MS INTERNATIONAL plc
Annual Report 2017
Company Registration Number 00653735
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 and company statements of financial position
Consolidated and company cash flow statements
Notes to the financial statements
Summary of Group results 2013 – 2017
Corporate governance statement
Report of the directors
Directors’ remuneration report
List of subsidiaries
Notice of Annual General Meeting
2
3
4
5
6
7
7
9
9
10
11
12
13
40
41
43
47
50
52
1
M S I N T E R N A T I O N A L p l c
The year in brief
2017
Total
2016
Total
£000
222222222222222222222222222222222222222222222222
£000
Revenue
49,282
222222222222222222222222222222222222222222222222
53,823
Profit before taxation
1,682
222222222222222222222222222222222222222222222222
1,526
Earnings per share
9.6p
222222222222222222222222222222222222222222222222
9.1p
Dividends payable per share
8.00p
222222222222222222222222222222222222222222222222
8.00p
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
2
M S I N T E R N A T I O N A L p l c
Chairman’s Statement
Results and Review
It has been a period of solid growth across much of the Group coupled with important and significant new
investment to ensure we continue to take full advantage of future opportunities.
Revenue has increased across three of the Group’s four divisions and it would have been all four had it not
been for the rescheduling of a delivery, for a long standing international defence customer, into our 2017/18 financial
year. Even so, overall revenue was up an impressive 9.2% at £53.82m for the year ended 29th April 2017 (2016 –
£49.28m).
Investment across the divisions was considerable and wide ranging, reflecting our determination and
commitment to optimise their future potential. This increased investment nevertheless impacted short term returns
and profit before taxation amounted to £1.53m (2016 – £1.68m). Earnings per share were 9.1p (2016 – 9.6p).
The balance sheet is strong and at the year-end had net cash amounting to £15.21m (2016 – £12.76m).
‘Defence division’ markets generally remained testing, reflecting the many constraints placed on global defence
ministries which are faced with numerous, diverse threats and yet often only have limited resources to support
military procurement programmes. Hence, although programmes may be approved and planning initiated, thereafter
they frequently become delayed; postponed or at worst, even cancelled. Despite such unpredictability, it is important
that we continue to invest in extensive new product development as well as essential international marketing
campaigns, as we seek to match the ever-changing requirements and expectations of the international market.
‘Forgings division’ lifted revenue by 6% as a result of strong growth in the United States and a good measure
of recovery in our Brazilian operations. European markets serviced from our UK facility, remained relatively
constant but were, as a result, highly competitive. The very recent production ‘start-up phase’ of our new superb and
substantial fork-arm manufacturing property in South Carolina – a notable investment – is in process. Whilst there
is still much to do and costs to complete, the facility will provide a significant capability to meet the opportunities of
a changing market place.
‘Petrol Station Superstructures division’ produced an impressive performance, lifting revenue by some 26%
over last year. Pleasingly, the number of petrol stations operating in the UK increased in 2016, the first upturn in
several decades. Demand for new station builds, upgrades, plus repairs and maintenance work created a strong
market for ‘Global-MSI’. Clearly, we are also benefiting from having added the complimentary capabilities of station
branding via ‘Petrol Sign’ to that of our established design, manufacture and construction of canopies and
convenience stores. Our broader offering has enabled the division’s marketing operations to gain added impetus.
Elsewhere, in a response to a lean market for new petrol stations in Eastern Europe, our Polish operation
successfully expanded into other markets and completed new station builds in twelve other countries around the
world in addition to its native Poland.
‘Petrol Station Branding division,’ with operations in the Netherlands; Germany and the UK are all making
progress. Towards the end of the period, we were at last able to commence initial work on an extensive programme
to rebrand the estate of a major petrol station client in Germany. The Netherlands’ operation continues to support
the initiation of the German programme and the UK business also in its first year of operation, successfully winning
business independently and also when teaming-up with the ‘Petrol Station Superstructures Division’, for those
clients requiring a ‘one-stop’ turn-key service.
Outlook
We believe that the Group is in excellent shape and well positioned to achieve further progress following the
considerable investment made across the various businesses. The order book is at a higher level than at this time
last year; in particular there is a good level of orders in hand for both established and recently developed defence
products. The new fork-arm facility in the United States has commenced some initial production and the prospects
for our two divisions that service the petrol station market, look most promising.
All matters considered the Board recommends the payment of a maintained final dividend of 6.5p per share
(2016 – 6.5p), making the total for the year of 8p (2016 – 8p). The final dividend is expected to be paid on 24th July
2017 to those shareholders on the register at the close of business on 23rd June 2017.
Michael Bell
6th June 2017
3
M S I N T E R N A T I O N A L p l c
Directors
Directors
Executive
Michael Bell ARICS (Executive Chairman)
Michael O’Connell FCA (Finance)
Nicholas Bell
Non-executive
Roger Lane-Smith – Age 71
Appointed as a director on 21st January, 1983. He is a non-executive director of Timpson Group plc, Lomond
Capital Partners, Mostyn Estates Limited and a number of other private companies. He is also a Senior Consultant
at DLA Piper UK LLP.
David Pyle – Age 71
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 71
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.
Following the termination of the employment of the managing director of MSI Defence Systems Ltd, David
Hansell has been appointed interim chief executive until a replacement is recruited.
222222222222222222222222222222222222222222222222
Company Secretary
David Kirkup FCA
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Registered Office
Balby Carr Bank
Doncaster
DN4 8DH
England
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Company Registration Number 00653735
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4
M S I N T E R N A T I O N A L p l c
Advisors
Auditors
Ernst & Young LLP
2 Citygate
St James’ Boulevard
Newcastle
NE1 4JD
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Registrars and Transfer Office
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
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Solicitors
DLA Piper UK LLP
1 St. Peter’s Square
Manchester
M2 3DE
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Nominated Advisor
Shore Capital & Corporate Limited
Bond Street House
14 Clifford Street
London
W15 4JU
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Brokers
Shore Capital & Corporate Limited
Bond Street House
14 Clifford Street
London
W15 4JU
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Bankers
Lloyds Bank
First Floor
14 Church Street
Sheffield
S1 1HP
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5
M S I N T E R N A T I O N A L p l c
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 29th April, 2017 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.
The referendum on the UK’s membership of the EU increases economic and operational uncertainty.
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.
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Key performance indicators
Revenue
Profit before taxation
Earnings per share
2017
£000
53,823
1,526
9.1p
2016
£000
49,282
1,682
9.6p
Change
%
9.2
-9.3
-5.2
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
6th June, 2017
6
M S I N T E R N A T I O N A L p l c
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:
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 00653735
We have audited the financial statements of MS INTERNATIONAL plc for the 52 weeks ended 29th April
2017 which comprise the consolidated income statement, the consolidated and company statement of comprehensive
income, the consolidated and company statement of changes in equity, the consolidated and company statement of
financial position, the consolidated and company cashflow statements, and the related notes 1 to 29. 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 Statement of Directors’ Responsibilities set out on page 7, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing
Practices Board’s Ethical Standards for Auditors.
7
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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
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:
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 29 April 2017 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 matter prescribed by the Companies Act 2006
In our opinion:
based on the work undertaken in the course of the audit;
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;
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Company and its environment obtained in the course of
the audit, we have identified no material misstatements in the Strategic Report or Directors’ Report.
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:
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.
Sandra Thompson
(Senior statutory auditor)
for and on behalf of Ernst & Young LLP,
Statutory Auditor
Newcastle
6th June 2017
The maintenance and integrity of the MS INTERNATIONAL plc web site is the responsibility of the
directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the
auditors accept no responsibility for any changes that may have occurred to the financial statements since they
were initially presented on the web site.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
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M S I N T E R N A T I O N A L p l c
Consolidated income statement
For the 52 weeks ended 29th April, 2017
Continuing operations
2016
Total
£000
49,282
Revenue
Cost of sales
(36,413)
2222222222222222222222222222222222222 2222 2222
12,869
Gross profit
Distribution costs
(3,104)
Administrative expenses
(7,909)
2017
Total
£000
53,823
(38,875)
14,948
(3,654)
(9,523)
Notes
3/4
(13,177)
(11,013)
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1,856
Group operating profit
Finance revenue
47
(5)
Finance costs
Other finance costs – pensions
(216)
(174)
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1,682
Profit before taxation
Taxation
(98)
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Profit for the period attributable to equity holders of the parent
1,584
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Earnings per share: basic and diluted
9.6p
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1,771
33
(31)
(247)
(245)
4/5
7
8
21
1,526
(28)
1,498
9.1p
10
9
Consolidated and company statement of comprehensive income
For the 52 weeks ended 29th April, 2017
Group
Company
2017
Total
£000
2016
Total
£000
2017
Total
£000
2016
Total
£000
228
757
1,584
1,498
2,702
1,926
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 profit to be reclassified to profit
or loss in subsequent periods
–
22222222222222222222222222 2222 2222 2222 2222
Remeasurement gains/(losses) on defined benefit pension
scheme
Deferred taxation on remeasurement on defined benefit
165
scheme
(153)
Change in taxation rates
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Net other comprehensive income/(loss) not being reclassified
to profit or loss in subsequent periods
(814)
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Total comprehensive income for the period attributable
to equity holders of the parent
1,112
22222222222222222222222222 2222 2222 2222 2222
165
(153)
(16)
(75)
(16)
(75)
2,259
2,706
(814)
(826)
(826)
757
998
228
95
95
4
4
–
–
9
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 2nd May, 2015
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
4,146
1,629
(289)
(3,059) 20,316
Total
£000
28,299
–
–
–
–
Profit for the period
Other comprehensive
income/(loss)
Total comprehensive income
Dividends paid (note 11)
Change in taxation rates
Depreciation of buildings
revaluation
–
–
222222222222 222 222 222 222 222 222 222 222 222
At 30th April, 2016
28,060
(814)
770
(1,320)
–
(586)
998
(1,320)
83
228
228
–
–
(3,059) 19,773
–
–
–
83
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,584
1,629
1,584
2,815
4,222
1,840
(61)
901
(7)
–
–
–
–
–
7
–
–
–
Profit for the period
Other comprehensive income
Total comprehensive income
Dividends paid (note 11)
Change in taxation rates
Depreciation of buildings
revaluation
–
–
222222222222 222 222 222 222 222 222 222 222 222
At 29th April, 2017
29,041
222222222222 222 222 222 222 222 222 222 222 222
1,498
4
1,502
(1,320)
–
1,498
761
2,259
(1,320)
42
–
757
757
–
–
(3,059) 19,962
–
–
–
–
42
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,840
2,815
1,629
4,257
901
696
(7)
–
–
–
7
–
–
(b) Company
At 2nd May, 2015
1,840
901
1,565
4,240
1,629
–
(3,059) 17,554
24,670
Profit for the period
Other comprehensive loss
Total comprehensive income
Dividends paid (note 11)
Change in taxation rates
Depreciation of buildings
revaluation
–
–
222222222222 222 222 222 222 222 222 222 222 222
At 30th April, 2016
24,545
1,926
(814)
1,112
(1,320)
–
1,926
(814)
1,112
(1,320)
83
(3,059) 17,353
–
–
–
–
83
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,629
4,316
1,565
1,840
901
(7)
–
–
–
7
–
–
–
Profit for the period
Other comprehensive loss
Total comprehensive income
Dividends paid (note 11)
Change in taxation rates
Depreciation of buildings
revaluation
–
–
222222222222 222 222 222 222 222 222 222 222 222
At 29th April, 2017
25,972
222222222222 222 222 222 222 222 222 222 222 222
2,702
4
2,706
(1,320)
–
2,702
4
2,706
(1,320)
41
(3,059) 18,745
–
–
–
–
41
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,629
1,565
4,351
1,840
901
(6)
–
6
–
–
–
–
–
10
M S I N T E R N A T I O N A L p l c
Consolidated and company statements of financial position
At 29th April, 2017
Group
Company
2017
£000
2016
£000
2017
£000
2016
£000
Notes
ASSETS
Non-current assets
12,869
12
Property, plant and equipment
13
Intangible assets
4
14
Investments in subsidiaries
14,170
Deferred income tax asset
15
1,376
22222222222222222222222222 2222 2222 2222 2222
28,419
22222222222222222222222222 2222 2222 2222 2222
15,955
5,671
–
1,376
12,653
–
14,339
1,272
19,099
5,301
–
1,272
25,672
28,264
23,002
Current assets
5,808
Inventories
Trade and other receivables
9,655
Income tax receivable
–
Prepayments
682
Cash and cash equivalents
18
11,017
22222222222222222222222222 2222 2222 2222 2222
27,162
22222222222222222222222222 2222 2222 2222 2222
55,581
TOTAL ASSETS
22222222222222222222222222 2222 2222 2222 2222
7,043
8,996
118
784
12,758
10,145
11,393
199
943
15,210
7,989
14,566
–
824
13,526
63,562
37,890
65,169
52,701
36,905
29,699
16
17
EQUITY AND LIABILITIES
Equity
1,840
19
Equity share capital
20
Capital redemption reserve
901
20
Other reserve
1,565
20
Revaluation reserve
4,316
20
Special reserve
1,629
20
Currency translation reserve
–
20
Treasury shares
(3,059)
20
Profit for the period
1,755
20
Retained earnings
15,598
22222222222222222222222222 2222 2222 2222 2222
24,545
TOTAL EQUITY SHAREHOLDERS' FUNDS
22222222222222222222222222 2222 2222 2222 2222
1,840
901
2,815
4,222
1,629
(61)
(3,059)
1,584
18,189
1,840
901
2,815
4,257
1,629
696
(3,059)
1,498
18,464
1,840
901
1,565
4,351
1,629
–
(3,059)
2,572
16,174
29,041
25,973
28,060
Non-current liabilities
7,644
21
Defined benefit pension liability
Deferred income tax liability
15
987
22222222222222222222222222 2222 2222 2222 2222
8,631
22222222222222222222222222 2222 2222 2222 2222
7,485
1,449
7,485
911
7,644
1,590
8,934
8,396
9,234
Current liabilities
22,270
Trade and other payables
Income tax payable
135
22222222222222222222222222 2222 2222 2222 2222
22,405
22222222222222222222222222 2222 2222 2222 2222
55,581
TOTAL EQUITY AND LIABILITIES
22222222222222222222222222 2222 2222 2222 2222
30,607
193
25,464
123
15,253
154
63,562
25,587
65,169
30,800
52,701
15,407
22
These accounts and notes on page 13 to 39 were approved by the Board of Directors on 6th June, 2017, and
signed on its behalf by
Michael Bell,
Executive Chairman
Michael O’Connell,
Finance Director
11
M S I N T E R N A T I O N A L p l c
Consolidated and company cash flow statements
For the 52 weeks ended 29th April, 2017
Group
Company
2017
£000
2016
£000
2017
£000
2016
£000
Note
Profit before taxation
1,526
1,682
2,544
1,880
12
13
14
Adjustments to reconcile profit before taxation to
net cash inflow/(outflow) from operating activities
Depreciation charge
861
Amortisation charge
9
Impairment in investment in subsidiary undertaking
28
Profit on sale of fixed assets
(91)
Finance costs
170
Foreign exchange gains
–
(Increase)/decrease in inventories
1,585
(Increase)/decrease in receivables
(403)
Increase in prepayments
(187)
Increase/(decrease) in payables
(1,705)
Increase/(decrease) in progress payments
(2,479)
Pension fund payments
(275)
22222222222222222222222222 2222 2222 2222 2222
(607)
Cash generated from/(invested in) operating activities
Net interest received
46
Taxation (paid)/received
16
22222222222222222222222222 2222 2222 2222 2222
(545)
1,060
609
–
(98)
174
83
2,394
840
(194)
(1,981)
(2,479)
(275)
853
4
(155)
(34)
228
–
(2,181)
(4,911)
(142)
1,409
6,928
(311)
1,105
535
–
(35)
245
419
(3,102)
(2,397)
(159)
3,126
7,085
(311)
Net cash inflow/(outflow) from operating activities
Investing activities
(2,438)
Acquisition of Petrol Sign bv
Investment in Petrol Sign GmbH
(19)
Investment in Global MSI bv
–
12
Purchase of property, plant and equipment
(1,172)
Sale of property, plant and equipment
12
141
22222222222222222222222222 2222 2222 2222 2222
(3,488)
Net cash outflow from investing activities
22222222222222222222222222 2222 2222 2222 2222
(2,612)
–
–
(2,330)
149
–
–
–
(4,165)
140
–
–
(14)
(720)
117
8,037
2
(242)
1,815
42
(134)
4,232
19
65
(4,025)
(4,793)
4,316
7,797
1,723
(617)
11
Financing activities
(1,320)
Dividends paid
Dividend received from subsidiary
171
22222222222222222222222222 2222 2222 2222 2222
(1,149)
Net cash outflow from financing activities
22222222222222222222222222 2222 2222 2222 2222
(5,182)
Increase/(decrease) in cash and cash equivalents
16,199
Opening cash and cash equivalents
22222222222222222222222222 2222 2222 2222 2222
11,017
18
Closing cash and cash equivalents
22222222222222222222222222 2222 2222 2222 2222
(4,390)
17,148
(1,320)
130
(1,320)
–
(1,320)
–
2,452
12,758
2,509
11,017
(1,320)
(1,190)
13,526
15,210
(1,320)
12,758
12
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
At 29th April, 2017
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 29th April, 2017 were authorised for issue by the board of the directors on 6th June, 2017 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 29th April, 2017 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 statement of financial position 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 and costs to complete can be measured reliabily.
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.
Change in accounting policies
There were no changes in accounting policies during the year or in the prior year which impacted the group.
222222222222222222222222222222222222222222222222
13
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)
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 statement of financial position 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 Euro, 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 statement of financial position 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 the income statement. A revaluation deficit is recognised in the income statement, 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
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
14
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 10 to 20 years
Design database – over 10 years
Customer relationships – over 8 to 10 years
Software costs – over 3 to 5 years
Non- compete agreement – over 3 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
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)
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 schemes
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 the income statement 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 statement of financial position 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 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 the income statement 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.
16
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 the income statement.
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.
222222222222222222222222222222222222222222222222
17
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 statement of financial position date.
222222222222222222222222222222222222222222222222
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:
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.
222222222222222222222222222222222222222222222222
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.
18
(cid:0)
(cid:0)
(cid:0)
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)
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)
IFRS 2
IFRS 9
IFRS 15
IFRS 16
Classification and measurement of share based
payment transactions - Amendments to IFRS2
Financial instruments
Revenue from contracts with customers
Leases
IFRIC interpretation 22
Foreign currency transactions
Annual improvements 2014-2016 cycle
Effective date
(1)
01 January 2018
01 January 2018
01 January 2018
01 January 2019
01 January 2018
01 January 2018
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 1 April 2016.
Adoption of these standards did not have any material impact on financial performance or position of the Group.
The Group are still assessing the impact of IFRS 9, IFRS 15 and IFRS 16 as at the date of this report.
222222222222222222222222222222222222222222222222
3
Revenue
2017
£000
2016
£000
Sale of goods
38,046
10,775
Revenue under contract accounting
2222222222222222222222222222222222222 2222 2222
48,821
461
Rendering of services
2222222222222222222222222222222222222 2222 2222
49,282
2222222222222222222222222222222222222 2222 2222
53,246
577
39,567
13,679
53,823
No revenue was derived from exchanges of goods or services (2016 – £Nil).
222222222222222222222222222222222222222222222222
19
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 29th April, 2017 and 30th April, 2016. 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, manufacture, construction, branding, maintenance
and restyling of petrol station superstructures. The Petrol Station Branding division is engaged in the design and
installation of the complete appearance of petrol stations
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
2017
£000
2016
£000
Restated
2017
£000
Forgings
2016
£000
Restated
Petrol Station
Superstructures
2017
£000
2016
£000
Restated
Petrol Station
Branding
2016
£000
Restated
2017
£000
Total
2017
£000
2016
£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
37
262
957
(393)
(287)
(721)
1,950
6,669
1,822
6,669
1,771
(245)
20,847 21,907 12,562 11,922 13,745 10,842
4,611 53,823 49,282
222 222 222 222 222 222 222 222 222 222
20,847 21,907 12,562 11,922 13,745 10,842
4,611 53,823 49,282
222 222 222 222 222 222 222 222 222 222
1,856
(174)
222 222
1,682
(98)
222 222
1,584
222 222
3,668 49,528 43,050
9,651
14,034
222 222
63,562 52,701
222 222
985 25,454 15,232
9,409
9,067
222 222
34,521 24,641
222 222
2,207
1,506
222 222 222 222 222 222 222 222 222 222
30,576 24,607
18,333 10,411
1,526
(28)
3,297
305
4,111
1,490
1,443
362
341
347
254
627
219
211
80
336
470
575
214
233
2,572
2,644
5,514
8,260
1,498
1,905
5,178
1,378
2,458
5,250
9,525
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.
Following the establishment of the Petrol Station Branding division, management have revised the allocation
of certain costs which has led to a restatement of the prior year segment result for the divisions. The total segment
result of the Group for the prior year remains unchanged.
20
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)
Geographical analysis
The following table presents revenue and expenditure and certain assets and liabilities information by
geographical segment for the periods ended 29th April, 2017 and 30th April, 2016. 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.
Revenue
External
Non-current assets
Current assets
Liabilities
Capital expenditure
2222222222
Information about major customers
Europe
2017
£000
45,599
21,230
35,911
29,163
2016
£000
39,238
21,683
27,544
22,675
North America
2016
2017
£000
£000
Rest of the World
2016
2017
£000
£000
Total
2017
£000
2016
£000
6,072
4,351
1,213
4,922
3,935
1,246
1,483
1,531
2,152
6,109
53,823 49,282
91
766
436
73
672
435
25,672 23,002
37,890 29,699
34,521 24,641
2,330
222 222 222 222 222 222 222 222
4,165
3,149
1,069
1,261
992
24
–
2017
£000
2016
£000
Revenue from major customers arising from sales reported in the Defence segment:
–
10,042
222222222222222222222222222222222222222222222222
Customer 1
Customer 1
9,065
–
5
Group operating profit
This is stated after charging:
Audit of the financial statements
Other fees for auditors
Other assurance services
Taxation services
2017
£000
92
21
54
2016
£000
86
61
41
1,060
609
147
774
33
25,247
1,200
222222222222222222222222222222222222222222222222
Depreciation
Amortisation of intangible assets
Foreign exchange gains
Hire of plant and machinery
Other operating leases - minimum lease payments
Cost of inventories recognised as an expense
Research and development costs
1,105
535
240
1,212
44
29,857
1,529
6
Employee Information
The average number of employees, including executive directors, during the period was:
2017
Number
2016
Number
Production
Technical
Distribution
Administration
237
68
31
59
2222222222222222222222222222222222222 2222 2222
395
2222222222222222222222222222222222222 2222 2222
234
65
30
80
409
21
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
6
(a)
Employee Information (continued)
Staff costs
Including executive directors, employment costs were as follows:
2017
£000
2016
£000
Wages and salaries
Social Security costs
Other pension costs
11,558
1,227
412
2222222222222222222222222222222222222 2222 2222
13,197
2222222222222222222222222222222222222 2222 2222
12,764
1,355
398
14,517
(b)
Directors’ emoluments
2017
£000
2016
£000
Aggregate directors’ emoluments (note 27)
Post employment benefits
1,128
31
2222222222222222222222222222222222222 2222 2222
1,159
2222222222222222222222222222222222222 2222 2222
1,152
31
1,183
7
Finance revenue
2017
£000
2016
£000
Bank interest
47
2222222222222222222222222222222222222 2222 2222
47
2222222222222222222222222222222222222 2222 2222
33
33
8
Finance costs
2017
£000
2016
£000
Bank interest
Other
3
2
2222222222222222222222222222222222222 2222 2222
5
2222222222222222222222222222222222222 2222 2222
26
5
31
9 (a) Taxation
The charge for taxation comprises:
2017
£000
2016
£000
Current tax
United Kingdom corporation tax
Tax over provided in previous years
Foreign corporation tax
83
(82)
150
2222222222222222222222222222222222222 2222 2222
151
2222222222222222222222222222222222222 2222 2222
Group current tax
9
15
116
140
Deferred tax
Origination and reversal of temporary differences
Adjustments in respect of prior years
Impact of reduction in deferred tax rate to 17%
(54)
37
(36)
2222222222222222222222222222222222222 2222 2222
(53)
2222222222222222222222222222222222222 2222 2222
98
2222222222222222222222222222222222222 2222 2222
Group deferred tax (note 15)
(73)
(26)
(13)
Tax on profit
(112)
28
Tax relating to items charged or credited to other comprehensive income
Deferred tax
Deferred tax on remeasurement losses on pension scheme current year
Impact of reduction in deferred tax rate to 17%
(165)
153
2222222222222222222222222222222222222 2222 2222
(12)
2222222222222222222222222222222222222 2222 2222
Income tax in the statement of comprehensive income
16
75
91
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
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 (20%) (2016 – 20%).
The differences are explained below:
2016
£000
1,682
2222222222222222222222222222222222222 2222 2222
336
Profit multiplied by standard rate of corporation tax of 20% (2016 – 20%)
2017
£000
1,526
Profit before tax
305
Expenses not deductible for tax purposes
Adjustments in respect of overseas tax rates
Current tax adjustment in respect of prior periods
Deferred tax adjustment in respect of prior periods
Impact of reduction in deferred tax rate to 17%
(173)
16
(82)
37
(36)
2222222222222222222222222222222222222 2222 2222
98
2222222222222222222222222222222222222 2222 2222
(434)
181
15
(26)
(13)
Total tax charge for the period
28
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 £1,498,000 (2016 – £1,584,000).
16,504,691 (2016 – 16,504,691) Ordinary shares, being the weighted average number of Ordinary
shares in issue.
This represents 18,396,073 (2016 – 18,396,073) being the weighted average number of Ordinary shares in
issue less 1,891,382 (2016 – less 1,891,392) being the weighted average number of shares both held within the ESOT
245,048 (2016 – 245,048) and purchased by the Company 1,646,334 (2016 – 1,646,334).
222222222222222222222222222222222222222222222222
11
Dividends paid and proposed
2017
£000
2016
£000
Declared and paid during the year
On Ordinary shares
Final dividend for 2016: 6.50p (2015 – 6.50p)
Interim dividend for 2017: 1.50p (2016 – 1.50p)
1,073
247
2222222222222222222222222222222222222 2222 2222
1,320
2222222222222222222222222222222222222 2222 2222
1,073
247
1,320
Proposed for approval by shareholders at the AGM
Final dividend for 2017: 6.50p (2016 – 6.50p)
1,073
2222222222222222222222222222222222222 2222 2222
1,073
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
12
Property, plant and equipment
Freehold
property
£000
Plant and
equipment
£000
(a)
Group
Cost or valuation
At 2nd May, 2015
Additions
Disposals
Acquisition–Petrol Sign bv
Exchange differences
13,948
1,467
(1,079)
171
12
2222222222222222222222222222222 2222 2222
14,519
1,438
(404)
198
2222222222222222222222222222222 2222 2222
15,751
2222222222222222222222222222222 2222 2222
At 30th April, 2016
Additions
Disposals
Exchange differences
12,221
863
–
–
8
13,092
2,727
–
191
At 29th April, 2017
16,010
Accumulated depreciation
At 2nd May, 2015
Depreciation charge for the period
Disposals
Exchange differences
At 30th April, 2016
Depreciation charge for the period
Disposals
Exchange differences
11,431
879
(1,028)
19
2222222222222222222222222222222 2222 2222
11,301
920
(299)
183
2222222222222222222222222222222 2222 2222
12,105
2222222222222222222222222222222 2222 2222
3,646
2222222222222222222222222222222 2222 2222
3,218
2222222222222222222222222222222 2222 2222
Net book value at 30th April, 2016
Net book value at 29th April, 2017
175
181
–
(1)
At 29th April, 2017
355
185
–
17
15,453
12,737
557
Analysis of cost or valuation
At professional valuation 2014
At cost
–
15,755
2222222222222222222222222222222 2222 2222
15,755
2222222222222222222222222222222 2222 2222
At 29th April, 2017
12,221
3,789
16,010
Analysis of cost or valuation
At professional valuation 2014
At cost
–
14,519
2222222222222222222222222222222 2222 2222
14,519
2222222222222222222222222222222 2222 2222
At 30th April, 2016
12,221
871
13,092
24
Total
£000
26,169
2,330
(1,079)
171
20
222
27,611
4,165
(404)
389
222
31,761
222
11,606
1,060
(1,028)
18
222
11,656
1,105
(299)
200
222
12,662
222
19,099
222
15,955
222
12,221
19,544
222
31,765
222
12,221
15,390
222
27,611
222
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)
Freehold
property
£000
Plant and
equipment
£000
(b)
Company
Cost or valuation
At 2nd May, 2015
Additions
Disposals
12,945
1,172
(1,046)
2222222222222222222222222222222 2222 2222
13,071
720
(340)
2222222222222222222222222222222 2222 2222
13,451
2222222222222222222222222222222 2222 2222
At 30th April, 2016
Additions
Disposals
10,950
–
–
10,950
–
–
At 29th April, 2017
10,950
Accumulated depreciation
At 2nd May, 2015
Depreciation charge for the period
Disposals
At 30th April, 2016
Depreciation charge for the period
Disposals
11,141
714
(996)
2222222222222222222222222222222 2222 2222
10,859
707
(257)
2222222222222222222222222222222 2222 2222
11,309
2222222222222222222222222222222 2222 2222
2,142
2222222222222222222222222222222 2222 2222
2,212
2222222222222222222222222222222 2222 2222
Net book value at 29th April, 2017
Net book value at 30th April, 2016
At 29th April, 2017
146
147
–
293
146
–
10,511
10,657
439
Analysis of cost or valuation
At professional valuation 2014
At cost
–
13,311
2222222222222222222222222222222 2222 2222
13,311
2222222222222222222222222222222 2222 2222
At 29th April, 2017
10,950
–
10,950
Analysis of cost or valuation
At professional valuation 2014
At cost
–
13,071
2222222222222222222222222222222 2222 2222
13,071
2222222222222222222222222222222 2222 2222
At 30th April, 2016
10,950
–
10,950
Total
£000
23,895
1,172
(1,046)
222
24,021
720
(340)
222
24,401
222
11,287
861
(996)
222
11,152
853
(257)
222
11,748
222
12,653
222
12,869
222
10,950
13,311
222
24,261
222
10,950
13,071
222
24,021
222
(c)
(d)
Depreciation has not been charged on freehold land which is included at a book value of £4,895,000 (2016 –
£4,413,000) Company £3,380,000 (2016 – £3,380,000) at 29th April, 2017.
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 £11,121,000 (2016 –
£8,203,000) at 29th April, 2017.
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.
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 (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
Goodwill
£000
Trade
name
£000
Design
database
£000
Non-
Customer
complete relationship
£000
£000
Order Development
costs
£000
backlog
£000
Software
costs
£000
2,064
865
1,370
–
1,020
111
279
330
Group
£000
6,039
Group
Cost
At 2nd May, 2015
Acquisition–
Petrol Sign bv
Exchange differences
Amortisation
At 2nd May, 2015
Amortisation during
the year
Exchange differences
At 30th April, 2016
Amortisation during
the year
Exchange differences
588
48
147
12
–
2,288
–
187
222222222222 222 222 222 222 222 222 222 222 222
1,370
8,514
–
–
–
189
222222222222 222 222 222 222 222 222 222 222 222
8,703
222222222222 222 222 222 222 222 222 222 222 222
At 30th April, 2016
Additions
Exchange differences
2,461
–
110
1,024
–
12
2,700
–
49
At 29th April, 2017
279
–
–
304
–
15
330
–
–
1,332
109
46
–
3
178
15
43
3
1,036
2,749
2,571
1,370
330
279
319
–
–
–
–
49
–
213
675
–
626
111
279
317
2,221
136
609
–
13
222222222222 222 222 222 222 222 222 222 222 222
811
2,843
243
5
153
8
12
–
56
–
326
272
874
279
269
9
–
–
–
–
–
12
–
137
535
–
24
222222222222 222 222 222 222 222 222 222 222 222
3,402
948
222222222222 222 222 222 222 222 222 222 222 222
At 29th April, 2017
284
8
33
14
17
1
60
1
1,166
279
330
330
319
–
–
–
–
4
–
30
–
Net book value at
29th April, 2017
5,301
422
222222222222 222 222 222 222 222 222 222 222 222
2,749
1,405
706
19
–
–
–
Net book value at
30th April, 2016
559
5,671
222222222222 222 222 222 222 222 222 222 222 222
1,587
2,700
755
32
34
–
4
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
13
Intangible assets (continued)
Development
costs
£000
Software
costs
£000
Company
£000
Company
Cost
At 2nd May, 2015
Additions
330
–
2222222222222222222222222222222 2222 2222
330
–
2222222222222222222222222222222 2222 2222
330
2222222222222222222222222222222 2222 2222
At 30th April, 2016
Additions
At 29th April, 2017
279
–
279
–
279
Amortisation
At 2nd May, 2015
Amortisation during the year
At 30th April, 2016
Amortisation during the year
317
9
2222222222222222222222222222222 2222 2222
326
4
2222222222222222222222222222222 2222 2222
330
2222222222222222222222222222222 2222 2222
–
2222222222222222222222222222222 2222 2222
4
2222222222222222222222222222222 2222 2222
Net book value at 30th April, 2016
Net book value at 29th April, 2017
At 29th April, 2017
279
–
279
–
279
–
–
609
–
222
609
–
222
609
222
596
9
222
605
4
222
609
222
–
222
4
222
Goodwill acquired through business combinations and licences has been allocated for impairment testing
purposes to the petrol station superstructures division and the petrol station branding division which are operating
segments.
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
2017
£000
Goodwill
2016
£000
Petrol station superstructure division
Petrol station branding division
2,064
636
2222222222222222222222222222222222222 2222 2222
2,700
2222222222222222222222222222222222222 2222 2222
Net book value
2,064
685
2,749
Group
The performance of the petrol station superstructure division and the petrol station branding division are the
lowest levels 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 divisions over the next 5 years and was based on the following key assumptions:
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 17.87%.
Based on the above assumptions, the value in use calculated for the petrol station superstructure division and
the petrol station branding division 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 reasonably possible changes in the assumptions used would give rise to an impairment.
222222222222222222222222222222222222222222222222
27
(cid:0)
(cid:0)
(cid:0)
M S I N T E R N A T I O N A L p l c
Notes to the financial statements
Continued
14
Investment in subsidiary undertakings
Principal subsidiary undertakings are set out on pages 50 and 51.
Company
At 30th April, 2016
Release of impairment in investment in MSI-Forks Garfos
Industriais Ltda
Cost of investment in Global MSI bv
2222222222222222222222222222
At 29th April, 2017
2222222222222222222222222222
2017
£000
2017
£000
Cost
Impairment
2017
£000
Net book
value
16,332
(2,162)
14,170
–
14
155
14
2222 2222 2222
14,339
2222 2222 2222
155
–
(2,007)
16,346
The release of impairment of £155,000 represents the write back of a previous investment impairment in MSI-
Forks Garfos Industriais Ltda. These impairment losses have been written back to the recoverable amount of the
investment which has been based upon value in use. The main events and circumstances that have led to this
impairment write back, are a trading performance improvement within this subsidiary undertaking during the
current year, which is expected to continue in future years.
Global MSI bv was established to transact and develop resultant business in The Netherlands.
222222222222222222222222222222222222222222222222
15
Deferred income tax
The deferred income tax included in the Group income statement is:
2016
£000
54
15
(135)
12
37
(36)
2222222222222222222222222222222222222 2222 2222
(53)
2222222222222222222222222222222222222 2222 2222
Taxation deferred by capital allowances
Taxation on other temporary differences
Taxation on intangibles
Taxation on defined benefits pension
Adjustments in respect of prior periods
Impact of reduction in deferred tax rate (18% to 17%)
2017
£000
(16)
47
(117)
13
(26)
(13)
(112)
The deferred income tax asset included in the balance sheet is:
Group
Company
Taxation on pension liability
222222222222222222222222
Deferred income tax asset
222222222222222222222222
The movements on the deferred tax liability are:
2017
£000
2016
£000
2017
£000
1,376
1,272
1,272
2222 2222 2222
1,272
2222 2222 2222
1,272
1,376
2016
£000
1,376
222
1,376
222
At 2nd May, 2015
Included in Group income statement
Included in statement of comprehensive income
222222222222222222222222222222222222
At 30th April, 2016
Included in Group income statement
Included in statement of comprehensive income
222222222222222222222222222222222222
At 29th April, 2017
222222222222222222222222222222222222
28
Group and Company
Taxation on
pension liability
1,376
(12)
12
2222
1,376
(13)
(91)
2222
1,272
2222
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 (continued)
The deferred income tax liability included in the balance sheet is:
Group
Company
Taxation deferred by capital allowances
Taxation on other temporary differences
Taxation on intangible assets
Taxation on buildings revaluation
222222222222222222222222
Deferred income tax liability
222222222222222222222222
The movements on the deferred tax liability are:
2017
£000
2016
£000
2017
£000
351
(139)
654
724
314
(109)
561
683
314
(109)
–
706
2222 2222 2222
911
2222 2222 2222
1,449
1,590
Group
Taxation
deferred by
capital
allowances
Taxation
on other
temporary
differences
£000
£000
Taxation
on
intangible
assets
£000
Taxation
on
buildings
revaluation
£000
2016
£000
346
(106)
–
747
222
987
222
Total
£000
At 2nd May, 2015
Included in Group income statement
Included in equity
Acquired on acquisition
1,283
(65)
(53)
425
22222222222222222222 222 222 222 222 222
1,590
(125)
(16)
22222222222222222222 222 222 222 222 222
1,449
22222222222222222222 222 222 222 222 222
At 30th April, 2016
Included in Group income statement
Included in equity
(182)
45
(2)
–
348
(150)
31
425
807
–
(83)
–
(139)
34
(4)
654
(122)
29
At 29th April, 2017
310
40
1
–
724
–
(41)
351
(37)
–
(109)
683
561
314
Company
Taxation
deferred by
capital
allowances
Taxation
on other
temporary
differences
£000
£000
Taxation
on
intangible
assets
£000
Taxation
on
buildings
revaluation
£000
Total
£000
At 2nd May, 2015
Included in Company income statement
Included in equity
984
86
(83)
22222222222222222222 222 222 222 222 222
987
(35)
(41)
22222222222222222222 222 222 222 222 222
911
22222222222222222222 222 222 222 222 222
At 30th April, 2016
Included in Company income statement
Included in equity
(106)
(3)
–
(150)
44
–
At 29th April, 2017
830
–
(83)
747
–
(41)
346
(32)
–
304
42
–
(109)
–
–
–
–
–
–
706
314
–
Deferred taxation has been provided at the rate enacted at the balance sheet date of 17% except for the
deferred taxation relating to the amortised intangibles arising on the acquisition of Petrol Sign bv which has been
provided at 25%.
The Group and Company also has capital losses of £4,350,000 (2016 – £4,350,000).
222222222222222222222222222222222222222222222222
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
16
Inventories
Raw materials
Work in progress
Finished goods
222222222222222222222222
222222222222222222222222
Inventory write downs during the year
222222222222222222222222
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
2017
£000
2016
£000
2017
£000
2,492
3,925
626
4,273
4,999
873
3,047
4,807
135
2222 2222 2222
7,989
2222 2222 2222
10,145
7,043
2017
2016
2017
33
2222 2222 2222
35
(95)
2016
£000
1,947
3,721
140
222
5,808
222
2016
(98)
222
Group
Company
2017
£000
2016
£000
2017
£000
7,744
1,188
–
64
9,631
1,723
–
39
6,792
1,723
6,036
15
2222 2222 2222
14,566
2222 2222 2222
11,393
8,996
2,033
2222 2222 2222
2,270
1,861
2016
£000
6,578
1,188
1,874
15
222
9,655
222
1,666
222
The aggregate amount of costs incurred and recognised profits to date on contracts is £13,679,000 (2016 –
£10,775,000).
(a) Trade receivables are denominated in the following currencies
Group
Company
2017
£000
2016
£000
2017
£000
6,019
983
361
381
6,208
2,578
516
329
6,208
593
(14)
5
2222 2222 2222
6,792
2222 2222 2222
9,631
7,744
2016
£000
6,019
559
–
–
222
6,578
222
Sterling
Euro
US dollar
Other currencies
222222222222222222222222
222222222222222222222222
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 (continued)
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
2017
2016
Total
£000
9,631
7,744
Not
past due
£000
8,028
6,026
< 30 days
£000
30-60 days
£000
60-90 days
£000
> 90 days
£000
1,397
1,424
182
269
15
9
9
16
As at 29th April, 2017 trade receivables at a nominal value of £84,000 (2016 – £102,000) were impaired and
fully provided. Bad debts of £19,000 (2016 – £51,000) were recovered and bad debts of £17,000 (2016 –
£24,000) were incurred.
Company
2017
2016
6,792
6,578
5,623
5,182
1,139
1,158
30
238
–
–
–
–
As at 29th April, 2017 trade receivables at a nominal value of £37,000 (2016 – £39,000) were impaired and
fully provided. Bad debts of £6,000 (2016 – £8,000) were recovered and bad debts of £4,000 (2016 – £23,000)
were incurred.
(b) Retentions on contracts are denominated in the following currencies
Group
Company
Sterling
Euro
US dollar
Other currencies
222222222222222222222222
222222222222222222222222
2017
£000
2016
£000
2017
£000
1,188
–
–
–
1,723
–
–
–
1,732
–
–
–
2222 2222 2222
1,732
2222 2222 2222
1,723
1,188
2016
£000
1,188
–
–
–
222
1,188
222
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
2017
2016
Company
Total
£000
1,723
1,188
Up to 6
months
£000
1,723
1,188
6-12
months
£000
12-18
months
£000
18-24
months
£000
–
–
–
–
–
–
–
1,723
–
1,188
222222222222222222222222222222222222222222222222
1,723
1,188
2017
2016
–
–
–
–
18
Cash and cash equivalents
Group
Company
2017
£000
2016
£000
2017
£000
7,420
5,338
9,880
5,330
13,526
–
2222 2222 2222
13,526
2222 2222 2222
15,210
12,758
2016
£000
5,715
5,302
222
11,017
222
Cash at bank and in hand
Short term deposits
222222222222222222222222
222222222222222222222222
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
19
Issued capital
Group
Company
2017
£000
2016
£000
2017
£000
2016
£000
3,500
3,500
3,500
3,500
Ordinary shares at 10p each
Authorised – 35,000,000 (2016 – 35,000,000)
Allotted, issued and fully paid – 18,396,073
(2016 – 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 (18% to 17%).
Special reserve
The balance classified as special reserve represents the share premium on the issue of the Company’s equity
share capital.
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
2017
£000
2016
£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 (2016 – 245,048) Ordinary shares, which represents 1.3%
(2016 – 1.3%) of the issued share capital of the Company at an aggregate cost of £100,006. The market value of the
shares at 29th April, 2017 was £414,000 (2016 – £448,000). The Company has made payments of £Nil (2016 – £Nil)
into the ESOT bank accounts during the period. No options over shares (2016 – 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 £5,000 (2016 – £7,000).
During the period no options on shares were exercised (2016 – Nil) and no shares were purchased (2016 – Nil).
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)
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
1,722
1,237
222222222222222222222222222222222222222222222222
2,959
222222222222222222222222222222222222222222222222
£000
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:-
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, 2014 by a professionally
qualified actuary.
From 6 April 2016 the Company directly pays the expenses of the Scheme . With effect from April
2015 until April 2023 the deficit reduction payments paid into the Scheme by the Company were
increased to £300,000 per annum , increasing thereafter at 3% per annum.The total deficit reduction
payments made in the year were £311,000 (2016-£295,000).
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.
Assumptions
2017
2016
3.30%
3.30%
2.80%
1.60%
21.7 yrs
23.4yrs
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)
2.50%
3.70%
3.10%
1.90%
21.3 yrs
22.7 yrs
A 0.5% reduction in the discount rate would lead to an increase in past service liabilities of around £2m.
Members living around 1 year longer than expected would lead to an increase in past service liabilities of
around £1.1m.
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 years.
Statement of financial position
2017
£000
2016
£000
Present value of obligations
Fair value of plan assets
28,801
(21,157)
2222222222222222222222222222222222222 2222 2222
7,644
2222222222222222222222222222222222222 2222 2222
30,790
(23,305)
Net liability
7,485
33
(cid:0)
(cid:0)
(cid:0)
(cid:0)
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)
Income Statement
2017
£000
2016
£000
Interest on net liabilities
Administration expenses
216
320
2222222222222222222222222222222222222 2222 2222
536
2222222222222222222222222222222222222 2222 2222
Total income statement cost
247
–
247
Change in defined benefit obligation
2017
£000
28,801
925
(77)
2016
£000
30,102
936
(215)
3,298
(597)
Opening defined benefit obligation
Interest cost
Experience gains 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
–
(1,425)
2222222222222222222222222222222222222 2222 2222
28,801
2222222222222222222222222222222222222 2222 2222
Defined benefit obligation
(408)
(1,749)
30,790
Change in fair value of plan assets
2017
£000
2016
£000
Opening fair value of plan assets
Interest income on assets
Actual return on assets less amount included in net interest
Deficit reduction contributions by employer
Contributions by employer towards scheme expenses
Administration expenses
Benefits paid
23,225
720
(1,638)
295
300
(320)
(1,425)
2222222222222222222222222222222222222 2222 2222
21,157
2222222222222222222222222222222222222 2222 2222
21,157
678
2,908
311
–
–
(1,749)
Fair value of plan assets
23,305
Statement of comprehensive income
2017
£000
2016
£000
Actual return on assets less amounts included in net interest
Remeasurement (losses)/gains
(1,638)
812
2222222222222222222222222222222222222 2222 2222
(826)
2222222222222222222222222222222222222 2222 2222
2,908
(2,813)
95
2017
£000
2016
£000
Expected deficit reduction contributions into the Scheme during
next accounting year:
311
2222222222222222222222222222222222222 2222 2222
320
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)
Asset
allocation
Asset
allocation
Plan
assets
£000
7,591
7,950
3,571
3,362
831
Plan
assets
£000
7,487
6,219
4,100
2,456
895
Breakdown of assets at 29th April, 2017
Equities - UK market
Equities - non UK market
Corporate Bonds
Gilts
Cash/other
33%
34%
15%
14%
4%
2222222222222222222222222222222222222 2222 2222
100%
2222222222222222222222222222222222222 2222 2222
23,305
Breakdown of assets at 30th April, 2016
Equities - UK market
Equities - non UK market
Corporate Bonds
Gilts
Cash/other
36%
29%
19%
12%
4%
2222222222222222222222222222222222222 2222 2222
100%
2222222222222222222222222222222222222 2222 2222
21,157
22
Trade and other payables
Group
Company
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
2017
£000
2016
£000
2017
£000
3,353
–
2,670
1,748
7,482
5,572
–
3,350
1,975
14,567
3,624
8,108
3,315
1,251
14,309
2222 2222 2222
30,607
2222 2222 2222
25,464
15,253
147
2222 2222 2222
294
254
2016
£000
2,832
8,228
2,431
1,398
7,381
222
22,270
222
92
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 £15.21m – Company £13.53m (2016 Group – £12.76m – Company
£11.02m). The Group and Company has available a bank multicurrency overdraft facility of £4.8m which is
renewable on 1st January 2018.
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.
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
23
Financial instruments (continued)
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.
2017
Sterling
2016
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 29th April, 2017 was as
follows:
Group
Company
Floating rate
financial assets/
(liabilities)
£000
Floating rate
financial assets/
(liabilities)
£000
Total
£000
15,973
(2,007)
1,184
60
2222
15,210
2222
9,118
1,455
2,051
134
2222
12,758
2222
15,973
(2,007)
1,184
60
2222
15,210
2222
9,118
1,455
2,051
134
2222
12,758
2222
15,968
(2,064)
(383)
5
2222
13,526
2222
9,111
782
1,118
6
2222
11,017
2222
Total
£000
15,968
(2,064)
(383)
5
222
13,526
222
9,111
782
1,118
6
222
11,017
222
2017
Sterling
US Dollar
Euro
Other
222222222222222222
Total
222222222222222222
2016
Sterling
US Dollar
Euro
Other
222222222222222222
Total
222222222222222222
Foreign currency risk
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.
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)
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 29th April, 2017 these currency exposures are as follows:-
Presentational currency of Group operations
2017
Sterling
222222222222222222222222
Total
222222222222222222222222
2016
Sterling
222222222222222222222222
Total
222222222222222222222222
Functional currency of Company operations
2017
Sterling
222222222222222222222222
Total
222222222222222222222222
2016
Sterling
222222222222222222222222
Total
222222222222222222222222
Net foreign currency monetary assets/(liabilities)d
Sterling
£000
US Dollar
£000
Total
£000
Euro
£000
5
(2,686)
959
2222 2222 2222
959
2222 2222 2222
(2,686)
5
256
1,773
2222 2222 2222
1,773
2222 2222 2222
750
750
256
(1,722)
222
(1,722)
222
2,779
222
2,779
222
Net foreign currency monetary assets/(liabilities)d
Sterling
£000
US Dollar
£000
Total
£000
Euro
£000
–
(2,686)
(73)
2222 2222 2222
(73)
2222 2222 2222
(2,686)
–
9
1,182
2222 2222 2222
1,182
2222 2222 2222
750
750
9
(2,759)
222
(2,759)
222
1,941
222
1,941
222
No significant differences exist between the book value and the fair value of the financial assets and liabilities
as at 29th April, 2017 and 30th April, 2016.
Fair values
No significant differences exist between the book value and the fair value of the financial assets and liabilities
as at 29th April, 2017 and 30th April, 2016.
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 statement of financial position 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.
222222222222222222222222222222222222222222222222
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
Capital commitments
Group
Company
Contracted but not provided in the financial statements
59
22222222222222222222222222 2222 2222 2222
59
22222222222222222222222222 2222 2222 2222
1,464
1,464
59
59
2017
£000
2016
£000
2017
£000
2016
£000
189
222
189
222
25
Obligations under leases
Future minimum rentals payable under non-cancellable operating leases are as follows:
Group
Company
2017
£000
2016
£000
2017
£000
Amounts payable
Within one year
In two to five years
Five years or more
27
26
–
22222222222222222222222222 2222 2222 2222
53
22222222222222222222222222 2222 2222 2222
240
442
316
1,138
998
301
449
388
2016
£000
11
22
–
222
33
222
The Group has entered into commercial leases on certain properties, plant and equipment. These leases have
a duration of between 1 and 9 years.
222222222222222222222222222222222222222222222222
26
Contingent liabilities
The Company is contingently liable in respect of guarantees, indemnities and performance bonds given in the
ordinary course of business amounting to £3,952,725 at 29th April, 2017 (2016 – £6,258,538).
222222222222222222222222222222222222222222222222
27
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 £322,822 (2016 – £128,764)
Sales of goods and services £2,521,915 (2016 – £1,583,187)
The following balances between the Company and other subsidiaries in the Group are included in the
Company balance sheet as at 29th April, 2017:
Amounts owed by the Company £8,108,000 (2016 – £8,228,000)
Amounts owed to the Company £6,036,000 (2016 – 1,874,000)
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
2017
£000
1,152
2016
£000
1,128
2017
£000
1,152
31
2222 2222 2222
31
31
1,183
2222 2222 2222
1,183
1,159
2016
£000
1,128
31
222
1,159
222
Short-term employee benefits
Post-employment benefits
222222222222222222222222
See Directors remuneration report on page 47
222222222222222222222222
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
28
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;
2017
2017
2016
2016
Enterprise management incentive scheme
Outstanding as at 30th April, 2016
Options exercised
Options lapsed
222222222222222222222222
Outstanding as at 29th April, 2017
222222222222222222222222
194.0p
–
–
214,000
–
–
214,000
–
–
2222 2222 2222
214,000
2222 2222 2222
214,000
194.0p
194.0p
–
–
222
194.0p
222
The expense recognised for share options during the year is £Nil (2016 – £Nil)
222222222222222222222222222222222222222222222222
29
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 29th April, 2017 and 30th April, 2016.
Capital comprises equity attributable to the equity holders of the parent company £29,041,000 (2016 –
£28,060,000).
222222222222222222222222222222222222222222222222
39
M S I N T E R N A T I O N A L p l c
Summary of group results 2013 – 2017
GROUP INCOME STATEMENT
2017
£000
2016
£000
2015
£000
2014
£000
2013
£000
49,282
Group revenue
Group operating profit
Finance
54,494
53,823
22222222222222222222 2222 2222 2222 2222 2222
4,780
(217)
22222222222222222222 2222 2222 2222 2222 2222
4,563
(480)
22222222222222222222 2222 2222 2222 2222 2222
4,083
1,498
22222222222222222222 2222 2222 2222 2222 2222
Profit before taxation
Taxation
Profit for the period
2,928
(354)
3,203
(275)
1,682
(98)
1,541
(188)
1,856
(174)
1,740
(199)
45,503
47,130
1,584
1,353
2,574
1,526
1,771
(245)
(28)
STATEMENT OF FINANCIAL POSITION
Assets employed
Intangible assets
Property, plant and equipment
Other net current (liabilities)/assets
Cash and cash equivalents
4,451
13,755
3,887
13,447
15,210
22222222222222222222 2222 2222 2222 2222 2222
35,540
36,703
22222222222222222222 2222 2222 2222 2222 2222
3,818
14,563
(446)
17,148
5,671
15,955
1,534
12,758
4,135
15,127
1,695
14,286
35,243
35,918
35,083
(2,907)
19,099
5,301
Financed by
Ordinary share capital
Reserves
1,840
27,214
27,201
22222222222222222222 2222 2222 2222 2222 2222
29,054
6,486
7,662
22222222222222222222 2222 2222 2222 2222 2222
35,540
36,703
22222222222222222222 2222 2222 2222 2222 2222
Shareholders’ funds
Net non current liabilities
28,060
7,858
28,299
6,784
29,143
6,100
1,840
26,220
1,840
26,459
1,840
27,303
35,918
35,243
35,083
29,041
1,840
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; September, 2016 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 2017 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.
41
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 19th, July, 2017 can be found in the Notice of Meeting on page 52.
On behalf of the Board
David Kirkup
Secretary
6th June, 2017
42
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 29th April,
2017. The directors present their corporate governance statement on pages 41 and 42 of this report.
222222222222222222222222222222222222222222222222
1
Principal activities and business review
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 £1,498,000 (2016 -
£1,584,000). The directors recommend a final dividend of 6.50 pence per share (2016 - 6.50 pence per share), making
a total of 8.00 pence per share (2016 - 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 6th June, 2017 are shown on page 4.
All of the directors served throughout the year.
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 29th April 2017 and as at 6th June, 2017, 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
29.3%
16.3%
10.6%
9.2%
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 6th June 2017.
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
43
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 6th June, 2017 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:
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.
44
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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 23rd June, 2017, 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 19th October, 2018 whichever is the 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 23rd June, 2017, 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 £167,496 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 £167,496 (which represents approximately
ten per cent of the issued ordinary share capital of the Company (excluding treasury shares) as at
23rd June, 2017 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 19th October, 2018
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 per cent of the issued ordinary share capital of the Company (excluding treasury
shares) as at 23rd June, 2017, 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 19th October, 2018 whichever is the 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.
45
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 6th June 2017, 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 4. Having made enquiries of fellow directors and of the Company’s auditors, each of the directors confirms that:
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:
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
6th June, 2017
46
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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
2016/2017 amounted in total to 2.6% (2016 – 3.1%) 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 ceased 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.
47
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 29th April, 2017, of £100 invested in MS
INTERNATIONAL plc on 28th April, 2012 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
)
%
(
n
r
u
t
e
R
r
e
d
o
h
e
r
a
h
S
l
l
a
t
o
T
0
28 April 2012
27 April 2013
03 May 2014
02 May 2015
30 April 2016
29 April 2017
MS INTERNATIONAL plc
FTSE Small Cap Index
Information subject to audit
Emoluments of directors
Directors’ remuneration in respect of the period to 29th April, 2017.
2017
2017
2017
2017
2016
2016
2016
salary
£
and fees
£
and fees
£
400,000 400,000
2017
Other
benefits
£
2016
Other
benefits
£
201
Basic salary Basic salary Additional Additional
salary
£
222222222222222222222222222222222222222222222222
Michael Bell
12,513 460,781 466,782
–
222222222222222222222222222222222222222222222222
6,256 270,028 276,382
–
Michael O'Connell
222222222222222222222222222222222222222222222222
Nicholas Bell
6,256 222,734 221,254
–
222222222222222222222222222222222222222222222222
David Pyle
73,450
–
222222222222222222222222222222222222222222222222
David Hansell
50,000
–
222222222222222222222222222222222222222222222222
Roger Lane-Smith
40,000
–
222222222222222222222222222222222222222222222222
200,000 200,000
225,000 225,000
Bonus
£
Bonus
£
31,088
50,000
40,000
50,000
10,918
40,000
81,088
49,863
17,275
76,879
39,569
26,879
14,998
45,126
54,269
23,450
50,000
40,000
50,000
5,459
5,459
Total
Total
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Following the termination of the employment of the managing director of MSI Defence Systems Ltd, David Hansell
has been appointed interim chief executive until a new replacement is recruited.His remuneration, during the period,
for this temporary divisional executive appointment is shown above as additional salary.
Other benefits represent the provision of company cars, death in service benefit and medical and disability insurance
Pension contributions
2017
Total
£
2016
Total
£
Michael Bell
–
222222222222222222222222222222222222222222222222
Michael O’Connell
–
222222222222222222222222222222222222222222222222
Nicholas Bell
30,938
222222222222222222222222222222222222222222222222
Roger Lane-Smith
–
222222222222222222222222222222222222222222222222
David Pyle
–
222222222222222222222222222222222222222222222222
–
David Hansell
222222222222222222222222222222222222222222222222
30,819
–
–
–
–
–
48
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
The pension contributions are paid to personal retirement benefit schemes.
Directors’ share options
Details of directors' options at 6th June, 2017 and 29th April, 2017 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 29th April, 2017 was 169p and the range during the financial year was 142p
to 184p.
Date Exercise Michael Nicholas
Bell
price O’Connell
David
Pyle
David
Hansell
Issued
Total
222222222222222222222222222222222222222222222222
Share options at 6th June, 2017
and 29th April, 2017
exercisable between:
1st October, 2008 to
30th September, 2017
214,000
222222222222222222222222222222222222222222222222
1st October, 2007
194.0p
32,000
75,000
32,000
75,000
By order of the Board,
David Kirkup
Secretary
6th June, 2017
49
M S I N T E R N A T I O N A L p l c
List of subsidiaries
(i)
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.
Global-MSI bv
Petrol Sign bv
Petrol Sign GmbH
Petrol Sign Ltd.
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.
1298 Galleria Boulevard, 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
De Hoef 8
5311 GH Gameren
The Netherlands
De Hoef 8
5311 GH Gameren
The Netherlands
Osteriede 3
30827 Garbsen
Berenbostel
Germany
Balby Carr Bank,
Doncaster
DN4 8DH
England
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.
Design, manufacture and construction of petrol
station superstructures.
Design, restyling, production and installation of
the complete appearance of petrol station
superstructures and forecourt.
Design, restyling, production and installation of
the complete appearance of petrol station
superstructures and forecourt.
Design, restyling, production and installation of
the complete appearance of petrol station
superstructures and forecourt.
NOTES
1.
100% of the ordinary shares are held in all cases.
2. All companies are registered in England and Wales with the exception of MSI-Forks Inc. which is registered in USA, MSI-
Forks Garfos Industriais Ltda which is registered in Brazil, Global-MSI Sp. z o.o. which is registered in Poland, Petrol Sign
bv and Global-MSI bv which are registered in The Netherlands and Petrol Sign GmbH which is registered in Germany. 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
bv, Global-MSI bv and Petrol Sign GmbH (which operate in Western Europe).
50
M S I N T E R N A T I O N A L p l c
List of subsidiaries
Continued
(ii)
Non Operating subsidiaries
Conder Ltd.
Global-MSI (Overseas) Ltd.
MDM Investments Ltd.
Mechforge Ltd.
MSI-Petrol Sign Ltd.
Petrol Sign-MSI Ltd.
NOTES
1.
100% of the ordinary share capital of each entity is held in all cases.
2. All companies are registered in England and Wales
3. All companies are dormant and non operating, with the exception of MDM Investments Ltd, which is the trustee company of
the MS INTERNATIONAL plc Retirement and Death Benefits Scheme.
51
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 seventh annual general meeting of MS INTERNATIONAL plc
(“Company”) will be held at The Holiday Inn, Warmsworth, Doncaster on 19th July, 2017 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 29th
April, 2017.
To approve the directors’ remuneration report for the 52 weeks ended 29th April, 2017.
To declare a final dividend for the year 52 weeks ended 29th April, 2017 of 6.5p per ordinary share of 10p each
in the capital of the Company, to be paid on 24th July, 2017 to shareholders whose names appear on the
register as at close of business on 23th June, 2017.
To re-elect as a director of the Company, Nicholas Bell, a director retiring by rotation. Nicholas Bell is aged 43
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 Timpson Group plc, Lomond Capital Partners, Mostyn
Estates Limited 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.
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 19th October, 2018 (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
11.
(“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
practical problems under the laws of any territory or the requirements of any regulatory body or
stock exchange; and
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Continued
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 19th October, 2018
(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 per cent 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 19th October, 2018
(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
23rd June, 2017
Registered office:
Balby Carr Bank
Doncaster
DN4 8DH
Registered in England and Wales No. 653735
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Notice of Annual General Meeting
Continued
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 close of business on 17th July, 2017
(or, if the meeting is adjourned, no later than close of business 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 17th July, 2017 (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 Registrars (ID RA10) no later than 12 noon on 17th July, 2017
(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.
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
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Notice of Annual General Meeting
Continued
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 23rd June, 2017 (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
23rd June, 2017 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)
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
(b)
a right under such an agreement to give instructions to the shareholder as to the exercise of voting rights.
if the Nominated Person has no such right or does not wish to exercise such right, he/she may have
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)
(b)
to do so would interfere unduly with the preparation for the meeting or would involve the disclosure of
confidential information; or
it is undesirable in the interests of the Company or the good order of the meeting that the question be
answered.
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.
11.
Biographical details of all those directors who are offering themselves for reappointment at the meeting are
set out in the Notice.
Dividend Warrants
Dividend warrants will be posted on 21st July, 2017 to those members registered on the books of the Company
on 23rd June, 2017.
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