)
(3,667)
(1,903)
Total net assets of companies with
non-controlling interests
Revenue of companies with
non-controlling interests … …
Profit / (loss) for the year of companies
with non-controlling interests …
Total comprehensive income of
companies with non-controlling interests
3,426
4,411
17,097
15,273
20,523
19,684
19,835
12,294
18,764
15,796
38,599
28,090
(1,177)
1,333
2,851
1,844
1,674
3,177
(985)
1,475
2,647
1,933
1,662
3,408
68
59585 Goodwin Directors Report 2020.qxp_Layout 1 19/08/2020 13:56 Page 71
NOTES TO THE FINANCIAL STATEMENTS
15. Investments in associates
The Group’s share of profit after tax in its associates for the year ended 30th April, 2020 was £66,000 (2019:
£233,000).
Summary financial information of the Group’s share of associates is as follows:
Balance at 1st May, 2019 (1st May, 2018) … … … … … … …
Profit before tax … … … … … … … … … … …
Tax … … … … … … … … … … … … …
Dividend … … … … … … … … … … … …
Exchange adjustment … … … … … … … … … …
Disposal … … … … … … … … … … … …
Balance at 30th April… … … … … … … … … …
Assets
… … … … … … … … … … … …
Liabilities … … … … … … … … … … … …
2020
£’000
739
80
(14)
-
11
-
816
1,076
(260)
816
2019
£’000
1,963
298
(65)
(1,254)
76
(279)
739
1,112
(373)
739
On 26th April 2019, the Group increased its ownership and control of Asian Industrial and Jewelry Plaster.
The Group’s pre-existing interest in these two companies was reported as a disposal in the prior year. Details of
the acquisitions are included in note 14.
Summarised financial information of the Group’s share of the individually material associate, Jewelry Plaster,
is shown below. The figures for 2019 reflect trading for the full year, before the Group increased its control
of the company.
On 26th April, 2019, 25.5% of Jewelry Plaster was acquired by Goodwin PLC, thus moving this company from an
associate company to a subsidiary company. In accordance with the revised status the figures for 2020 are zero.
Revenue … … … … … … … … … … … …
Profit after tax … … … … … … … … … … …
2020
£’000
-
-
2019
£’000
1,406
148
69
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NOTES TO THE FINANCIAL STATEMENTS
16. Intangible assets
Brand
names
and
intellectual
property
£’000
Goodwill
£’000
Cost
Balance at 1st May, 2018 …
Additions… … … …
Additions – company acquisition
Disposals… … … …
…
Exchange adjustment
10,050
75
-
-
(117)
6,974
799
-
(19)
(80)
Order
book
£’000
162
-
-
-
(3)
Manufact- Software Develop-
ment
costs
£’000
and
Licences
£’000
uring
rights
£’000
Total
£’000
5,117
201
-
-
-
708
115
4
(135)
(8)
5,844
1,500
-
-
(31)
28,855
2,690
4
(154)
(239)
Balance at 30th April, 2019
10,008
7,674
159
5,318
684
7,313 31,156
Balance at 1st May, 2019 …
Additions… … … …
… …
Reclassification
Disposals… … … …
…
Exchange adjustment
10,008
161
-
-
64
7,674
1,936
-
-
62
159
-
-
-
2
5,318
102
-
-
-
684
275
357
(116)
(25)
7,313
1,105
-
-
8
31,156
3,579
357
(116)
111
Balance at 30th April, 2020
10,233
9,672
161
5,420
1,175
8,426 35,087
Amortisation and impairment
Balance at 1st May, 2018 …
Amortisation for the year …
Disposals… … … …
…
Exchange adjustment
339
-
-
4
4,983
514
(19)
(67)
162
-
-
(3)
1,536
309
-
-
Balance at 30th April, 2019
343
5,411
159
1,845
Balance at 1st May, 2019 …
Amortisation for the year …
… …
Reclassification
Disposals… … … …
…
Exchange adjustment
343
-
-
-
-
5,411
439
-
-
34
159
-
-
-
2
1,845
382
-
-
-
Balance at 30th April, 2020
343
5,884
161
2,227
281
219
(135)
-
365
365
220
357
(116)
(16)
810
416
270
-
(7)
7,717
1,312
(154)
(73)
679
8,802
679
287
-
-
1
8,802
1,328
357
(116)
21
967 10,392
Net book value
At 1st May, 2018… … …
9,711
1,991
At 30th April, 2019
and 1st May, 2019 … …
9,665
2,263
At 30th April, 2020
…
9,890
3,788
-
-
-
3,581
427
5,428
21,138
3,473
3,193
319
365
6,634
22,354
7,459 24,695
Customer lists are included within brand names and intellectual property or within manufacturing rights,
depending on the nature of the acquisition; non-compete agreements are disclosed within manufacturing rights.
During the year, the Group added to its portfolio of intangible assets.
On 23rd December, 2019, Goodwin PLC successfully acquired the globally recognised Castaldo silicone rubber
and wax division, including the intellectual property, trade name and associated trademarks. For the past 75
years Castaldo has been at the centre of the worldwide jewellery casting industry and the recent acquisition will
further increase the Group’s global market share within the moulding rubber and injection wax business.
Identifiable assets acquired
The table below analyses the total identifiable Castaldo assets acquired during the year.
Property, plant and equipment
… … … … … … … …
Brand name and registered trademarks … … … … … … …
… … … … … … … … … … …
Customer list
Recipe intellectual property … … … … … … … … …
…
…
…
…
…
…
…
…
Total identifiable net assets acquired
£’000
38
1,301
77
558
1,974
70
59585 Goodwin Directors Report 2020.qxp_Layout 1 19/08/2020 13:56 Page 73
NOTES TO THE FINANCIAL STATEMENTS
16. Intangible assets (continued)
Consideration
The consideration for the net assets acquired is as follows:
Cash consideration paid
… … … … … … … … …
Cash consideration to be paid … … … … … … … … …
…
…
…
…
Total cash consideration
Acquisition costs … … … … … … … … … … …
…
…
£’000
1,517
457
1,974
23
Amortisation and impairment charges
The amortisation charge of £1,328,000 (2019: £1,312,000) is recognised in cost of sales in the statement of profit
or loss.
Impairment testing for cash-generating units containing goodwill
The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might
be impaired. For the purpose of impairment testing, goodwill is allocated to the relevant subsidiary which
is the lowest level within the Group at which the goodwill is monitored for internal management purposes.
The aggregate carrying amounts of goodwill allocated to each unit are:
2020
£’000
4,744
3,346
1,260
540
2019
£’000
4,688
3,346
1,245
386
… … … … … … … … … …
Noreva GmbH
Goodwin Refractory Services Holdings Limited … … … … …
NRPL Aero Oy… … … … … … … … … … …
Other … … … … … … … … … … … …
9,890
9,665
An impairment test is a comparison of the carrying value of the assets of a cash-generating unit (“CGU”) to
their recoverable amount, based on a value-in-use calculation. Recoverable amount is the greater of
value-in-use and market value. Where the recoverable amount is less than the carrying value an impairment
results. During the year each CGU containing goodwill was separately assessed and tested for impairment.
As part of testing goodwill for impairment detailed forecasts of operating cash flows for the next five years
are used, which are based on approved budgets and plans by the Board. The forecasts represent the best
estimate of future performance of the CGU based on past performance and expectations for the market
development of the CGU.
A number of key assumptions are used as part of impairment testing. These key assumptions, such as the
CGU’s position within its relevant market; its ability to generate profitable orders within that market; expected
growth rates both in the market and geographically, are made by management who also take into account
past experience and knowledge of forecast future performance together with other relevant external sources
of information.
The projections use various growth rates consistent with the profit forecasts of the CGU for the first five
years, with growth rates of typically 0% to 15% thereafter, extrapolated over the minimum expected life span
of the unit. The forecasts are then discounted at an appropriate pre-tax weighted average cost of capital rate
considering the perceived levels of risk, ranging between 10% and 20% (2019: between 19% and 21%) for the
Mechanical Engineering Division and 13% to 21% (2019: between 14% and 22%) for the Refractory Engineering
Division. Further sensitivity tests are then performed reducing the discounted cash flows by 10% and also
increasing the discount rate by a range of up to 10% to confirm there is no need to consider further a need for
impairment.
The estimates and assumptions made in connection with the impairment testing could differ from future actual
results of operations and cash flows. A reasonably likely variation in the assumptions would not give rise to an
impairment. However, future events could cause the Group to conclude that impairment indicators exist and
that the asset values associated with a given operation have become impaired.
71
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NOTES TO THE FINANCIAL STATEMENTS
17. Inventories
Raw materials and consumables … … … … … … … …
Work in progress … … … … … … … … … … …
Finished goods … … … … … … … … … … …
2020
£’000
18,717
17,334
8,836
44,887
2019
£’000
15,576
23,324
11,624
50,524
The amount of inventory impaired during the year was £2,745,000 (2019: £2,550,000). The comparative for the
prior year has been amended to incorporate the impairment charge for all inventory classifications.
The Group carries provisions against inventories as follows:
Raw materials and consumables … … … … … … … …
Work in progress … … … … … … … … … … …
Finished goods … … … … … … … … … … …
18. Trade and other financial assets
Balances due within one year
Trade receivables … … … … … … … … … …
Other financial assets … … … … … … … … …
…
…
2020
£’000
301
532
417
1,250
2020
£’000
23,589
897
24,486
2019
£’000
253
829
337
1,419
2019
£’000
23,279
1,685
24,964
The Group has a long-term receivable balance due from an associate company, which is repayable within five
years. The balance, which is due after more than one year is disclosed within non-current assets, with the
balance due within one year, of £255,000 (2019: £240,000) being reported within other current financial assets.
Interest is charged at a commercial rate.
Balances due after more than one year
Other receivables … … … … … … … … … …
…
19. Other receivables
Advance payments to suppliers
… … … … … … … …
Prepayments and other non-financial assets … … … … … …
Corporation tax receivable … … … … … … … … …
… … … … … … … …
Deferred tax asset (see note 26)
20. Cash and cash equivalents
Cash and cash equivalents per balance sheet … … … … … …
Bank overdrafts … … … … … … … … … … …
Cash and cash equivalents per cash flow statement … … … … …
2020
£’000
252
2020
£’000
1,640
2,582
284
60
4,566
2020
£’000
9,840
(391)
9,449
2019
£’000
505
2019
£’000
565
1,911
176
63
2,715
2019
£’000
9,640
(9,147)
493
21. Interest-bearing loans and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing bank loans and
borrowings. The bank loans repayable by instalment are secured against a property in Germany and furnaces in
the UK (see note 12). For more information about the Group’s exposure to interest rate and foreign currency risk,
see note 28.
Non-current liabilities
2020
£’000
Bank loans and committed facilities … … … … … … … …
14,260
Current liabilities
Bank loans and committed facilities … … … … … … … …
Bank overdrafts … … … … … … … … … … …
12,750
391
13,141
2019
£’000
19,322
112
9,147
9,259
72
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NOTES TO THE FINANCIAL STATEMENTS
21. Interest-bearing loans and borrowings (continued)
Reconciliation of liabilities arising from financing activities
Opening
balance Change in
bank
1st May
2019 overdrafts Cash flows movement
£’000
£’000
£’000
£’000
Foreign
Closing
balance
exchange 30th April
2020
£’000
Bank overdrafts used for
cash management … … …
Bank loans … … … … …
Bank loans repayable
9,147
18,000
(8,756)
-
by instalments … … … …
1,434
-
28,581
(8,756)
Opening
balance
1st May
2018
£’000
4,585
11,000
110
Change in
bank
overdrafts
£’000
4,562
-
-
15,695
4,562
Bank overdrafts used for
cash management … … …
Bank loans … … … … …
Bank loans repayable
by instalments … … … …
Bank loans repayable by instalments
Bank loans are payable as follows:
-
3,000
4,556
7,556
-
-
20
20
391
21,000
6,010
27,401
Closing
balance
30th
Cash flows movement April 2019
£’000
Foreign
exchange
£’000
£’000
-
7,000
1,337
8,337
-
-
(13)
(13)
9,147
18,000
1,434
28,581
2020
2019
Interest
£’000
Principal
£’000
26
91
149
266
2020
£’000
112
298
1,024
1,434
2019
£’000
17,012
1,701
1,857
Less than one year … … …
Between one and five years
…
… …
More than five years
Minimum
loan
payments
£’000
912
3,547
2,289
6,748
Interest Principal
£’000
£’000
162
419
157
738
750
3,128
2,132
6,010
Minimum
loan
payments
£’000
138
389
1,173
1,700
22. Trade and other financial liabilities
Trade payables … … … … … … … … … … …
Other financial liabilities… … … … … … … … … …
Other taxation and social security costs … … … … … … …
… 19,238
1,688
…
2,559
…
23. Other payables
Accrued expenses… … … … … … … … … … …
Advance payments from customers … … … … … … … …
…
…
23,485
20,570
2020
£’000
3,212
86
3,298
2019
£’000
4,300
471
4,771
73
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NOTES TO THE FINANCIAL STATEMENTS
24. Deferred consideration
Deferred consideration on acquisitions … … … … … … …
…
2020
£’000
-
2019
£’000
204
At 30th April, 2019, the balance related to the acquisition of Jewelry Plaster (see note 14). As at 30th April, 2020,
the balance has been written back due to performance criteria not being met.
25. Warranty provision
Balance at 1st May, 2019 (1st May, 2018) … … … … … … …
Generated … … … … … … … … … … … …
Credited to the statement of profit or loss … … … … … … …
Exchange adjustment … … … … … … … … … …
Balance at 30th April… … … … … … … … … …
Warranty due within one year … … … … … … … … …
Warranty due after one year … … … … … … … … …
Balance at 30th April… … … … … … … … … …
2020
£’000
493
251
(265)
5
484
160
324
484
2019
£’000
513
166
(176)
(10)
493
261
232
493
Provisions for warranties relate to products sold and generally cover a period of between 1 and 3 years.
26. Deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets
Liabilities
Property, plant and equipment
… … …
Intangible assets … … … … … …
Derivative financial instruments … … …
Share-based payments reserve
… … …
Other temporary differences … … … …
2020
£’000
221
286
241
1,888
192
2,828
2019
£’000
-
-
252
2,630
125
3,007
Deferred tax asset (see note 19) … … … … … … … …
Deferred tax liability … … … … … … … … … …
2020
£’000
(3,765)
(1,898)
(98)
-
(78)
(5,839)
2020
£’000
60
(3,071)
(3,011)
Property,
plant and Intangible
Derivative
financial
assets instruments
£’000
£’000
equipment
£’000
Share-
based
payments
Other
temporary
reserve differences
£’000
£’000
2019
£’000
(3,014)
(1,306)
-
-
-
(4,320)
2019
£’000
63
(1,376)
(1,313)
Total
£’000
Balance at 1st May, 2018
(2,661)
(1,510)
199 -
40
(3,932)
…
Impact of IFRS 15
Recognised in profit or loss …
…
Recognised in equity
…
Exchange adjustment
-
(347)
-
(6)
-
175
-
29
- -
(101) 484
154 2,146
- -
214
(129)
-
-
214
82
2,300
23
Balance at 30th April, 2019
(3,014)
(1,306)
252 2,630
125
(1,313)
Recognised in profit or loss …
…
Recognised in equity
…
Exchange adjustment
(546)
-
16
(115)
(161)
(30)
(186) (995)
77 253
- -
(10)
-
(1)
(1,852)
169
(15)
Balance at 30th April, 2020
(3,544)
(1,612)
143 1,888
114
(3,011)
74
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NOTES TO THE FINANCIAL STATEMENTS
26. Deferred tax assets and liabilities (continued)
Within the current and previous year, the Group has no material tax losses where a deferred tax asset has been
recognised. As at 30th April, 2020, the Group has not recognised £511,000 of deferred tax assets in relation
to the accumulated losses (2019: £690,000) within overseas subsidiaries.
On 11th March, 2020, it was announced that the UK corporation tax rate would remain at 19% on 1st April, 2020
and would no longer reduce to 17%. This measure was made under a Budget resolution which has statutory
effect under the provisions of the Provisional Collection of Taxes Act 1968 and, as such, it is substantively enacted
on the passing of the resolution on 17th March, 2020. On this basis the deferred tax liability has been calculated
at a rate of 19%.
27. Capital and reserves
Share capital
Authorised, allotted, called up and fully paid:
7,200,000 ordinary shares of 10p each … … … … … … … …
Issue of 163,200 ordinary shares of 10p each … … … … … … …
2020 2019
£’000
£’000
720
16
736
720
-
720
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled
to one vote per share at meetings of the Company.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations.
Share-based payments reserve
The share-based payments reserve is a non cash-impacting provision, as required by Accounting Standard
IFRS 2, relating to the Equity Long Term Incentive Plan, which vested at 1st May, 2019. Further details are included
in note 35.
Cash flow hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow
hedge instruments related to hedged transactions that have not yet occurred.
Deferred tax
The aggregate deferred tax relating to items that are recognised in equity is an asset of £1,629,000 (2019:
£2,350,000), being £1,348,000 (2019: £2,146,000) in respect of the Equity Long Term Incentive Plan and £281,000
(2019: £204,000) in respect of derivatives.
28. Financial risk management
The Group’s operations expose it to a variety of financial risks that include the effects of changes in market prices
(interest rates, foreign exchange rates and commodity prices), credit risk and liquidity. The Group has in place
risk management policies that seek to limit the adverse effects on the financial performance of the Group by
using various instruments and techniques.
Risk management policies have been set by the Board and applied by the Group.
a) Credit risk
The Group’s financial assets are cash and cash equivalents and trade and other receivables, the carrying
amounts of which represent the Group’s maximum exposure to credit risk in relation to financial assets.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned
by international credit rating agencies.
The Group’s credit risk is primarily attributable to its trade receivables and is managed through the following
processes:
i) The majority of orders accepted by Group companies are backed by credit insurance.
ii) Some orders are accepted with no credit insurance but with letters of credit.
iii) Some orders are accepted with no credit insurance and no letter of credit but with an internal analysis of
the customer’s size, creditworthiness, historic profitability and payment record.
iv) A few orders (less than 10%) are taken at risk following review by at least two Board members.
v) Major orders are normally accompanied by stage payments which go towards mitigating our credit risk.
75
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NOTES TO THE FINANCIAL STATEMENTS
28. Financial risk management (continued)
a) Credit risk (continued)
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure
to credit risk at the reporting date was:
Carrying amount
Contract assets … … … … … … … …
Trade and other financial assets – due after more than one year
Trade and other financial assets – due within one year … …
Cash at bank and cash equivalents … … … … …
Derivative financial assets… … … … … … …
Notes
5
18
18
20
28(d)
2020
£’000
6,558
252
24,486
9,840
1,205
42,341
2019
£’000
3,698
505
24,964
9,640
195
39,002
The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
UK … … … … … … … … … … … …
Rest of Europe … … … … … … … … … …
USA … … … … … … … … … … … …
… … … … … … … … … …
Pacific Basin
Rest of World … … … … … … … … … …
Carrying amount
2020
£’000
5,403
1,947
1,640
5,072
9,527
2019
£’000
4,914
3,732
719
7,994
5,920
23,589
23,279
The ageing of trade receivables and impairments at the reporting date was:
Net
2020
£’000
Not past due … … … 14,696
3,067
Past due 1-30 days … …
2,609
Past due 31-90 days… …
3,217
Past due more than 90 days
Gross
2020
£’000
14,709
3,083
2,656
3,457
Impairment
provision
2020
£’000
(13)
(16)
(47)
(240)
Net
2019
£’000
16,956
3,944
1,190
1,189
Gross
2019
£’000
16,956
3,944
1,190
1,470
Impairment
provision
2019
£’000
-
-
-
(281)
23,589
23,905
(316)
23,279
23,560
(281)
Management believes that there are no significant credit risks remaining with the above net receivables and
that the credit quality of customers is good, based on a review of past payment history and the current
financial status of the customers. Included in trade receivables are retentions which are job specific and
have varying due dates depending on the complexity of the job. These are included in the not past due
category. The Group has not renegotiated the terms of any trade receivables and has not pledged any
trade receivables as security.
The Directors estimate that the fair value of the Group’s trade and other receivables is approximate to their
carrying values.
An analysis of the provision for impairment of receivables is as follows:
Balance at 1st May, 2019 (1st May, 2018) … … … … … …
Exchange adjustment … … … … … … … … …
Impairment charged through the statement of profit or loss … … …
Impairment provision utilised during the year … … … … …
At 30th April
… … … … … … … … … …
2020
£’000
281
(6)
49
(8)
316
2019
£’000
429
(1)
38
(185)
281
76
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NOTES TO THE FINANCIAL STATEMENTS
28. Financial risk management (continued)
b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
At the year end the Group had the following unutilised bank facilities in respect of which all conditions
precedent had been met:
Uncommitted
2019
2020
£’000
£’000
Committed
2020
£’000
2019
£’000
Total
2020
£’000
2019
£’000
Unutilised bank facilities
… 17,095
7,585
12,000
15,000
29,095
22,585
The Group’s principal borrowing facilities are provided by three banks in the form of borrowings and short-
term overdraft facilities. The quantum of borrowing facilities available to the Group is reviewed regularly in
light of current working capital requirements and the need for capital investment for the long-term future
for the Group.
Maturity analysis
The table below analyses the Group’s financial liabilities into maturity groupings based on the period
outstanding at the balance sheet date up to the contractual maturity date. All figures are contracted gross
cash flows that have not been discounted.
2020
Contractual cash flows
Within
1 year
£’000
1-5 years
£’000
5+ years
£’000
Non-derivative financial liabilities
Bank loans and committed facilities … 12,912
391
Overdrafts … … … … …
1,016
Finance leases
… … … …
Operating leases … … … …
536
Trade and other financial liabilities … 23,485
12,547
-
271
1,139
-
2,289
-
-
-
-
Total
£’000
27,748
391
1,287
1,675
23,485
2020
Carrying
value
Total
£’000
27,010
391
1,256
1,566
23,485
Total … … … … … … 38,340
13,957
2,289
54,586
53,708
The 30th April, 2020 bank loans and committed facilities are repayable as follows: £12 million within year
end 30th April, 2021 and £9 million within year end 30th April, 2024. The interest rates chargeable on these
loans are on a floating basis against LIBOR and UK base rate, with bank margins of less than 2%. There is
also a bank loan of £1.3 million repayable by instalments, with the final payment due in the year ended 30th
April, 2039. Interest is charged at an effective interest rate of 1.96%, which is fixed for the whole period.
Non-derivative financial liabilities
Bank loans and committed facilities …
Overdrafts … … … … …
Finance leases
… … … …
Trade and other financial liabilities …
Deferred considerations on acquisitions
Within
1 year
£’000
138
9,147
980
20,570
204
Total … … … … … …
31,039
19,573
2019
Contractual cash flows
1-5 years
£’000
5+ years
£’000
18,389
-
1,184
-
-
1,173
-
-
-
-
1,173
2019
Carrying
value
Total
£’000
19,434
9,147
2,103
20,570
204
51,458
Total
£’000
19,700
9,147
2,164
20,570
204
51,785
c) Market risk
Foreign exchange risk
The Group is subject to fluctuations in exchange rates on its net investments overseas and transactional
monetary assets and liabilities not denominated in the operating (or “functional”) currency of the operating
unit involved.
The Group is exposed to fluctuations in several currencies which give rise to the net currency gains and
losses recognised in the statement of profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
28. Financial risk management (continued)
c) Market risk (continued)
Foreign exchange risk (continued)
The Group at its discretion is empowered to hedge its estimated annual foreign currency exposure in respect
of forecast sales and purchases if the Board deems it appropriate after having taken into account the
expected movement in the foreign exchange rates. The Group uses forward exchange contracts to hedge
its foreign currency risk. All the foreign exchange contracts have maturities within three years after the
balance sheet date. Where necessary, the forward exchange contracts are rolled over at maturity.
In respect of other monetary assets and liabilities held in currencies, the Group ensures that the net
exposure is eliminated through the use of forward exchange contracts or spot transactions at the time the
contractual commitment is in place.
Currency profile of financial assets and liabilities:
2020
US
Dollar
£’000
2019
US
Dollar
£’000
2020
2019
2020
2019
2020
Euro
£’000
Euro
£’000
Other
£’000
Other
£’000
Total
£’000
2019
Total
£’000
Trade and other
receivables
Cash and cash
equivalents
Trade and other
payables
4,584
5,076
1,068
1,225
-
59
5,652
6,360
576
(2,412)
(2,634)
(7,172)
1,786
(35)
(272)
(9,619)
(1,770)
(169)
(1,185)
(603)
(1,768)
(17)
(4,723)
(789)
3,390
2,495
(2,751)
(6,550)
18
7
657
(4,048)
The following significant exchange rates applied during the year:
US Dollar … … … … …
Euro … … … … … …
Average exchange rate
2019
1.3046
1.1353
2020
1.2661
1.1427
Reporting date spot rate
2019
1.3040
1.1633
2020
1.2594
1.1497
Interest rate risk
The Group is subject to fluctuations in interest rates on its borrowings and surplus cash. The Group is aware
of the financial products available to hedge against adverse movements in interest rates. Formal reviews
are undertaken to determine whether such instruments are appropriate for the Group. During the year, no
new interest rate swaps or caps were entered into.
The table below shows the Group’s financial assets and liabilities split by those bearing fixed and floating
rates and those that are non interest-bearing.
Fixed rate
Floating rate
Non interest-bearing
Total
2020
£’000
2019
£’000
2020
£’000
2019
£’000
9,640
-
2020
£’000
-
6,558
2019
£’000
-
3,698
2020
£’000
9,840
6,558
-
-
9,840
-
746
-
-
-
-
-
-
-
-
-
-
-
-
24,231
1,205
(18,965)
24,723
195
(18,002)
24,738
1,205
(18,965)
-
-
-
(391)
-
-
-
(9,147)
(23,485)
-
(1,273)
-
(20,570)
(204)
(1,693)
-
(23,485)
-
(1,273)
(391)
2019
£’000
9,640
3,698
25,469
195
(18,002)
(20,570)
(204)
(1,693)
(9,147)
Cash and cash
equivalents
Contract assets
Trade and
financial assets
Derivative assets
Contract liabilities
Trade and other
-
-
507
-
-
-
-
-
-
financial liabilities
Deferred consideration
Derivative liabilities
Bank overdrafts
Bank loans and
committed
facilities
Finance lease
liabilities
(5,988)
(1,370)
(21,022)
(18,064)
(1,256)
(2,103)
Operating lease
liabilities
(1,566)
-
-
-
-
-
-
-
-
-
-
-
(27,010)
(19,434)
(1,256)
(2,103)
(1,566)
-
(8,303)
(2,727)
(11,573)
(17,571)
(11,729)
(11,853)
(31,605)
(32,151)
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NOTES TO THE FINANCIAL STATEMENTS
28. Financial risk management (continued)
d) Capital management
The Group’s main objective when managing capital is to safeguard the Group’s ability to continue as a
going concern in order to provide returns to shareholders. The Board maintains a strong capital base
so as to maintain investor, creditor and market confidence and to sustain future development of the
business. Operations are funded through various shareholders’ funds, bank debt, finance leases and, where
appropriate, deferred consideration on acquisitions. The capital structure of the Group reflects the
judgement of the Board as to the appropriate balance of funding required. At 30th April, 2020, the capital
used was £123.8 million (2019: £126.4 million) as shown in the following table:
Cash and cash equivalents … … … … … … (9,840)
Finance leases … … … … … … … …
1,256
… … … … 27,010
Bank loans and committed facilities
391
Overdrafts
-
Deferred consideration
… … … … … … … …
… … … … … …
2020
£’000
2019
£’000
(9,640)
2,103
19,434
9,147
204
Net debt … … … … … … … … … 18,817
Total equity attributable to equity holders of the parent … 105,017
21,248
105,165
Capital
123,834
126,413
The Group aims to maintain a strong credit rating and headroom whilst optimising return to shareholders
through an appropriate balance of debt and equity funding. The Group’s general strategy is to keep the debt
to equity ratio below 30%, adjusted where appropriate for the effect of acquisitions. At 30th April, 2020 net
debt was £18.8 million (2019: £21.2 million). The gearing ratio, excluding deferred consideration from net
debt, is 17.9% (2019: 20%).
The Group manages its capital structure and makes adjustments to it with regard to the risks inherent in the
business and in light of changes to economic conditions.
Working capital is managed in order to generate maximum conversion of profits into cash and cash
equivalents. Dividends are paid from current year profits, thereby maintaining equity.
The policy for debt is to ensure a smooth debt maturity profile with the objective of ensuring continuity of
funding. The repayment profile for the debt is shown in note 28(b).
There were no changes in the Group’s approach to capital management during the year.
Currency derivatives
The Group utilises currency derivatives to hedge future transactions and cash flows. The Group is party to
a variety of foreign currency forward contracts in the management of its exchange rate exposures.
Forecast transactions
The Group classifies its forward exchange contracts hedging forecast transactions as cash flow hedges and
states them at fair value.
The nominal value of forward exchange contracts used as hedges of forecast transactions at 30th April, 2020,
in Sterling terms, was £97 million spread across USD, EUR and THB denominated contracts. The fair value
of these contracts at 30th April, 2020 was a liability of £750,000 (being assets totalling £338,000 and liabilities
totalling £1,088,000). In addition, a nominal value of £9.4 million of USD denominated forward exchange
contracts, which matured before 30th April, 2020, have been carried forward as part of the hedge reserve
given that the underlying transactions had not occurred and the hedge was still effective at maturity. The
fair value of these at 30th April, 2020 was a liability of £731,000. The Group also had a number of forward
contracts not designated as cash flow hedges, and therefore recorded at fair value through the statement of
profit or loss. The nominal value of these contracts at 30th April, 2020, in Sterling terms, was £37 million
spread across USD and EUR denominated contracts. The fair value of these at 30th April, 2020 was an asset
of £682,000 (being assets totalling £867,000, and liabilities totalling £185,000).
The nominal value of forward exchange contracts used as hedges of forecast transactions at 30th April, 2019,
in Sterling terms, was £53 million spread across USD and EUR denominated contracts. The fair value of
these at 30th April, 2019 was a liability of £1,200,000 (being assets totalling £158,000 and liabilities totalling
£1,358,000). The Group also had a number of forward contracts not designated as cash flow hedges, and
therefore recorded at fair value through the statement of profit or loss. The nominal value of these contracts
at 30th April, 2019, in Sterling terms, was £7 million spread across USD and EUR denominated contracts.
The fair value of these at 30th April, 2019 was a liability of £298,000 (being assets totalling £37,000, and
liabilities totalling £335,000).
Recognised assets and liabilities
Changes in the fair value of forward exchange contracts that economically hedge monetary assets and
liabilities in foreign currencies and for which no hedge accounting is applied are recognised in the statement
of profit or loss. Both the changes in fair value of the forward contracts and the foreign exchange gains and
losses relating to the monetary items are recognised as part of cost of sales.
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NOTES TO THE FINANCIAL STATEMENTS
28. Financial risk management (continued)
d) Capital management (continued)
Derivative financial instruments
The following table sets out the periods when the cash flows are expected to occur and when they are
expected to affect profit or loss:
Forward exchange contracts / currency swaps
Assets not designated in a cash
…
Assets designated and effective
flow hedge relationship
… …
as cash flow hedging instruments … …
Total assets
Liabilities not designated in a cash
flow hedge relationship
… … …
Liabilities designated and effective
2020
Carrying
amount
£’000
Expected Within
cash flow 1 year
£’000
£’000
Between
1 and
5 years
£’000
867
338
867
338
1,205
1,205
223
233
456
644
105
749
(185)
(185)
(185)
-
(202)
(202)
Between
1 and
5 years
£’000
21
16
37
(78)
(145)
(223)
as cash flow hedging instruments … …
(1,088)
(1,088)
(886)
Total liabilities
(1,273)
(1,273)
(1,071)
Forward exchange contracts / currency swaps
Assets not designated in a cash
…
Assets designated and effective
flow hedge relationship
… …
as cash flow hedging instruments … …
Total assets
Liabilities not designated in a cash
flow hedge relationship
… … …
Liabilities designated and effective
as cash flow hedging instruments … …
Total liabilities
2019
Carrying
amount
£’000
Expected Within
1 year
cash flow
£’000
£’000
37
158
195
37
158
195
16
142
158
(335)
(335)
(257)
(1,358)
(1,693)
(1,358)
(1,213)
(1,693)
(1,470)
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NOTES TO THE FINANCIAL STATEMENTS
28. Financial risk management (continued)
d) Capital management (continued)
Sensitivity analysis
The Group has calculated the following sensitivities based on available data from forward contract markets
for the principal foreign currencies in which the Group operates. Given recent fluctuations in rates, it is
deemed sensible to provide the quantum for a 1% change in rates to aid understanding. These figures can
be extrapolated proportionately to obtain an estimate of the impact of large movements. The Group’s
exposure to foreign currency changes for all other foreign currencies is not considered material.
Impact on equity
1% increase in US Dollar fx rate against pound Sterling
… … …
1% increase in Euro fx rate against pound Sterling … … … …
1% decrease in US Dollar fx rate against pound Sterling … … …
1% decrease in Euro fx rate against pound Sterling … … … …
Impact on the statement of profit or loss
2020
£’000
(Profit)/loss
2019
£’000
(Profit)/loss
(633)
(202)
633
202
(406)
(253)
406
253
2020
£’000
(Profit)/loss
2019
£’000
(Profit)/loss
1% increase in US Dollar fx rate against pound Sterling
… … …
1% increase in Euro fx rate against pound Sterling … … … …
1% decrease in US Dollar fx rate against pound Sterling … … …
1% decrease in Euro fx rate against pound Sterling … … … …
1% increase in interest rates
… … … … … … …
(102)
(175)
102
175
-
(74)
95
74
(95)
235
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NOTES TO THE FINANCIAL STATEMENTS
28. Financial risk management (continued)
e) Total financial assets and liabilities
The table below sets out the Group’s accounting classification of each class of financial assets and liabilities
and their fair values at 30th April, 2020 and 30th April, 2019.
30th April, 2020
30th April, 2019
Carrying
amount
£’000
Fair value
£’000
Carrying
amount
£’000
Fair value
£’000
9,840
6,558
23,589
1,149
9,840
6,558
23,589
1,149
9,640
3,698
23,279
2,190
9,640
3,698
23,279
2,190
867
867
37
37
Financial assets
At amortised cost
Cash and cash equivalents … … …
Contract assets … … … … …
Trade receivables … … … … …
Other receivables… … … … …
At fair value through profit and loss
Derivative financial assets not designated in
a cash flow hedge relationship … …
Fair value – hedging instrument
Derivative financial assets designated and
effective as cash flow hedging instruments
338
338
158
158
Total financial assets… … … …
42,341
42,341
39,002
39,002
30th April, 2020
30th April, 2019
Carrying
amount
£’000
Fair value
£’000
Carrying
amount
£’000
Fair value
£’000
Financial liabilities at amortised cost
… … … …
Contract liabilities
Trade payables … … … … …
Other financial liabilities
… … …
Deferred consideration … … … …
Finance lease liabilities … … … …
Operating lease liabilities
… … …
Bank loans and committed facilities… …
Bank overdrafts … … … … …
18,965
19,238
4,247
-
1,256
1,566
27,010
391
18,965
19,238
4,247
-
1,256
1,566
27,010
391
18,002
17,012
3,558
204
2,103
-
19,434
9,147
18,002
17,012
3,558
204
2,103
-
19,434
9,147
At fair value through the profit and loss
Derivative financial liabilities not designated in
a cash flow hedge relationship … …
185
185
335
335
Fair value – hedging instrument
Derivative financial liabilities designated and
effective as cash flow hedging instruments
1,088
Total financial liabilities … … …
73,946
1,088
73,946
1,358
71,153
1,358
71,153
Derivative financial assets and liabilities fair values in the above table are derived using Level 2 inputs as
defined by IFRS 7 as detailed in the paragraph below.
IFRS 7 requires that the classification of financial instruments at fair value be determined by reference to the
source of inputs used to derive the fair value. This classification uses the following three-level hierarchy:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - inputs other
than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); Level 3 - inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The Group does not use derivatives for speculative purposes. All transactions in derivative financial
instruments are underpinned by firm orders from customers or to suppliers or where there is a high
degree of probability that orders will be received.
For short-term cash and cash equivalents, trade and other receivables, trade and other financial liabilities,
fixed and floating rate borrowings, the fair values are the same as carrying value.
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NOTES TO THE FINANCIAL STATEMENTS
29. Capital commitments
Contracted capital commitments at 30th April, 2020 for which no provision has been made in these financial
statements were £4,154,000 (2019: £392,000).
30. Guarantees and contingencies
The table below sets out the number and value of unexpired bank guarantee bonds as at 30th April, 2020 and
30th April, 2019. These guarantee bonds are required as part of the terms and conditions within our mechanical
engineering contracts.
219 guarantee and bonds contracts (2019: 265) … … … … …
31. Subsequent events
2020
£’000
11,944
2019
£’000
10,698
After the balance sheet date an ordinary dividend of 81.71p per qualifying ordinary share was proposed by the
Directors (2019: Ordinary dividend of 96.21p).
The current year proposed ordinary dividend of £6,016,000 has not been provided for within these financial
statements (2019: Proposed ordinary dividend of £6,927,000 was not provided for within the comparative figures).
On 11th June, 2020 Goodwin PLC drew down £30 million of funding from the Bank of England CCFF scheme.
This loan will be repaid in full on 27th April, 2021.
On 31st July, 2020 and as a result of a competitive tender exercise, Goodwin PLC replaced its Lloyds Bank PLC
revolving credit and overdraft facilities with new facilities from Santander UK plc. As a result of this exercise,
the Group now has £24.5 million on a 5 year committed basis (Lloyds £13 million) and £5 million on overdraft
(Lloyds £16.5 million) thus giving the Group proportionately more in the way of long-term committed lines.
The Group is also in the final stages of renegotiating a £10 million revolving credit facility which expires in
October 2020. The Directors do not see an issue in renewing these facilities.
Covid-19 continues to impact on the Refractory Engineering segment performance since the end of the current
financial year but the Directors remain confident that the impact here will be short lived.
On 30th June, 2020 the Group acquired freehold, plant and buildings for a sum of £770,000. This acquisition
complements the mixing business activities at Hoben International where the plant is reaching capacity.
32. Non-principal subsidiaries and associates
Registered Country of
address*
Incorporation
Class of
shares held % held
Non-principal Subsidiaries:
Asian Industrial Investment Casting
4
Powders Private Limited … … … … …
4
… …
Easat Radar Systems India Private Limited
1
Goodwin Engineering Training Company Limited …
4
Goodwin Refractory Services India Private Limited …
Duvelco Limited
1
… … … … … …
Jewelry Wax Limited … … … … … … 14
GRS Silicone Company Limited … … … … 17
… … … … … 12
SRS Guangzhou Limited
16
Shenzhen King-Top Modern Hi-Tech Company Limited
Ordinary
India
Ordinary
India
England and Wales Ordinary
India
Ordinary
England and Wales Ordinary
Ordinary
Thailand
Ordinary
China
Ordinary
China
Ordinary
China
Holding Companies:
Goodwin Refractory Services Holdings Limited… …
Ying Tai (UK) Limited … … … … … …
1
1
England and Wales Ordinary
England and Wales Ordinary
Non-principal Associates:
Tet Goodwin Property Company Limited … … … 11
Thailand
Ordinary
Dormant companies:
Gold Star Powders Limited … … … … …
Net Central Limited … … … … … …
Sandersfire International Limited … … … …
Specialist Refractory Services Limited … … …
1
1
1
1
England and Wales Ordinary
England and Wales Ordinary
England and Wales Ordinary
England and Wales Ordinary
*The registered address for each company can be found in note 34.
All of the above companies are included as part of the consolidated accounts.
100
100
100
100
100
75
75
75
75
100
75
49
100
100
100
100
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NOTES TO THE FINANCIAL STATEMENTS
33. Related parties
Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not
reported in this note. Year end balances and transactions during the year with the Group’s associate
companies are shown below.
2020 2019
£’000 £’000
Jewelry Plaster Limited
Revenue …
… … … … …
Management fee income … … … …
… … … … …
Interest income
… … … … …
Dividends …
TET Goodwin Property Company Limited
Rental cost …
Interest income
Receivables …
… … … … …
… … … … …
… … … … …
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
…
-
-
-
-
337
24
507
582
36
97
1,254
310
20
745
34. Registered offices of subsidiaries and associates
The registered offices of the companies listed in notes 14 and 32 are listed below.
Ivy House Foundry, Hanley, Stoke-on-Trent ST1 3NR
1.
2. Brassington, Nr. Matlock, Derbyshire DE4 4HF
3. 13-1, Jungbong-daero, 396 Beon-Gil, Seo-gu, Incheon, South Korea
4. 112/2-5 Chinna Amman Koil Street, Kalavakkam, Thiruporur 603 110, Tamil Nadu, India
5. Suite C, F1, Building #14, Xiya Road No.11, Waigaoqiao Free Trade Zone, 200131, Shanghai, China
6. Hocksteiner Weg 56, D - 41189 Mönchengladbach, Germany
7. Suite 1105, Building 1, Wanguocheng Moma, No.16 Changfeng West Street, Wanbailin District, Taiyuan,
Shanxi Province, 30021, China
8. Rua das Margaridas s/n, No 70, Barrio Terra Preta - Mairipora – SP, CEP 07662-025, São Paulo, Brazil
9. Confidential Tax and Business Services, Level 1, 449 Gympie Road, Kedron Qld 4031, Australia
10. Koivupuistontie 34, 01510 Vantaa, Finland
11. 99/9 Moo5 Khlong Yong, Bhudhamontol, Nakhonpathom 73170, Thailand
12. No.73, Jiao Xin Road, Lanhe Town, Nansha District, Guangzhou City, 511480, China
13. 400 metres North from Nan Zhai Committee, Xifuzhen Street, Chengyang District, Qingdao City, 266106, China
14. 238, 3rd Floor, OPG Tech Building Bangkhuntien-Chatalay, Samaedum Sub-district, Bangkhuntien District,
Bangkok 10150, Thailand
15. Unit 1 Bridgeway Business Park, Cnr Sam Green Road and Pinnacle Close, Tunney Extension 9, Germiston,
Gauteng 1401, South Africa
16. No.2-1, Shanzixia Road, Dakang Community, Yuanshan Street, Longgang District, Shenzhen City, Guangdong
Province, China
17. 165 Minsheng Road. Lanhe Town, Nansha District, Guangzhou, China
35. Share-based payment transactions
The Group had one share option scheme, the LTIP, the terms of which are outlined in the Directors’ Remuneration
Policy and Report on page 30. The scheme has now ended.
The non cash-impacting provision for the year, recognised in the statement of profit or loss in respect of
share-based payments is £Nil (2019: £1,220,000).
Grant date/ Method of Maximum Vesting Contractual life
employees settlement number of conditions of options
entitled instruments
Options granted on Equity 576,000 For every 10% Expiry date:
5th October, 2016 growth in TSR 30th April, 2019
to Executive 28,800 shares
Directors will vest
Awards entitle each holder to earn up to 1% of the share capital of the Company subject to the performance
condition.
An award vested and became exercisable over 0.05% of the share capital of the Company for every 10%
increase in the TSR of the Company at the end of the three financial years ending on 30th April, 2019 with
a base year of 2009 but excluding the growth already achieved up to 30th April, 2016.
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NOTES TO THE FINANCIAL STATEMENTS
35. Share-based payment transactions (continued)
2020
2019
Number of share options
Outstanding at beginning of year … … … … … … … … -
Vested 1st May, 2019 … … … … … … … … 489,600
Exercised during the year … … … … … … … … 163,200
Share price at the date of exercise … … … … … … … … £34.00
Exerciseable at end of year … … … … … … … … 326,400
-
-
-
-
-
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NOTES TO THE FINANCIAL STATEMENTS
36. Alternative performance measures
As outlined in note 3, IFRS 16 has not had a significant impact on either the profit or loss or the net assets of
the Group. For this reason, the Alternative Performance Measures are considered to have been prepared on
a consistent basis.
Measure
Method of calculation / reference
2020
2019
Gross profit (£’000)
Revenue (£’000)
34,769
Consolidated statement of profit or loss, page 42
Consolidated statement of profit or loss, page 42 144,512
40,632
127,046
Gross profit as percentage of
revenue (%)
Gross profit / revenue
24.1
32.0
Operating profit (£’000)
Capital employed (£’000)
Consolidated statement of profit or loss, page 42
Note 28 (d), page 79
12,858
123,834
16,411
126,413
Return on capital employed (%)
Operating profit / capital employed
10.4
13.0
18,817
-
21,248
204
18,817
21,044
Net debt (£’000)
Deferred consideration (£’000)
Note 28 (d), page 79
Note 28 (d), page 79
Net debt excluding deferred
consideration (£’000)
Net assets attributable to equity
holders of the parent (£’000)
Consolidated balance sheet, page 46
105,017
105,165
Gearing (%)
Net debt (excluding deferred consideration)
/ equity, as above
17.9
20.0
Net profit attributable to equity
holders of the parent (£’000)
Net assets attributable to equity
holders of the parent (£’000)
Consolidated statement of profit or loss, page 42
7,866
11,505
Consolidated balance sheet, page 46
105,017
105,165
Return on investment (%)
Net profit / net assets
7.5
10.9
Revenue (£’000)
Average number of employees
Consolidated statement of profit or loss, page 42 144,512
1,190
Note 7, page 61
127,046
1,082
Sales per employee (£’000)
Group revenue / average employees
121
117
Annual post tax profit (£’000)
Depreciation owned assets (£’000)
Depreciation finance leased assets
Amortisation (£’000)
Consolidated statement of profit or loss, page 42
Note 6, page 61
Note 6, page 61
Note 6, page 61
8,340
5,874
290
1,328
12,447
5,571
248
1,312
Annual post tax profit +
depreciation + amortisation (£’000)
15,832
19,578
Annual pre-tax profit (£’000)
Impact of IFRS 16 implementation
Impact of IFRS 15 implementation
Consolidated statement of profit or loss, page 42
Note 3 page 57
Note 3 page 53 Directors’ Report and Accounts
April, 2019
12,115
28
16,410
-
-
(1,682)
Like-for-like annual pre tax
profit (£’000)
12,143
14,728
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NOTES TO THE FINANCIAL STATEMENTS
GOODWIN PLC
COMPANY BALANCE SHEET
at 30th April, 2020
NON-CURRENT ASSETS
Property, plant and equipment … … … … … …
Investment properties … … … … … … …
Right-of-use assets… … … … … … … …
Investments … … … … … … … … …
Intangible assets … … … … … … … …
CURRENT ASSETS
Other receivables … … … … … … … …
Deferred tax asset … … … … … … … …
Cash at bank and in hand
… … … … … …
Notes
C4
C4
C4
C5
C6
C7
C10
2020
£’000
22,210
24,811
3,202
25,801
15,531
2019
£’000
24,583
24,741
-
25,374
12,877
91,555
87,575
26,383
31,092
-
111
216
87
26,494
31,395
TOTAL ASSETS
… … … … … … … …
118,049
118,970
CURRENT LIABILITIES
Interest-bearing loans and borrowings
… … … …
Other payables … … … … … … … …
Corporation tax … … … … … … … …
NON-CURRENT LIABILITIES
Interest-bearing loans and borrowings
… … … …
Deferred income … … … … … … … …
Deferred tax liabilities … … … … … … …
C8
C9
C8
C10
13,958
5,515
-
10,750
6,696
332
19,473
17,778
13,009
1,034
1,118
18,856
1,087
-
15,161
19,943
TOTAL LIABILITIES … … … … … … … …
34,634
37,721
NET ASSETS … … … … … … … … …
83,415
81,249
EQUITY
Called up share capital … … … … … … …
C11
Share-based payments reserve
… … … … …
Profit and loss account … … … … … … …
736
5,244
77,435
720
4,991
75,538
TOTAL EQUITY
… … … … … … … …
83,415
81,249
Profit after tax for the year … … … … … … …
8,824
17,178
These financial statements were approved by the Board of Directors on 13th August, 2020, and signed on its behalf by:
T. J. W. Goodwin
Director
M. S. Goodwin
Director
S. R. Goodwin
Director
Company Registration Number: 305907
The notes on pages 89 to 98 form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
GOODWIN PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 30th April, 2020
YEAR ENDED 30TH APRIL, 2020
Balance at 1st May, 2019
Total comprehensive income:
Profit
… … … … … …
… … … …
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
Issue of shares … … … … … …
Other transactions
… … … … …
Dividends paid … … … … … …
Notes
Share
capital
£’000
Share-
based
payments
reserve
£’000
Retained
earnings
£’000
Total
equity
£’000
C2
720
-
-
16
-
-
4,991
75,538
81,249
-
8,824
8,824
-
-
253
-
8,824
-
-
(6,927)
8,824
16
253
(6,927)
BALANCE AT 30TH APRIL, 2020
736
5,244
77,435
83,415
YEAR ENDED 30TH APRIL, 2019
Balance at 1st May, 2018
Total comprehensive income:
Profit … … … … … … …
… … … …
C2
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
Equity-settled share-based payment transactions
Tax on equity-settled share-based payment transactions
Dividends paid … … … … … …
720
1,625
64,370
66,715
-
-
-
-
-
-
17,178
17,178
-
1,220
2,146
-
17,178
-
-
(6,010)
17,178
1,220
2,146
(6,010)
BALANCE AT 30TH APRIL, 2019
720
4,991
75,538
81,249
The notes on pages 89 to 98 form part of these financial statements.
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C1
Accounting policies
NOTES TO THE FINANCIAL STATEMENTS
Principal accounting policies
These financial statements present information about the Company as an individual undertaking and not
about its Group. These financial statements were prepared in accordance with Financial Reporting Standard
101 Reduced Disclosure Framework (“FRS 101”).
Basis of accounting
Goodwin PLC (the “Company”) is a company incorporated and domiciled in England and Wales.
In preparing these financial statements, the Company applies the recognition, measurement and disclosure
requirements of International Financial Reporting Standards as adopted by the EU (“Adopted IFRSs”), but
makes amendments where necessary in order to comply with Companies Act 2006.
The Company proposes to continue to adopt the reduced disclosure framework of FRS 101 in its next financial
statements. The accounting policies set out below have, unless otherwise stated, been applied consistently
to all periods presented in these financial statements.
The consolidated financial statements of Goodwin PLC are prepared in accordance with International Financial
Reporting Standards and are available to the public and may be obtained from The Company Secretary,
Goodwin PLC, Ivy House Foundry, Hanley, Stoke-on-Trent, ST1 3NR.
The Company is exempt under S408 (3) Companies Act 2006 from the requirement to present its own profit
and loss account.
In these financial statements, the Company has applied the exemptions available under FRS101 in respect of
the following disclosures:
• A cash flow statement and related notes;
• Comparative period reconciliations for share capital, tangible fixed assets and intangible assets;
• Disclosures in respect of transactions with wholly-owned subsidiaries;
• Disclosures in respect of capital management;
• The effects of new but not yet effective IFRSs;
As the consolidated financial statements of Goodwin PLC include the equivalent disclosures, the Company
has also taken the exemptions under FRS101 available in respect of certain disclosures required by IFRS 13
Fair Value Measurement and the disclosures required by IFRS 7 Financial Instrument Disclosures.
Judgements made by the Directors, in the application of these accounting policies that have a significant
effect on the financial statements and estimates with a significant risk of material adjustment in the next
year are discussed in note 2 of the Group financial statements.
Measurement convention
The financial statements have been prepared under the historical cost accounting rules and in accordance
with applicable Accounting Standards.
Investments in subsidiary undertakings
In the Company’s financial statements, investments in subsidiary undertakings are stated at cost less amounts
written off for impairment.
Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies at the foreign
exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies at the balance sheet date are translated at the foreign exchange rate ruling at that date. Foreign
exchange differences arising on translation are recognised in the statement of profit or loss within
operating profit.
Financial instruments
Financial assets and financial liabilities are recognised on the Company’s balance sheet when the Company
has become a party to the contractual provisions of the instrument. The principal financial assets and
liabilities of the Company are as follows:
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand including cash deposits with an original
maturity of three months or less.
Bank overdrafts that are repayable on demand and form an integral part of the Company’s cash
management are included as a component of cash and cash equivalents for the purpose only of the
statement of cash flows.
Recognition and valuation of equity instruments
Equity instruments are stated at par value. For ordinary share capital, the par value is recognised in share
capital and the premium in the share premium reserve.
Recognition and valuation of financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements into which
the Company has entered.
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NOTES TO THE FINANCIAL STATEMENTS
C1
Accounting policies (continued)
Financial instruments (continued)
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded initially at their fair value less attributable
transaction costs. They are subsequently carried at their amortised cost and finance charges and are
recognised in the statement of profit or loss over the term of the instrument using an effective rate of
interest.
Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently at amortised cost using
the effective interest method where material.
Intangible fixed assets and amortisation
Manufacturing rights, brand names and customer lists purchased by the Company are amortised to nil
by equal annual instalments over their estimated useful lives. Expenditure on development activities is
capitalised if the product or process is technically and commercially feasible and the Company has sufficient
resources to complete development. The expenditure capitalised includes the cost of materials, direct
labour and an appropriate proportion of overheads.
Amortisation rates are as follows:
Manufacturing rights … … … … … 11 - 15 years
Brand names … … … … … … now fully amortised
Software and licences
Intellectual property rights … … … … 15 years
Non-compete agreements … … … … 15 years
Capitalised development costs … … … Minimum expected order unit intake or
… … … … 4 years
minimum product life
… … … … … … over estimated production life
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for
as separate items of property, plant and equipment.
Depreciation is charged to the statement of profit or loss over the estimated useful lives of each part of an
item of property, plant and equipment on the following bases:
Freehold land … … … … … … Nil
Freehold buildings … … … … … 2% to 4% on reducing balance or cost
Plant and machinery … … … … … 5% to 25% on reducing balance or cost
Motor vehicles … … … … … … 15% or 25% on reducing balance
Tooling
Fixtures and fittings … … … … … 15% to 25% on reducing balance
Assets in the course of construction are not depreciated.
Investment properties
Investment properties are properties which are held either to earn rental income or for capital appreciation
or for both. Investment properties are stated at cost less accumulated depreciation.
Depreciation is charged to the statement of profit or loss on a straight-line basis over the estimated useful
lives of investment properties which is typically 25 years.
Government grants
Government grants relating to income are recognised in the statement of profit or loss as a deduction from
the expenses that they are intended to compensate.
Unamortised government grants relating to assets are recognised in the balance sheet as a deferred creditor.
Amortisation of such grants is credited to profit and loss in accordance with the useful lives of the assets
to which they relate.
Provisions
A provision is recognised in the balance sheet when the Company has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required
to settle the obligation. 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.
Leases
The Company’s accounting policy on leases up to April 2019 was as follows:
Operating lease payments
Payments made under operating leases are recognised in the statement of profit or loss on a straight-line
basis over the term of the lease. Lease incentives received are recognised in the statement of profit or loss
as an integral part of the total lease expense.
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C1
NOTES TO THE FINANCIAL STATEMENTS
Accounting policies (continued)
Leases (continued)
Finance lease payments
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding
liability. The finance charge is allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability.
This policy has been amended in accordance with IFRS 16, and the new policy it outlined below.
Definition of a lease
A contract is a lease or contains a lease if it transfers the right to use an identified asset over the contract
term, in exchange for payment. In determining whether a contract gives the Company the right to use an
asset, the Company assesses whether:
• the contract involves the use of an identified asset;
• the Company has the right to obtain substantially all of the economic benefit of using the asset; and
• the Company has the right to direct the use of the asset by deciding how the asset is employed.
Lease term
The lease term is the non-cancellable period of a lease, and options to extend the lease or terminate it, where
it is probable that the Company will exercise the available options. At the start of a lease, the Company makes
a judgement about whether it is reasonably certain to exercise the options, and reassesses this judgement at
every reporting period. Contracts, where the original lease term has expired, with assets continuing to be
leased on a short-term rolling basis of a few months, are treated as short-term leases.
Lease balances
A right-of-use asset and a lease liability are calculated at the beginning of a lease. The right-of-use asset is
measured initially at cost, being the opening lease liability, adjusted for any lease payments made by the
start of the lease, adjusted for any initial direct costs, which have been incurred.
The lease liability is measured initially at the present value of the lease payments, which are outstanding at
the start date, discounted at either the rate implicit in the lease or the Company’s incremental borrowing rate.
With the exception of leases containing an option to purchase, the Company uses its incremental borrowing
rate as the discount rate. Lease liabilities are measured at amortised cost, using the effective rate, and
adjusted as required for any subsequent change to the lease terms.
The right-of-use asset is depreciated on a straight-line basis over the lease term, or from the start date of
the lease to the end of the useful life of the right-of-use asset as appropriate. The method of calculating the
estimated useful lives of the right-of-use assets and testing for impairment is the same as that for property,
plant and equipment.
Recognition exemptions
Payments for short-term leases, lasting twelve months or less, without a purchase option continue to be
reported an as operating expense on a straight-line basis over the term of the lease.
The cost of leasing low-value items will continue to be reported as an operating expense over the life of
the lease.
Financial expenses
Financial expenses comprise interest payable, interest on finance leases using the effective interest method
and the unwinding of the discount on provisions. Borrowing costs that are directly attributable to the
acquisition, construction or production of an asset that takes a substantial time to be prepared for use are
capitalised as part of the cost of that asset.
Interest income and interest payable is recognised in the statement of profit or loss as it accrues.
Pension costs
The Company contributes to a defined contribution pension scheme for employees under an Auto Enrolment
Pension arrangement as required by Government legislation. The assets of the scheme are held in
independently administered funds. Company pension costs are charged to the statement of profit or loss
in the year for which contributions are payable.
Contributions to the schemes are made on a monthly basis, and at the end of the financial year there were
one month’s contributions outstanding, which were paid in the following month.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the statement
of profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax
provided is based on the expected manner of realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
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NOTES TO THE FINANCIAL STATEMENTS
C1
Accounting policies (continued)
Taxation (continued)
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be avail-
able against which the asset can be utilised.
Share-based payment transactions
Share-based payment arrangements, in which the Company receives goods or services as consideration for
its own equity instruments, are accounted for as equity-settled share-based payment transactions, regardless
of how the equity instruments are obtained by the Company.
The grant date fair value of share-based payment awards granted to employees is recognised as an
employee expense, with a corresponding increase in equity, over the period in which the employees become
unconditionally entitled to the awards. The fair value of the awards is measured using an option valuation
model, taking into account the terms and conditions upon which the awards were granted.
C2
Expenses and auditor’s remuneration
Included in the profit / (loss) before taxation are the following:
Depreciation
… … … … … … …
Owned assets
… … … … … … …
Assets held under finance leases
Amortisation of intangible assets
… … … … … … …
Reversal of impairment of amounts due from Group undertakings … …
Impairment of investments in subsidiary companies… … … … …
2020
£’000
2,788
203
708
-
-
2019
£’000
2,092
202
137
(4,040)
1,385
Fees receivable by the auditors and the auditor’s associates in respect of:
Audit of these financial statements
… … … … … … …
45
39
Amounts paid to the Company’s auditor in respect of services to the Company, other than the audit of the
Company’s financial statements, have not been disclosed as the information is required instead to be
disclosed on a consolidated basis (see note 6 of the Group financial statements).
C3
Staff numbers and costs
The average number of persons employed by the Company (including Directors) during the year, analysed
by category, was as follows:
Number of employees
2020 2019
Administration staff … … … … … … … … … … 51 50
2020 2019
£’000 £’000
The aggregate payroll costs of these persons were as follows:
Wages and salaries … … … … … … … … … … 3,730 3,723
Social security costs … … … … … … … … … … 469 424
Other pension costs … … … … … … … … … … 98 107
4,297 4,254
Details of the Directors’ remuneration can be found within the Directors’ Remuneration Report on page 29.
The emoluments of the highest paid Director were £310,000 (2019: £397,000). The number of Directors
who were members of a defined contribution pension scheme was 6 (2019: 8).
A charge of £Nil for the LTIP (2019: £1,220,000) has been recognised in the year, but not included in the
above table. Further information is contained in note 35 of the Group financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
C4
Tangible fixed assets
Investment
properties
Property, Plant and Equipment
Cost
Balance at 1st May, 2019
… …
Additions
Reclassifications
…
IFRS 16 classification
adjustment … …
Disposals
… …
Intercompany transfers
£’000
29,559
124
23
-
-
856
Land and
Plant and
buildings equipment
£’000
£’000
Fixtures
and
Assets in
course of
fittings construction
£’000
£’000
Total
£’000
1,166
-
-
-
-
-
32,853
897
4,497
(4,045)
(47)
197
1,637
68
-
-
(2)
-
4,767
1,735
(4,520)
40,423
2,700
(23)
-
-
-
(4,045)
(49)
197
Balance at 30th April, 2020
30,562
1,166
34,352
1,703
1,982 39,203
Depreciation
Balance at 1st May, 2019
Charged in year … …
IFRS 16 classification
adjustment - opening
Disposals
… …
Intercompany transfers
4,818
933
-
-
-
644
20
-
-
-
14,090
1,737
1,106
98
(640)
(32)
(28)
-
(2)
-
-
-
-
-
-
15,840
1,855
(640)
(34)
(28)
Balance at 30th April, 2020
5,751
664
15,127
1,202
- 16,993
Net book value
At 30th April, 2019 …
At 30th April, 2020
24,741
24,811
522
502
18,763
19,225
531
501
4,767
24,583
1,982 22,210
A bank loan of £4.7 million is secured against three furnaces (see note C8).
The Company’s investment properties have been valued, using the cost model, and depreciated over their
estimated useful lives – typically 25 years. In the opinion of the Directors, the fair value of the investment
properties as at 30th April, 2020 was estimated to be £45 million (2019: £45 million). Fair value for this
purpose is based on Level 3 fair value inputs and, specifically, the Directors’ opinion as to the amount for
which the property could be exchanged between knowledgeable, willing parties in an arm’s length
transaction given a reasonable timeframe in which to conclude such an exchange.
Cost
Opening IFRS 16 classification adjustment
Balance at 30th April, 2020
… … … … … …
…
…
4,045
Right-of-
use assets
£’000
Depreciation
Opening IFRS 16 classification adjustment
Charged in the year
… … … … … …
… … … … … … … … … …
…
…
…
…
Balance at 30th April, 2020
Net book value at 30th April, 2020
The right-of-use assets secure lease obligations (see note C8).
93
4,045
640
203
843
3,202
59585 Goodwin Directors Report 2020.qxp_Layout 1 19/08/2020 13:56 Page 96
NOTES TO THE FINANCIAL STATEMENTS
C5
Fixed asset investments
Shares in
associated
undertakings
£’000
Shares in
Group
undertakings
£’000
Cost
Balance at 1st May, 2019 … … … … …
… … … … … … …
Additions
… … … … … … …
Disposals
Balance at 30th April, 2020
Impairment
Balance at 1st May, 2019 … … … … …
… … … … … … …
Disposals
Balance at 30th April, 2020
Net book value
At 30th April, 2019 … … … … … …
At 30th April, 2020
237
-
-
237
-
-
-
237
237
Total
£’000
31,334
505
(125)
31,097
505
(125)
31,477
31,714
5,960
(47)
5,960
(47)
5,913
5,913
25,137
25,374
25,564
25,801
A list of principal subsidiaries and associates is given in note 14 and a list of non-principal subsidiaries and
associates is given in note 32 of the Group financial statements.
During the year, the Company sold its shareholding in Asian Industrial Investment Casting Powders Private
Limited, to Gold Star Powders, India, a fellow group company. The Company acquired 100% of Duvelco
Limited, a company incorporated in 2020.
C6
Intangible fixed assets
Brand
names
and Manu- Software Develop-
ment
intellectual facturing
costs Total
property rights
£’000 £’000
£’000 £’000
and
Licences
£’000
Cost
Balance at 1st May, 2019 … … … 5,680 2,145
Additions … … … … … 2,186 102
Intercompany transfers … … … - -
142
147
-
7,758 15,725
175 2,610
752 752
Balance at 30th April, 2020 7,866 2,247
289
8,685 19,087
Amortisation
Balance at 1st May, 2019 … … … 880 1,364
Amortisation for the year … … … 240 112
Balance at 30th April, 2020 1,120 1,476
109
24
133
495 2,848
332 708
827 3,556
Net book value
At 30th April, 2019 … … … … 4,800 781
33
7,263 12,877
At 30th April, 2020 6,746 771
156
7,858 15,531
During the financial year, Goodwin PLC successfully acquired the globally recognised Castaldo silicone rubber
and wax division, including the intellectual property, trade name and associated trademarks. For the past
75 years Castaldo has been at the centre of the worldwide jewellery casting industry and the recent
acquisition will further increase the Group’s global market share within the moulding rubber and
injection wax business. Details of the acquisition are included in note 16 of the Group financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
C7
Debtors
Interest-bearing
Amounts owed by Group undertakings – repayable on demand
… …
Amounts owed by Group undertakings – repayable within five years … …
Non interest-bearing
… …
Amounts owed by Group undertakings – repayable on demand
Amounts owed by Group undertakings – repayable within five years … …
Other debtors … … … … … … … … … … …
Prepayments and accrued income
… … … … … … …
Corporation tax receivable… … … … … … … … …
2020
£’000
5,229
2,782
17,095
598
202
439
38
2019
£’000
6,918
3,869
18,735
783
226
561
-
26,383
31,092
C8
Interest-bearing loans and borrowings
This note provides information about the contractual terms of the Company’s interest-bearing bank loans
and borrowings. For more information about the Group’s exposure to interest rate and foreign currency risk,
see note 28 of the Group financial statements.
Non-current liabilities
Finance lease liabilities … … … … … … … … … …
Bank loans and committed facilities … … … … … … … …
… … … … … … …
Bank loans repayable by instalments
2020
£’000
-
9,000
4,009
13,009
Current liabilities
Finance lease liabilities … … … … … … … … … …
859
Bank loans and committed facilities … … … … … … … … 12,000
657
Bank loans repayable by instalments
… … … … … … …
442
Bank overdrafts … … … … … … … … … … …
2019
£’000
856
18,000
-
18,856
835
-
-
9,915
13,958
10,750
Finance lease liabilities
Finance lease liabilities are payable as follows:
Less than one year
Between one and five years
2020
2019
Minimum
lease
payments
£’000
872
-
Interest Principal
£’000
859
-
£’000
13
-
Minimum
lease
payments
£’000
872
869
Interest Principal
£’000
835
856
£’000
37
13
872
13
859
1,741
50
1,691
Bank loan repayable by instalments
The loan is secured against three furnaces (see note C4). Bank loans are payable as follows:
Less than one year
Between one and five years
More than five years
2020
2019
Minimum
loan
payments
£’000
795
3,180
1,192
Interest Principal
£’000
657
2,846
1,163
£’000
138
334
29
Minimum
loan
payments
£’000
-
-
-
Interest Principal
£’000
-
-
-
£’000
-
-
-
5,167
501
4,666
-
-
-
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NOTES TO THE FINANCIAL STATEMENTS
C9
Other payables
Trade payables… … … … … … … … … … …
Amounts owed to Group undertakings – interest-bearing… … … …
Amounts owed to Group undertakings – non interest-bearing … … …
Other taxation and social security
… … … … … … …
Accruals and deferred income … … … … … … … …
2020
£’000
1,164
2,535
784
617
415
5,515
C10 Provisions for liabilities
Deferred taxation
Balance at 1st May, 2019
… … … … … … … … … … …
Recognised in the statement of profit or loss … … … … … … … …
Recognised in equity … … … … … … … … … … … …
2019
£’000
580
4,947
18
273
878
6,696
2020
£’000
(216)
1,587
(253)
Balance at 30th April, 2020… … … … … … … … … … …
1,118
The elements of deferred taxation are as follows:
Difference between accumulated depreciation and
amortisation and capital allowances … … … … … … …
3,009
Share-based payment reserve … … … … … … … … … (1,888)
(3)
Other temporary differences … … … … … … … … …
2020
£’000
1,118
2019
£’000
2,418
(2,630)
(4)
(216)
Within the current and previous year, the Company has no unrelieved tax losses.
On 11th March, 2020, it was announced that the UK corporation tax rate would remain at 19% on 1st April,
2020 and would no longer reduce to 17%. This measure was made under a Budget resolution which has
statutory effect under the provisions of the Provisional Collection of Taxes Act 1968 and, as such, it is
substantively enacted on the passing of the resolution on 17th March, 2020. On this basis the deferred tax
liability has been calculated at a rate of 19%.
C11 Called up share capital
Authorised, allotted, called up and fully paid:
7,200,000 ordinary shares of 10p each
… … … … … … …
Issue of 163,200 ordinary shares of 10p each … … … … … …
2020
£’000
720
16
736
2019
£’000
720
-
720
Details of the share issue are contained in note 35 of the Group financial statements.
C12 Contingent liabilities
The Company is jointly and severally liable for value added tax due by other members of the Group
amounting to £Nil (2019: £Nil).
C13 Related Party Transactions
The Company has applied the exemptions available under FRS 101 in respect of the disclosure of transactions
with wholly-owned subsidiary companies. The Company has transacted with Easat Radar Systems Limited,
Internet Central Limited, Jewelry Plaster Limited, NRPL Aero Oy, Siam Casting Powers Limited and Ying Tai
(UK) Limited which are not wholly-owned subsidiaries.
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NOTES TO THE FINANCIAL STATEMENTS
C13 Related Party Transactions (continued)
Transactions and balances are summarised below:
2020
£’000
… … … … … … … …
… … … … … … … …
… … … … … … … …
… … … … … … … …
… … … … … … … …
… … … … … … … …
Interest receivable
Interest payable
Dividend income
Management fee income
Rental income
Transfer of development costs
Interest-bearing balances
Amounts owed by Group undertakings – repayable on demand … … … 5,229
Amounts owed by Group undertakings – repayable within five years
… … 2,782
Interest-bearing balances
Amounts owed to Group undertakings – repayable on demand
238
10
-
810
257
-
… … … 1,837
2019
£’000
418
13
515
660
123
4,700
6,918
3,569
1,523
Compensation of key management personnel
Key management personnel are defined in the Directors’ Remuneration Report on page 27, and their
remuneration is disclosed on pages 29 and 30 of the Group financial statements. All the Executive Directors
are party to an Equity Long Term Incentive Plan (LTIP). Further details of the LTIP can be found in note 35
of the Group financial statements.
C14 Commitments
Contracted capital commitments at 30th April, 2020 for which no provision has been made in these financial
statements were £Nil (2019: £331,000).
C15 Subsequent events
After the balance sheet date, ordinary dividends were declared of £6,016,000, which have not been provided
for within these financial statements.
On 11th June, 2020 Goodwin PLC drew down £30 million of funding from the Bank of England CCFF scheme.
This loan will be repaid in full on 27th April, 2021.
On 31st July, 2020 and as a result of a competitive tender exercise, Goodwin PLC replaced its Lloyds Bank
PLC revolving credit and overdraft facilities with new facilities from Santander UK plc. As a result
of this exercise, the Group now has £24.5 million on a 5 year committed basis (Lloyds £13 million) and
£5 million on overdraft (Lloyds £16.5 million) thus giving the Group proportionately more in the way of
long-term committed lines.
The Group is also in the final stages of renegotiating a £10 million revolving credit facility which expires
in October 2020. The Directors do not see an issue in renewing these facilities.
On 30th June, 2020 the Company acquired freehold, plant and buildings for a sum of £770,000. This
acquisition complements the mixing business activities at Hoben International where the plant is
reaching capacity.
C16 Dividends
Paid ordinary dividends during the year in respect of prior years
96.21p (2019: 83.473p) per qualifying ordinary share
… … … …
2020
£’000
6,927
2019
£’000
6,010
After the balance sheet date an ordinary dividend of 81.71p per qualifying ordinary share was proposed by
the Directors (2019: Ordinary dividend of 96.21p).
The proposed current year ordinary dividend of £6,016,000 has not been provided for within these financial
statements (2019: Proposed ordinary dividend of £6,927,000 was not provided for).
C17 Accounting estimates and judgements
The material accounting estimates and judgements for the Company follow that of the Group which have
been considered in note 2 of the Group financial statements.
C18 Share-based payment transactions
Details of the equity-settled share-based payment transactions are disclosed in note 35 of the Group financial
statements.
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FIVE YEAR FINANCIAL SUMMARY
Continuing operations
2016
£’000
2017
£’000
2018
£’000
2019
£’000
2020
£’000
Revenue… … … … … … … …
Profit before taxation
… … … … …
Tax on profit … … … … … … …
Profit after taxation … … … … … …
123,539
12,314
(3,376)
8,938
131,587
9,244
(2,487)
6,757
124,811
13,300
(3,865)
9,435
127,046
16,410
(3,963)
12,447
144,512
12,115
(3,775)
8,340
Basic earnings per ordinary share
… … …
Diluted earnings per ordinary share … … …
122.75p
122.75p
84.47p
84.47p
118.11p
118.11p
159.79p
149.65p
107.93p
103.31p
Total equity … … … … … … …
90,117
93,661
104,827
109,291
109,602
98