- Part 4: For the preceding part double click ID:nRSH6657Lc
At 31 March 2014 the Company had no capital commitments (2013: £Nil).
4.
CAPITAL COMMITMENTS
At 31 March 2014 the Company had no capital commitments (2013: £Nil).
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE YEAR ENDED 31 MARCH 2014
5. FIXED ASSET INVESTMENTS Subsidiary
Undertakings
COST £'000
At 1 April 2013 3,406
Disposals (3,406)
-------------
At 31 March 2014 -
-------------
AMOUNTS WRITTEN OFF
At 1 April 2013 922
Disposals (922)
-------------
At 31 March 2014 -
-------------
NET BOOK AMOUNT
At 31 March 2014 -
======
At 31 March 2013 2,484
======
The wholly owned subsidiary is:
Company Activity Country of incorporation
British Polar Engines Limited Engineering Great Britain
The investment in British Polar Engines Limited was fully provided at 31 March 2014 and 31 March 2013. Danway Limited, a
Cayman Islands based dormant subsidiary, was struck off from the Cayman Islands Register of Companies on 28 June 2013.
6 CURRENT ASSET INVESTMENTS 2014 2013
£'000 £'000
Equities 129 84
Cash on deposit 42 48
------------- -------------
171 132
====== ======
======
======
7. DEBTORS 2014 2013
£'000 £'000
Prepayments and accrued income 18 11
------------- -------------
18 11
====== ======
======
======
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY
FOR THE YEAR ENDED 31 MARCH 2014
8. CREDITORS 2014 2013
£'000 £'000
Amounts falling due within one year
Amounts due to group undertakings - 815
Other creditors 21 19
Accruals and deferred income 33 50
------------- -------------
54 884
====== ======
Amounts falling due after one year 2014 2014
£'000 £'000
Amounts due to group undertakings - 2,292
------------- -------------
- 2,292
====== ======
======
======
9. DEFERRED TAXATION
There is no unprovided deferred taxation liability at 31 March 2014 or 31 March 2013.
No provision has been made for the potential deferred tax assets on the trading losses carried forward as they are not sufficiently certain to crystallise in the foreseeable future. The amounts not recognised (all of which have been calculated at 20% (2013: 20%) are set out below:
2014 2013
£'000 £'000
Arising from trading losses 273 272
Arising from capital losses 1,655 1,831
------------- -------------
1,928 2,103
====== ======
ASSOCIATED BRITISH ENGINEERING PLC
NOTES TO THE ACCOUNTS - COMPANY (Continued)
FOR THE YEAR ENDED 31 MARCH 2014
10. CALLED UP SHARE CAPITAL 2014 2013
£'000 £'000
Nominal value:
Allotted and fully paid:
2,048,990 ordinary shares of £0.025 each 51 51
1,313,427 deferred shares of £1.975 each share premium 2,594 2,594
------------- -------------
2,645 2,645
====== ======
Carrying value:
Equity shares:
2,040,000 ordinary shares of £0.025 each 51 51
====== ======
Further to the Extraordinary General Meeting held on 1 September 1999 the ordinary shares have 200 votes per share.
The deferred shares do not have voting rights and do not carry any entitlement to attend general meetings of the Company;
they are not admitted to any Stock Exchange and carry a right to participate in any return of capital once an amount of
£100 has been paid in respect of each new ordinary share.
11. SHARE BASED PAYMENTS
The Company operates an Executive Share Option Scheme (ESOP) under which options are granted with the guidance of the remuneration committee. Options are granted with a fixed exercise price equal to the market price of the shares under option at the date of the grant. The contractual life of an option is 10 years. Options granted under the ESOP will become exercisable on the third anniversary of the date of the grant. There were no unexercised share options at the end of the year as all share options have
lapsed.
12. RESERVES £'000 £'000
Profit and loss Share premium
At 1 April 2013 (8,665) 5,370
Profit for the year 671 -
------------- -------------
At 31 March 2014 7,994 5,370
====== ======
There were no movements in other reserves during the year. As permitted by the Companies Act 2006, the Company's profit and
loss account has not been included in these accounts. The Company's profit for the financial year was £671,000 (2013:
£173,000).
13. CONTINGENT LIABILITIES
There were no contingent liabilities at 31 March 2014 or 31 March 2013.
14. RELATED PARTY TRANSACTIONS
The Company has taken advantage of the exemption conferred by FRS 8 with regard to disclosing transactions with
wholly-owned subsidiaries on the grounds that the results of the subsidiaries are included in the publicly available
consolidated financial statements of Associated British Engineering plc. There were no transactions with any other group
entities.
ASSOCIATED BRITISH ENGINEERING PLC
STATEMENT OF DIRECTORS' RESPONSIBILITIES
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Directors' Report, the Remuneration Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors
are required to prepare the Group financial statements in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union and have elected to prepare the parent company financial statements under United
Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws). Under company law
the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of
the state of affairs and profit or loss of the company and group for that period. In preparing these financial statements,
the directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and prudent;
· state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements;
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company
will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's
transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to
ensure that the financial statements and the Remuneration report comply with the Companies Act 2006 and Article 4 of the
IAS Regulation. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The directors confirm that:
· so far as each director is aware, there is no relevant audit information of which the company's auditor is unaware;
and
· the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware
of any relevant audit information and to establish that the auditors are aware of that information.
The directors are responsible for preparing the annual report in accordance with applicable law and regulations. Having
taken advice from the Audit Committee, the directors consider the annual report and the financial statements, taken as a
whole, provides the information necessary to assess the company's performance, business model and strategy and is fair,
balanced and understandable.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the
company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
To the best of my knowledge:
· the financial statements, prepared in accordance with applicable accounting standards, give a true and fair view of
the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the
consolidation taken as a whole; and
· the annual report, including the strategic report, 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.
C Weinberg
Director
7 July 2014
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT
(AS REFERRED TO IN THE DIRECTORS' REPORT)
In accordance with the requirements of the Listing Rules of the Financial Services Authority, set out below are details of
the Company's corporate governance arrangements, including a statement as to how the Company applies the principles of
Section 1 of the UK Corporate Governance Code, together with a statement regarding its compliance with specific provisions.
Whilst welcoming the principles contained within the Code, the Board considers that it should be recognised that what may
be appropriate for a large Company may not necessarily be so appropriate for a smaller company and the Company's current
circumstances. As a result, the Company has been in compliance throughout the year with the provisions set out in the UK
Corporate Governance Code with the following exceptions:-
· The division of responsibilities between the roles of chairman and chief executive have not been clearly established,
set out in writing and agreed by the Board. This is contrary to provision A.2.1. This has not been put in place because
there is no chief executive on the Board;
· The Company does not have a Nomination Committee, this is contrary to provisions B2.1-B2.2. This has not been
considered necessary due to the size and nature of the Board which consists of four non-executive directors;
· The non-executive directors of the Company have not been appointed for specific terms as required by provision
B2.3. This has not been considered necessary to date but is being actively considered by the Board;
· There is no formal training programme for new directors on joining the Board. This is contrary to provision B4.2.
This has not been considered necessary to date but is being actively considered by the Board;
· The Board has not undertaken a formal and rigorous annual evaluation of its own performance and the
individual directors. This is contrary to provision B.6.1. This has not been considered necessary to date but is being
actively considered by the Board.
Board of Directors
The Board comprises four non-executive directors, as detailed in the Directors' Report.
In common with other organisations of a similar size, the directors review all the transactions and activities of the
business. The Board of Directors is responsible for formulating strategy and monitoring financial performance. The
directors are in frequent contact throughout the year in connection with the Group's business, meet as required and also
attend one formal Board meeting. The strategies proposed by management of the subsidiary are fully discussed, critically
examined against the best and long term interests of not only the shareholders, but also employees, customers, suppliers
and various communities within which the Group operates. During the year, all four serving directors were in attendance at
the Board meeting. The Board retains full responsibility for the direction and control of the Group and has a formal
schedule of matters in respect of which decisions are reserved to it, covering key areas including strategy formulation,
acquisitions or disposals, approval of the budget for the subsidiary, financial results, board appointments and proposals
for dividend payments.
The Board has full and timely access to relevant information throughout the Group.
All directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring
that Board procedures are compiled with. There is also formal agreed procedure for directors in the furtherance of their
duties to take independent professional advice as necessary at the Company's expense.
The business address of each of the directors is 9 High Street, Little Eversden, Cambridge CB23 1HE.
The Board is supported by a senior management team which includes the following individuals:
Stewart Davis (66), managing director of BPE. Stewart has worked for BPE for 51 years, and is qualified as a mechanical
engineer. As Sales Director from 1985 he was responsible for negotiating major naval contracts with international
governments for the supply of spare parts and technical support for vessels supplied by the Ministry of Defence. He was
appointed Managing Director in 2007.
Rupert Pearce Gould (62), chairman of BPE. Rupert is a chartered accountant and has served as an executive director and
chairman in both the public and private sector. He has been chairman of BPE since 2000.
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT (continued)
Non-Executive Directors
The biographies of the directors appear on page 54 and show considerable and varied experience in the business world and
the City. The Board has appointed Andrew Beaumont as a senior independent non-executive director. There have been no
changes in the other significant commitments of the Chairman.
All directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring
that Board procedures are complied with. There is also a formal agreed procedure for directors in the furtherance of their
duties to take independent professional advice as necessary at the Company's expense.
Under the Company's Articles of Association, at least one third of the directors retire from office each year. The
retiring director is eligible for re-election.
The role of non-executive directors is a vital element of corporate accountability. Due to the small size of the Board and
because there are no full time executive directors, the non-executive directors do carry out certain limited specific
executive responsibilities.
Nomination
Appointment to executive director would be fully discussed by the Chairman and the two non-executive directors. Potential
new non-executive directors are proposed by all the members of the Board in the light of the Company's business
requirements and the need to have a balanced Board. Possible candidates are discussed amongst all directors before any
approach is made to them.
Audit Committee
The Company's audit committee comprises of Mr Andrew Beaumont (Chairman) and Mr Colin Weinberg. The audit committee is to
meet at least twice a year to monitor the financial reporting process, including its annual and interim accounts; the
effectiveness of the Company's internal controls and risk management systems; statutory audit of the annual and
consolidated accounts; and to review and monitor the independence of the statutory auditor and provision of additional
services to the Group.
The audit committee reviews final drafts of the Group's Report and Accounts for both the half and full year. As part of
this process, the performance of the Group's major divisions is considered, with key judgements, estimates and accounting
policies being approved by the committee ahead of recommendation to the board.
The primary areas of financial reporting judgement considered by the Committee in relation to the 2013 financial statements
and how they were addressed are outlined below:
Revenue Recognition and Management Override
The Committee have reviewed the systems and control processes in place during the financial year to 31 March 2014 and
concluded that, given the resources available, appropriate procedures are in place. There is sufficient level of
supervisory oversight in place to ensure that revenue is not materially misstated and the risk of management override has
been reduced.
GHG Emissions/Carbon Reporting
It was brought to the attention of the Committee that the requirement for the disclosures concerning greenhouse gas
emission was effective for the first time. It was decided that the intensity measurement to be used for emissions reporting
would be normalised using £'000 of turnover.
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT (continued)
Audit Committee (continued)
Assessing external audit effectiveness
The Audit Committee reviews audit quality every year using feedback from the Board and the Senior Management Team. The
effectiveness and quality of the audit process is considered by focusing on the scope of the audit and auditor independence
in order to ensure that the quality of the audit process is not compromised and remains effective.
Appointing the auditor and safeguards on non-audit services
The current auditors have acted for more than ten years and do not provide any non-audit services. The Audit Committee will
consider the practicalities of putting the audit out to tender.
Remuneration
The Company's remuneration committee comprises Mr Andrew Beaumont (Chairman) and Mr Stephen Cockburn. The remuneration
committee is to meet at least twice a year and has as its remit the determination and review of, amongst others, the
remuneration of executive directors (as and when appointed) and any share incentive plans adopted, or be adopted, by the
Company.
Communication with Shareholders
The Board believes it is important to respond adequately to the queries of both private and institutional shareholders. The
Group responds throughout the year to correspondence from shareholders on a wide variety of issues.
The Chairman's Statement in the Annual Report contains a business review. An interim business review is also provided with
the half yearly announcement. The Chairman is available to shareholders at any time to discuss strategy and governance
matters.
The Board seeks to ensure that its report and accounts and other financial statements provide a clear assessment of the
Group's business. All shareholders have the opportunity to ask questions and express their views at the Company's Annual
General Meeting, at which all directors are available to take questions.
ASSOCIATED BRITISH ENGINEERING PLC
CORPORATE GOVERNANCE REPORT (continued)
AUDIT AND INTERNAL CONTROL
The directors are responsible for the Group's system of internal control and reviewing its effectiveness. These controls
can only ever provide reasonable but not absolute assurance that assets are safeguarded against material misstatement or
loss, that proper accounting records are maintained, and that the information used internally, or for publication, is
accurate and reliable. The key procedures, which exist to provide external control, are as follows -
- clearly defined organisation structures with segregation of duties wherever practicable. Operating and
financial responsibilities for the subsidiary Company are delegated to the subsidiary's Board and there are limits which
apply to capital expenditure and significant contracts
- a regular review is undertaken to assess the risks facing the trading subsidiary and to enhance the systems
which manage the risk identified. Local management establishes control procedures for each of the risks identified and
reports whether the key controls have operated effectively
- agreement of Group short term financial objectives and business plans
- review by the Board of monthly Group Financial Statements and monitoring of results against budget. The
Board attends regular Board meetings of the subsidiary
- Board control over treasury, taxation, legal, insurance and personnel issues
- the acquisition or disposal of a business may not be completed without the approval of the Board.
- the operational responsibility for preparing the consolidated accounts is delegated to a third party service
provider with the Board retaining responsibility for overall content, presentation and final review of the consolidated
accounts.
Through these mechanisms, Group performance is continually monitored, risks identified in a timely manner, their financial
implication assessed, control procedure re-evaluated and corrective actions agreed and implemented.
The Board believes that it is not currently appropriate for the Company to maintain an internal audit function due to the
size of the Group and the manner in which the Board are involved in payment and financial commitment execution.
The Board consider the independence and objectivity of the external auditor on an annual basis, with particular regard to
non-audit services. The split between audit and non-audit fees for the year and information on the nature of the non-audit
fees appear in note 3 to the financial statements. There were no non-audit fees incurred from the auditor during the year.
The Board also receive an annual confirmation of independence from the auditors.
GOING CONCERN
The financial statements have been prepared on the going concern basis. There have been no changes to accounting policies
in the year. The most notable accounting event has been the increase in the pension scheme deficit based on this year's
actuarial forecast and mentioned in the Chairman's Statement. The directors have agreed a revised schedule of the
contributions to eliminate the deficit on the ABE Pension Fund over thirteen years starting from the year ended 31 March
2010. Based on the Group's budgets and cash forecasts, the Board considers that the Group has sufficient resources to meet
all necessary outgoings and to enable it to continue in operational existence for the foreseeable future.
C Weinberg
Director
7 July 2014
ASSOCIATED BRITISH ENGINEERING PLC
DIRECTORS' REMUNERATION REPORT
Introduction
This Report is submitted in accordance with Schedule 8 to the Large and Medium sized Companies and Groups (Accounts and
Reports) (Amendment) Regulations 2013 in respect of the year ended 31 March 2014. The new reporting requirements entail
two sections to be included, a Policy Report and an Annual Remuneration Report which are presented below.
The Company's auditor, Grant Thornton UK LLP, is required to give its opinion on certain information included in this
report, this comprises of the Directors' remuneration - single figure table on page 52 and the information on directors
shareholdings which is contained in the directors report on page 4 and also forms part of this directors remuneration
report. Their report on these and other matters is set out on pages 9 to 11.
Consideration by the Directors of Matters Relating to Directors' Remuneration
The Company's Remuneration Committee considers Directors' remuneration and has not sought advice or services from any
person in respect of its consideration of Directors' remuneration during the period although the Directors expect from time
to time to review the fees against those paid to the boards of directors of comparable organisations and appointments. The
Company does not have a Chief Executive Officer, Senior Management or any full time employees.
DIRECTORS' REMUNATION POLICY REPORT
The Board consists entirely of Non-Executive Directors, who meet at least four times a year and on other occasions as
necessary to deal with important aspects of the Company's affairs.
The Company's policy is for the Directors to be remunerated in the form of fees, payable monthly in arrears. The
non-executive directors each receive a fee for their services, which is agreed by the Remuneration Committee after
reviewing comparable organisations and appointments. None of the non-executive directors receive a pension or other
benefit from the Company, nor do they participate in any bonus or incentive schemes or share option schemes.
The fees are not specifically related to the Directors' performance, either individually or collectively. The Board is
also entitled to be repaid all reasonable travelling subsistence and other expenses incurred by them respectively whilst
conducting their duties as Directors, however no other remuneration or compensation was paid or payable by the Company
during the period to any of the current Directors. There will be no payment for loss of office unless approved by a
separate shareholder resolution.
The Company's policy is that the fees payable to each Director should reflect the time spent by the director on the
Company's affairs and the responsibilities borne by each Director. They should be sufficient to attract candidates of high
calibre to be recruited. The policy is for the Chairman of the Board to be paid higher fees than the other Directors in
recognition of the more onerous role. The Remuneration policy is to review the Director's fee rates from time to time,
benchmarking the fees against comparable organisations and appointments, although such review will not necessarily result
in any change. Due to the nature of the Company, there are no full time employees other than the Directors and therefore
the requirement to consider the percentage change in remuneration of all employees when determining the Directors'
remuneration is not considered to be relevant.
The non-executive directors do not have service contracts with the Company. In accordance with the Articles of Association
each director retires from office at the third annual general meeting after the annual general meeting at which he was last
elected. A retiring director is eligible for re-election.
A Director may resign by notice in writing to the Board at any time giving one months' notice. None of the Directors are
entitled to compensation payable upon early termination of their contract other than in respect of any unexpired notice
period.
ASSOCIATED BRITISH ENGINEERING PLC
DIRECTORS' REMUNERATION REPORT (continued)
In accordance with the new reporting requirements of Large and Medium sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013, an Ordinary resolution for the approval of the remuneration policy of the Company to remain
in force for a three year period, will also be put to the members of the Annual General Meeting and effective from that
date.
ANNUAL REMUNERATION REPORT
DIRECTORS' REMUNERATION - SINGLE FIGURE TABLE (AUDITED) 2014 2013
Total Total
£'000 £'000
Mr D A H Brown 15 15
Mr S J Cockburn 10 10
Mr C Weinberg 10 10
Mr A Beaumont 10 12
-------- --------
45 47
==== ====
The amounts above all relate to directors fees and represent the total remuneration of the company's directors.
The remuneration policy described above will be implemented with effect from 1 October 2014 subject to approval at the AGM
and remain unchanged for a three year period. The Board will review the remuneration of the Directors if thought after
reviewing comparable organisations and appointments on an annual basis. Only a change in role is likely to incur a change
in the remuneration of any one director otherwise.
This section of the report is subject to approval by a simple majority of shareholders at the AGM in September 2014, as in
previous years.
Statement of Voting at the Annual General Meeting (AGM)
The 2012 Remuneration Report was presented to the AGM in September 2013 and received shareholder approval following a vote
on a show of hands. 0.47% of the votes cast on the proxy forms were against the Report and no votes were withheld. The
proxy forms returned contained no explanation for the votes against the resolution. At the AGM the Chairman advised the
shareholders attending that an increase of director's fees at present would be inappropriate.
Shareholders' views are always considered by the Board. Shareholders can contact the Board in writing or by phone using the
Registered Office contact details as set out on the following page.
Total Shareholder Return (TSR)
ASSOCIATED BRITISH ENGINEERING PLC
DIRECTORS' REMUNERATION REPORT (continued)
Source: Yahoo UK finance
The graph above shows ABE's TSR performance compared to the FTSE All Share index over the past five years. TSR is defined
as share price growth plus reinvested dividends. This provides a basis for comparison with a relevant equity index.
Company Performance
The Board is responsible for the Company's business strategy and performance.
The Statement of Directors' responsibilities, Corporate Governance report and the Directors' Remuneration report on pages
46 to 53 form part of the Directors' report to the parent Company only financial statements,
On behalf of the Board
C Weinberg
Director
7 July 2014
ASSOCIATED BRITISH ENGINEERING PLC
DIRECTORS AND ADVISERS
The Board comprises four directors:
DAVID BROWN (61) became a non-executive director on 22 March 2000 and became Chairman on 11 November 2002. He is a
consultant to a major industrial Group in Ukraine, working on mergers and acquisition and financing transactions. He has
previously been a company secretary and director of two fully listed companies and general counsel on the Canary Wharf
Development. He is a non-practising qualified solicitor.
STEPHEN COCKBURN (74) has been a non-executive director since 1979. He has been a non-executive director of AIM-listed
Fiske plc since September 1999 and is a non-executive director of The Investment Company plc.
COLIN WEINBERG (65) became a non-executive director on 10 November 2003. He was a member of the London Stock Exchange from
1980 to 1987 and was admitted to fellowship of the Securities Institute in 1995. He was previously a non-executive director
of Peckham Building Society and was also during the year appointed as a non-executive director of Kennedy Ventures PLC.
ANDREW BEAUMONT (54) was appointed a non-executive director on 21 December 2011. He is a director of Aldbury Associates
Limited, a business which provides company secretarial services. His past experience includes having been a director of
Independent Registrars Group Limited (IRG), and working in Russia for part of the Overseas Aid Development Agency as a
British consultant to the governing body for regulating Registrars (PARTAD).
SECRETARY & REGISTERED OFFICE BANKERS
haysmacintyre Company Secretaries Limited The Royal Bank of Scotland plc
26 Red Lion Square 5th Floor
London Tay House
WC1R 4AG 300 Bath Street
Registered No. 110663 Glasgow
Tel No: 020 7969 5500 G2 4RS
AUDITOR CORPORATE ADVISERS
Grant Thornton UK LLP Beaumont Cornish Limited
3140 Rowan PlaceJohn Smith Drive 2nd Floor Bowman House
Oxford 29 Wilson Street
OX4 2WB London
EC2M 2SJ
REGISTRARS
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
SOLICITORS
Fladgate LLP
12 Great Queen Street
London
WC2B 5DG
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