MS INTERNATIONAL plc
Annual Report 2015
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M S I N T E R N A T I O N A L p l c
Contents
The year in brief
Chairman’s Statement
Directors
Advisors
Strategic report
Statement of directors’ responsibilities
Report of the auditors
Consolidated income statement
Consolidated and company statement of comprehensive income
Consolidated and company statement of changes in equity
Consolidated statements of financial position
Cash flow statements
Notes to the financial statements
Summary of group results 2011 – 2015
Corporate governance statement
Report of the directors
Directors’ remuneration report
Principal operating subsidiaries
Notice of Annual General Meeting
2
3
5
6
7
8
8
10
10
11
12
13
14
39
40
42
46
49
50
1
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The year in brief
M S I N T E R N A T I O N A L p l c
£000
222222222222222222222222222222222222222222222222
£000
Revenue
47,130
222222222222222222222222222222222222222222222222
45,503
Profit before taxation
2,928
222222222222222222222222222222222222222222222222
1,541
2015
Total
2014
Total
14.6p
Earnings per share
222222222222222222222222222222222222222222222222
Dividends payable per share
8.00p
222222222222222222222222222222222222222222222222
8.00p
8.20p
Financial Calendar Key Dates
Annual Results Announced
Annual General Meeting
Final Dividend Payable
Half-Year Results Announced
Interim Dividend Payable
June
July
July
November
December
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Chairman’s Statement
Results and review
I am pleased to announce that there has been a much improved performance by the Group during the second
half of the year. Accordingly, for the 12 months to 2nd May, 2015, profit before tax was £1.54m (2014 – £2.93m) on
revenue of £45.50m (2014 – £47.13m). Earnings per share were 8.20p (2014 – 14.6p).
Net cash and short term deposits increased once again to a record high of £17.15m (2014 – £14.29m) at
year-end.
The Group’s current order book remains very strong. While marginally lower at year-end than that the £46m
reported for 2014, it has since increased following the award of a follow-on two year contract by the UK MoD for the
maintenance and support of MSI-DS 30mm naval gun systems and associated ancillary equipment in the RN fleet.
Although the exact value of that contract is confidential, I can reveal that it is in excess of £12m.
‘Defence’ the global equipment markets of which remain constrained, despite the incredibly high number of
conflicts and threats to international stability that are erupting, or intensifying, around the world. Restricted
financial budgets, political instability and tensions, are critical factors that continue to disrupt military procurement
plans and planning. As a consequence ‘Defence’ revenue was 15% lower than the previous year. This, combined with
the essential investment committed to a number of major ‘in-house’ research and development programmes for new
products – aimed at broadening our product range and extending our market opportunities – resulted in a full year
loss, albeit considerably reduced from that reported at the interim stage.
‘Forgings’ achieved advances in both revenue and profit over the previous year. The UK and USA operations
performed extremely well and ahead of our expectations, reaping the benefit of operational improvements, supported
by plant and equipment upgrades. The South America operation, although highly efficient, had to contend with the
negative impact of a weakening market and currency, owing to the region’s current fiscal difficulties.
‘Petrol Station Superstructures’ overall revenue was similar to that of the previous year, with an increase
from the UK operation as a result of strong growth in the number of forecourt convenience stores completed in the
period. Conversely, there was a distinct reduction in activity of the Poland based business that traditionally services
many of the East European countries. Political uncertainty in the region discouraged many customers and potential
developers to commit to their plans for new petrol station construction projects and station upgrades.
Outlook
‘Defence’, we are predicting an improvement in the level of activity for our business in the second half of the
current year, even though markets remain constrained. A very positive result from our substantial new product
development programme is the winning of the first order for our new MSI-DS 20mm naval gun system. The
requirement for three systems – received from a European shipbuilder – will be delivered in the current year and
installed on new ships for an overseas navy. This is an important breakthrough for the Group, and is part of our
commitment to broaden the range of our product offering directed at the growing international market for small
naval vessels. We look forward to completing the development of other new products that will become available to
market in the course of the next 12 months.
‘Forgings’, should maintain a relatively stable position. The division’s short lead-time order books are highly
sensitive to variations in demand and the prevailing economic conditions in its individual global markets. Currently,
we are planning to expand our capacity and capability in the United States to accommodate opportunities in that
market. Throughout the division, we remain firmly committed to ensuring that we maintain and develop highly
efficient production equipment and systems.
‘Petrol Station Superstructures’ markets continue to transform with the major oil companies leading the way
in withdrawing from front line retailing by disposing of parts of their estates to independent dealers, dealer groups
and operators. We perceive this to be an opportunity to expand our position in the market through providing an
enhanced service to customers not only in terms of new build but also in relation to station maintenance and
upgrades.
Post year-end event; Acquisition
I am pleased, also, to announce that the Company has acquired the entire issued share capital of Petrol Sign
B.V., a company based in the Netherlands. The consideration for the acquisition is €3.4 million on a cash and debt
free basis and includes “normalised” working capital. The consideration has been satisfied from the Company’s
existing cash resources.
3
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M S I N T E R N A T I O N A L p l c
Chairman’s Statement
Continued
Petrol Sign designs, restyles, produces and installs the complete branding and signage appearance of petrol
station superstructures and forecourts throughout many parts of Western Europe. The acquisition will enhance our
ability to offer and include branding and signage services as an option to petrol station markets and customers and
will become an integral part of the Groups ‘Petrol Station Superstructures’ division. The vendor and managing
director of Petrol Sign will continue to be employed by the company as its managing director.
Further details relating to this acquisition are set out in a separate announcement.
All matters considered the Board recommends the payment of a maintained final dividend of 6.5p per share
(2014 – 6.5p), making the total for the year of 8p (2014 – 8p). The final dividend is expected to be paid on 24th July,
2015 to those shareholders on the register at the close of business on 26th June, 2015.
Michael Bell
17th June, 2015
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Directors
Directors
Executive
Michael Bell ARICS (Executive Chairman)
Michael O’Connell FCA (Finance)
Nicholas Bell
Non-executive
Roger Lane-Smith – Age 69
Appointed a director on 21st January, 1983. He is a non-executive director of Dolphin Capital Investors,
Timpson Group plc, Lomond Capital Partners and a number of other private companies. He is also a Senior
Consultant at DLA Piper UK LLP.
David Pyle – Age 69
Appointed an executive director on 9th July, 1980. He stepped down as an executive director on
27th April, 2013 and was appointed a non-executive director.
David Hansell – Age 69
Appointed a non-executive director on 3rd June, 2014. David has been with MS INTERNATIONAL plc,
working at MSI-Defence Systems Ltd since 1962, becoming managing director in 2002.
222222222222222222222222222222222222222222222222
Company Secretary
David Kirkup FCA
222222222222222222222222222222222222222222222222
Registered Office
Balby Carr Bank,
Doncaster,
DN4 8DH
England
222222222222222222222222222222222222222222222222
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Advisors
Auditors
Ernst & Young LLP,
1 Bridgewater Place,
Water Lane,
Leeds,
LS11 5QR
222222222222222222222222222222222222222222222222
Registrars and Transfer Office
Capita Asset Services,
The Registry,
34 Beckenham Road,
Beckenham,
Kent,
BR3 4TU
222222222222222222222222222222222222222222222222
Solicitors
DLA Piper UK LLP,
3 Noble Street,
London,
EC2V 7EE
222222222222222222222222222222222222222222222222
Nominated Advisor
Shore Capital & Corporate Limited,
Bond Street House,
14 Clifford Street,
London,
W15 4JU
222222222222222222222222222222222222222222222222
Brokers
Shore Capital & Corporate Limited,
Bond Street House,
14 Clifford Street,
London,
W15 4JU
222222222222222222222222222222222222222222222222
Bankers
Lloyds Bank,
First Floor,
14 Church Street,
Sheffield,
S1 1HP
222222222222222222222222222222222222222222222222
6
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Strategic report
Business review
The Group is engaged in the design and manufacture of specialist engineering products and the provision of
related services.
A review of the operations of the Company and subsidiaries and their position at 2nd May, 2015 are provided
in the Chairman’s Statement.
Segment information for the year under review is provided in note 4 “Segment Information” to the Group
financial statements.
222222222222222222222222222222222222222222222222
Principal risks and uncertainties
The principal risk and uncertainties facing the Group relate to levels of customer demand for the Group’s
products and services. Customer demand is driven mainly by general economic conditions but also by pricing,
product quality and delivery performance of MS INTERNATIONAL plc and in comparison with our competitors.
Sterling exchange rates against other currencies can influence pricing. The principal financial risks and
uncertainties in the business are set out in note 23 “Financial Instruments” to these Group financial statements.
222222222222222222222222222222222222222222222222
Key performance indicators
Revenue
Profit before taxation
Earnings per share
2015
£000
45,503
1,541
8.20p
2014
£000
47,130
2,928
14.6p
Change
%
(3.5)
(47.4)
(43.8)
A review of the changes in the key performance indicators is provided in the Chairman’s Statement.
By order of the Board,
David Kirkup
Secretary
17th June, 2015
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Statement of directors’ responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance
with applicable United Kingdom law and regulations. Company law requires the directors to prepare such financial
statements for each financial year. Under that law, the directors are required to prepare Group and Parent Company
financial statements under IFRSs as adopted by the European Union.
Under company law the directors must not approve the accounts 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 the profit or loss of the Group for
that period. In preparing those financial statements, the directors are required to:
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present fairly the financial position, financial performance and cash flows of the Group and Parent
Company;
select suitable accounting policies in accordance with IAS 8: Accounting policies, Changes in
accounting Estimates and Errors and then apply them consistently;
present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information;
make judgements that are reasonable;
provide additional disclosures when compliance with the specific requirements in IFRSs as adopted
by the European Union is insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the Group and Parent Company’s financial position
and financial performance; and
state whether the Group and Parent Company financial statements have been prepared in
accordance with IFRSs as adopted by the European Union, subject to any material departures
disclosed and explained in the financial statements.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group and Parent Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Group and Parent Company and to enable them to ensure that the financial statements comply with
the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets
of the Group and Parent Company and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The directors are also responsible for preparing the Report of the directors, the Directors’ remuneration
report and the Corporate governance statement in accordance with the Companies Act 2006 and applicable
regulations, including the requirements of the Listing Rules and the Disclosure and Transparency Rules.
Independent auditors’ report to the members of MS INTERNATIONAL plc –
Registration Number 653735
We have audited the financial statements of MS INTERNATIONAL plc for the 52 weeks ended 2nd May
2015 which comprise the consolidated group income statement, the consolidated and company statement of
comprehensive income, the consolidated and company statement of changes in equity, the consolidated statement of
financial position, the group and company cashflow statements, and the related notes 1 to 31. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 8, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law
8
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M S I N T E R N A T I O N A L p l c
Independent auditors’ report to the members of MS INTERNATIONAL plc
Continued
and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing
Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and
the parent company’s circumstances and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the directors; and the overall presentation of the
financial statements. In addition, we read all the financial and non-financial information in the annual report to
identify material inconsistencies with the audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the
course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we
consider the implications for our report.
Opinion on financial statements
In our opinion:
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the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 2nd May, 2015 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as adopted
by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year
for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report
to you if, in our opinion:
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adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Alistair Denton
(Senior statutory auditor)
for and on behalf of Ernst & Young LLP,
Statutory Auditor
Leeds
17th June, 2015
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Consolidated income statement
For the 52 weeks ended 2nd May, 2015
2014
Total
£000
47,130
Revenue
Cost of sales
(34,266)
2222222222222222222222222222222222222 2222 2222
12,864
Gross profit
Distribution costs
(2,707)
(6,954)
Administrative expenses
2222222222222222222222222222222222222
2015
Total
£000
45,503
(34,763)
10,740
(2,357)
(6,643)
Notes
3/4
(9,000)
(9,661)
2222222222222222222222222222222222222 2222 2222
3,203
Group operating profit
Finance revenue
48
(69)
Finance costs
Other finance costs – pensions
(254)
(275)
2222222222222222222222222222222222222 2222 2222
2,928
Profit before taxation
Taxation
(354)
2222222222222222222222222222222222222 2222 2222
Profit for the period attributable to equity holders of the parent
2,574
2222222222222222222222222222222222222 2222 2222
Earnings per share: basic and diluted
14.6p
2222222222222222222222222222222222222 2222 2222
1,740
70
(32)
(237)
(199)
4/5
7
8
21
1,541
(188)
1,353
8.2p
10
9
Consolidated and company statement of comprehensive income
For the 52 weeks ended 2nd May, 2015
Group
Company
2015
Total
£000
2014
Total
£000
2015
Total
£000
2014
Total
£000
–
955
(244)
(106)
(106)
2,574
1,353
1,605
Profit for the period attributable to equity holders of the parent
22222222222222222222222222 2222 2222 2222 2222
Exchange differences on retranslation of foreign operations
–
22222222222222222222222222 2222 2222 2222 2222
Net other comprehensive loss to be reclassified to profit or
loss in subsequent periods
–
22222222222222222222222222 2222 2222 2222 2222
Remeasurement (losses)/gains on defined benefit pension
scheme
Deferred taxation on remeasurement (losses)/gains on defined
benefit scheme
Revaluation surplus on land and buildings
Deferred taxation on revaluation surplus on land
and buildings
(473)
22222222222222222222222222 2222 2222 2222 2222
Net other comprehensive (loss)/profit not being reclassified
to profit or loss in subsequent periods
2,139
22222222222222222222222222 2222 2222 2222 2222
Total comprehensive income for the period attributable to
equity holders of the parent
3,744
22222222222222222222222222 2222 2222 2222 2222
(396)
2,056
(396)
1,939
193
–
193
–
2,049
4,379
(771)
(771)
(964)
(964)
(244)
(446)
952
184
476
952
–
–
–
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M S I N T E R N A T I O N A L p l c
Consolidated and company statement of changes in equity
(a) Group
At 27th April, 2013
Capital
Issued redemption
reserve
capital
£000
£000
Other Revaluation
reserve
£000
reserves
£000
Special
reserve
£000
Foreign
exchange
reserve
£000
Treasury
shares
£000
Retained
earnings
£000
1,840
901
2,815
2,532
1,629
61
(100) 19,376
Total
£000
29,054
–
Profit for the period
2,574
–
Other comprehensive income/(loss)
1,805
–
Total comprehensive income/(loss)
4,379
–
Dividends paid (note 11)
(1,452)
–
Purchase of own shares (note 20)
(2,959)
Change in taxation rates
–
121
222222222222 222 222 222 222 222 222 222 222 222
At 3rd May, 2014
29,143
–
–
–
–
(2,959)
–
2,574
556
3,130
(1,452)
–
–
–
1,493
1,493
–
–
121
–
(244)
(244)
–
–
–
(3,059) 21,054
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,146
2,815
1,629
1,840
(183)
901
–
Profit for the period
1,353
–
Other comprehensive loss
(877)
–
Total comprehensive (loss)/income
476
Dividends paid (note 11)
–
(1,320)
222222222222 222 222 222 222 222 222 222 222 222
At 2nd May, 2015
28,299
222222222222 222 222 222 222 222 222 222 222 222
1,353
(771)
582
(1,320)
–
(106)
(106)
–
(3,059) 20,316
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,840
4,146
2,815
1,629
(289)
901
(b) Company
At 27th April, 2013
1,840
901
1,565
2,532
1,629
–
(100) 17,670
26,037
–
Profit for the period
1,605
–
Other comprehensive income
2,139
–
Total comprehensive income
3,744
–
Dividends paid (note 11)
(1,452)
311
–
Dividend received from subsidiary
–
Purchase of own shares (note 20)
(2,959)
Change in taxation rates
–
125
222222222222 222 222 222 222 222 222 222 222 222
At 3rd May, 2014
25,806
–
–
–
–
–
(2,959)
–
1,605
556
2,161
(1,452)
311
–
–
–
1,583
1,583
–
–
–
125
(3,059) 18,690
_
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,240
1,565
1,629
1,840
901
–
–
Profit for the period
955
–
Other comprehensive loss
(771)
–
Total comprehensive income
184
Dividends paid (note 11)
–
(1,320)
222222222222 222 222 222 222 222 222 222 222 222
At 2nd May, 2015
24,670
222222222222 222 222 222 222 222 222 222 222 222
955
(771)
184
(1,320)
(3,059) 17,554
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,840
4,240
1,629
1,565
901
–
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M S I N T E R N A T I O N A L p l c
Consolidated statements of financial position
At 2nd May, 2015
Group
Company
2015
£000
2014
£000
2015
£000
2014
£000
Notes
18
16
17
19,262
31,206
24,754
18,474
35,696
33,339
54,170
12
13
14
15
12,608
13
11,741
392
14,563
3,818
–
93
15,127
4,135
–
–
8,464
9,454
40
590
17,148
7,393
9,252
–
495
16,199
8,162
8,260
51
447
14,286
ASSETS
Non-current assets
12,955
Property, plant and equipment
Intangible assets
21
Investments in subsidiaries
11,829
Deferred income tax asset
167
22222222222222222222222222 2222 2222 2222 2222
24,972
22222222222222222222222222 2222 2222 2222 2222
Current assets
7,250
Inventories
Trade and other receivables
8,276
Income tax receivable
–
Prepayments
363
Cash and short-term deposits
13,241
22222222222222222222222222 2222 2222 2222 2222
29,130
22222222222222222222222222 2222 2222 2222 2222
54,102
TOTAL ASSETS
22222222222222222222222222 2222 2222 2222 2222
EQUITY AND LIABILITIES
Equity
1,840
Equity share capital
Capital redemption reserve
901
Other reserve
1,565
Revaluation reserve
4,240
Special reserve
1,629
Currency translation reserve
–
Treasury shares
(3,059)
Retained earnings
18,690
22222222222222222222222222 2222 2222 2222 2222
25,806
22222222222222222222222222 2222 2222 2222 2222
Non-current liabilities
5,889
Defined benefit pension liability
Deferred income tax liability
–
22222222222222222222222222 2222 2222 2222 2222
5,889
22222222222222222222222222 2222 2222 2222 2222
Current liabilities
22,294
Trade and other payables
Income tax payable
113
22222222222222222222222222 2222 2222 2222 2222
22,407
22222222222222222222222222 2222 2222 2222 2222
54,102
TOTAL EQUITY AND LIABILITIES
22222222222222222222222222 2222 2222 2222 2222
1,840
901
2,815
4,146
1,629
(183)
(3,059)
21,054
1,840
901
2,815
4,146
1,629
(289)
(3,059)
20,316
1,840
901
1,565
4,240
1,629
–
(3,059)
17,554
19
20
20
20
20
20
20
20
26,454
92
18,994
–
15,225
–
6,877
–
6,877
–
5,889
211
54,170
26,546
18,994
58,093
58,093
28,299
24,670
50,468
15,225
29,143
50,468
6,877
6,877
21
15
6,100
22
These accounts and notes on pages 14 to 38 were approved by the Board of Directors on 17th June, 2015, and
signed on its behalf by
Michael Bell,
Executive Chairman
Michael O’Connell,
Finance Director
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M S I N T E R N A T I O N A L p l c
Cash flow statements
For the 52 weeks ended 2nd May, 2015
Profit before taxation
1,541
2,928
Note
2015
£000
2014
£000
2015
£000
943
2014
£000
1,709
Group
Company
12
13
14
21
Adjustments to reconcile profit before taxation to net
cash in flow from operating activities
Depreciation charge
1,028
Amortisation charge
9
Impairment in investment in subsidiary undertaking
40
Administration expenses-pension fund
350
Profit on sale of fixed assets
(130)
Finance costs
236
Foreign exchange gains/(losses)
–
Increase in inventories
(1,594)
(Increase)/decrease in receivables
5,562
(Increase)/decrease in prepayments
56
Decrease in payables
(2,877)
Increase in progress payments
1,869
Pension fund payments
(529)
22222222222222222222222222 2222 2222 2222 2222
5,729
Cash generated from operating activities
18
Interest received/(paid)
Taxation paid
(257)
22222222222222222222222222 2222 2222 2222 2222
5,490
Net cash inflow from operating activities
1,227
316
–
350
(124)
275
(136)
(1,626)
4,805
73
(2,550)
1,632
(529)
1,117
317
–
316
(78)
199
65
(302)
(1,194)
(143)
(389)
4,158
(529)
931
8
88
316
(75)
178
–
(143)
(976)
(132)
(38)
4,198
(529)
4,769
59
(41)
5,078
38
(288)
6,641
(21)
(708)
4,828
4,787
5,912
(940)
278
(693)
184
(833)
187
Investing activities
(842)
12
Purchase of property, plant and equipment
Sale of property, plant and equipment
12
178
22222222222222222222222222 2222 2222 2222 2222
(664)
Net cash outflow from investing activities
22222222222222222222222222 2222 2222 2222 2222
Financing activities
(1,452)
Dividends paid
Dividend received from subsidiary
311
Purchase of own shares
20
(2,959)
22222222222222222222222222 2222 2222 2222 2222
(4,100)
Net cash outflow from financing activities
22222222222222222222222222 2222 2222 2222 2222
726
Increase in cash and cash equivalents
12,515
Opening cash and cash equivalents
22222222222222222222222222 2222 2222 2222 2222
13,241
18
Closing cash and cash equivalents
22222222222222222222222222 2222 2222 2222 2222
(1,320)
–
–
(1,320)
–
–
(1,452)
–
(2,959)
2,862
14,286
2,958
13,241
839
13,447
(1,320)
(1,320)
16,199
17,148
(4,411)
14,286
(646)
(509)
(662)
13
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 14
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
At 2nd May, 2015
1
Authorisation of financial statements and statement of compliance with IFRSs
The Group’s and Company’s financial statements of MS INTERNATIONAL plc (the ‘Company’) for the year
ended 2nd May, 2015 were authorised for issue by the board of the directors on 17th June, 2015 and the statements
of financial position were signed on the board’s behalf by Michael Bell and Michael O’Connell. MS
INTERNATIONAL plc is a public limited company incorporated and domiciled in England and Wales. The
Company’s Ordinary shares are traded on the London Stock Exchange.
The Group’s and Company’s financial statements have been prepared in accordance with International
Financial Reporting Standards as adopted by the EU as they apply to the financial statements of the Group and
Company for the year ended 2nd May, 2015 applied in accordance with the provisions of the Companies Act 2006.
The Company has taken advantage of the exemption provided under section 408 of the Companies Act 2006
not to publish its individual income statement and related notes.
222222222222222222222222222222222222222222222222
2
Accounting Policies
Basis of preparation
The consolidated financial statements are presented in pounds sterling and all values are rounded to the
nearest thousand (£000) except when otherwise indicated.
The preparation of financial statements requires management to make judgements, estimates and
assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts
reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes
could differ from those estimates. The following judgements have had the most significant effect on amounts
recognised in the financial statements:
Defined benefit pension obligations
Measurement of defined benefits obligations requires estimation of future changes in salaries and inflation,
as well as mortality rates and the selection of a suitable discount rate (see note 21).
Contract sales
Assessment of the extent to which contract outcomes can be measured reliability.
Taxation
The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the
tax authorities of the respective countries in which it operates. The amount of such provisions is based on various
factors, such as experience with previous tax audits and differing interpretations of tax regulations by the taxable
entity and the responsible tax authority.
Impairment of non-financial assets
The Group’s impairment test for goodwill and intangible assets with indefinite useful lives is based either on
fair value less costs to sell or a value in use calculation. The fair value less costs to sell calculation is based on
available data from binding sales transactions in an arm’s length transaction on similar assets or observable market
prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash
flow model.
222222222222222222222222222222222222222222222222
Statement of compliance
The consolidated financial statements of MS INTERNATIONAL plc have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted in the EU.
222222222222222222222222222222222222222222222222
Basis of consolidation
The consolidated financial statements comprises the financial statements of MS INTERNATIONAL plc and
its subsidiaries as at the Saturday nearest to the 30th April each period. The financial statements of the subsidiaries
are prepared for the same reporting period as the parent Company, using consistent accounting policies.
All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-Group
transactions that are recognised in assets, are eliminated in full.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date that such control ceases.
14
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 15
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
2
Accounting policies (continued)
Change in accounting policies
There were no changes in accounting policies during the year which impacted the Group.
222222222222222222222222222222222222222222222222
The Company’s investments in subsidiaries
In its separate financial statements the Company’s investments in subsidiaries are carried at cost less
provision for impairment.
222222222222222222222222222222222222222222222222
Foreign currency translation
The consolidated financial statements are presented in pounds sterling which is the Company’s functional and
presentation currency. Each entity in the Group determines its own functional currency and items included in the
financial statements of each entity are measured using that functional currency. Transactions in foreign currencies
are initially recorded at the functional currency rate ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at
the balance sheet date. All differences are taken to profit or loss. Non-monetary items measured at fair value in
foreign currency are translated using the exchange rates at the date when the fair value was determined.
The main functional currencies of the Group’s overseas subsidiaries are the US$, the Polish Zloty and the
Brazilian Real. As at the reporting date, the assets and liabilities of the overseas subsidiaries are translated into the
presentation currency of the Group at the rate of exchange ruling at the balance sheet date and their income
statements are translated at the weighted average exchange rates for the year. The exchange differences arising on
the retranslation are taken directly to a separate component of equity. On disposal of a foreign entity, the deferred
cumulative amount recognised in equity relating to that particular foreign operation is recognised in the income
statement.
222222222222222222222222222222222222222222222222
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses.
Such cost includes costs directly attributable to making the asset capable of operating as intended. Borrowing costs
attributable to assets under construction are recognised as an expense as incurred.
Land and buildings are recognised initially at cost and thereafter carried at fair value less depreciation and
impairment charged subsequent to the date of the revaluation. Fair value is based on periodic valuations by an
external independent valuer and is determined from market-based evidence by appraisal. Valuations are performed
frequently enough to ensure that the fair value of a revalued asset does not differ materially from its carrying
amount.
Any revaluation surplus is credited to the revaluation reserve in equity except to the extent that it reverses
a decrease in the carrying value of the same asset previously recognised in profit or loss, in which case the increase
is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent of any existing
surplus in respect of that asset in the revaluation reserve.
Additionally, accumulated depreciation as at revaluation date is eliminated against the gross carrying
amount of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal any
revaluation reserve relating to the particular asset being sold is transferred to retained earnings.
Depreciation is provided on all property, plant and equipment, other than freehold land, at rates calculated
to write off the cost, less estimated residual value based on prices prevailing at the balance sheet date, of each asset
evenly over its expected useful life as follows:
Property other than freehold land – over 50 years
Plant and machinery – over 3 to 8 years
Computer equipment – over 3 to 5 years
Fixtures and fittings – over 3 to 8 years
The carrying values of property, plant and equipment are reviewed for impairment when events or changes
in circumstances indicate the carrying value may not be recoverable.
222222222222222222222222222222222222222222222222
15
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M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
2
Accounting policies (continued)
Intangible assets
Intangible assets acquired separately are measured at cost on initial recognition. Following initial
recognition, intangible assets are carried at cost less any accumulated amortisation and impairment losses.
Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure
is reflected in the income statement in the year in which the expenditure is incurred. The useful lives of intangible
assets are assessed to be either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method are reviewed at least at each financial year end. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the
amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
The useful economic lives of each tangible asset with finite lives are as follows:
Tradename – over 20 years
Design database – over 10 years
Customer relationships – over 8 years
Software costs – over 3 to 5 years
Order backlog – over 1 year
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the
cash generating unit level and are not amortised. The useful life of an intangible asset with an indefinite life is
reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in
the useful life assessment from indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the
asset is derecognised.
222222222222222222222222222222222222222222222222
Derivative financial instruments and hedging
The Group uses derivative financial instruments such as forward currency contracts to hedge its risks
associated with foreign currency fluctuations. Derivative financial instruments are initially recognised at fair value
on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives
are carried as assets when the fair value is positive and as liabilities when the fair value is negative.
The fair value of forward currency contracts is calculated by reference to current forward exchange rates for
contracts with similar maturity profiles.
A hedge of the foreign currency risk of a firm commitment is accounted for as a cash flow hedge.
Any gains or losses arising from changes in the fair value of derivatives that do not qualify for hedge
accounting are taken to the income statement.
222222222222222222222222222222222222222222222222
Inventories
Inventories are valued at the lower of historic cost and net realisable value.
Costs incurred in bringing each product to its present location and condition is accounted for as follows:
Raw materials – purchase cost on a first-in, first-out basis.
Finished goods and work in progress – cost of direct materials and labour and a proportion of manufacturing
overheads based on normal operating capacity but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs
necessary to make the sale.
Progress payments received and receivable are deducted from the value of raw materials and work in progress
to which they relate. Any excess progress payments are included in trade and other payables.
222222222222222222222222222222222222222222222222
16
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M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
2
Accounting policies (continued)
Trade and other receivables
Trade receivables, which generally have 30 days terms, are recognised and carried at original invoice amount
less an allowance for any uncollectable amounts. Provision is made when there is objective evidence that the Group
may not be able to collect the debts. Bad debts are written off when identified.
222222222222222222222222222222222222222222222222
Treasury shares
Own shares held by the Company and Group are classified in equity and are recognised at cost. No gain or
loss is recognised on the purchase, sale, issue or cancellation of the Group’s own equity instruments.
222222222222222222222222222222222222222222222222
Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank, on short-term deposit and in hand.
For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and cash
equivalents as defined above.
222222222222222222222222222222222222222222222222
Pension scheme
The cost of providing benefits under the defined benefit plan is determined using the projected unit credit
method, which attributes entitlement to benefits to the current period (to determine current service cost) and to the
current and prior periods (to determine the present value of defined benefit obligation) and is based on actuarial
advice. Past service costs are recognised in profit or loss immediately. When a settlement (eliminating all obligations
for benefits already accrued) or a curtailment (reducing future obligations as a result of a material reduction in the
scheme membership or a reduction in future entitlement) occurs the obligation and related plan assets are
remeasured using current actuarial assumptions and the resultant gain or loss recognised in the income statement
during the period in which the settlement or curtailment occurs.
The interest element of the defined benefit cost represents the change in present value of scheme obligations
resulting from the passage of time, and is determined by applying the discount rate to the opening present value of
the benefit obligation, taking into account material changes in the obligation during the year. Remeasurement gains
and losses are recognised in full in the statement of recognised income and expense in the period in which they occur.
Actual gains/losses less amount included in net interest costs are included in other comprehensive income.
The defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the
present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds) less the
fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price
information and in the case of quoted securities is the published bid price. The value of a net pension benefit asset
is restricted to the sum of any unrecognised past service costs and the present value of any amount the Group
expects to recover by way of refunds from the plan or reductions in the future contributions.
Contributions to defined contribution schemes are recognised in the income statement in the period in which
they become payable.
222222222222222222222222222222222222222222222222
Business combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any
non-controlling interest in the acquiree. The choice of measurement of non-controlling interest, either at fair value
or at the proportionate share of the acquiree’s identifiable net assets is determined on a transaction by transaction
basis. Acquisition costs incurred are expensed and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the
acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset
or liability will be recognised in accordance with IAS 39 either in profit or loss or in other comprehensive income. If
the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within
equity.
17
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M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
2
Accounting policies (continued)
Business combinations (continued)
Goodwill is initially measured at cost being the excess of the aggregate of the acquisition-date fair value of
the consideration transferred and the amount recognised for the non-controlling interest (and where the business
combination is achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity interest in
the acquiree) over the net identifiable amounts of the assets acquired and the liabilities assumed in exchange for the
business combination. Assets acquired and liabilities assumed in transactions separate to the business
combinations, such as the settlement of pre-existing relationships or post-acquisition remuneration arrangements
are accounted for separately from the business combination in accordance with their nature and applicable IFRSs.
Identifiable intangible assets, meeting either the contractual-legal or separability criterion are recognised separately
from goodwill. Contingent liabilities representing a present obligation are recognised if the acquisition-date fair
value can be measured reliably.
If the aggregate of the acquisition-date fair value of the consideration transferred and the amount recognised
for the non-controlling interest (and where the business combination is achieved in stages, the acquisition-date fair
value of the acquirer’s previously held equity interest in the acquiree) is lower than the fair value of the assets,
liabilities and contingent liabilities and the fair value of any pre-existing interest held in the business acquired, the
difference is recognised in profit and loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated
to each of the Group’s cash-generating units (or Groups of cash generating units) that are expected to benefit from
the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Each
unit or group of units to which goodwill is allocated shall represent the lowest level within the entity at which the
goodwill is monitored for internal management purposes and not be larger than an operating segment before
aggregation.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of,
the goodwill associated with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured
based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.
222222222222222222222222222222222222222222222222
Revenue
Revenue represents the turnover, net of discounts, derived from services provided to customers and sales of
products applicable to the period.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised.
Revenue, in respect of products, is recognised when the significant risks and rewards of ownership of the
goods have passed to the buyer and the amount of revenue can be measured reliably, this is usually on despatch.
Revenue from the provision of engineering services is recognised as the work is performed.
Contract sales are recognised by reference to the stage of completion. Stage of completion is measured by
reference to the value of cost completed as a percentage of the total estimated value of the costs of the contract.
Where the contract outcome cannot be measured reliably revenue is recognised only to the extent of the costs
recognised that are recoverable.
222222222222222222222222222222222222222222222222
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and
all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as income
over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate.
Where the grant relates to an asset, the fair value is credited to a deferred income account and is released to the
income statement over the expected useful life of the relevant asset by equal annual instalments.
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M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
2
Accounting policies (continued)
Taxes
Income tax is charged or credited directly to other comprehensive income or equity if it relates to items that
are credited or charged to, respectively, other comprehensive income or equity. Otherwise income tax is recognised
in the income statement.
222222222222222222222222222222222222222222222222
Current tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to
be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance sheet date.
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Deferred tax
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements, with the following exceptions:
l
l
l
where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination that at the time of the transaction affects neither accounting
nor taxable profit or loss;
in respect of taxable temporary differences associated with investments in subsidiaries, associates and joint
ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable
that the temporary differences will not reverse in the foreseeable future; and
deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, carried forward tax credits or tax losses can be
utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are
expected to apply when the related asset is realised or liability is settled, based on tax rates and laws enacted or
substantively enacted at the balance sheet date.
222222222222222222222222222222222222222222222222
Dividends payable
Dividends are recognised when they become legally payable. In the case of interim dividends this is when
paid, in the case of final dividends this is when approved by the shareholders.
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Exceptional items
The Group presents as exceptional items on the face of the income statement, those material items of income
and expense which, because of the nature and unexpected infrequency of the events giving rise to them merit
separate presentation to allow shareholders to understand better the elements of financial performance in the year,
so as to facilitate comparison with prior periods and to assess better trends in financial performance.
222222222222222222222222222222222222222222222222
Share-based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted and is recognised as an expense over the vesting period,
which ends on the date on which the relevant employees become fully entitled to the award. Judgement is required
in determining the most appropriate valuation model for a grant of equity instruments, depending on the terms and
conditions of the grant. Management are also required to use judgement in determining the most appropriate inputs
to the valuation model including expected life of the option, volatility and dividend yield.
19
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M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
2
Accounting policies (continued)
Share-based payments (continued)
New standards and interpretations not applied – The IASB and IFRIC have issued the following standards,
amendments and interpretations with an effective date after the date of these financial statements:
International Accounting Standards (IAS/IFRSs)
IAS 1 Amendment
IAS 19 Amendment
IFRS 9
IFRS 15
Annual improvements 2010-2012 cycle
Annual improvements 2011-2013 cycle
Annual improvements 2012-2014 cycle
presentation of financial statements
employee benefits
Financial instruments
Revenue from contracts with customers
Effective date
(1)
01 January 2016
01 July 2014
01 January 2018
01 January 2017
01 July 2014
01 July 2014
Friday, January 01, 2016
1 The effective dates stated above are those given in the original IASB/IFRIC standards and interpretations. As the Group prepares
its financial statements in accordance with IFRS as adopted by the European Union, the application of new standards and
interpretations will be subject to their having being endorsed for use in the EU via the EU endorsement mechanism. In the
majority of cases, this will result in an effective date consistent with that given in the original standard or interpretation but the
need for endorsements restricts the Group’s discretion to early adopt standards.
The Group has adopted all applicable amendments to standards with an effective date from 1st April, 2014.
Adoption of these standards did not have any material impact on financial performance or position of the Group.
222222222222222222222222222222222222222222222222
3
Revenue
2015
£000
2014
£000
Sale of goods
32,820
13,881
Revenue under contract accounting
2222222222222222222222222222222222222 2222 2222
46,701
Rendering of services
429
2222222222222222222222222222222222222 2222 2222
47,130
2222222222222222222222222222222222222 2222 2222
44,932
571
31,652
13,280
45,503
No revenue was derived from exchanges of goods or services (2014 – £Nil).
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20
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M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
4
Segment information
The following table presents revenue and profit and certain assets and liability information regarding the
Group’s divisions for the periods ended 2nd May, 2015 and 3rd May, 2014. The reporting format is determined by the
differences in manufacture and services provided by the Group. The Defence division is engaged in the design,
manufacture and service of defence equipment. The Forgings division is engaged in the manufacture of forgings. The
Petrol Station Superstructures division is engaged in the design and construction of petrol station superstructures.
Management monitors the operating results of its business units separately for the purpose of making decisions
about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or
loss which in certain respects, as explained in the table below, is measured differently from operating profit or loss in
the consolidated financial statements. Group financing (including finance costs and finance revenue) and income taxes
are managed on a Group basis and are not allocated to operating segments.
Defence
Forgings
2015
£000
2014
£000
2015
£000
2014
£000
Petrol Station
Superstructures
2014
2015
£000
£000
Total
2015
£000
2014
£000
Revenue
External
22222222
Total revenue
22222222
Segment result
Net finance costs
22222222
Profit before taxation
Taxation
22222222
Profit for the period
22222222
Segmental assets
Unallocated assets (see below)
22222222
Total assets
22222222
Segmental liabilities
Unallocated liabilities(see below)
22222222
Total liabilities
22222222
Capital expenditure
Depreciation
22222222
591
926
855
(151)
1,686
1,036
14,058
19,445
19,445
13,627
14,058
13,627
13,373
15,120
13,373
15,120
1,740
(199)
45,503 47,130
17,010
222 222 222 222 222 222 222 222
45,503 47,130
17,010
222 222 222 222 222 222 222 222
3,203
(275)
222 222
2,928
(354)
222 222
2,574
222 222
39,968 37,618
14,202 12,850
222 222
54,170 50,468
222 222
18,061 16,775
4,550
7,810
222 222
25,871 21,325
222 222
1,541
(188)
28,460
14,407
10,234
24,619
1,353
2,045
6,299
5,209
1,609
2,763
3,778
6,658
6,341
121
330
222 222 222 222 222 222
168
276
526
424
82
217
450
454
134
189
Unallocated assets includes certain fixed assets, intangible assets, current assets and deferred tax assets.
Unallocated liabilities includes the defined pension benefit scheme liability and certain current liabilities.
Geographical analysis
The following table presents revenue and expenditure and certain assets and liabilities information by
geographical segment for the periods ended 2nd May, 2015 and 3rd May, 2014. The Group’s geographical segments
are based on the location of the Group’s assets. Revenue from external customers is based on the geographical
location of its customers.
Europe
2015
£000
2014
£000
North America
2014
2015
£000
£000
Rest of the World
2014
2015
£000
£000
Total
2015
£000
2014
£000
Revenue
External
Non-current assets
Current assets
Liabilities
Capital expenditure
2222222222
36,255
18,174
34,063
25,593
751
45,503 47,130
4,487
18,474 19,262
61
35,696 31,206
1,191
25,871 21,325
390
940
–
222 222 222 222 222 222 222 222
32,803
19,026
29,682
20,805
904
9,840
175
856
653
36
4,438
108
201
19
–
4,810
192
1,432
259
135
886
21
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 22
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
4
Segment information (continued)
Information about major customers
Revenue from major customers arising from sales reported in the Defence Segment:
2015
£000
2014
£000
–
10,796
222222222222222222222222222222222222222222222222
Customer 1
Customer 1
10,715
–
5
Group operating profit
This is stated after charging:
Audit of the financial statements
Other fees for auditors
Other assurance services
Taxation service
2015
£000
76
11
40
2014
£000
79
11
28
1,227
316
220
682
60
17,507
1,050
194
222222222222222222222222222222222222222222222222
Depreciation
Amortisation of intangible assets
Foreign exchange losses
Hire of plant and machinery
Other operating leases – minimum lease payments
Cost of inventories recognised as an expense
Research and development costs
Redundancy and terminations costs
1,117
317
18
785
51
18,925
1,200
59
6
Employee Information
2015
Number
2014
Number
The average number of employees, including executive directors, during the period was:
Production
Technical
Distribution
Administration
199
62
25
51
2222222222222222222222222222222222222 2222 2222
337
2222222222222222222222222222222222222 2222 2222
210
65
27
54
356
(a)
Staff costs
Their, including executive directors, employment costs were as follows:
2015
£000
2014
£000
Wages and salaries
Social Security costs
Other pension costs
11,162
1,302
408
2222222222222222222222222222222222222 2222 2222
12,872
2222222222222222222222222222222222222 2222 2222
11,967
1,313
506
13,786
(b)
Directors’ emoluments
2014
£000
2013
£000
1,112
2222222222222222222222222222222222222 2222 2222
Aggregate directors’ emoluments (note 28)
1,141
22
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 23
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
7
Finance revenue
2015
£000
2014
£000
Bank interest
Other
48
–
2222222222222222222222222222222222222 2222 2222
48
2222222222222222222222222222222222222 2222 2222
46
24
70
8
Finance costs
2015
£000
2014
£000
Bank interest
Interest on taxation
69
–
2222222222222222222222222222222222222 2222 2222
69
2222222222222222222222222222222222222 2222 2222
32
–
32
9 (a) Taxation
The charge for taxation comprises:
2015
£000
2014
£000
Current tax
United Kingdom corporation tax
Tax over provided in previous years
Foreign corporation tax
236
(32)
381
2222222222222222222222222222222222222 2222 2222
585
2222222222222222222222222222222222222 2222 2222
Group current tax
19
(5)
286
300
Deferred tax
Origination and reversal of temporary differences (note 15)
Adjustments in respect of prior years
Impact of reduction in deferred tax rate to 20%
(72)
(67)
(92)
2222222222222222222222222222222222222 2222 2222
(231)
2222222222222222222222222222222222222 2222 2222
354
2222222222222222222222222222222222222 2222 2222
Group deferred tax
(50)
(62)
–
Tax on profit
(112)
188
Tax relating to items charged or credited to other comprehensive income
Deferred tax
Deferred tax on remeasurement gains/losses on pension scheme current year
Impact of reduction in deferred tax rate to 20%
Deferred taxation on revaluation surplus on land and buildings
219
177
446
2222222222222222222222222222222222222 2222 2222
842
2222222222222222222222222222222222222 2222 2222
Income tax in the statement of comprehensive income
(193)
–
–
(193)
23
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 24
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
9 (b) Factors affecting the tax charge for the year
The tax assessed for the period differs to the standard rate of corporation tax in the UK (21%). The differences
are explained below:
2015
£000
2014
£000
Profit before tax
2,928
2222222222222222222222222222222222222 2222 2222
673
(128)
(99)
(92)
2222222222222222222222222222222222222 2222 2222
354
2222222222222222222222222222222222222 2222 2222
Profit multiplied by standard rate of corporation tax of 21% (2014 – 23%)
Expenses not deductible for tax purposes
Adjustment in respect of prior periods
Impact of reduction in deferred tax rate to 20%
Total tax charge for the period
324
(69)
(67)
–
1,541
188
10
Earnings per share
The calculation of basic earnings per share is based on:
(a)
(b)
Profit for the period attributable to equity holders of the parent of £1,353,000 (2014 – 2,574,000).
16,504,691 (2014 – 17,603,561) Ordinary shares, being the weighted average number of Ordinary
shares in issue.
This represents 18,396,073 (2014 – 18,396,073) being the weighted average number of Ordinary shares in
issue less 1,891,382 (2013 – less 792,512) being the weighted average number of shares both held within the ESOT
245,048 (2014 -245,048) and purchased by the Company 1,646,334 (2014 – 547,464).
222222222222222222222222222222222222222222222222
11
Dividends paid and proposed
2015
£000
2014
£000
Declared and paid during the year
On Ordinary shares
Final dividend for 2014 : 6.50p (2013 – 6.50p)
Interim dividend for 2015 : 1.50p (2014 – 1.50p)
1,180
272
2222222222222222222222222222222222222 2222 2222
1,452
2222222222222222222222222222222222222 2222 2222
1,073
247
1,320
Proposed for approval by shareholders at the AGM
Final dividend for 2015: 6.50p (2014 – 6.50p)
1,073
2222222222222222222222222222222222222 2222 2222
1,073
24
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 25
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
12
Property, plant and equipment
Freehold
property
£000
Plant and
equipment
£000
(a)
Group
Cost or valuation
At 27th April, 2013
Additions
Disposals
Revaluation
Exchange differences
13,586
940
(652)
–
(149)
2222222222222222222222222222222 2222 2222
13,725
833
(522)
(88)
2222222222222222222222222222222 2222 2222
13,948
2222222222222222222222222222222 2222 2222
At 3rd May, 2014
Additions
Disposals
Exchange differences
10,892
–
–
1,495
(54)
12,333
–
–
(112)
At 2nd May, 2015
12,221
Accumulated depreciation
At 27th April, 2013
Depreciation charge for the period
Disposals
Revaluation
Exchange differences
10,431
1,074
(498)
–
(76)
2222222222222222222222222222222 2222 2222
10,931
936
(413)
(23)
2222222222222222222222222222222 2222 2222
11,431
2222222222222222222222222222222 2222 2222
2,517
2222222222222222222222222222222 2222 2222
2,794
2222222222222222222222222222222 2222 2222
At 3rd May, 2014
Depreciation charge for the period
Disposals
Exchange differences
292
153
–
(444)
(1)
Net book value at 2nd May, 2015
Net book value at 3rd May, 2014
–
181
–
(6)
At 2nd May, 2015
12,046
12,333
175
Analysis of cost or valuation
At professional valuation 2014
At cost
–
13,948
2222222222222222222222222222222 2222 2222
13,948
2222222222222222222222222222222 2222 2222
12,221
–
12,221
Analysis of cost or valuation
At professional valuation 2011
At cost
–
13,725
2222222222222222222222222222222 2222 2222
13,725
2222222222222222222222222222222 2222 2222
12,333
–
12,333
25
Total
£000
24,478
940
(652)
1,495
(203)
222
26,058
833
(522)
(200)
222
26,169
222
10,723
1,227
(498)
(444)
(77)
222
10,931
1,117
(413)
(29)
222
11,606
222
14,563
222
15,127
222
12,221
13,948
222
26,169
222
12,333
13,725
222
26,058
222
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 26
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
12
(b)
Property, plant and equipment (continued)
Company
Freehold
property
£000
Plant and
equipment
£000
Cost or valuation
At 27th April, 2013
Additions
Disposals
Revaluation
12,428
842
(514)
–
2222222222222222222222222222222 2222 2222
12,756
693
(504)
2222222222222222222222222222222 2222 2222
12,945
2222222222222222222222222222222 2222 2222
At 3rd May, 2014
Additions
Disposals
9,250
–
–
1,700
10,950
–
–
At 2nd May, 2015
10,950
Accumulated depreciation
At 27th April, 2013
Depreciation charge for the period
Disposals
Revaluation
At 3rd May, 2014
Depreciation charge for the period
Disposals
10,305
912
(466)
–
2222222222222222222222222222222 2222 2222
10,751
785
(395)
2222222222222222222222222222222 2222 2222
11,141
2222222222222222222222222222222 2222 2222
1,804
2222222222222222222222222222222 2222 2222
2,005
2222222222222222222222222222222 2222 2222
Net book value at 2nd May, 2015
Net book value at 3rd May, 2014
240
116
–
(356)
At 2nd May, 2015
–
146
–
10,804
10,950
146
Analysis of cost or valuation
At professional valuation 2014
At cost
–
12,945
2222222222222222222222222222222 2222 2222
12,945
2222222222222222222222222222222 2222 2222
10,950
–
10,950
Analysis of cost or valuation
At professional valuation 2011
At cost
–
12,428
2222222222222222222222222222222 2222 2222
12,428
2222222222222222222222222222222 2222 2222
9,250
–
9,250
Total
£000
21,678
842
(514)
1,700
222
23,706
693
(504)
222
23,895
222
10,545
1,028
(466)
(356)
222
11,107
931
(395)
222
11,643
222
12,608
222
12,955
222
10,950
12,945
222
23,895
222
9,250
12,428
222
21,678
222
(c)
(d)
Depreciation has not been charged on freehold land which is included at a book value of £3,877,000 (2014 –
£3,943,000) Company £3,380,000 (2014 – £3,380,000) at 2nd May, 2015.
On 30th April, 2014 the Group’s land and buildings which consist of manufacturing and office facilities in the
UK and Poland, were valued by Dove Haigh Phillips (UK) and KonSolid-Nieruchomosci (Poland).
Management determined that these constitute one class of asset under IFRS 13 (designated as level 3 fair
value assets), based on the nature, characteristics and risks of the properties.
If land and buildings were valued using the cost method, carrying amounts would be £7,332,000 (2014 –
£7,332,000) at 2nd May, 2015.
The UK properties were valued on the basis of an existing use value in accordance with the Appraisal and
Valuation Standards (5th Edition) published by the Royal Institution of Chartered Surveyors. The Poland property
was valued based on the income approach, converting anticipated future benefits in the form of rental income into
present value. For all properties, there is no difference between current use and highest and best use.
26
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 27
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
12
Property, plant and equipment (continued)
Significant unobservable valuation input
Basis of measurement
Value Range
UK Properties
Value in use
£293-315 sq./m
Poland Property
Monthly rental
£4-£11 sq./m pcm
Significant increases/(deceases) in the above measurements would result in a significant higher/(lower) fair
value.
The valuation has given rise to a revaluation surplus of £1,939,000.
222222222222222222222222222222222222222222222222
13
Intangible assets
Group
Cost
At 27th April, 2013
Additions
222222222222222
At 3rd May, 2014
Additions
222222222222222
At 2nd May, 2015
222222222222222
Amortisation
At 27th April, 2013
Amortisation during the year
222222222222222
At 3rd May, 2014
Amortisation during the year
222222222222222
At 2nd May, 2015
222222222222222
Net book value at 2nd May, 2015
222222222222222
Net book value at 3rd May, 2014
222222222222222
Goodwill
£000
Trade
name
£000
Design
Customer
database relationship
£000
£000
Order Development
costs
£000
backlog
£000
Software
costs
£000
Group
£000
111
–
865
–
1,020
–
2,064
–
1,370
–
6,039
–
222 222 222 222 222 222 222 222
6,039
–
222 222 222 222 222 222 222 222
6,039
222 222 222 222 222 222 222 222
1,370
–
2,064
–
1,020
–
330
–
279
–
865
–
111
–
2,064
1,370
1,020
330
–
279
–
330
279
865
111
–
–
111
–
279
–
400
137
126
43
372
127
300
9
–
–
169
44
537
138
1,588
316
222 222 222 222 222 222 222 222
1,904
317
222 222 222 222 222 222 222 222
2,221
222 222 222 222 222 222 222 222
3,818
222 222 222 222 222 222 222 222
4,135
222 222 222 222 222 222 222 222
309
8
499
127
279
–
111
–
2,064
2,064
317
279
213
626
695
111
394
675
652
521
696
833
13
21
–
–
–
–
–
Development
costs
£000
Software
costs
£000
Company
£000
Company
Cost
At 27th April, 2013
Additions
330
–
2222222222222222222222222222222 2222 2222
330
–
2222222222222222222222222222222 2222 2222
330
2222222222222222222222222222222 2222 2222
At 3rd May, 2014
Additions
At 2nd May, 2015
279
–
279
–
279
Amortisation
At 27th April, 2013
Amortisation during the year
At 3rd May, 2014
Amortisation during the year
300
9
2222222222222222222222222222222 2222 2222
309
8
2222222222222222222222222222222 2222 2222
317
2222222222222222222222222222222 2222 2222
13
2222222222222222222222222222222 2222 2222
21
2222222222222222222222222222222 2222 2222
Net book value at 2nd May, 2015
Net book value at 3rd May, 2014
At 2nd May, 2015
279
–
279
–
279
–
–
27
609
–
222
609
–
222
609
222
579
9
222
588
8
222
596
222
13
222
21
222
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 28
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
13
Intangible assets (continued)
Goodwill acquired through business combinations and licences has been allocated for impairment testing
purposes to the petrol station superstructures division which is an operating segment.
Impairment testing
Goodwill considered significant in comparison to the Group’s total carrying amount of such assets has been
allocated to cash-generating units or groups of cash-generating units as follows:
Goodwill
2015
£000
Goodwill
2014
£000
2,064
2222222222222222222222222222222222222 2222 2222
Petrol station superstructure division
2,064
Group
The performance of the petrol station superstructure division is the lowest level at which goodwill is
monitored for internal management purposes.
At the year end, value in use was determined by discounting the future cash flows generated from the
continuing operations of the company over the next 5 years and was based on the following key assumptions:
l
l
l
Detailed 5 year management forecast.
A growth in cashflows estimated for 5 years, and a growth rate of 2% assumed thereafter.
Cash flows were discounted at a rate of 17.97%. This is the discount rate as calculated using the
Weighted Average Cost of Capital.
Based on the above assumptions, the value in use calculated for Global-MSI did not indicate the need for
impairment. The growth rates used in the value in use calculation reflect management’s expectations for the
business based upon previous experience and taking into consideration recent sales wins.
No likely changes in the assumptions used would give rise to an impairment.
222222222222222222222222222222222222222222222222
14
Investment in subsidiary undertakings
Principal subsidiary undertakings are set out on page 49.
Company
At 3rd May, 2014
Impairment in investment in MSI-Forks Garfos
Industriais Ltda
2222222222222222222222222222
At 2nd May, 2015
2222222222222222222222222222
2015
£000
2015
£000
Cost
Impairment
2015
£000
Net book
value
13,875
(2,046)
11,829
–
(88)
2222 2222 2222
11,741
2222 2222 2222
(2,134)
13,875
(88)
The impairment of £88,000 represents the write down of the investment in MSI-Forks Garfos Industriais Ltda
to fair value. Fair value was determined by the net assets of MSI-Forks Garfos Industriais Ltda. This is subject to
annual impairment testing.
28
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 29
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
15
Deferred income tax
The deferred income tax included in the Group income statement is as follows:
2015
£000
2014
£000
Taxation deferred by capital allowances
Other temporary differences
Taxation on defined benefits pension
Adjustments in respect of prior periods
Impact of reduction in deferred tax rate (23% to 20%)
(21)
(34)
(17)
(67)
(92)
2222222222222222222222222222222222222 2222 2222
(231)
2222222222222222222222222222222222222 2222 2222
9
(54)
(5)
(62)
–
(112)
The deferred income tax included in the balance sheet is as follows:
Group
2015
£000
2014
£000
Taxation deferred by capital allowances
Other temporary differences
Taxation on pension liability
Taxation on buildings revaluation
(327)
(255)
1,178
(807)
2222222222222222222222222222222222222 2222 2222
(211)
2222222222222222222222222222222222222 2222 2222
Deferred income tax asset/(liability)
(310)
(166)
1,376
(807)
93
Company
2015
£000
2014
£000
Taxation deferred by capital allowances
Other temporary differences
Taxation on pension liability
Taxation on buildings revaluation
(321)
140
1,178
(830)
2222222222222222222222222222222222222 2222 2222
167
2222222222222222222222222222222222222 2222 2222
(304)
150
1,376
(830)
Deferred income tax asset
392
Deferred taxation has been provided at 20%. This is the rate enacted at the balance sheet date.
The Group and Company also has capital losses of £4,350,000 (2014 – £4,350,000).
222222222222222222222222222222222222222222222222
16
Inventories
Group
Company
2015
£000
2014
£000
2015
£000
2,950
4,795
417
3,407
4,375
682
2,976
4,241
176
2222 2222 2222
7,393
2222 2222 2222
8,464
8,162
2014
£000
2,504
4,675
71
222
7,250
222
Raw materials
Work in progress
Finished goods
222222222222222222222222
222222222222222222222222
29
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 30
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
17
Trade and other receivables
Trade receivables
Retentions on contracts
Amounts owed by subsidiary undertakings
Other receivables
222222222222222222222222
222222222222222222222222
Gross amounts due from customers for contract
work – included above
222222222222222222222222
Group
Company
2015
£000
2014
£000
2015
£000
5,572
2,644
–
44
7,772
1,681
–
1
6,646
1,681
924
1
2222 2222 2222
9,252
2222 2222 2222
9,454
8,260
224
2222 2222 2222
491
821
2014
£000
4,326
2,644
1,264
42
222
8,276
222
200
222
The aggregate amount of costs incurred and recognised profits to date on contracts is £13,280,000 (2014 –
£13,881,000).
(a) Trade receivables are denominated in the following currencies:
Group
Company
Sterling
Euro
US dollar
Other currencies
222222222222222222222222
222222222222222222222222
2015
£000
2014
£000
2015
£000
4,105
510
245
712
6,545
236
643
348
6,545
101
–
–
2222 2222 2222
6,646
2222 2222 2222
7,772
5,572
2014
£000
4,105
221
–
–
222
4,326
222
Trade receivables are non-interest bearing and are generally on 30 days terms and are shown net of provision
for impairment. The aged analysis of trade receivables not impaired is as follows:
Group
2015
2014
Total
£000
7,772
5,572
Not
past due
£000
6,328
3,686
< 30 days
£000
30-60 days
£000
60-90 days
£000
> 90 days
£000
1,224
1,058
98
159
105
49
17
620
As at 2nd May, 2015 trade receivables at a nominal value of £52,000 (2014 – £184,000) were impaired and
fully provided. Bad debts of £151,000 (2014 – £165,000) were recovered and bad debts of £42,000 (2014 –
£21,000) were incurred.
Company
2015
2014
6,646
4,326
5,604
2,666
905
922
57
96
80
28
–
614
As at 2nd May, 2015 trade receivables at a nominal value of £39,000 (2014 – £168,000) were impaired and
fully provided. Bad debts of £143,000 (2014 – £165,000) were recovered and bad debts of £15,000 (2014 –
£5,000) were incurred.
(b) Retentions on contracts are denominated in the following currencies:
Group
Company
Sterling
Euro
US dollar
Other currencies
222222222222222222222222
222222222222222222222222
30
2015
£000
2014
£000
2015
£000
2,644
–
–
–
1,681
–
–
–
1,681
–
–
–
2222 2222 2222
1,681
2222 2222 2222
1,681
2,644
2014
£000
2,644
–
–
–
222
2,644
222
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 31
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
17
Trade and other receivables (continued)
Retentions on contracts are non interest bearing and represent amounts contractually retained by customers
on completion of contracts for specific time periods as follows:
Group
2015
2014
Company
Total
£000
1,681
2,644
Up to 6
months
£000
1,681
2,644
6-12
months
£000
12-18
months
£000
18-24
months
£000
–
–
–
–
–
–
–
1,681
–
2,644
222222222222222222222222222222222222222222222222
1,681
2,644
2015
2014
–
–
–
–
18
Cash
Group
Company
Cash at bank and in hand
Short-term deposits
222222222222222222222222
222222222222222222222222
19
Issued capital
2015
£000
2014
£000
2015
£000
4,786
9,500
9,884
7,264
8,935
7,264
2222 2222 2222
16,199
2222 2222 2222
17,148
14,286
2014
£000
3,741
9,500
222
13,241
222
Group
Company
2015
£000
3,500
2014
£000
3,500
2015
£000
3,500
2014
£000
3,500
Ordinary shares at 10p each
Authorised – 35,000,000 (2014 – 35,000,000)
Allotted, issued and fully paid – 18,396,073
(2014 – 18,396,073)
1,840
222222222222222222222222222222222222222222222222
1,840
1,840
1,840
20
Reserves
Share Capital
The balance classified as share capital includes the nominal value on issue of the Company’s equity share
capital, comprising 10p Ordinary shares.
Capital redemption reserve
The balance classified as capital redemption reserve represents the nominal value of issued share capital of
the Company, repurchased.
Other reserve
This is the revaluation reserve previously arising under UK GAAP which is now part of non-distributable
retained reserves.
Revaluation reserve
The asset revaluation reserve is used to record increases in the fair value of land and buildings and decreases
to the extent that such decrease relates to an increase on the same assets previously recognised in equity. This also
includes the impact of the change in related deferred tax due to the change in corporation tax (21% to 20%).
Special reserve
The balance classified as special reserve represents the share premium on the issue of the Company’s equity
share capital.
31
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 32
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
20
Reserves (continued)
Currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation
of the financial statements of foreign subsidiaries. It is also used to record the effect of hedging net investments in
foreign operations.
Treasury shares
2015
£000
2014
£000
Employee Share Ownership Trust
Shares in treasury (see below)
100
2,959
2222222222222222222222222222222222222 2222 2222
3,059
2222222222222222222222222222222222222 2222 2222
100
2,959
3,059
During 1991 the Company established an Employee Share Ownership Trust (“ESOT”). The trustee of the
ESOT is Appleby Trust (Jersey) Ltd, an independent company registered in Jersey. The ESOT provides for the issue
of options over Ordinary shares in the Company to Group employees, including executive directors, at the discretion
of the Remuneration Committee.
The trust has purchased an aggregate 245,048 (2014 – 245,048) Ordinary shares, which represents 1.3%
(2014 – 1.3%) of the issued share capital of the Company at an aggregate cost of £100,006. The market value of the
shares at 2nd May, 2015 was £346,000 (2014 – £508,000). The Company has made payments of £Nil (2014 – £Nil)
into the ESOT bank accounts during the period. No options over shares (2014 – Nil) have been granted during the
period. Details of the outstanding share options, for Directors are included in the Directors’ remuneration report.
The assets, liabilities, income and costs of the ESOT have been incorporated into the Company’s financial
statements. Total ESOT costs charged to the income statement in the period amounts to £4,000 (2014 – £4,000).
During the period no options on shares were exercised (2014 – Nil) and no shares were purchased (2014 – Nil).
The Company made the following purchases of its own 10p Ordinary shares to be held in Treasury:
11th December, 2013 1,000,000 shares from the Group’s pension scheme.
30th January, 2014 646,334 shares
£000
1,722
1,237
222222222222222222222222222222222222222222222222
2,959
222222222222222222222222222222222222222222222222
21
Pension liability
The Company operates an employee defined benefits scheme called the MS INTERNATIONAL plc Retirement
and Death Benefits Scheme (the Scheme). IAS 19 requires disclosure of certain information about the Scheme
as follows:
l
l
l
l
Until 5th April, 1997 the Scheme provided defined benefits and these liabilities remain in respect of
service prior to 6th April, 1997. From 6th April, 1997 until 31st May, 2007 the Scheme provided future
service benefits on a defined contribution basis.
The last formal valuation of the Scheme was performed at 5th April, 2011 by a professionally qualified
actuary.
The Company has paid contributions into the Scheme for life insurance premiums and other Scheme
expenses. In addition from April 2013, the employer has paid £229,000 per annum to the defined
benefits section of the Scheme.
From 1st June, 2007 the Company has operated a defined contributions scheme for its UK employees
which is administered by a UK pension provider.
Members contributions are paid in line with this scheme’s documentation over the accounting period and the
Company has no further payment obligations once the contributions have been made.
The Company’s policy for recognising remeasurement gains and losses is to recognise them immediately
through the statement of comprehensive income.
32
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 33
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
21
Pension liability (continued)
Assumptions
2014
4.10%
3.70%
3.10%
1.90%
21.10yrs
22.40yrs
222222222222222222222222222222222222222222222222
Discount rate at year-end
Future salary increases
Pension increases – RPI inflation
Pension increases – CPI inflation
Life expectancy of current pensioners (from age 65)
Life expectancy of future pensioners (from age 65)
2015
3.20%
3.50%
3.00%
1.80%
21.6yrs
23.3yrs
A 0.5% reduction in the discount rate would lead to an increase in past service liabilities of around £1.8m.
Members living around 1 year longer than expected would lead to an increase in past service liabilities of
around £1.0m.
In relation to the other assumptions there is no sensitivity analysis as small changes in these assumptions
will not have a material impact.
The average duration of the scheme is 12/13 years.
Balance sheet
2015
£000
2014
£000
Present value of obligations
Fair value of plan assets
28,786
22,897
2222222222222222222222222222222222222 2222 2222
5,889
2222222222222222222222222222222222222 2222 2222
30,102
23,225
Net liability
6,877
Profit & loss
2015
£000
2014
£000
Interest on net liabilities
Administration expenses
254
350
2222222222222222222222222222222222222 2222 2222
604
2222222222222222222222222222222222222 2222 2222
Total profit and loss cost
237
316
553
Change in defined benefit obligation
Opening defined benefit obligation
Interest cost
Experience (gains)/losses arising on scheme liabilities
Changes in financial assumptions underlying the present
value of scheme liabilities
Changes in demographic assumptions underlying the present
value of scheme liabilities
Benefits paid
99
(1,409)
2222222222222222222222222222222222222 2222 2222
28,786
2222222222222222222222222222222222222 2222 2222
Defined benefit obligation
(81)
(1,360)
30,102
2015
£000
28,786
1,151
(1,088)
2014
£000
29,990
1,113
53
2,694
(1,060)
33
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 34
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
21
Pension liability (continued)
Change in fair value of plan assets
2015
£000
2014
£000
Opening fair value of plan assets
Interest income on assets
Actual return on assets less amount included in net interest
Contributions by employer
Administration expenses
Benefits paid
23,224
859
44
529
(350)
(1,409)
2222222222222222222222222222222222222 2222 2222
22,897
2222222222222222222222222222222222222 2222 2222
22,897
914
561
529
(316)
(1,360)
Fair value of plan assets
23,225
Statement of comprehensive income
2015
£000
2014
£000
Actual return on assets less amounts included in net interest
Remeasurement (losses)/gains
44
908
2222222222222222222222222222222222222 2222 2222
952
2222222222222222222222222222222222222 2222 2222
561
(1,525)
(964)
229
2222222222222222222222222222222222222 2222 2222
Expected Group contribution to plan during next accounting year
229
2015
£000
2014
£000
Plan
assets
Asset
allocation
Breakdown of assets at 2nd May, 2015
Equities – UK market
Equities – non-UK market
Corporate Bonds
Gilts
Cash/other
35%
36%
15%
11%
2%
2222222222222222222222222222222222222 2222 2222
100%
2222222222222222222222222222222222222 2222 2222
8,181
8,472
3,511
2,623
438
23,225
Plan
assets
Asset
allocation
Breakdown of assets at 3rd May, 2014
Equities – UK market
Equities – non-UK market
Alternative assets
Corporate Bonds
Gilts
Cash/other
34%
40%
0%
13%
11%
2%
2222222222222222222222222222222222222 2222 2222
100%
2222222222222222222222222222222222222 2222 2222
7,759
9,249
89
2,877
2,508
415
22,897
34
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 35
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
22
Trade and other payables
Trade payables
Amounts owed to subsidiary undertakings
Other payables
Accruals
Progress payments
222222222222222222222222
222222222222222222222222
Gross amounts due to customers for contract
work – included above
222222222222222222222222
23
Financial instruments
Management of financial risks
Group
Company
2015
£000
2014
£000
2015
£000
4,555
–
3,105
1,762
5,803
4,254
–
2,829
1,950
9,961
3,966
8,107
2,722
1,799
9,860
2222 2222 2222
26,454
2222 2222 2222
18,994
15,225
125
2222 2222 2222
320
442
2014
£000
4,164
8,102
2,862
1,504
5,662
222
22,294
222
128
222
The major financial risks faced by the Group and Company are funding risks, interest rate risks and currency
risks.
Funding risk
At the year end the Group had net cash of £17.15m – Company £16.20m (2014 Group – £14.29m – Company
£13.24m). The Group and Company has available a bank multicurrency overdraft facility of £4.8m which is
renewable on 1st January, 2016.
Interest rate risk
The bank multicurrency overdraft facility is at a floating rate of interest, based on the base rate of each
respective currency. This position is monitored constantly by the Board to ensure any risk is minimised. The Board
believe that the main interest rate risk relates to maximising interest income on cash balances.
The following table demonstrates the sensitivity to a reasonable possible change in interest rates, with all
other variables held constant of the Group’s profit before tax. There is no impact on the Group’s equity.
2015
Sterling
2014
Sterling
Increase/decrease
in basis points
Effect on profit
before tax
+50
–50
+50
–50
50
(50)
50
(50)
The interest rate profile of the financial assets of the Group and Company as at 2nd May, 2015 was as follows:
Group
Company
2015
Sterling
US Dollar
Euro
Other
222222222222222222
Total
222222222222222222
Floating rate
financial assets/
(liabilities)
£000
Floating rate
financial assets/
(liabilities)
£000
Total
£000
13,300
2,956
834
58
2222
17,148
2222
13,292
2,561
345
1
2222
16,199
2222
13,300
2,956
834
58
2222
17,148
2222
35
Total
£000
13,292
2,561
345
1
222
16,199
222
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 36
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
23
Financial instruments (continued)
2014
Sterling
US Dollar
Euro
Other
222222222222222222
Total
222222222222222222
Foreign currency risk
11,919
2,483
905
(1,021)
2222
14,286
2222
11,919
2,483
905
(1,021)
2222
14,286
2222
11,916
2,050
328
(1,053)
2222
13,241
2222
11,916
2,050
328
(1,053)
222
13,241
222
Exposure to risk is incurred by the Group and Company through overseas sales.
This exposure is minimised by the following:
(1)
(2)
invoicing in sterling where practicable.
using foreign currency received for purchases where appropriate.
Currency exposures
The table below shows the Group’s currency exposures; i.e., those transactional exposures that give rise to the
net currency gains and losses recognised in the income statement. Such exposures comprise the monetary assets and
monetary liabilities of the Group that are not denominated in the operating (or “functional”) currency of the
operating unit involved.
As at 2nd May, 2015 these currency exposures are as follows:
Functional currency of Group operations
2015
Sterling
222222222222222222222222
Total
222222222222222222222222
2014
Sterling
222222222222222222222222
Total
222222222222222222222222
Functional currency of Company operations
2015
Sterling
222222222222222222222222
Total
222222222222222222222222
2014
Sterling
222222222222222222222222
Total
222222222222222222222222
Net foreign currency monetary assets/(liabilities)d
Sterling
£000
US Dollar
£000
Total
£000
Euro
£000
199
695
2222 2222 2222
695
2222 2222 2222
2,128
2,128
199
1,217
(1,532)
552
2222 2222 2222
552
2222 2222 2222
(1,532)
1,217
3,022
222
3,022
222
237
222
237
222
Net foreign currency monetary assets/(liabilities)d
Sterling
£000
US Dollar
£000
Total
£000
Euro
£000
192
22
2222 2222 2222
22
2222 2222 2222
2,128
2,128
192
(954)
1,217
(84)
2222 2222 2222
(84)
2222 2222 2222
1,217
(954)
2,342
222
2,342
222
179
222
179
222
No significant differences exist between the book value and the fair value of the financial assets and liabilities
as at 2nd May, 2015 and 3rd May, 2014.
Fair values
No significant differences exist between the book value and the fair value of the financial assets and liabilities
as at 2nd May, 2015 and 3rd May, 2014.
Credit risk
There are no significant concentrations of credit risk within the Group or Company. The maximum credit risk
exposure relating to financial assets is represented by carrying values at the balance sheet date.
The Group and Company have established procedures to minimise the risk of default by trade debtors
including credit checks undertaken before a customer is accepted and credit insurance where available and
appropriate. Historically these procedures have proved effective in minimising the level of impaired and past due
receivables.
36
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 37
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
24
Income statement
The profit for the financial period dealt with in the financial statements of the Company was £955,000
(2014 – £1,605,000).
222222222222222222222222222222222222222222222222
25
Capital committments
Group
Company
Contracted but not provided in the financial statements
72
22222222222222222222222222 2222 2222 2222
72
22222222222222222222222222 2222 2222 2222
185
185
72
72
2015
£000
2014
£000
2015
£000
2014
£000
185
222
185
222
26
Obligations under leases
Future minimum rentals payable under non-cancellable operating leases are as follows:
Group
Company
Amounts payable
Within one year
In two to five years
22
25
22222222222222222222222222 2222 2222 2222
47
22222222222222222222222222 2222 2222 2222
173
25
198
199
181
18
2015
£000
2014
£000
2015
£000
2014
£000
31
18
222
49
222
The Group has entered into commercial leases on certain properties, plant and equipment. These leases have
an average duration of between 1 and 2 years.
222222222222222222222222222222222222222222222222
27
Contingent liabilities
The Company is contingently liable in respect of guarantees, indemnities and performance bonds given in the
ordinary course of business amounting to £6.772,100 at 2nd May, 2015 (2014 – £7,602,881).
222222222222222222222222222222222222222222222222
28
Related party transactions
The following transactions took place, during the year, between the Company and other subsidiaries in the
Group.
Purchases of goods and services £15,780 (2014 – £1,309)
Sales of goods and services £2,964,112 (2014 – £2,529,757)
The following balances between the Company and other subsidiaries in the Group are included in the
Company balance sheet as at 2nd May, 2015.
Amounts owed by the Company £8,107,000 (2014 – £8,102,000)
Amounts owed to the Company £924,000 (2014 – £1,264,000)
Sales and purchases between related parties are made at normal market prices. Terms and conditions for
transactions with subsidiaries and the joint venture are unsecured and interest free. Balances are placed on inter-
company accounts with no specified credit period.
Key management personnel (main board directors) compensation.
Group
Company
2015
£000
2014
£000
2015
£000
1,112
228
1,141
127
1,141
127
2222 2222 2222
1,268
2222 2222 2222
1,268
1,340
2014
£000
1,112
228
222
1,340
222
Short-term employee benefits
Post-employment benefits
222222222222222222222222
222222222222222222222222
37
4046 - MSI R+A 002_002 18/06/2015 15:22 Page 38
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
29
Share-based payments
Share options are granted to senior executives in two schemes; the Employee Share Option Scheme and the
Enterprise Management Incentive Scheme. The exercise price of the option is no less than the market price of the
shares on the date of the grant. The options vest after the executives have been in service for specified times of not
less than one year from the date of grant. The contractual life of the options vary up to 10 years. There are no cash
settlement alternatives.
The following table illustrates the number and weighted average exercise prices (WAEP) of and movements
in, share options during the year.
2015
2015
2014
2014
Enterprise management incentive scheme
Outstanding as at 3rd May, 2014
Options exercised
Options lapsed
194.0p
–
–
222222222222222222222222222222222222222222222222
194.0p
222222222222222222222222222222222222222222222222
Outstanding as at 2nd May, 2015
214,000
–
–
214,000
–
–
194.0p
–
–
214,000
214,000
194.0p
The expense recognised for share options during the year is £Nil (2014 – £Nil).
222222222222222222222222222222222222222222222222
30
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating
and healthy capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic
conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders,
return capital to shareholders or issue new shares. No changes were made to the objectives, policies or processes
during the years ended 2nd May, 2015 and 3rd May, 2014.
Capital comprises equity attributable to the equity holders of the parent company £28,299,000
(2014 – £29,143,000).
222222222222222222222222222222222222222222222222
31
Post balance sheet event
On the 17th June, 2015 the Company acquired the 100% shareholding in Petrol Sign B.V., a Company based
in The Netherlands from Lambooij Holdings B.V. The consideration for the acquisition is n3,400,000 on a cash and
debt free basis and includes “normalised” working capital.
Petrol Sign B.V. designs, restyles, produces and installs the complete appearance of petrol station
superstructures and forecourt. The acquisition will enhance and widen the ability of our Petrol Station
Superstructure Division to offer a more complete package of services to customers.
For the financial year ended 31st December, 2014, Petrol Sign B.V. had unaudited revenues of n4,156,000
(2013 – n3,190,000) and an unaudited profit before taxation of n446,000 (2013 – n196,000). As at 31st December,
2014, Petrol Sign B.V. had unaudited net assets of n756,000.
As a result of the acquisition date being so close to the financial statement approval date, the information to
make the following disclosures was not available.
1.
2.
The amounts recognised at the acquisition date for each class of the acquiree’s assets, liabilities and
contingent liabilities, and the carrying amount of those classes, determined in accordance with IFRSs,
immediately before the combination.
A description of the factors that contributed to a cost that results in the recognition of goodwill,
including a description of each intangible asset that was not recognised separately from goodwill and
an explanation of why the intangible asset’s fair value could not be measured reliably.
3.
For acquired receivables:
(i)
(ii)
(iii)
for fair value of the receivables;
the gross contractual amounts receivable; and
the best estimate at the acquisition date of the contractual cash flows not expected to be
collected.
4.
The total amount of goodwill that is expected to be deductible for tax purposes.
222222222222222222222222222222222222222222222222
38
4046 - MSI R+A 003_003 18/06/2015 15:23 Page 39
M S I N T E R N A T I O N A L p l c
Summary of group results 2011 – 2015
GROUP INCOME STATEMENT
2015
£000
2014
£000
2013
£000
2012
£000
2011
£000
47,130
Group revenue
Group operating profit
Finance
54,202
45,503
22222222222222222222 2222 2222 2222 2222 2222
6,401
1,740
283
(199)
22222222222222222222 2222 2222 2222 2222 2222
6,684
1,541
(1,179)
(188)
22222222222222222222 2222 2222 2222 2222 2222
5,505
1,353
22222222222222222222 2222 2222 2222 2222 2222
Profit before taxation
Taxation
Profit for the period
8,388
(2,078)
8,590
(202)
2,928
(354)
3,203
(275)
4,563
(480)
4,780
(217)
55,948
54,494
2,574
6,310
4,083
BALANCE SHEETS
Assets employed
Intangible assets
Tangible fixed assets
Other net current (liabilities)/assets
Bank balances
5,160
3,818
12,514
14,563
1,249
(446)
9,877
17,148
22222222222222222222 2222 2222 2222 2222 2222
28,800
35,083
22222222222222222222 2222 2222 2222 2222 2222
4,798
13,818
4,424
10,037
4,451
13,755
3,887
13,447
4,135
15,127
1,695
14,286
35,540
33,077
35,243
Financed by
Ordinary share capital
Reserves
1,840
1,840
23,934
26,459
22222222222222222222 2222 2222 2222 2222 2222
25,774
28,299
3,026
6,784
22222222222222222222 2222 2222 2222 2222 2222
28,800
35,083
22222222222222222222 2222 2222 2222 2222 2222
Shareholders’ funds
Net non current liabilities
29,054
6,486
28,405
4,672
29,143
6,100
1,840
27,214
1,840
26,565
1,840
27,303
35,243
35,540
33,077
Note: The results for the years 2011 – 2012 have not been restated to reflect the effects of IAS 19 R “Employee
Benefits”.
39
4046 - MSI R+A 003_003 18/06/2015 15:23 Page 40
M S I N T E R N A T I O N A L p l c
Corporate governance statement
As an AIM listed company MS INTERNATIONAL plc is not required to comply with the UK Corporate
Governance Code and has not elected to voluntarily comply.
However, the Group is committed to high standards of governance appropriate to its size and structure. The
main features of the Group’s corporate governance arrangements are set out below.
The Board consists of three executive directors, one of whom, Michael Bell, is the Executive Chairman and
three non-executive directors, Roger Lane-Smith, David Pyle and David Hansell. The Chairman has no other
significant commitments. Day-to-day control of subsidiary and joint venture operations is vested in individual
company managing directors, supported by their respective financial managers.
The Board meets at least quarterly throughout the year to direct and control the overall strategy and
operating performance of the Group. To enable them to carry out these responsibilities all directors have full and
timely access to all relevant information. Executive directors, except for Company business trips and holidays, meet
daily and the Chairman periodically meets with the non-executive directors. Additionally subsidiary operations have
monthly Board meetings which the main Board chairman chairs and the main Board financial director attends.
Procedures are in place for directors to seek independent advice at the expense of the Company and the
Company has insurance in respect of legal action against the Directors. The Company Secretary is responsible to the
Board for ensuring that Board procedures are complied with and for advising the Board on all governance matters.
The Audit Committee consists of two non-executive directors, Roger Lane-Smith and David Pyle. In the
opinion of the Board, the non-executive directors have recent and relevant financial experience through their
directorships, and extensive experience in dealing with the City. All Board members attend all meetings as
appropriate. The external auditors have direct access to the Committee without the executive directors being
present.
The Audit Committee evaluates the Group’s risk profile and reviews the Group’s half and full year financial
statements. The Audit Committee is responsible for recommendations for appointment, reappointment or removal of
the external auditors. The auditors provide taxation services to the Group. This arrangement has been reviewed by
the Board and the audit committee and is not considered to affect the auditors objectivity and independence.
The committee recommended that the Board present a resolution to the shareholders at the 2015 AGM for
the reappointment of the external auditors. This followed the assessment of the quality of the service provided, the
expertise and resources made available to the Group, auditor independence and effectiveness of the audit process.
Arrangements by which staff can, in confidence, raise concerns about possible improprieties in financial and
other matters – ‘whistleblowing’ procedures, with any of the Board of directors are in place.
The Audit Committee and the Board have considered whether there is a need for an internal audit function
and believes that the circumstances and size of the Group make such a function unnecessary.
The role and membership of the Remuneration Committee is set out in the Directors’ remuneration report.
The Board is responsible for establishing and maintaining the Group’s system of internal control. Internal
control systems are designed to meet the particular needs of the Company concerned bearing in mind the resources
available and the risks to which it is exposed, and by their nature can provide reasonable but not absolute assurance
against material misstatement or loss. The key procedures which the directors have established with a view to
providing effective internal control are as follows:
The Board has overall responsibility for the Group and there is a formal schedule of matters specifically
reserved for decision by the Board which covers the key areas of the Group’s affairs including acquisitions and
divestment policy, approval of budgets, capital expenditure, major buying and selling contracts and general treasury
and risk management policies. There is a clearly decentralised structure which delegates authority, responsibility
and accountability, including responsibility for internal financial control, to management of the operating companies.
Responsibility levels and delegation of authority and authorisation levels throughout the Group are set out in
the corporate accounting and procedures manual.
There is a comprehensive system for reporting financial results. Monthly accounts are prepared on a timely
basis. They include income statement, balance sheet, cash flow and capital expenditure reporting with comparisons
to budget and forecast. The budget is prepared annually and revised forecasts are produced monthly.
There is an investment evaluation process to ensure Board approval for all major capital expenditure
commitments.
There is a contract evaluation process to ensure executive director approval for all major sales contracts.
40
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M S I N T E R N A T I O N A L p l c
Corporate governance statement
Continued
The Board has reviewed the effectiveness of the system of internal controls and together with operational
management, has identified and evaluated the critical business and financial risks of the Group. These risks are
reviewed continually. Where appropriate, action is taken to manage the risks.
The directors have a reasonable expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the
accounts.
The Board recognises the importance of communication with all shareholders and is ready, where practicable,
to discuss relevant matters with all shareholders. Inter alia, the Board uses the Annual General Meeting to
communicate with shareholders and welcomes their constructive participation. Details of the Annual General
Meeting to be held on 17th July, 2015 can be found in the Notice of Meeting on page 50.
On behalf of the Board
David Kirkup
Secretary
17th June, 2015
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M S I N T E R N A T I O N A L p l c
Report of the directors
The directors present their report and the Group financial statements for the 52 weeks ended 2nd May, 2015. The
directors present their Corporate governance statement on pages 40 and 41 of this report.
222222222222222222222222222222222222222222222222
1
Principal activities of the Group
A review of the Group’s trading during the year is contained in the Chairman’s Statement and Strategic
report.
222222222222222222222222222222222222222222222222
2
Results and dividends
The profit after taxation for the period attributable to shareholders amounted to £1,353,000 (2014 –
£2,574,000). The directors recommend a final dividend of 6.50 pence per share (2014 – 6.50 pence per share), making
a total of 8.00 pence per share (2014 – 8.00 pence per share).
222222222222222222222222222222222222222222222222
3
Going concern
The Group has considerable financial resources together with long term contracts with a number of
customers. As a consequence, the directors believe that the Group is well placed to manage its business risk
successfully despite the current uncertain economic outlook.
After making enquiries the directors have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to
adopt the going concern basis in preparing the annual report and accounts.
222222222222222222222222222222222222222222222222
4
Directors
The names of the directors of the Company at 17th June, 2015 are shown on page 5.
All of the directors served throughout the year other.
In accordance with the Articles of Association Nicholas Bell retires by rotation and, being eligible, offers
himself for re-election. In addition, Roger Lane-Smith, David Pyle and David Hansell retire from the Board at the
AGM and, being eligible, offer themselves for re-election. The Chairman confirms that Nicholas Bell, Roger Lane-
Smith, David Pyle and David Hansell continue to be effective and to demonstrate commitment to their roles,
including the commitment of their time for the Board and Committee meetings and their other duties.
222222222222222222222222222222222222222222222222
5
Substantial interests in shares
As at 2nd May and as at 17th June, 2015, the directors had been advised of the following notifiable interests:
Michael Bell
Cavendish Asset Management Limited
David Pyle
Michael O’Connell
Mrs Patricia Snipe
% of share capital held
28.9%
16.2%
11.0%
9.1%
4.9%
Apart from these, the directors have not been formally notified of any other notifiable shareholdings in excess
of 3% of share capital held on 17th June, 2015.
222222222222222222222222222222222222222222222222
6
Employee involvement
The directors have continued their commitment to the development of employee involvement and
communication throughout the Group.
Regular meetings are held with employees to provide and discuss information of concern to them as
employees, including financial and economic factors affecting the performance of the Company in which they are
employed.
222222222222222222222222222222222222222222222222
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M S I N T E R N A T I O N A L p l c
Report of the directors
Continued
7
Employment of disabled persons
The Company and its subsidiaries have continued the policy regarding the employment of disabled persons.
Full and fair consideration is given to applications for employment made by disabled persons having regard to their
particular aptitudes and abilities. Appropriate training is arranged for disabled persons, including retraining for
alternative work of employees who may become disabled, to promote their career development within the
organisation.
222222222222222222222222222222222222222222222222
8
Additional information for shareholders
The Company purchased 1,000,000 of its Ordinary shares of 10p each for a total consideration of £1,721,976
on 11th December, 2013 and a further 646,334 Ordinary shares of 10p each for a total consideration of £1,237,251
on 30th January, 2014.
The following provides the additional information required for shareholders as a result of the implementation
of the Takeover Directive into UK Law.
At 17th June, 2015 the Company’s issued share capital comprised:
Ordinary shares of 10p each
Ordinary shares of 10p each held in treasury
Ordinary shares of 10p each not held in treasury
Number
18,396,073
1,646,334
16,749,739
£000
1,840
165
1,675
% of total
share capital
100.00
8.95
91.05
The above figure (16,749,739 ordinary shares of 10p) is the number of ordinary shares to be used as a
denominator for the calculation of a shareholder’s interest for the determination of any notification requirement in
respect of their interest(s) or change of interest(s).
The Company is not aware of any agreements between shareholders that may result in restrictions on the
transfer of securities and for voting rights.
Ordinary shares
On a show of hands at a general meeting of the Company every holder of ordinary shares present in person
and entitled to vote shall have one vote and on a poll, every member present in person or by proxy and entitled to
vote shall have one vote for every ordinary share held. The notice of the general meeting specifies deadlines for
exercising voting rights either by proxy notice or present in person or by proxy in relation to resolutions to be passed
at general meeting. All proxy votes are counted and the numbers for, against or withheld in relation to each
resolution are announced at the Annual General Meeting.
There are no restrictions on the transfer of ordinary shares in the Company other than:
l
l
Certain restrictions may from time to time be imposed by laws and regulations (for example, insider
trading laws and market requirements relating to close periods); and;
Pursuant to the Listing Rules of the Financial Services Authority whereby certain employees of the
Company require the approval of the Company to deal in the Company’s securities.
The Company’s articles of association may only be amended by a special resolution at a general meeting of
the shareholders. Directors are reappointed by ordinary resolution at a general meeting of the shareholders. The
Board can appoint a director but anyone so appointed must be elected by an ordinary resolution at the next general
meeting.
Any director, other than the Chairman, who has held office for more than three years since their last
appointment must offer themselves up for re-election at the annual general meeting.
Company share schemes
The Employee Share Ownership Trust holds 1.46% of the issued share capital of the Company (excluding
treasury shares) in trust for the benefit of employees of the Group and their dependants. The voting rights in
relation to these shares are exercised by the trustee.
43
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M S I N T E R N A T I O N A L p l c
Report of the directors
Continued
8
Additional information for shareholders (continued)
Change of control
The Company is not party to any agreements which take effect, alter or terminate upon a change of control
of the Company following a takeover bid.
There are no agreements between the Company and its directors or employees providing for compensation
for loss of office or employment (whether through resignation, purported redundancy or otherwise) that occurs
because of a takeover bid.
222222222222222222222222222222222222222222222222
9
Special business at the Annual General Meeting
Resolution 10: Authority to allot shares
Generally, the directors may only allot shares in the Company (or grant rights to subscribe for, or to convert
any security into, shares in the Company) if they have been authorised to do so by shareholders in general meeting.
Resolution 10 renews a similar authority given at last year’s AGM and, if passed, will authorise the directors
to allot shares in the Company (and to grant such rights) up to an aggregate nominal amount of £558,324 (which
represents approximately one third of the issued ordinary share capital of the Company (excluding treasury shares)
as at 17th June, 2015, being the last practicable date before the publication of this document). If given, this
authority will expire at the conclusion of the Company’s next AGM or on 17th October, 2016 (whichever is earlier).
It is the directors’ intention to renew this authority each year.
As of the date of this document, 1,646,334 Ordinary shares are held by the Company in treasury representing
8.95% of the issued Ordinary share capital of the Company as at 24th June, 2015, being the last practicable date
before the publication of this document.
The directors have no current intention to exercise the authority sought under resolution 10.
Resolution 11: Disapplication of pre emption rights
Generally, if the directors wish to allot new shares or other equity securities (within the meaning of section
560 of the 2006 Act) for cash or sell shares for cash, then under the Act they must first offer such shares or securities
to shareholders in proportion to their existing holdings. These statutory pre emption rights may be disapplied by
shareholders.
Resolution 11, which will be proposed as a special resolution, renews a similar power given at last year’s AGM
and, if passed, will enable the directors to allot equity securities for cash, or sell treasury shares for cash, up to a
maximum aggregate nominal amount of £83,748 without having to comply with statutory pre emption rights, but
this power will be limited to allotments or sales.
(a)
(b)
in connection with a rights issue, open offer or other pre emptive offer to ordinary shareholders and
to holders of other equity securities (if required by the rights of those securities or the directors
otherwise consider necessary), but (in accordance with normal practice) subject to such exclusions
or other arrangements, such as for fractional entitlements and overseas shareholders, as the
directors consider necessary;
in any other case, up to an aggregate nominal amount of £83,748 (which represents approximately
five per cent of the issued ordinary share capital of the Company (excluding treasury shares) as at
24th June, 2015 being the last practicable date before the publication of this document).
If given, this power will expire at the conclusion of the Company’s next AGM or on 17th October, 2016
(whichever is the earlier). It is the directors’ intention to renew this power each year.
Resolution 12: Purchase by the Company of its own shares
Resolution 12, which will be proposed as a special resolution renews a similar authority given at last year’s
AGM. If passed, it will allow the Company to purchase up to 1,674,973 ordinary shares in the market (which
represents approximately 10% of the issued ordinary share capital of the Company (excluding treasury shares) as
at 24th June, 2014, being the last practicable date before the publication of this document). The minimum and
maximum prices for such a purchase are set out in the resolution. If given, this authority will expire at the
conclusion of the Company’s next AGM or on 17th October, 2016 (whichever is earlier). It is the directors’ intention
to renew this authority each year.
The directors have no current intention to exercise the authority sought under resolution 12 to make market
purchases.
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M S I N T E R N A T I O N A L p l c
Report of the directors
Continued
9
Special business at the Annual General Meeting (continued)
The Company is permitted to hold shares in treasury as an alternative to cancelling them. Shares held in
treasury may be subsequently cancelled, or sold for cash or used to satisfy options under the Company’s share
schemes. While held in treasury, the shares are not entitled to receive any dividends or dividend equivalents (apart
form any issue of bonus shares) and have no voting rights. The directors believe it is appropriate for the Company
to have the option to hold its own shares in treasury, if, at a future date, the directors exercise this authority in order
to provide the Company with additional flexibility in the management of its capital base. The directors will have
regard to institutional shareholder guidelines which may be in force at the time of such purchase, holding or re-sale
of shares held in treasury. As at 17th June, 2015, the Company holds 1,646,334 Ordinary shares of 10p each in
treasury which represents 8.95% of the total number of Ordinary shares of 10p each issued.
Resolution 13: Notice period for general meetings
Resolution 13 will be proposed as a special resolution to allow the Company to call general meetings (other
than an AGM) on 14 clear days’ notice.
Changes made to the 2006 Act by the Companies (Shareholders’ Rights) Regulations 2009 increase the notice
period required for general meetings of the Company to 21 days unless shareholders approve a shorter notice period,
which cannot however be less than 14 clear days. AGMs will continue to be held on at least 21 clear days’ notice.
Before the Regulations came into force, the Company was able to call general meetings other than an AGM
on 14 clear days’ notice without obtaining shareholder approval. Resolution 11 seeks such approval in order to
preserve this flexibility. The shorter notice period would not however be used as a matter of routine for such
meetings, but only where it is merited by the business of the meeting and is considered to be in the interests of
shareholders as a whole. If given, the approval will be effective until the Company’s next annual general meeting,
when it is intended that a similar resolution will be proposed.
Note that the changes to the 2006 Act mean that, in order to be able to call a general meeting on less than
21 clear days’ notice, the Company must make a means of electronic voting available to all shareholders for that
meeting.
222222222222222222222222222222222222222222222222
10
Auditors
A resolution to reappoint the auditors, Ernst & Young LLP, will be proposed at the Annual General Meeting.
222222222222222222222222222222222222222222222222
11
Directors’ statement as to disclosure of information to auditors
The directors who were members of the board at the time of approving the directors’ report are listed on
page 5. Having made enquiries of fellow directors and of the Company’s auditors, each of the directors
confirms that:
l
l
to the best of each director’s knowledge and belief, there is no information relevant to the preparation
of their report of which the Company’s auditors are unaware; and
each director has taken all the steps a director might reasonably be expected to have taken to be aware
of relevant audit information and to establish that the Company’s auditors are aware of that
information.
222222222222222222222222222222222222222222222222
12
We confirm that to the best of our knowledge:
l
l
the financial statements, prepared in accordance with International Financial Reporting Standards as
adopted by the EU, 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 business review, together with the Chairman’s statement, includes a fair review of the
development and performance of the business and the position of the Company and the undertakings
included in the consolidation taken as a whole, together with a description of the principal risks and
uncertainties that they face
By order of the Board,
David Kirkup
Secretary
17th June, 2015
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M S I N T E R N A T I O N A L p l c
Directors’ remuneration report
Information not subject to audit
Policy on remuneration of executive directors
The Remuneration Committee which, currently, comprises the non-executive directors, Roger Lane-Smith and
David Pyle, aims to ensure that remuneration packages and service contracts are competitive and designed to retain,
attract and motivate executive directors of the right calibre.
The salary for each director is determined by the Remuneration Committee by reference to a range of factors
including experience appropriate to the Group, length of service and salary rates for similar jobs in comparative
companies. In view of the size and nature of the Group and the continuing need to optimise subordinate management
structures particular emphasis is given to the advantages which flow from the long term continuity of the executive
directors. All aspects of the executive directors’ current remuneration packages were established in June 1996 when
revised contracts of service, embracing reduced notice periods, were agreed. The contracts of service are reviewed
from time to time and consideration given to whether any amendment is appropriate. The Remuneration Committee
has not sought any external advice during the year.
The main components of the remuneration package for the executive directors are as follows:
1.
Basic Salary
Salaries for executive directors are reviewed annually by the Remuneration Committee.
2.
Performance related annual bonus
An annual bonus is paid depending on achievement of profitability targets. Bonus payments achieved for
2014/2015 amounted in total to 2.8% (2014 – 11.5%) of total executive basic salaries.
3.
Share Options
Directors are eligible to participate in the Employee and the Enterprise Management Incentive share option
schemes. The Remuneration Committee is responsible for granting options. Options have only been granted at an
exercise price of not less than the price paid by the scheme to acquire the shares. Share options are issued without
performance criteria and have no vesting period.
4.
Until 27th April 2013, pension contributions were calculated as a percentage of total emoluments. From
28th April, 2013, pension contributions will be calculated as a percentage of basic pay and bonus only. The executive
directors have full discretion as to how they choose to invest their Pension Contributions. All pension contributions
for executive directors over the age of 65 will cease from 30th April, 2015.
Other benefits are provided in the form of company cars, death in service benefit cover and medical and
5.
disability insurance.
Service Contracts
As from 28th April, 2013 Michael Bell and Michael O’Connell have one year rolling contracts. As from
22nd July, 2013, Nicholas Bell has a one year rolling contract. The contracts are terminable by the directors at one
year’s notice and by the Company at one year’s notice. Directors are entitled to termination payments equivalent to
the unexpired portion of the contract based on basic salary and benefits including bonus payments.
Prior to 28th April, 2013 Michael Bell had a three-year rolling contract and Michael O’Connell a two year
rolling contract. These notice periods were reduced without compensation in April, 2013.
Prior to June 1996 each of the executive directors had a four-year rolling contract. These notice periods were
reduced without compensation in June 1996.
The dates of appointments are shown below:
Michael Bell – 9th July, 1980
Michael O’Connell – 4th February, 1985
Nicholas Bell – 22nd July, 2013
Non-executive directors
The level of the non-executive directors’ remuneration has been determined by the Board as an annual fee and
is paid monthly. There are no formal service contracts between the Company and any of the non-executive directors.
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M S I N T E R N A T I O N A L p l c
Directors’ remuneration report
Continued
Information not subject to audit
Performance Graph
The performance graph shows the accumulated value, by 2nd May, 2015, of £100 invested in MS
INTERNATIONAL plc on 28th April, 2010 compared to the accumulated value of £100 invested in the FTSE Small Cap
Index, over the same period. The other points plotted are the accumulated values at intervening year ends. The FTSE
Small Cap Index is considered by the Board to be the most relevant index for comparison.
MS INTERNATIONAL plc versus FTSE Small Cap Index
MS INTERNATIONAL plc total shareholder return compared against total return of the FTSE Small Cap Index
250
200
150
100
50
0
02 May 2010
30 April 2011
28 April 2012
27 April 2013
03 May 2014
02 May 2015
MS INTERNATIONAL plc
FTSE Small Cap
)
%
(
n
r
u
t
e
R
r
e
d
o
h
e
r
a
h
S
l
l
a
t
o
T
Information subject to audit
Emoluments of directors
Directors’ remuneration in respect of the period to 2nd May, 2015
2015
2014
2015
2014
2015
2014
Basic salary Basic salary
and fees
£
2015
Other
benefits
£
2014
Other
benefits
£
400,000
400,000
Bonus
£
Bonus
£
and fees
£
Total
£
222222222222222222222222222222222222222222222222
Michael Bell
527,121
73,175
222222222222222222222222222222222222222222222222
Michael O'Connell
284,169
39,493
222222222222222222222222222222222222222222222222
Nicholas Bell
142,753
18,693
222222222222222222222222222222222222222222222222
David Pyle
117,246
21,173
222222222222222222222222222222222222222222222222
–
David Hansell
222222222222222222222222222222222222222222222222
Roger Lane-Smith
40,000
222222222222222222222222222222222222222222222222
Total
£
484,811
224,511
270,311
225,000
200,000
225,000
100,000
117,115
40,000
71,173
50,000
40,000
50,000
50,000
11,636
82,293
44,828
36,755
17,379
22,414
17,246
40,000
5,818
5,818
8,259
–
–
–
–
–
–
–
–
–
–
–
Other benefits represent the provision of company cars, death in service benefit and medical and disability insurance
Pension contributions
2015
Total
£
2014
Total
£
Michael Bell
133,448
222222222222222222222222222222222222222222222222
Michael O’Connell
74,224
222222222222222222222222222222222222222222222222
Nicholas Bell
20,174
222222222222222222222222222222222222222222222222
David Pyle
–
222222222222222222222222222222222222222222222222
Roger Lane-Smith
–
222222222222222222222222222222222222222222222222
David Hansell
–
222222222222222222222222222222222222222222222222
30,873
34,623
61,745
–
–
–
The pension contributions are paid to personal retirement benefit schemes.
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M S I N T E R N A T I O N A L p l c
Directors’ remuneration report
Continued
Information not subject to audit
Directors’ share options
Details of directors' options at 17th June, 2015 and 2nd May, 2015 granted under the Enterprise Management
Incentive scheme are set out below. The directors' options were all granted at market price. The market price of the
Company's shares at 2nd May, 2015 was 141p and the range during the financial year was 119p to 211.5p.
Date Exercise Michael Nicholas
Bell
price O’Connell
David
Pyle
David
Hansell
Issued
Total
222222222222222222222222222222222222222222222222
Share options at 17th June, 2015
and 2nd May, 2015 exercisable
between:
1st October, 2008 to
30th September, 2017
214,000
222222222222222222222222222222222222222222222222
1st October, 2007
194.0p
75,000
32,000
32,000
75,000
By order of the Board,
David Kirkup
Secretary
17th June, 2015
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M S I N T E R N A T I O N A L p l c
Principal operating subsidiaries
MSI-Defence Systems Ltd.
MSI-Forks Ltd.
MSI-Forks Inc.
MSI-Forks Garfos
Industriais Ltda.
MSI-Quality Forgings Ltd.
Global-MSI plc
Global-MSI Sp. z o.o.
Petrol Sign B.V.
Salhouse Road,
Norwich,
NR7 9AY
England
Balby Carr Bank,
Doncaster,
DN4 8DH
England
Design, manufacture and service of defence
equipment.
Manufacture of fork-arms for the fork lift truck,
construction, agricultural and quarrying
equipment industries.
280 Mount Gallant Road, Manufacture of fork-arms for the fork lift truck,
Rock Hill
SC 29730
USA
construction, agricultural and quarrying
equipment industries.
Rua Professor Campos
de Oliveira,
310
São Paulo
Brazil
Balby Carr Bank,
Doncaster,
DN4 8DH
England
Balby Carr Bank,
Doncaster,
DN4 8DH
England
Ul. Działowskiego 13,
30-339 Krakow
Poland
Manufacture of fork-arms for the fork lift truck,
construction, agricultural and quarrying
equipment industries.
Manufacture of open die forgings.
Design, manufacture and construction of petrol
station superstructures.
Design, manufacture and construction of petrol
station superstructures.
De Hoef 8
5311 GH Gameren
The Netherlands
Design, restyling, production and installation of
the complete appearance of petrol station
superstructures and forecourt.
NOTES
1.
2.
100% of the equity is held in all cases.
All companies are registered in England and Wales with the exception of MSI-Forks Inc. which is registered in America,
MSI-Forks Garfos Industriais Ltda which is registered in Brazil, Global-MSI Sp. z o.o. which is registered in Poland and
Petrol Sign B.V. which is registered in The Netherlands. All companies operate principally in the United Kingdom except
for MSI-Forks Inc., MSI-Forks Garfos Industriais Ltda (which operate principally in the Americas), Global-MSI Sp. z o.o.
(which operates in Poland and Eastern Europe) and Petrol Sign B.V. (which operates in The Netherlands and Western
Europe).
All companies, apart from Petrol Sign B.V., (see note 31) have been included in the Group consolidated accounts.
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M S I N T E R N A T I O N A L p l c
Notice of Annual General Meeting
Notice is given that the fifty fifth annual general meeting of MS INTERNATIONAL plc
(“Company”) will be held at The Holiday Inn, Warmsworth, Doncaster on 17th July, 2015 at 12 noon to
consider and, if thought fit, to pass the following resolutions. Resolutions 1 to 10 will be proposed as
ordinary resolutions and resolutions 11 to 13 will be proposed as special resolutions:
As ordinary business:
1.
2.
3.
4.
5.
6.
7.
8.
9.
To receive the Company’s annual accounts and directors’ and auditors’ reports for the 52 weeks ended 2nd May,
2015.
To approve the directors’ remuneration report for the 52 weeks ended 2nd May, 2015.
To declare a final dividend for the year 52 weeks ended 2nd May, 2015 of 6.5p per ordinary share of 10p each
in the capital of the Company, to be paid on 24th July, 2015 to shareholders whose names appear on the
registered as at close of business on 26th June, 2015.
To re-elect as a director of the Company, Nicholas Bell, a director retiring by rotation. Nicholas Bell is aged 41
years old and joined the Company in 1999, becoming a director in 2013.
To reappoint as a non-executive director of the Company, Roger Lane-Smith who was appointed as a director
on 21st January, 1983. He is a non-executive director of Dolphin Capital Investors, Timpson Group plc,
Lomond Capital Partners and a number of other private companies. He is also a Senior Consultant at DLA
Piper UK LLP.
To reappoint as a non-executive director of the Company David Pyle, who was appointed as an executive
director in 1980, David joined the Company in 1968 and stepped down as company secretary and executive
director on 27th April, 2013.
To reappoint as a non-executive director of the Company, David Hansell, who was appointed to the Board as a
director on 3rd June, 2014. David joined the Company in 1962 becoming a director in 2014.
To reappoint Ernst & Young LLP as auditors of the Company.
To authorise the directors to determine the remuneration of the auditors.
As special business:
10.
11.
That, pursuant to section 551 of the Companies Act 2006 (“2006 Act”), the directors be and are generally and
unconditionally authorised to exercise all powers of the Company to allot shares in the Company or to grant
rights to subscribe for or to convert any security into shares in the Company up to an aggregate nominal
amount of £558,324 provided that (unless previously revoked, varied or renewed) this authority shall expire
at the conclusion of the next annual general meeting of the Company after the passing of this resolution or
on 17th October, 2016 (whichever is the earlier), save that the Company may make an offer or agreement
before this authority expires which would or might require shares to be allotted or rights to subscribe for or
to convert any security into shares to be granted after this authority expires and the directors may allot
shares or grant such rights pursuant to any such offer or agreement as if this authority had not expired. This
authority is in substitution for all existing authorities under section 551 of the Companies Act 2006 (which,
to the extent unused at the date of this resolution, are revoked with immediate effect).
That, subject to the passing of resolution 11 and pursuant to sections 570 and 573 of the Companies Act 2006
(“2006 Act”), the directors be and are generally empowered to allot equity securities (within the meaning of
section 560 of the 2006 Act) for cash pursuant to the authority granted by resolution 11 and to sell Ordinary
shares held by the Company as treasury shares for cash as if section 561(1) of the 2006 Act did not apply to
any such allotment or sale, provided that this power shall be limited to the allotment of equity securities or
sale of treasury shares:
11.1
in connection with an offer of equity securities (whether by way of a rights issue, open offer or
otherwise):
11.1.1
to holders of Ordinary shares in the capital of the Company in proportion (as nearly as
practicable) to the respective numbers of Ordinary shares held by them; and
11.1.2
to holders of other equity securities in the capital of the Company, as required by the rights
of those securities or, subject to such rights, as the directors otherwise consider necessary;
but subject to such exclusions or other arrangements as the directors may deem necessary or
expedient in relation to treasury shares, fractional entitlements, record dates or any legal or
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practical problems under the laws of any territory or the requirements of any regulatory body or
stock exchange; and
11.2
otherwise than pursuant to paragraph 12.1 of this resolution, up to an aggregate nominal amount
of £167,496;
and (unless previously revoked, varied or renewed) this power shall expire at the conclusion of the next
annual general meeting of the Company after the passing of this resolution or on 17th October, 2016
(whichever is the earlier), save that the Company may make an offer or agreement before this power expires
which would or might require equity securities to be allotted or treasury shares to be sold for cash after this
power expires and the directors may allot equity securities or sell treasury shares for cash pursuant to any
such offer or agreement as if this power had not expired. This power is in substitution for all existing powers
under section 570 and 573 of the Companies Act 2006 (which, to the extent unused at the date of this
resolution, are revoked with immediate effect).
12.
That, pursuant to section 701 of the Companies Act 2006 (“2006 Act”), the Company be and is generally and
unconditionally authorised to make market purchases (within the meaning of section 693(4) of the 2006 Act)
of Ordinary shares of £0.10 each in the capital of the Company (“Shares”), provided that:
(a)
(b)
(c)
the maximum aggregate number of Shares which may be purchased is 1,674,973;
the minimum price (excluding expenses) which may be paid for a Share is £0.10;
the maximum price (excluding expenses) which may be paid for a Share is the higher of:
(i)
(ii)
an amount equal to 105% of the average of the middle market quotations for a Share as
derived from the Daily Official List of the London Stock Exchange plc for the five business
days immediately preceding the day on which the purchase is made; and
an amount equal to the higher of the price of the last independent trade of a Share and
the highest current independent bid for a Share on the trading venue where the purchase
is carried out,
and (unless previously revoked, varied or renewed) this authority shall expire at the conclusion of the next
annual general meeting of the Company after the passing of this resolution or on 17th October, 2016
(whichever is the earlier), save that the Company may enter into a contract to purchase Shares before this
authority expires under which such purchase will or may be completed or executed wholly or partly after this
authority expires and may make a purchase of Shares pursuant to any such contract as if this authority had
not expired.
13.
That a general meeting of the Company (other than an annual general meeting) may be called on not less
than 14 clear days’ notice.
By Order of the Board
………………………………………
David Kirkup
Secretary
17th June, 2015
Registered office:
Balby Carr Bank
Doncaster
DN4 8DH
Registered in England and Wales No. 653735
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Notes
Entitlement to attend and vote
1.
The right to vote at the meeting is determined by reference to the register of members. Only those
shareholders registered in the register of members of the Company as at 6 p.m. on 15th July, 2015 (or, if the
meeting is adjourned, no later than two days prior to any adjourned meeting) shall be entitled to attend and
vote at the meeting in respect of the number of shares registered in their name at that time. Changes to
entries in the register of members after that time shall be disregarded in determining the rights of any person
to attend or vote (and the number of votes they may cast) at the meeting.
Proxies
2.
A shareholder is entitled to appoint another person as his or her proxy to exercise all or any of his or her
rights to attend and to speak and vote at the meeting. A proxy need not be a member of the Company.
3.
4.
A shareholder may appoint more than one proxy in relation to the meeting, provided that each proxy is
appointed to exercise the rights attached to a different share or shares held by that shareholder. Failure to
specify the number of shares each proxy appointment relates to or specifying a number which when taken
together with the numbers of shares set out in the other proxy appointments is in excess of the number of
shares held by the shareholder may result in the proxy appointment being invalid.
A proxy may only be appointed in accordance with the procedures set out in notes 3 to 4 and the notes to the
proxy form.
The appointment of a proxy will not preclude a shareholder from attending and voting in person at the
meeting.
A form of proxy is enclosed. When appointing more than one proxy, the proxy form may be photocopied. Please
indicate the proxy holder’s name and the number of shares in relation to which they are authorised to act as
your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if
the proxy instruction is one of multiple instructions being given. All forms must be signed and should be
returned together in the same envelope.
To be valid, a proxy form must be received by post or (during normal business hours only) by hand at the
offices of the Company’s registrar, Capita Asset Services, PXS, 34 Beckenham Road, Kent, BR3 4TU, no later
than 12 noon on 15th July, 2015 (or, if the meeting is adjourned, no later than 48 hours before the time of any
adjourned meeting).
CREST members who wish to appoint a proxy or proxies for the meeting (or any adjournment of it) through
the CREST electronic proxy appointment service may do so by using the procedures described in the CREST
Manual. CREST personal members or other CREST sponsored members, and those CREST members who
have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s),
who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate
CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear
UK & Ireland Limited’s specifications and must contain the information required for such instructions, as
described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a
proxy or is an amendment to the instruction given to a previously appointed proxy, must, in order to be valid,
be transmitted so as to be received by Capita Asset Services (ID RA10) no later than 12 noon on 15th July,
2015 (or, if the meeting is adjourned, no later than 48 hours before the time of any adjourned meeting). For
this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the
message by the CREST Applications Host) from which Capita Registrars is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies
appointed through CREST should be communicated to the appointee through other means.
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CREST members and, where applicable, their CREST sponsors or voting service providers should note that
Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular
messages. Normal system timings and limitations will therefore apply in relation to the input of CREST
Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member
is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure
that his or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to
ensure that a message is transmitted by means of the CREST system by any particular time. In this
connection, CREST members and, where applicable, their CREST sponsors or voting service providers are
referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST
system and timings.
The Company may treat a CREST Proxy Instruction as invalid in the circumstances set out in Regulation
35(5)(a) of the Uncertificated Securities Regulations 2001.
Corporate representatives
5.
A shareholder which is a corporation may authorise one or more persons to act as its representative(s) at the
meeting. Each such representative may exercise (on behalf of the corporation) the same powers as the
corporation could exercise if it were an individual shareholder, provided that (where there is more than one
representative and the vote is otherwise than on a show of hands) they do not do so in relation to the same
shares.
Total voting rights
6.
As at 24th June, 2015 (being the last practicable date before the publication of this notice), the Company’s
issued share capital consists of 18,396,073 Ordinary shares of 10p each, carrying one vote each. The Company
holds 1,646,334 Ordinary shares in treasury. Therefore, the total voting rights in the Company as at
24th June, 2015 are 16,749,739.
Nominated Persons
7.
Where a copy of this notice is being received by a person who has been nominated to enjoy information rights
under section 146 of the Companies Act 2006 (“2006 Act”) (“Nominated Person”):
(a)
(b)
the Nominated Person may have a right under an agreement between him/her and the shareholder
by whom he/she was nominated, to be appointed, or to have someone else appointed, as a proxy for
the meeting; or
if the Nominated Person has no such right or does not wish to exercise such right, he/she may have
a right under such an agreement to give instructions to the shareholder as to the exercise of voting
rights.
The statement of the rights of shareholders in relation to the appointment of proxies in notes 2 to 4 does not
apply to a Nominated Person. The rights described in such notes can only be exercised by shareholders of the
Company.
Questions at the meeting
8.
Shareholders have the right to ask questions at the meeting relating to the business being dealt with at the
meeting in accordance with section 319A of the 2006 Act. The Company must answer any such question
unless:
(a)
disclosure of confidential information; or
to do so would interfere unduly with the preparation for the meeting or would involve the
(b)
be answered.
it is undesirable in the interests of the Company or the good order of the meeting that the question
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Documents available for inspection
9.
The following documents will be available for inspection during normal business hours at the registered office
of the Company from the date of this notice until the time of the meeting. They will also be available for
inspection at the place of the meeting from at least 15 minutes before the meeting until it ends.
(a)
(b)
Copies of the service contracts of the executive directors; and
Particulars of transactions of directors in the shares of the Company.
Biographical details of directors
10.
Biographical details of all those directors who are offering themselves for reappointment at the meeting are
set out in the Notice.
11.
Dividend Warrants
Dividend warrants will be posted on 23th July, 2015 to those members registered on the books of the
Company on 26th June, 2015.
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