REG - Melrose Industries - Listing Rule 6.1.3D: Required Information <Origin Href="QuoteRef">MRON.L</Origin> - Part 3
24/03/2017 14:10
- Part 3: For the preceding part double click ID:nRSX5021Ab
share based awards outstanding as at 31 December 2016. Refer to the
"Circular to Melrose Shareholders" dated 6 July 2016 for details of the Nortek
Group's previous share incentive compensation plans.
19. Issued capital and reserves
Share Capital 31 December 2016
$m
Authorised common stock
1,000 Ordinary Shares of $0.01 each ---
Ordinary shares issued and fully paid
100 Ordinary Shares of $0.01 each ---
Authorised preferred stock
1,000 of $0.01 each; none issued and outstanding ---
---
---
Cumulative translation reserve
The Cumulative translation reserve contains exchange differences on the
translation of subsidiaries with a functional currency other than United
States dollars.
Hedging reserve
The Hedging reserve represents the cumulative fair value gains and losses on
derivative financial instruments for which cash flow hedge accounting has been
applied.
Other reserves
Pursuant to the merger agreement, Nortek, Inc. merged with Nevada, Corp. The
impact of the merger related entries was a credit to equity of $661.4
million.
20. Cash flows from operating activities
Year ended
31 December 2016
$m
Underlying operating profit 241.0
Adjustments for:
Depreciation of property, plant and equipment 34.7
Amortisation of computer software 8.6
Loss on sale of property, plant and equipment 0.1
Movement in provisions (30.6)
Decrease in receivables 15.5
Decrease in inventories 15.5
Decrease in payables (16.2)
Tax paid (6.9)
Interest paid (50.4)
Defined benefit contributions paid (5.8)
Acquisition costs (37.8)
(73.3)
Net cash from operating activities 167.7
167.7
21. Commitments and contingencies
Lease Obligations
Future total minimum rentals payable under non-cancellable operating leases
were as follows:
31 December 2016
$m
Amounts payable:
Within one year 24.9
After one year but within five years 63.3
Over five years 29.6
117.8
117.8
Certain of these lease agreements provide for increased payments based on
changes in the consumer price index. Under certain of these lease agreements,
the Nortek Group is also obligated to pay insurance and taxes. Certain of the
Nortek Group's operating lease arrangements for the rental of real estate
contain renewal options. The Nortek Group has reviewed the provisions of the
renewal options and determined that none of the renewal options represent
bargain renewal options. In addition, certain of the Nortek Group's operating
lease arrangements for the rental of real estate contain certain restrictions,
including restrictions on use and sublease of the leased properties. The
Nortek Group has evaluated the restrictions and determined that none of the
restrictions limit its ability to utilise the property for its intended
purpose.
The Nortek Group is obligated under operating lease agreements for the rental
of certain real estate and machinery and equipment to be used in operations.
The lease terms of real estate range vary in length and for the rental of
machinery and equipment used in operations range from approximately 1 to 5
years.
Capital commitments
At 31 December 2016, there were commitments of $2.4 million relating to the
acquisition of new plant and machinery.
22. Controlling Party
The Nortek Group's immediate parent is Nevada Holdco Corp., a company
incorporated in the United States of America. The ultimate parent company and
controlling party is Melrose Industries PLC, a company incorporated in England
& Wales. The registered office of Melrose Industries PLC is 11th Floor, The
Colmore Building, 20 Colmore Circus Queensway, Birmingham, West Midlands, B4
6AT.
23. Related party disclosures
Transactions between the Nortek Group and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. The Nortek Group did not enter into any significant transactions in the
ordinary course of business with associates during the current or prior year.
Amounts owed to the parent undertaking as at 31 December 2016 were $743.8
million and amounts due from the parent undertaking were $29.1 million. The
amount of interest charged during the year was $15.2 million.
Remuneration of key management personnel
Disclosures required by IAS 24 for compensation of key management personnel
have not been provided as the key management personnel of Nortek have been
replaced in the year by the key management personnel in Melrose. The annual
report of Melrose Industries Plc discloses the remuneration of Melrose key
management personnel.
24. Nortek group information
Information on subsidiaries
The historical financial information of the Nortek Group includes the
following wholly owned subsidiaries:
Name Jurisdiction
Best S.p.A. Italy
Best Deutschland GmbH Germany
Best Poland S.p.zo.o. Poland
Broan Building Products-Mexico, S. de R.L. de C.V. Mexico
Broan-NuTone Canada, ULC Canada
Nortek Air Solutions Canada Canada
Innergy Tech, Inc. Canada
Venmar Ventilation ULC Canada
Ergotron, Inc. Minnesota
Dongguan Ergotron Precision Technology Co. Ltd. China
Ergotron Nederland B.V. The Netherlands
Broan-NuTone LLC Delaware
Broan Building Products (Huizhou) Co., Ltd. China
Broan-NuTone (HK) Limited Hong Kong
Pacific Zephyr Range Hood, Inc. California
Zephyr Ventilation, LLC California
Eaton-Williams Group Limited United Kingdom
Nortek Security & Control LLC California
GTO Access Systems, LLC Florida
Operator Specialty Company, Inc. Michigan
Core Brands, LLC California
Linear Electronics (Shenzhen) Co., Ltd. China
Nortek International Holdings, B.V. The Netherlands
Nortek Global HVAC, LLC Delaware
Nortek Air Solutions, LLC Delaware
Nortek Global HVAC de Puerto Rico, LLC Puerto Rico
Nortek Global HVAC Latin America, Inc. Delaware
Nortek Global HVAC de Mexico S.A. de R.L. de C.V. Mexico
Nordyne Argentina SRL Argentina
Nordyne do Brasil Distribuidora de Ar Condicionado Ltda. Brazil
Nortek Air Solutions Quebec, Inc. Canada
Nortek (Shanghai) Trading Co., Ltd. China
Nortek Global HVAC (UK) Limited United Kingdom
Nortek Global HVAC France S.A.S. France
Nortek Global HVAC Belgium NV Belgium
Dongguan Ergotron Precision Technology Design Services Co., Ltd. China
Ergotron (UK) Limited United Kingdom
Ergotron Canada Corporation Canada
Ergotron Deutschland GmbH Germany
Ergotron France Sarl France
Ergotron Japan KK Japan
Nortek Distribution Services, LLC Delaware
Nortek Australia Pty Ltd. Australia
Australia
PART II - Accountant's Report
The Board of Directors
on behalf of Melrose Industries PLC
11th Floor, The Colmore Building
20 Colmore Circus Queensway
Birmingham
B4 6AT
Investec Bank plc
2 Gresham Street
London
EC2V 7QP
J.P. Morgan Securities plc
25 Bank Street
London
E14 5JP
24 March 2017
Dear Sirs
Nortek, Inc. (together with its subsidiaries, "Nortek Group")
We report on the financial information in respect of Nortek Group for the year
ended 31 December 2016 set out above in Part I (Nortek, Inc. Consolidated
Historical Financial Information), required to be included in the announcement
of Melrose Industries PLC (the "Company") dated 24 March 2017 to transfer its
entire ordinary share capital from the standard segment of the Official List
of the FCA to the premium segment (the "Transfer Announcement"). This
financial information has been prepared for inclusion in the Transfer
Announcement on the basis of the accounting policies set out in note 2 to the
financial information. This report is required by obligations that the Company
has under Listing Rule 6.1.3DR and is given for the purpose of complying with
that requirement and for no other purpose.
Responsibilities
The Directors of the Company are responsible for preparing the financial
information on the basis of preparation set out in Note 2 to the financial
information.
It is our responsibility to form an opinion on the financial information and
to report our opinion to you. Save for any responsibility which we may have
to those persons to whom this report is expressly addressed as a result of the
inclusion of this report in the Announcement, to the fullest extent permitted
by law we do not assume any responsibility and will not accept any liability
to any other person for any loss suffered by any such other person as a result
of, arising out of, or in connection with this report or our statement,
consenting to its inclusion in the Announcement.
Basis of opinion
We conducted our work in accordance with Standards for Investment Reporting
issued by the Auditing Practices Board in the United Kingdom. Our work
included an assessment of evidence relevant to the amounts and disclosures in
the financial information. It also included an assessment of significant
estimates and judgments made by those responsible for the preparation of the
financial information and whether the accounting policies are appropriate to
the entity's circumstances, consistently applied and adequately disclosed.
We planned and performed our work so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial
information is free from material misstatement whether caused by fraud or
other irregularity or error.
Our work has not been carried out in accordance with auditing or other
standards and practices generally accepted in jurisdictions outside the United
Kingdom, including the United States of America, and accordingly should not be
relied upon as if it had been carried out in accordance with those standards
and practices.
Opinion on financial information
In our opinion, the financial information gives, for the purposes of the
Transfer Announcement, a true and fair view of the state of affairs of the
Nortek Group as at 31 December 2016 and of its losses, cash flows and changes
in equity for the year ended 31 December 2016 in accordance with the basis of
preparation set out in Note 2 to the financial information.
Yours faithfully
Deloitte LLP
Chartered Accountants
Deloitte LLP is a limited liability partnership registered in England and
Wales with registered number OC303675 and its registered office at 2 New
Street Square, London EC4A 3BZ, United Kingdom. Deloitte LLP is the United
Kingdom member firm of Deloitte Touche Tohmatsu Limited ("DTTL"), a UK private
company limited by guarantee, whose member firms are legally separate and
independent entities. Please see www.deloitte.co.uk/about for a detailed
description of the legal structure of DTTL and its member firms.
This information is provided by RNS
The company news service from the London Stock ExchangeRecent news on Melrose Industries
See all newsREG - Melrose Industries - Transaction in Own Shares
AnnouncementREG - Melrose Industries - Transaction in Own Shares
AnnouncementREG - Melrose Industries - Transaction in Own Shares
AnnouncementREG - Melrose Industries - Transaction in Own Shares
AnnouncementREG - Melrose Industries - Notification of Transactions of PDMR
Announcement