Annual Report • Sep 30, 2012
Annual Report
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The result for the year to 30 September 2012 is a net Loss before Taxation of £984,000 (2011: Profit of £34,000), on Revenues 9% lower at £14.5 million (2011: £16.0 million). The loss after Taxation is £737,000 (2011: £189,000 Profit) resulting in a Loss per Share of 6.83p (2011: Earnings per share of 1.62p).
Net cash balances at the year end were £1.81 million (2011: £2.85 million). Total capital expenditure during the year was £632,000 (2011: £735,000). £207,000 of this expenditure relates to investment in software for the new computer system which was implemented during the year. This is in addition to the £202,000 spent on the same project last year.
The Directors are proposing a final dividend of 0.5p per share (2011: 1.0p). This, when added to the interim dividend paid on 25 June 2012 gives a total for the year of 1.5p (2011: 2.0p). If approved by shareholders at the forthcoming Annual General Meeting, the dividend will be payable on 22
February 2013 to shareholders on the register on 25 January 2013. The ex dividend date is 23 January 2013. We are always reluctant to cut our dividend but given the financial performance
this year we have to reflect this in the final dividend.
Titon retains a strong balance sheet with £1.81 million of cash at the year end and has net assets of £9.2 million.
The Directors are obviously very disappointed with the result for the year. The large trading loss reflects the continued deterioration in almost all of the markets in which we operate. Construction and particularly house building and refurbishment activity has borne the brunt of the economic slowdown resulting in contracting sales and fierce competition for component suppliers such as Titon.
In the United Kingdom output from the construction sector over the twelve months from 1st October 2011 has fallen by approximately 11% and was still declining even when the most recent Gross Domestic Products Index increased by 1% for the quarter ended 30th September 2012. By the mid point of the financial year it was evident that this decline was continuing and that we would need to make significant reductions in our cost base. This has been a major focus for me since joining Titon on the 30th April 2012.
UK Revenues have fallen by 8.5% to £11.21 million (2011: £12.25 million) and now represent 77.1% of Group turnover (2011: 76.6%). There has been a 3.8% fall in UK private house building and, more notably, a 29.2% fall in public sector house building for the 12 month period ending in June 2012 against the comparable period ending in June 2011 for which data is available. This illustrates clearly the effect of the slowdown and has had a major impact on our sales volumes. Reduced Local Authority spending and the lack of consumer confidence to invest in new windows, doors and conservatories has impacted on our traditional hardware business, where sales have fallen by 7.1% over the year. We have reviewed our sales and product offerings in this sector and expect to introduce some new products early in 2013.
For ventilation systems we have seen that the trend towards the use of heat recovery ventilation systems experienced over the past few years has slowed. The house builders have looked to make savings in building costs, wherever possible and this has been combined with the fall in public sector house building already noted above. We are committed to increasing and improving our mechanical ventilation range and will be announcing new products and new features during the coming year. One of the strengths of Titon is the quality of the Design and Research & Development team and an ability to develop innovative new products. I expect that to continue in 2013.
We reported in last year's statement that we had commenced litigation in the High Court against a UK competitor, Nuaire Limited, in respect of alleged patent and design right infringements of one of our mechanical ventilation product range. This action has been ongoing during the year with resultant additional legal costs of £127,000.
Revenues outside of the UK have fallen by 11% to £3.34 million (2011: £3.75 million). The major part of this reduction emanates from our joint venture in South Korea where revenues were 16.1% lower at £1.92 million (2011: £2.28 million). This reversal in volumes has resulted in a £74,000 loss at our Korean subsidiary, Titon Korea during the year. This, when added to our £39,000 share of losses in our associate Company, Browntech Sales Co. Ltd., makes a total loss of £113,000 in that country compared to the £29,000 profit last year. The South Korean construction market stalled badly over the early part of the year as economic growth slowed and the funding of social housing programmes were delayed. I am pleased to report that this market has returned to strong growth in recent months.
The majority of our other export sales are in Western Europe where demand has been curtailed by the well documented problems within the Euro zone. Sales in Scandinavia of our trickle vents have been lower when compared to earlier periods and the markets for heat recovery ventilation systems in the major European economies have been weak.
The reduction in staffing levels has occurred during the second half of the year as the need to reduce costs became apparent. As part of this process we have had to make 13 people redundant across our UK business, resulting in severance costs of £136,000 (2011: £62,000). Redundancy is always a very traumatic process for those involved and we express our gratitude and best wishes to our former employees and their families.
My Chairmanship of the Titon Group has come about due to the retirement from Office of John Anderson, the former Chairman and founder of the Company. John handed over to me in July this year after 40 years with Titon and has now become Deputy Chairman and Non-executive Director. On behalf of everyone involved with Titon I would like to thank John for his strong vision and leadership over the years and to wish him well in his retirement.
Mr Christopher Martin left Titon in August after 29 years service, the last 13 as a Director. We also wish Chris well in the future.
It has been another difficult year for all of our employees. We have recently agreed with our remaining UK employees to make reductions in their employment benefits packages and we thank them sincerely for the supportive attitude that they have demonstrated as we make the necessary adjustments to our costs.
The overriding objective of the Directors this year is to return the business to profitability. The overhead reduction programme that commenced during the year is now well underway and will lead to approximately £600,000 of savings in a full Financial Year.
I do want to emphasise that Titon retains a strong balance sheet with £1.81 million of cash at the year end and has net assets of £9.2 million. This strength will provide us with the opportunity to invest in new products and markets in 2013. The 2013 forecast for UK house building is that there will be a small increase in private sector housing starts but the decline in public sector housing will continue. Against this backdrop we envisage that prospects for
expanding our ventilation system sales will be limited. However, as noted above, we do have some new products in the pipeline and anticipate that these will strengthen our overall market position. In our window hardware market we will also be launching some new product ranges which we expect will gain us sales in markets where we have traditionally not competed.
We anticipate that our overseas sales will grow during the coming year with improvements expected from our South Korean and the USA businesses in particular. We are optimistic that our Korean activities will return to profit in comparison to the loss recorded this year.
In conclusion, we believe that the strength of Titon and the actions we have taken will result in a return to profitability in the year ahead.
On behalf of the Board
K A Ritchie Chairman 5 December 2012
The Directors present their report and the Group and Company financial statements for the year ended 30 September 2012.
The principal activities of the Group are the design, manufacture and marketing of ventilation products and window fittings. In the UK the Group markets a comprehensive range of passive and powered ventilation products to house builders, electrical contractors and window manufacturers. In addition to this, it is a leading supplier of window handles, hinges and locking mechanisms to its window-manufacturing customers. Overseas activities are increasingly important for the Group and largely involve the marketing of passive and powered ventilation products worldwide. The Group also has a manufacturing base in South Korea where it works in partnership with its local distributor.
The Consolidated Income Statement is set out on page 23. A summary of the results along with other selected Key Performance Indicators is as follows:
| 2012 £'000 |
2011 £'000 |
|
|---|---|---|
| Revenue | 14,548 | 15,995 |
| (Loss) / profit before tax | (984) | 34 |
| Tax credit | 247 | 155 |
| (Loss) / profit for the year after tax | (737) | 189 |
| Revenue per employee | 82 | 86 |
| (Loss) / profit after tax per employee | (4.2) | 1.0 |
| Cash and cash equivalents | 1,840 | 2,864 |
Comments on the results for the year, including a comprehensive business review are given in the Chairman's Statement. The Group's compliance with the UK Corporate Governance Code is set out on page 17.
The Directors recommend the payment of a final ordinary dividend of 0.5p (2011: 1.0p) per ordinary share. This, when taken with the interim dividend of 1.0p (2011: 1.0p) per ordinary share paid on 25 June 2012, gives a total dividend of 1.5p (2011: 2.0p) per ordinary share for the year ended 30 September 2012.
The Directors of the Company during the year and at the year end and their beneficial interests in the ordinary share capital were as follows:
| 30 September 2012 |
30 September 2011 |
||
|---|---|---|---|
| Ordinary shares of 10p each |
Ordinary shares of 10p each |
||
| K A Ritchie | Executive Director and Chairman – appointed 30 April 2012 | 927,280 | 927,280 |
| D A Ruffell | Chief Executive | 71,000 | 71,000 |
| J N Anderson | Non-executive Director and Deputy Chairman | 1,737,802 | 2,237,802 |
| T N Anderson | Sales & Marketing Director | 693,750 | 192,500 |
| P W E Fitt | Non-executive Director | - | - |
| N C Howlett | Development & Sustainability Director | 13,750 | 13,750 |
| C S Jarvis | Export Director | 45,000 | 45,000 |
| C J Martin | Supply Chain Director - resigned 14 September 2012 | - | 63,850 |
| P E O'Sullivan | Non-executive Director | - | - |
Details of Directors' share options are given in the Directors' Remuneration Report on page 16.
There were no other changes in Directors' beneficial shareholdings between 30 September 2012 and 13 December 2012.
As at 13 December 2012, the Company had been notified of the following voting interests in its ordinary share capital, disclosable under the Financial Services Authority's Disclosure and Transparency Rules of the following holdings, other than Directors' holdings, of 3 per cent or more in the ordinary share capital of the Company:
| Name | Shares | % |
|---|---|---|
| Discretionary Unit Fund Managers Ltd | 2,065,000 | 19.6 |
| Mrs A J Clipsham | 823,579 | 7.8 |
The ordinary share capital at 30 September 2012 consisted of 10,555,650 Titon Holdings Plc shares of 10p each. There were no changes during the year to the Company's ordinary share capital.
Details of the authorised and issued share capital of the Company as at 30 September 2012 are set out in note 18 of the Notes to the Financial Statements.
All of the Company's shares are ranked equally and the rights and obligations attaching to the Company's shares are set out in the Company's Articles of Association, copies of which can be obtained from Companies House in England and Wales or by writing to the Company Secretary.
There are no restrictions on the voting rights of shares and there are no restrictions in their transfer other than;
fsa.gov.uk/pubs/other/listing_rules.pdf)
Additionally, the Company is not aware of any agreements between shareholders of the Company that may result in restrictions on the transfer of ordinary shares or voting rights.
The Directors consider that research and development continues to play an important role in the Group's success as the need to provide increasingly energy efficient ventilation products will be a feature of our market over the coming years.
Investment in research and development amounted to £402,000 during the year (2011: £393,000). Development expenditure capitalised in 2012 amounted to an additional £88,000 (2011: £69,000) – see note 11 of the financial statements.
The Directors consider all the significant risks and uncertainties facing the business and spend appropriate time considering them. The Group has a system of risk management, which identifies these items and seeks ways of mitigating such risks as far as possible.
The policies that are adopted to identify and manage significant risks are set out in full on page 20 and the major risks are considered below:
Whilst the Group has a diverse range of customers there are certain key customers who account for a significant part of total revenue. Some risk exists that the current performance of the Group may not be maintained if such relationships were not to continue. Nominated Directors therefore continuously monitor key customer accounts. The Group considers it not to be in the interests of shareholders to disclose the names of key customers.
31% of Group revenue (2011: 33%) comprises products purchased from other UK and European manufacturing entities. The ongoing supply of product lines by Maco Door and Window Hardware (UK) Ltd, Securistyle Limited, Sobinco S.A. and certain Ventilation Systems component suppliers are important to Group profits and the relationships with key suppliers are handled by a nominated Director.
The market for the supply of Ventilation Systems and Window Hardware remains highly competitive. The Group seeks to manage the risk of losing customers to competition through the development of new products, through the specification of product with end users and through maintaining strong relationships and local representation with key customers.
Worldwide markets for ventilation products are largely determined by regulation. The Group recognises that the bringing forward of amendment to regulation is likely to accelerate and will, therefore, continue to place a high emphasis on consideration of regulatory developments.
The Group manufactures 69% (2011: 67%) of the products that it sells. Appropriate levels of inventory, along with duplication of key processes, tooling and component supplies have been established in order to minimise the risks involved by possible disruption to production facilities. In addition the Group has established procedures to minimise the risks of fire and other major disruption.
The Group operates comprehensive BS EN ISO 9001: 2008 procedures in the UK to ensure that product complaints are quickly and effectively dealt with. Monthly meetings are held that include members of the senior management team where both product quality and product complaint issues are discussed and appropriate action recommended. Effective Quality Control systems form part of the BS EN ISO 9001: 2008 procedures and are embedded within the culture of the Group.
The main risks arising from the Group's financial instruments are credit risk and foreign currency exchange risk. More information regarding the Group's approach to these risks is set out in note 20 to the consolidated financial statements.
The Group's credit risk is primarily attributable to its trade receivables. Exposure to credit risk is generally spread over a large number of customers and the Group adopts stringent procedures to ensure that credit risks are well managed.
The Group's banking facilities are designed to ensure that there are sufficient funds available for current operations and the Group's further development plans.
The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. The Group considers the overall translation risk to be limited given the nature and overall size of its foreign investments.
As with any manufacturing organisation, health and safety matters represent an increasing area of risk. The Group has an effective structure to support a robust Health and Safety policy.
The Group maintains a comprehensive range of insurance policies covering its employees, assets and other risk areas, which are reviewed on an on-going basis.
The Directors do not consider that there is any significant difference between the market value of freehold land and buildings and their net book value, as shown in the financial statements.
The Group recognises the importance of its employees in achieving its objectives and has contractual arrangements in place to encourage and reward loyalty and to safeguard the interests of the Group.
Employees are provided with information about the Group's activities via the Employee Consultative Committee, other staff meetings and staff notice boards. The Group aims to foster an environment in which employees and management can enjoy a free flow of information and ideas.
The Group is an equal opportunities employer and its policies for recruitment, training, career development and promotion are based on the aptitude and abilities of the individual.
The Group's approach and responsibilities for social and community issues are not covered in this report.
The Group gives full consideration to the career development and promotion of disabled persons, and to applications for employment from disabled persons, where the requirements of the job can be adequately fulfilled by a handicapped or disabled person.
The Group considers the training requirements of each disabled person on an individual basis.
Where an employee becomes disabled during the course of his or her employment, the Group will consider providing that employee with such means, including appropriate training, as will enable the employee to continue to carry out his or her job, where it reasonably can, or will attempt to provide an alternative suitable position.
The majority of suppliers to the Group are of a long standing nature with whom mutually acceptable payment terms have been established over the relationship period. Generally payments will be made between 30 and 60 days from the end of the month of delivery. In certain circumstances payment terms will be agreed with suppliers as part of the overall terms of a transaction, and will be adhered to by the Group. The Company does not make any trade purchases.
In respect of the Group, year end trade creditors represent 48 days (2011: 56 days) average purchases.
During the year the Group made various charitable donations amounting to £589 (2011: £600).
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, so that it can continue to provide returns for its shareholders and benefits for its other stakeholders.
The Group considers its capital to comprise ordinary share capital, share premium, capital redemption reserve and accumulated retained earnings. The translation reserve is not considered as capital. There have been no changes in what the Group considers to be capital since 2010/11. In order to maintain or adjust its working capital at an acceptable level and meet strategic investment needs, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders or sell assets.
The Group does not seek to maintain any particular debt to capital ratio, but will consider investment opportunities on their merits and fund them in the most effective manner.
The Group recognises the importance of a high commitment to environmental matters and has maintained its ISO 14001: 2004 Environmental Management System throughout the year.
The Group complies with current applicable legislation of the countries in which it operates; and will conduct operations such that:
As part of its processes the Group's environmental performance is reviewed monthly by senior management and a programme of continuous improvement for the benefit of customers, employees and the environment has been adopted.
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 company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss for the Group for that period.
In preparing these financial statements, the Directors are required to:
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 comply with the Companies Act 2006 and, as regards the Group financial statements, 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 are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
Each person who is a director at the date of approval of this report confirms that to the best of their knowledge:
The Directors at the time of approving the Directors' Report are listed on page 6. Having made enquiries of fellow Directors and of the Officers of the Company, each of the Directors confirms that:
The Company has purchased liability insurance cover, which remains in force at the date of the report, for the benefit of the Directors of the Company which gives appropriate cover for legal action brought against them. The Company also provides an indemnity for its Directors (to the extent permitted by law) in respect of liabilities which could occur as a result of their office. This indemnity does not provide cover should a Director be proved to have acted fraudulently or dishonestly.
The Company has authority from shareholders to purchase up to 10% of its own ordinary shares in the market. This authority was not used during the year nor in the period to 13 December 2012. The Board intends to seek shareholder approval to renew the authority at this year's Annual General Meeting.
In accordance with the Companies (Acquisition of Own Shares) (Treasury Shares) Regulations 2003, companies are permitted to hold purchased shares rather than cancelling them. The Board has no current intention to purchase shares as treasury shares
There have been no events since the balance sheet date that materially affect the position of the Group.
The Group's business activities, together with the factors likely to affect the Group's performance are set out on pages 5 and 7.
The Group's financial position and cash flows are described on pages 2 to 4. In addition, note 20 to the financial statements includes the Group's risk management objectives and policies; managing its financial risk and its exposures to credit risk, foreign exchange risk and liquidity risk.
The Group has considerable financial resources together with a diverse range of customers, and suppliers, across different geographic areas and markets. As a consequence the Directors believe that the Group is well placed to manage business risks successfully in the current economic climate.
The Directors have reviewed the budgets, projected cash flows and other relevant information for a period of 15 months from the balance sheet date. On the basis of this review 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 believe it is appropriate to continue to adopt the going concern basis in preparing the financial statements.
The Annual General Meeting of Titon Holdings Plc ("the Company") will be held at the Titon Factory and Showroom premises at Falconer Road, Haverhill, Suffolk, CB9 7XU on 19 February 2013 commencing at 11.00 a.m. A Notice convening the Annual General Meeting of the Company for 2013 may be found on page 56 of this document.
At the Annual General Meeting shareholders will be asked, as items of special business to give power to the Directors to allot shares, to give power to the Directors to disapply the pre-emption requirements of section 561 of the Companies Act 2006, to give power to the Directors to make market purchases of ordinary shares in the capital of the Company, subject to certain conditions and to approve the Directors' Remuneration Report. The Notice also sets out details of the ordinary business to be conducted at the Annual General Meeting.
Set out below is an explanation of the effect and purpose of the resolutions proposed.
The Directors recommend that the Company adopt the reports of the Directors and the Auditors and the audited accounts of the Company for year ended 30 September 2012.
The Directors' Report was approved by the Board on 13 December 2012 and signed by order of the Board.
The Directors recommend a final dividend of 0.5 pence per ordinary share. Subject to approval by shareholders, the final dividend will be paid on 22 February 2013 to shareholders of the register on 25 January 2013.
a Director. The Chairman confirms that, following performance evaluation Mr Ruffell continues to be effective and demonstrates commitment in his role.
This resolution proposes that BDO LLP should be reappointed as the Company's Auditors and authorises the Directors to determine their remuneration.
The Companies Act 2006 prevents directors of a public company from allotting unissued shares, other than pursuant to an employee share scheme, without the authority of shareholders in general meeting. In certain circumstances this could be unduly restrictive. The Directors' existing authority to allot shares, which was granted at the Annual General Meeting held on 21 February 2012, will expire at the end of this year's Annual General Meeting. Resolution 6 in the notice of Annual General Meeting will be proposed, as an ordinary resolution, to authorise the Directors to allot ordinary shares in the capital of the Company up to a maximum nominal amount of £250,000, representing approximately 23.7% of the nominal value of the ordinary shares in issue on 13 December 2012 (excluding treasury shares). The Company does not currently hold any shares in treasury.
The authority conferred by the resolution will expire on 18 May 2014 or, if sooner, at the end of next year's Annual General Meeting.
The Directors have no present plans to allot unissued shares other than on the exercise of share options under the Company's employee share option schemes. However, the Directors believe it to be in the best interests of the Company that they should continue to have this authority so that such allotments can take place to finance appropriate business opportunities that may arise.
The Companies Act 2006 requires listed companies to put a resolution to shareholders at each annual general meeting to approve the Directors' Remuneration Report, which forms part of the annual report. The vote is advisory in nature.
Resolution 7 in the Notice of Annual General Meeting, which will be proposed as an ordinary resolution, asks shareholders to approve the Remuneration Report, which can be found on pages 13 to 16 of this document.
Unless they are given an appropriate authority by shareholders, if the Directors wish to allot any of the unissued shares for cash or grant rights over shares or sell treasury shares for cash (other than pursuant to an employee share scheme) they must first offer them to existing shareholders in proportion to their existing holdings. These are known as pre-emption rights.
The existing disapplication of these statutory preemption rights, which was granted at the Annual General Meeting held on 21 February 2012 will expire at the end of this year's Annual General Meeting. Accordingly, resolution 8 in the Notice of Annual General Meeting will be proposed, as a special resolution, to give the Directors power to allot shares without the application of these statutory pre-emption rights: first, in relation to offers of equity securities by way of rights issue, open offer or similar arrangements; and second, in relation to the allotment of equity securities for cash up to a maximum aggregate nominal amount of £50,000 (representing approximately 4.7% of the nominal value of the ordinary shares in issue on 13 December 2012). The power conferred by this Resolution will expire on 18 May 2014 or, if sooner, at the end of next year's Annual General Meeting.
Resolution 9 in the Notice of Annual General Meeting, which will be proposed as a special resolution, will authorise the Company to make market purchases of up to 1,055,565 ordinary shares. This represents approximately 10% of the Company's ordinary shares in issue on 13 December 2012. The maximum price per share that may be paid shall be the higher of: (i) 5% above the average of the middle market quotations for an ordinary share for the five business days immediately before the day on which the purchase is made (exclusive of expenses); and (ii) the higher of the price of the last independent trade and the highest current independent bid on the trading venue where the purchase is carried out (exclusive of expenses). The minimum price shall not be less than 10p per share.
The authority conferred by this resolution will expire on 18 May 2014 or, if sooner, at the end of next year's Annual General Meeting.
Your Directors are committed to managing the Company's capital effectively. Although the Directors have no plans to make such purchases, buying back the Company's ordinary shares is one of the options they keep under review. Purchases would only be made after considering the effect on earnings per share, and the benefits for shareholders generally.
The Company may hold in treasury any of its own shares that it purchases in accordance with the Companies Act 2006 and the authority conferred by this resolution. This would give the Company the ability to re-issue treasury shares quickly and cost effectively and would provide the Company with greater flexibility in the management of its capital base.
As at 13 December 2012 there were options outstanding over 332,850 ordinary shares which, if exercised at that date, would have represented 3.1% of the Company's issued ordinary share capital (excluding treasury shares). If the authority given by resolution 8 were to be fully used, these would then represent 3.3% of the Company's issued ordinary share capital.
The Directors believe that the resolutions which are to be proposed at the Annual General Meeting are in the best interests of the Company and its shareholders as a whole and recommend that all shareholders vote in favour of them, as each of the Directors intends to do, in respect of his or her beneficial holding.
The Directors' Report was approved by the Board and signed by order of the Board:
Secretary 13 December 2012
The report has been prepared in accordance with the requirements of the Companies Act 2006, the Listing Rules of the UK Listing Authority and the UK Corporate Governance Code appended to the Listing Rules.
The Company's policy on remuneration is determined by its Remuneration Committee. The Committee presently consists of Mr P W E Fitt - a Non-executive Director, Mr J N Anderson – Deputy Chairman and Mr K A Ritchie - Group Chairman. Mr D A Ruffell, the Chief Executive, served on the Committee up until 2 October 2012 when he was replaced by Mr K A Ritchie. Mr P W E Fitt chairs the Committee.
The Company's policy on remuneration is to offer competitive remuneration packages, which are designed to reward, retain and to motivate the Directors, having regard to the size and complexity of the Group. Other than share option schemes, there are no specific performance related elements included within remuneration, and the Committee will review this policy during the coming year.
Benefits
The individual components of the remuneration package during the year were:
The basic salary of each Executive Director is determined by the Committee, giving due consideration to individual responsibility and performance and to salaries paid to Executive Directors of the Group companies and similar companies in comparable business sectors. Basic salaries are reviewed annually on 1 February.
Executive Directors are members of the Company's defined contribution pension scheme in which the Company's contribution is a fixed percentage at 10% of basic salary. Benefits are not pensionable.
The Company provides share option schemes for Directors and for other members of staff. The Company grants options at the discretion of the Remuneration Committee.
Options are currently held under four share option schemes in which employees have been invited to participate. Two schemes were introduced in February 1998; one Inland Revenue approved and the other unapproved. The ability to issue further options under these two schemes has now expired. Two further share option schemes were introduced in March 2010; one Inland Revenue approved and the other unapproved.
The exercise of options granted under all share option schemes is dependent upon the growth in the earnings per share of the Company, over any three consecutive financial years following the date of grant, exceeding the growth in the retail price index over the same period by at least 9 per cent.
The performance conditions are aimed to align Directors' performance to shareholder value and were selected by the Remuneration Committee on the advice of the Company's solicitors (the performance conditions are detailed in note 24 to the Financial Statements). Actual earnings per share performance will be determined by the Remuneration Committee.
Benefits paid to Executive Directors comprise taxable non-cash emoluments and include the provision of company cars and private health insurance. In addition, the Executive Directors participate in the Company's Group Life Insurance Scheme which provides a lump sum payment of four times basic salary.
All Executive Directors have service contracts, entered into on 1 August 2012, which are renewed annually and which provide for a 6 month notice period to be given either by the Company or by the Director. All Executive Directors' current contracts expire on 31 July 2013.
The three Non-executive Directors have service contracts that do not contain notice periods and which expire on 31 January 2013 or 31 July 2013. The remuneration for the Company's Non-executive Directors is set by the Board, and consists of fees for their services in connection with their role as Director and, where relevant, for additional services such as chairing Board Committees. They are not eligible for pension scheme membership and do not participate in any of the Company's share option schemes.
The Company's policy on the duration of, and notice periods and termination payments under, Directors' contracts is designed to attract and retain persons of the calibre required by the Company, with due regard being given to the interests of shareholders.
There are no pre-determined special provisions for Executive or Non-executive Directors with regard to compensation in the event of loss of office. The Remuneration Committee considers the circumstances of individual cases of early termination and determines compensation payments accordingly.
The Directors may not directly or indirectly hold any directorship or engage or be interested in any other business other than the Company or any other Group company during the term of their contracts without the previous written consent of the Board.
The following graph shows the Company's 5-year performance, measured by total shareholder return, compared with the equivalent performance of the FTSE All-Share Index.
This graph shows the percentage change in value of £1 invested in the Company on 30 September 2007 (assuming dividends reinvested) compared with the percentage change in value of £1 (assuming dividends reinvested) in the FTSE All-Share Index. The Directors consider the FTSE All-Share Index to be an appropriate choice as the Company is included within it.
The following disclosures on Directors' remuneration and share options have been audited.
The remuneration paid to the Directors during the year was as follows:
| *Salary and fees after 'salary sacrifice' |
Benefits | Total emoluments |
Pension contributions |
|||
|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | |||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Executive: | ||||||
| T N Anderson | 73 | 13 | 86 | 86 | 9 | 9 |
| R Brighton - resigned 30 April 2011 |
- | - | - | 53 | - | 4 |
| N C Howlett | 73 | 6 | 79 | 79 | 9 | 8 |
| C S Jarvis | 58 | 9 | 67 | 66 | 11 | 11 |
| C J Martin - resigned 14 Sept 2012 ** |
97 | 7 | 104 | 67 | 12 | 12 |
| K A Ritchie - appointed 30 April 2012 |
52 | 4 | 56 | - | 6 | - |
| D A Ruffell | 92 | 16 | 108 | 106 | 20 | 20 |
| Non-executive: | ||||||
| J N Anderson | 65 | 26 | 91 | 96 | - | - |
| P W E Fitt *** | 10 | - | 10 | 10 | - | - |
| P E O'Sullivan **** | 17 | - | 17 | 21 | - | - |
| 537 | 81 | 618 | 584 | 67 | 64 |
* A 'salary sacrifice' system is in operation, where the Company makes a pension contribution on behalf of each Director and their salary is reduced by a corresponding amount.
The remuneration package of each Executive Director includes non-cash benefits comprising the provision of a company car and private health insurance. The private health insurance scheme is ending on 1 December 2012.
The aggregate gains made by Directors on the exercise of share options during 2012 were £nil (2011: £nil).
Details of the interests of Directors who served during the year in options over ordinary shares are as follows:-
| Exercise price per share |
At 1 October 2011 |
Granted during the year |
Lapsed during the year |
At 30 September 2012 |
||
|---|---|---|---|---|---|---|
| Number | Number | Number | Number | |||
| T N Anderson | (a) (c) (d) |
103.5p 91.0p 48.0p |
10,000 3,150 34,950 |
- - - |
(10,000) - - |
- 3,150 34,950 |
| 48,100 | - | (10,000) | 38,100 | |||
| N C Howlett | (a) (b) (d) |
103.5p 99.0p 48.0p |
10,000 10,000 35,000 |
- - - |
(10,000) - - |
- 10,000 35,000 |
| 55,000 | - | (10,000) | 45,000 | |||
| C S Jarvis | (a) (c) (d) |
103.5p 91.0p 48.0p |
10,000 10,000 20,000 |
- - - |
(10,000) - - |
- 10,000 20,000 |
| 40,000 | - | (10,000) | 30,000 | |||
| C J Martin | (a) (d) |
103.5p 48.0p |
10,000 20,000 |
- - |
(10,000) - |
- 20,000 |
| 30,000 | - | (10,000) | 20,000 | |||
| D A Ruffell | (a) (c) (d) |
103.5p 91.0p 48.0p |
25,000 14,000 45,000 |
- - - |
(25,000) - - |
- 14,000 45,000 |
| 84,000 | - | (25,000) | 59,000 |
K A Ritchie, J N Anderson, P W E Fitt and P E O'Sullivan had no interests in options over shares during the year.
There have been no changes to the number of share options held by Directors between 30 September 2012 and 13 December 2012.
The options are exercisable between the following dates:
| (a) | 18 January 2005 | and | 18 January 2012 |
|---|---|---|---|
| (b) 18 May 2008 | and | 18 May 2015 | |
| (c) | 18 May 2009 | and | 18 May 2016 |
| (d) 9 June 2014 | and | 9 June 2021 |
The Directors may only exercise share options if the growth in the earnings per share of the Company over any period of three consecutive financial years of the Company following the date of grant, exceeds the growth in the retail price index over the same period by at least 9 per cent.
At 30 September 2012 the market price of the Company's shares was 33.0p, and the range during the year was 31.5p to 44.0p.
The Directors' Remuneration Report was approved by the Remuneration Committee and signed on its behalf by:
Remuneration Committee Chairman
13 December 2012
As part of this commitment to maintaining high standards of corporate governance, the Board applies, where they are deemed appropriate, the principles of corporate governance set out in the UK Corporate Governance Code ("the Code"; formerly the Combined Code) as issued by the FRC in June 2010. The Code can be found on the FRC website (www.frc.org.uk). Further explanation of how both the main provisions and the supporting provisions have been applied is set out below and in the Directors' Remuneration Report. The Directors confirm that the Group was compliant with all relevant provisions of Section 1 of the Code throughout the accounting period and up to the date of the Directors' Report except in the following areas:
The Chairman has not regularly reviewed and agreed with each of the Executive and Non-executive Directors their training and development needs and the Company has therefore not complied with paragraph B.4.2. The Board believes that this is not appropriate for a Company of this size and complexity. The Company operates an employee performance management system that encompasses the Executive Directors.
The Company has not undertaken performance evaluation of the Chairman, the Board as a whole or the Board Committees and has not therefore complied with paragraph B.6.3 of the Code. The Directors believe that this is not appropriate for a Company of this size and complexity.
The Board is accountable to the Company's shareholders for good corporate governance and the statements set out on pages 17 to 20 describe how the principles identified in the Code are applied by the Company.
The Board has a schedule of matters specifically reserved to it for decision including major capital expenditure decisions, business acquisitions and disposals and the setting of treasury policy. This also includes matters such as material financial commitments, commencing or settling major litigation and appointments to main and subsidiary company boards.
Scheduled Board Meetings take place on a quarterly basis with further adhoc meetings arranged as necessary. To enable the Board to function effectively and Directors to discharge their responsibilities, full and timely access is given to all relevant information. In the case of Board meetings, this consists of comprehensive management reporting information and discussion documents regarding specific matters.
The individual attendance by Executive Directors and Non-executive Directors at the Board and principal Board Committee Meetings held during the financial year is shown in the table below.
| Main Board |
Remuneration Committee |
Audit Committee |
|
|---|---|---|---|
| Total meetings held | 6 | 1 | 1 |
| K A Ritchie | 2 | - | 1 |
| D A Ruffell | 6 | 1 | 1 |
| T N Anderson | 6 | - | - |
| N C Howlett | 6 | - | - |
| C S Jarvis | 6 | - | - |
| J N Anderson | 6 | 1 | - |
| P W E Fitt | 4 | 1 | 1 |
| P E O'Sullivan | 4 | - | - |
There is an agreed procedure for Directors to take independent professional advice if necessary and at the Company's expense. This is in addition to the access which every Director has to the Company Secretary. The Secretary is charged by the Board with ensuring that Board procedures are followed.
When new members are appointed to the Board, they are provided with advice from the Company Secretary in respect of their role and duties as a public company director. Furthermore, all Directors have ongoing access to the Company Secretary for advice during the course of their appointment.
Appointments to the Board of both Executive and Nonexecutive Directors are considered by the Board as a whole.
Any Director appointed during the year is required, under the provisions of the Code, to retire and seek election by the shareholders at the next Annual General Meeting. The Articles of Association also require that one third of the Directors retire by rotation each year and seek reelection at the Annual General Meeting. The Directors required to retire are those in office longest since their previous re-election and in practice this means that each Director retires at least every three years, in accordance with the requirements of the Code.
The Directors who retire by rotation are Mr Keith Archibald Ritchie and Mr David Alan Ruffell. Both Directors, being eligible, offer themselves for re-election.
A statement of Directors' interests and copies of their service contracts are available for inspection during usual business hours at the registered office of the Company on each business day before, and will be available at the place of the Annual General Meeting for fifteen minutes prior to and during the meeting.
The Remuneration Committee, which determines the Company's policy on Directors' remuneration, met once during the financial year and Mr P W E Fitt, Mr J N Anderson and Mr D A Ruffell attended the meetings.
The Remuneration Committee terms of reference, established by the Board, are to:
Select the performance conditions relating to the Group's Share Option Schemes. Such performance conditions to be aimed to align Directors' interests to shareholder value.
Make recommendations to the Board of Directors on other matters relating to remuneration in the Group.
Full details of Directors' remuneration and a statement of the Company's remuneration policy are set out in the Directors' Remuneration Report on pages 13 to 16.
The Audit Committee reports to the Board on matters concerning the Group's internal financial controls, financial reporting and risk management systems, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken.
The Audit Committee is appointed by the Board for a period of three years and comprises Mr P W E Fitt, Mr K A Ritchie and Mr D A Ruffell and is chaired by Mr P W E Fitt.
The Audit Committee met once during the financial year and all three Committee members attended the meeting. The Audit Committee terms of reference, established by the Board, are to:
Make recommendations to the Board of Directors for it to put to the shareholders for their approval in general meeting, in relation to the appointment or reappointment of the external auditor and to approve the remuneration and terms of engagement of the external auditor;
Review and monitor the external auditor's independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements; and
The Board believes that due to the size of the business there is currently no requirement for an internal audit function. This position is reviewed annually.
The Company's auditors, BDO LLP, have been instructed to carry out non-audit work during the year as detailed in note 6 to the financial statements. The nonaudit work primarily comprised tax compliance work. The provision of these services represents a low risk to auditor independence which is safeguarded by separation of staff and supervision within BDO LLP.
The Board recognises the importance of communications with shareholders. The Business Review gives a detailed review of the business, and there is regular dialogue with institutional shareholders following the Group's preliminary announcement of the year end results and at the half year.
The Group's results and other announcements are published to the London Stock Exchange RNS service and on the Company's website.
The Board uses the Annual General Meeting to communicate with private and institutional investors and welcomes their participation.
The respective responsibilities of the Directors and the auditors in connection with the financial statements are explained on pages 9, 21 and 22. The Directors acknowledge that they are responsible for establishing and maintaining the Group's system of internal control and reviewing its effectiveness.
Internal control systems are designed to meet the particular needs of the Group 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 Directors confirm that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group, which complies with the guidance given by the Turnbull Committee. This has been in place throughout the year and up to the date of approval of the Annual Report. The process is regularly reviewed by the Board.
The key procedures that the Directors have established to provide effective internal control include:
The principal aspects of the Group's internal control processes used in preparing the Group's consolidated accounts include second reviews of consolidation workings and Board review of the composition of the Group's financial information.
The Directors have, through the Audit Committee, reviewed the effectiveness of the Group's system of internal control by reviewing the procedures noted above and are satisfied that it is appropriate to the size of the business.
The Company has a shareholding in an associate company. Controls within this entity may not be reviewed as part of the Company's formal corporate governance process due to the local delegation of managerial responsibilities, but instead are reviewed as part of the normal management process.
The Corporate Governance Report was approved by the Board on 13 December 2012 and signed on its behalf by:
K A Ritchie Chairman
We have audited the financial statements of Titon Holdings Plc for the year ended 30 September 2012 which comprise the consolidated income statement, the consolidated statement of comprehensive income, consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows, the parent company balance sheet and the related notes. The financial reporting framework that has been applied in the preparation of the consolidated group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied in preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
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.
As explained more fully in the statement of directors' responsibilities, 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 (APB's) Ethical Standards for Auditors.
A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/private.cfm.
In our opinion:
In our opinion:
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our opinion:
Under the Listing Rules we are required to review:
Cambridge United Kingdom 13 December 2012
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
for the year ended 30 September 2012
| Note | 2012 £'000 |
2011 £'000 |
|
|---|---|---|---|
| Revenue | 3 | 14,548 | 15,995 |
| Cost of sales | (11,668) | (12,376) | |
| Gross profit | 2,880 | 3,619 | |
| Distribution costs | (665) | (622) | |
| Administrative expenses | (3,186) | (2,992) | |
| Operating (loss) / profit | (971) | 5 | |
| Finance income | 5 | 26 | 36 |
| Share of losses from associate | 13 | (39) | (7) |
| (Loss) / profit before tax | 6 | (984) | 34 |
| Income tax credit | 7 | 247 | 155 |
| (Loss) / profit after income tax | (737) | 189 | |
| Attributable to: | |||
| Equity holders of the parent | (721) | 171 | |
| Non-controlling interest | (16) | 18 | |
| (Loss) / profit for the year | (737) | 189 | |
| (Loss) / earnings per share - basic | 9 | (6.83p) | 1.62p |
| - diluted | 9 | (6.83p) | 1.62p |
| 2012 £'000 |
2011 £'000 |
||
|---|---|---|---|
| (Loss) / profit for the year | (737) | 189 | |
| Exchange difference on retranslation of overseas operations |
6 | (11) | |
| Total comprehensive (loss) / income for the year | (731) | 178 | |
| Attributable to: | |||
| Equity holders of the parent | (715) | 160 | |
| Non-controlling interest | (16) | 18 | |
| (731) | 178 |
The notes on pages 27 to 48 form part of these financial statements.
at 30 September 2012
| Note | 2012 £'000 |
2011 £'000 |
|
|---|---|---|---|
| Assets | |||
| Property, plant and equipment | 10 | 3,484 | 3,682 |
| Intangible assets | 11 | 774 | 586 |
| Investments in associates | 13 | 48 | 87 |
| Total non-current assets | 4,306 | 4,355 | |
| Inventories | 14 | 2,578 | 2,593 |
| Trade and other receivables | 15 | 3,133 | 3,283 |
| Corporation tax | 75 | 71 | |
| Cash and cash equivalents | 19 | 1,840 | 2,864 |
| Total current assets | 7,626 | 8,811 | |
| Total Assets | 11,932 | 13,166 | |
| Liabilities | |||
| Deferred tax | 16 | 210 | 392 |
| Total non-current liabilities | 210 | 392 | |
| Trade and other payables | 17 | 2,478 | 2,623 |
| Bank overdraft | 19 | 27 | 17 |
| Corporation tax | 20 | 6 | |
| Total current liabilities | 2,525 | 2,646 | |
| Total Liabilities | 2,735 | 3,038 | |
| Equity | |||
| Share capital | 18 | 1,056 | 1,056 |
| Share premium reserve | 865 | 865 | |
| Capital redemption reserve | 56 | 56 | |
| Translation reserve | (7) | (13) | |
| Retained earnings | 7,096 | 8,017 | |
| Total Equity attributable to equity holders of the parent | 9,066 | 9,981 | |
| Non-controlling Interest | 131 | 147 | |
| Total Equity | 9,197 | 10,128 | |
| Total Liabilities and Equity | 11,932 | 13,166 |
The notes on pages 27 to 48 form part of these financial statements.
These financial statements were approved and authorised for issue by the Board on 13 December 2012 and signed on its behalf by:
K A Ritchie Chairman
at 30 September 2012
| Share capital |
Share premium reserve |
Capital redemption reserve |
Translation reserve |
Retained earnings |
Total | Non- controlling interest |
Total equity |
|
|---|---|---|---|---|---|---|---|---|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| At 1 October 2010 | 1,056 | 865 | 56 | (2) | 8,038 | 10,013 | - | 10,013 |
| Translation differences on overseas operations |
- | - | - | (11) | - | (11) | - | (11) |
| Profit for the year | - | - | - | - | 171 | 171 | 18 | 189 |
| Total Comprehensive Income for the year |
- | - | - | (11) | 171 | 160 | 18 | 178 |
| Dividends paid | - | - | - | - | (237) | (237) | - | (237) |
| Share-based payment expense |
- | - | - | - | 3 | 3 | - | 3 |
| Dilution of ownership of subsidiary |
- | - | - | - | 42 | 42 | 129 | 171 |
| At 30 September 2011 | 1,056 | 865 | 56 | (13) | 8,017 | 9,981 | 147 | 10,128 |
| Translation differences on overseas operations |
- | - | - | 6 | - | 6 | - | 6 |
| Loss for the year | - | - | - | - | (721) | (721) | (16) | (737) |
| Total Comprehensive Income for the year |
- | - | - | 6 | (721) | (715) | (16) | (731) |
| Dividends paid | - | - | - | - | (211) | (211) | - | (211) |
| Share-based payment expense | - | - | - | - | 11 | 11 | - | 11 |
| At 30 September 2012 | 1,056 | 865 | 56 | (7) | 7,096 | 9,066 | 131 | 9,197 |
The notes on pages 27 to 48 form part of these financial statements.
The following describes the nature and purpose of each reserve within equity:
| Reserve | Description and purpose |
|---|---|
| Share premium | Premium on shares issued in excess of nominal value |
| Capital redemption | Amounts transferred from share capital on redemption of issued shares |
| Translation reserve | Cumulative gains/losses arising on retranslating the net assets of overseas operations into Sterling |
| Retained earnings | All other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere |
for the year ended 30 September 2012
| Note | 2012 £'000 |
2011 £'000 |
|
|---|---|---|---|
| Cash generated from operating activities | |||
| (Loss) / profit before tax | (984) | 34 | |
| Depreciation of property, plant & equipment | 496 | 530 | |
| Amortisation on intangible assets | 117 | 105 | |
| Decrease / (increase) in inventories | 21 | (79) | |
| Decrease in receivables | 151 | 127 | |
| (Decrease) / increase in payables and other current liabilities | (145) | 99 | |
| Profit on sale of plant & equipment | (11) | (31) | |
| Share based payment – equity settled | 11 | 3 | |
| Interest received | (26) | (36) | |
| Share of associate's loss | 39 | 7 | |
| Cash (used in) / generated from operations | (331) | 759 | |
| Income taxes refunded / (paid) | 74 | (119) | |
| Net cash (used in) / generated from operating activities | (257) | 640 | |
| Cash flows from investing activities | |||
| Purchase of plant & equipment | (327) | (470) | |
| Purchase of intangible assets | (305) | (265) | |
| Proceeds from sale of plant & equipment | 40 | 33 | |
| Interest received | 26 | 36 | |
| Net cash used in investing activities | (566) | (666) | |
| Cash flows from financing activities | |||
| Dividends paid to equity shareholders | (211) | (237) | |
| Net cash used in financing activities | (211) | (237) | |
| Net decrease in cash & cash equivalents | 22 | (1,034) | (263) |
| Cash & cash equivalents at beginning of the year | 2,847 | 3,110 | |
| Cash & cash equivalents at end of the year | 19, 22 | 1,813 | 2,847 |
The notes on pages 27 to 48 form part of these financial statements.
at 30 September 2012
Titon Holdings Plc shares are publicly traded on the Official List of the London Stock Exchange. The nature of the Group's operations and its principal activities are set out in the Directors' Report on page 5. The consolidated financial statements were authorised for release on 13 December 2012.
The principal accounting policies adopted in the preparation of the consolidated financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated. These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations) as adopted by the European Union and issued by the International Accounting Standards Board (IASB) and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS.
The Directors have prepared the parent company financial statements in accordance with UK Generally Accepted Accounting Practice (UK GAAP) and these are presented separately on pages 49 to 54.
During the period, the following new standards, amendments and interpretations to existing standards were published. None had an impact on the reported result of the Group.
Standards, interpretations and amendments to existing standards published and effective in the current financial year relevant to the Group:
Standards, interpretations and amendments to existing standards that have been published as mandatory for later accounting periods but are not yet effective and have not been adopted early by the Group. The Group does not currently believe the adoption of these standards or interpretations would have a material impact on the consolidated results or financial position of the Group.
| Effective date (periods beginning) |
||
|---|---|---|
| • | Amendments to IAS 12 - Deferred Tax: Recovery of Underlying Assets. IAS 12 requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale |
1 January 2012 |
| • | Amendments to IAS 1 - Presentation of Items of Other Comprehensive Income. This Amendment requires companies to group together items within Other Comprehensive Income (OCI) that may be reclassified to the profit or loss section of the income statement |
1 July 2012 |
The Group's consolidated financial statements incorporate the financial statements of the Company (Titon Holdings Plc) and the entities controlled by the Company (its subsidiaries) made up to 30 September 2012. Control exists when the Company has the power, directly or indirectly to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the financial statements.
A non-controlling interest is the equity in a subsidiary not attributable, directly or indirectly, to a parent. Noncontrolling interests at the end of reporting period represent the non-controlling shareholders' portion of the fair values of the identifiable assets and liabilities of the subsidiary at the acquisition date and the noncontrolling interests' portion of movements in equity since the date of the combination. Non-controlling interest is presented within equity, separately from the parent's shareholders' equity.
Losses within a subsidiary are attributed to the noncontrolling interest even if that results in deficit balance.
Transactions entered into by group entities in a currency other than the currency of the primary economic environment in which they operate (their "functional currency") are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the balance sheet date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the consolidated income statement.
On consolidation, the results of overseas operations are translated into Sterling, which is the functional and presentational currency of the Company, at rates approximating those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the balance sheet date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised directly in equity (the "translation reserve").
Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another entity, it is classified as an associate. Associates are initially recognised in the consolidated balance sheet at cost.
The Group's share of post-acquisition profits and losses is recognised in the consolidated income statement, except that losses in excess of the Group's investment in the associate are not recognised unless there is an obligation to make good those losses. Profits and losses arising on transactions between the Group and its associates are recognised only to the extent of unrelated investors' interests in the associate. The investors' share in the associate's profits and losses resulting from these transactions is eliminated against the carrying value of the associate. Any premium paid for an associate above the fair value of the Group's share of the identifiable assets, liabilities and contingent liabilities acquired is capitalised and included in the carrying amount of the associate. The carrying amount of the investment in associates is subject to impairment in the same way as goodwill arising on a business combination (see accounting policy (h).
Upon disposal of overseas subsidiaries, exchange differences arising from the translation of the financial statements of foreign operations are recycled and taken to the consolidated income statement as part of the profit or loss on disposal. The Company has elected, in accordance with IFRS 1, that in respect of all foreign operations, any differences that have arisen before 1 October 2004 have been set to zero. Any gain or loss on the subsequent disposal of those foreign operations would exclude translation differences that arose before the date of transition to IFRS and include only subsequent translation differences.
More than 95% of sales from the Group's UK business are invoiced in Sterling.
Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation.
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred, if it is probable that the future economic benefits embodied within the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as incurred.
Freehold land is not depreciated. Depreciation is provided on all other items of property, plant and equipment to write off the carrying value of items over their expected useful economic lives. It is applied at the following rates:
| Freehold buildings | - | 2% per annum straight line |
|---|---|---|
| Improvements to leasehold property | - | 20% per annum straight line (or the lease term, if shorter) |
| Plant and equipment | - | 10% to 33.3% per annum straight line |
| Motor vehicles | - | 25% per annum straight line |
The carrying values of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable (see accounting policy (h)).
Intangible assets other than goodwill that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses (see accounting policy (h)).
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary or associate at the date of acquisition and subject to annual impairment testing. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill associated with the acquisition of associates is included within the investment in associates.
Goodwill is not subject to amortisation, but is tested for impairment annually. On disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss recognised in the income statement on disposal.
Goodwill arising on acquisitions is set off against reserves in accordance with Accounting Standards applicable at the time of acquisition. For all business combinations occurring prior to 1 October 2004, their accounting treatment was not restated in preparing the Group's opening IFRS balance sheet at 1 October 2004. The Group took advantage of the exemption not to restate acquisitions prior to the date of transition.
Capitalised development costs are amortised over the periods the Group expects to benefit from selling the products developed.
Expenditure on internally developed products is capitalised if all of the following can be demonstrated:
Development costs are amortised using the straight line method over their remaining estimated useful lives from the date that the products are available for sale to customers, which is normally between 3 and 5 years. The remaining useful lives of such development assets are assessed by the Directors annually.
Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects is recognised in the consolidated income statement as incurred.
Costs incurred on the acquisition of computer software are capitalised if they meet the recognition criteria of IAS 38 as described above. Computer software costs recognised as assets are written off over their estimated useful lives, which is normally between 3 and 10 years.
Other intangible assets arising on business combinations, including patents and customer bases, are recorded at fair value at the date of acquisition. Amortisation is charged to the income
Inventories are stated at the lower of cost and net realisable value. Cost is calculated as follows:
Raw materials - cost of purchase on first in, first out basis.
Work in progress and finished goods - cost of raw materials and labour, together with attributable
overheads based on the normal level of activity.
Net realisable value is based on estimated selling price less further costs to completion and disposal. A charge is made to the income statement for slow moving inventories. The charge is reviewed at each balance sheet date.
Cash and cash equivalents comprise cash balances, bank overdrafts and treasury deposits for cash flow purposes. The Group has no long term
The carrying amount of the Group's assets, other than deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. Impairment losses are recognised in the income statement.
The Company provides share option schemes for Directors and for other members of staff.
In accordance with IFRS 2 – Share-based payments, the fair value of the employee services received in exchange for the grant of options is recognised as an expense to the income statement over the vesting period of the option and the corresponding credit recognised to the Retained Earnings within equity. The Black-Scholes option pricing model has been used for calculating the fair value of the Group's share options. The Directors believe that this model is the most suitable for calculating the fair value of the equity based share options. Details of the inputs to the option pricing model are shown in note 24 to the financial statements.
borrowings and any available cash surpluses are placed on deposit.
statement on a straight-line basis over the estimated useful lives, which is normally 5 years. The remaining useful lives of such assets are
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.
assessed by the Directors annually.
v Subsequent expenditure
Other than in respect of goodwill, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
The fair value of the options are determined excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each balance sheet date the Group revises its estimates of the number of option awards that are expected to vest. The impact of the revision of original estimates, if any, is recognised in the income statement, with a corresponding adjustment to equity. No adjustment is made for failure to achieve market vesting conditions.
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in independently administered funds. Contributions to the pension scheme are charged to the income statement in the year in which they become payable.
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be
Revenue is derived principally from the sale of goods and is measured at the fair value of consideration received or receivable, after deducting discounts, settlement discounts, rebates and value added tax.
Finance income comprises interest receivable on funds invested.
Tax on the profit or loss for the periods presented comprises current and deferred tax.
Current tax is the expected corporation tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Temporary differences are not provided on goodwill that is not deductible for tax purposes or on the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
Operating leases represent leasing agreements that do not give rights approximating to ownership. Annual rentals are charged to the income statement
Provision is made at each balance sheet date for holidays accrued but not taken at the salary of the relevant employee at that date.
required to settle the obligation. They are discounted at a pre-tax rate reflecting current market assessments of the time value of money and risks specific to the liability.
A sale is usually recognised when the significant risks and rewards of ownership have passed to the customer, which is upon the transport of the goods from the company's premises.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
on a straight-line basis over the lease term. Lease incentives are recognised as an integral part of the total lease expense.
at 30 September 2012
Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when paid. In the case of
The Group classifies its financial assets depending on the purpose for which the asset was acquired. The Group holds only one class of financial assets, namely loans and receivables which comprise trade and other receivables and cash and cash equivalents in the balance sheet.
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (trade receivables), but also incorporate other types of contractual monetary asset. They are initially recognised at fair value and subsequently carried at amortised cost.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected
The Group classifies its financial liabilities depending on the purpose for which the liability was acquired. The Group holds only one class of financial liabilities, namely trade payables.
The consolidated financial statements incorporate the results of business using the purchase method. In the consolidated balance sheet, the Group's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at
The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
The Group reviews its inventory on a regular basis and, where appropriate, makes provision for slow moving and obsolete stock based on estimates of future sales activity. The estimate of the future sales activity will be final dividends, this is when approved by the shareholders at the AGM.
cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within distribution expenses in the income statement. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
From time to time, the Group elects to renegotiate the terms of trade receivables due from customers with which it has previously had a good trading history. Such renegotiations will lead to changes in the timing of payments rather than changes to the amounts owed.
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, such as short term fixed deposits with banks, and bank overdrafts. Bank overdrafts are shown on the face of the balance sheet.
Trade payables and other short-term monetary liabilities are initially recognised at fair value and subsequently carried at amortised cost.
the acquisition date. The Group's share of the results of acquired operations are included in the consolidated income statement from the date on which control is obtained.
based on both historical experience and expected outcomes based on knowledge of the markets in which the Group operates (see note 14 of the
Consolidated Financial Statements).
Depreciation is provided so as to write down the assets to their residual values over their estimated useful lives as set out in note 1 (d). The selection of these estimated lives requires the exercise of management judgement.
Intangible assets are amortised over their useful lives. Useful lives are based on the management's estimates of the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness. Changes to estimates can result in significant variations in the carrying value and amounts charged to the consolidated income statement in specific periods (see notes 1 (e) and 11 of the Consolidated Financial Statements).
Investments, property, plant and equipment and intangible assets are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. When a review for impairment is conducted, the recoverable amount of an asset or a cash-generating unit is determined based on value in-use calculations prepared on the basis of management's assumptions and estimates (see notes 1 (h), 10 and 11 of the Consolidated Financial Statements).
The charge for share-based payment is calculated in accordance with the assumptions described in note 24. The option valuation model used requires highly subjective assumptions to be made including the future volatility of the Company's share price, expected dividend yields, risk-free rate of return and expected staff turnover. The Directors draw upon a variety of external sources to aid in the determination of the appropriate data to use in such calculations.
IIn identifying its operating segments, management generally follows the Group's reporting lines, which represent the main geographic markets in which the Group operates. The segment reporting below is shown in a manner consistent with the internal reporting provided to the Board, which is the Chief Operating Decision Maker (CODM). These operating segments are monitored and strategic decisions are made on the basis of segment operating results. The Group operates three main business segments which are:
Inter-segment revenue is transacted on an arm's length basis and charged at prevailing market prices for a specific product and market or cost plus where no direct comparative market price is available. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Research and development entitywide financial expenses are not allocated to the business activities for which R&D is specifically performed and it is not therefore reported as a separate operating segment. Research and development expenses are included within the total un-allocated expenses figures set out below.
The measurement policies the Group uses for segment reporting under IFRS 8 are the same as those used in its financial statements.
The total assets for the segments represent the consolidated total assets attributable to these reporting segments. Parent company results and consolidation adjustments reconciling the segmental results and total assets to the consolidated financial statements, are included within the United Kingdom segment figures stated over page.
at 30 September 2012
| Business segment | United Kingdom |
South Korea |
All other countries |
Consolidated |
|---|---|---|---|---|
| For the year ended 30 September 2012 |
£'000 | £'000 | £'000 | £'000 |
| Segment revenue Inter-segment revenue |
11,213 - |
1,916 - |
1,419 213 |
14,548 213 |
| Total Revenue | 11,213 | 1,916 | 1,632 | 14,761 |
| Depreciation and amortisation | 538 | 87 | 4 | 629 |
| Operating profit / (loss) - segment result |
1,473 | (74) | 75 | 1,474 |
| Unallocated expenses Losses from associates Finance income |
(2,445) (39) 26 |
|||
| Loss before tax Tax credit |
(984) 247 |
|||
| Loss for the year | (737) | |||
| Total assets | 10,113 | 1,606 | 213 | 11,932 |
| Total assets include: Investments in associates |
48 | - | - | 48 |
| Additions to non-current assets (other than financial instruments and deferred tax assets) |
583 | 49 | - | 632 |
IFRS 8 requires entity wide disclosures to be made about the regions in which it earns its revenues and holds its non-current assets which are shown below.
| For the year ended 30 September 2012 |
United Kingdom |
Europe | USA | South East Asia |
All other regions |
Total |
|---|---|---|---|---|---|---|
| Revenues | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| By entities' country of domicile By country from which derived |
12,066 11,212 |
- 786 |
566 566 |
1,916 1,916 |
- 68 |
14,548 14,548 |
| Non-current assets By entities' country of domicile |
4,023 | - | 1 | 282 | - | 4,306 |
The Group's operations are separated between Group manufactured products and bought in products. The following table provides an analysis of the Group's external revenue by source of products, irrespective of the geographical region of sale.
| 2012 £'000 |
2011 £'000 |
|
|---|---|---|
| Group manufactured products Bought in products |
10,018 4,530 |
10,774 5,211 |
| Revenue | 14,548 | 15,995 |
| Business segment | United Kingdom |
South Korea |
All other countries |
Consolidated |
|---|---|---|---|---|
| For the year ended 30 September 2011 |
£'000 | £'000 | £'000 | £'000 |
| Segment revenue Inter-segment revenue |
12,245 - |
2,282 - |
1,468 160 |
15,995 160 |
| Total Revenue | 12,245 | 2,282 | 1,628 | 16,155 |
| Depreciation and amortisation | 538 | 87 | 4 | 629 |
| Operating profit - segment result | 2,121 | 36 | 91 | 2,248 |
| Unallocated expenses Losses from associates Finance income |
(2,243) (7) 36 |
|||
| Profit before tax Tax credit |
34 155 |
|||
| Profit for the year | 189 | |||
| Total assets | 11,330 | 1,706 | 130 | 13,166 |
| Total assets include: Investments in associates Additions to non-current assets |
87 | - | - | 87 |
| (other than financial instruments and deferred tax assets) |
718 | 222 | 1 | 941 |
IFRS 8 requires entity wide disclosures to be made about the regions in which it earns its revenues and holds its non-current assets which are shown below.
| For the year ended 30 September 2011 |
United Kingdom |
Europe | USA | South East Asia |
All other regions |
Total |
|---|---|---|---|---|---|---|
| Revenues | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| By entities' country of domicile By country from which derived |
13,277 12,245 |
- 980 |
436 436 |
2,282 2,330 |
- 4 |
15,995 15,995 |
| Non-current assets By entities' country of domicile |
4,182 | - | 5 | 277 | - | 4,464 |
at 30 September 2012
| 2012 | 2011 | |
|---|---|---|
| £'000 Staff costs, including Directors, were as follows: |
£'000 | |
| 4,037 Wages and salaries |
4,014 | |
| Employer's social security costs and similar taxes 376 |
365 | |
| Defined contribution pension cost 332 |
320 | |
| Share based payment expense – equity settled 11 |
3 | |
| 4,756 | 4,702 | |
| Number The average monthly number of employees during the year was as follows: |
Number | |
| Manufacturing 104 |
102 | |
| Sales, marketing and administration 73 |
84 | |
| 177 | 186 |
Details of Directors' emoluments, pension contributions and interests in share options are given in the Directors' Remuneration Report set out on pages 13 to 16.
| 5 | Finance income | 2012 £'000 |
2011 £'000 |
|
|---|---|---|---|---|
| Bank interest receivable on short term deposits | 26 | 36 |
| 2012 £'000 This is arrived at after charging/(crediting): |
2011 £'000 |
|---|---|
| Depreciation of property, plant and equipment 496 |
530 |
| 117 Amortisation of intangible assets |
99 |
| Research and development expenditure written off 402 |
393 |
| Operating lease rentals - land and buildings 76 |
76 |
| Operating lease rentals - vehicles 80 |
62 |
| Foreign exchange losses 11 |
8 |
| 11 Share based payment expense |
3 |
| Profit on disposal of fixed assets (11) |
(31) |
| Auditors' remuneration - for the audit of these accounts 47 |
47 |
| - for tax compliance services 6 |
6 |
| - for other non-audit services 5 |
5 |
| Note | 2012 £'000 |
2011 £'000 |
|
|---|---|---|---|
| Corporation tax credit | (56) | (65) | |
| Adjustment in respect of (over) / under provision in prior years | (9) | 2 | |
| Total corporation tax | (65) | (63) | |
| Deferred tax – origination and reversal of temporary differences | 16 | (182) | (92) |
| Income tax credit | (247) | (155) | |
| The charge for the year can be reconciled to the (loss) / profit per the income statement as follows: |
|||
| (Loss) / profit before tax | (984) | 34 | |
| Effect of: | |||
| Expected tax charge based on the standard rate of corporation tax in the UK of 25% (2011: 27%) Additional deduction for R&D expenditure |
(246) (85) |
9 (70) |
|
| Expenses not deductible for tax purposes | 13 | 26 | |
| Difference in deferred tax rates Other short term timing differences |
(4) (1) |
(33) (80) |
|
| Unrelieved tax losses | - | (9) | |
| Surrender of losses for R&D tax credit | 85 | - | |
| Adjustments in respect of prior periods | (9) | 2 | |
| Income tax credit | (247) | (155) | |
| Dividends | 2012 | 2011 | |
| Final 2011 dividend of 1.0 pence (2010: 1.25 pence) per ordinary share paid and proposed during the year relating to the |
£'000 | £'000 | |
| previous year's results | 106 | 132 | |
| Interim dividend of 1.0 pence (2011: 1.0 pence) per ordinary share paid during the year |
105 | 105 | |
| 211 | 237 |
The Directors are proposing a final dividend of 0.5 pence (2011: 1.0 pence) per share. This will result in a final dividend totalling £52,800 (2011: £105,000), subject to approval by the shareholders at the Annual General Meeting. This dividend has not been accrued at the balance sheet date.
9 (Loss) / earnings per ordinary share
| The calculation of the basic and diluted (losses) / earnings per share is based on the following data: |
2012 £'000 |
2011 £'000 |
|
|---|---|---|---|
| Numerator (Loss) / profit for the purposes of basic earnings per share being (Loss) / profit after tax attributable to members of Titon Holdings Plc |
(721) | 171 | |
| Denominator Weighted average number of ordinary shares for the purposes of basic |
Number | Number | |
| (loss) / earnings per share – at the beginning and end of the year | 10,555,650 | 10,555,650 | |
| (Loss) / earnings per share (pence) | |||
| Basic | (6.83p) | 1.62p | |
| Diluted | (6.83p) | 1.62p |
No employee options have been included in the calculation of diluted EPS because their exercise is contingent on the satisfaction of certain criteria that had not been met at the end of the year. The total number of options in issue is disclosed in the note 24.
| Freehold land and buildings |
Improvements to leasehold property |
Plant and equipment |
Motor vehicles |
Total | ||
|---|---|---|---|---|---|---|
| Cost | £'000 | £'000 | £'000 | £'000 | £'000 | |
| At 1 October 2010 Additions Disposals |
3,453 - - |
56 5 - |
6,669 383 (140) |
616 82 (179) |
10,794 470 (319) |
|
| At 1 October 2011 Additions Disposals |
3,453 - - |
61 - - |
6,912 296 (139) |
519 31 (139) |
10,945 327 (278) |
|
| At 30 September 2012 | 3,453 | 61 | 7,069 | 411 | 10,994 | |
| Depreciation At 1 October 2010 Charge for the year Disposals |
913 64 - |
52 4 - |
5,619 386 (140) |
466 76 (177) |
7,050 530 (317) |
|
| At 1 October 2011 Charge of the year Disposals |
977 64 - |
56 5 - |
5,865 371 (138) |
365 56 (111) |
7,263 496 (249) |
|
| At 30 September 2012 | 1,041 | 61 | 6,098 | 310 | 7,510 | |
| Net book value At 30 September 2012 |
2,412 | - | 971 | 101 | 3,484 | |
| At 30 September 2011 | 2,476 | 5 | 1,047 | 154 | 3,682 |
The Directors are not aware of any events or changes in circumstances during the year which would have a significant impact on the carrying value of the Group's property, plant and equipment at the balance sheet date.
At 30 September 2012, the Group had entered into contractual commitments for the acquisition of plant and equipment amounting to £45,000 (2011: £43,000).
| Development | |||||
|---|---|---|---|---|---|
| costs | |||||
| Computer | (Internally | ||||
| software | generated) | Goodwill | Patents | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Cost | |||||
| At 1 October 2010 | 312 | 139 | - | - | 451 |
| Additions Additions arising from |
196 | 69 | - | - | 265 |
| Business Combinations | - | - | 78 | 128 | 206 |
| Disposals | (14) | - | - | - | (14) |
| At 1 October 2011 | 494 | 208 | 78 | 128 | 908 |
| Additions | 207 | 88 | - | 10 | 305 |
| Disposals | (8) | - | - | - | (8) |
| At 30 September 2012 | 693 | 296 | 78 | 138 | 1,205 |
| Amortisation | |||||
| At 1 October 2010 | 197 | 40 | - | - | 237 |
| Charge for the year | 6 | 46 | - | 47 | 99 |
| Disposals | (14) | - | - | - | (14) |
| At 1 October 2011 | 189 | 86 | - | 47 | 322 |
| Charge for the year | 8 | 59 | - | 50 | 117 |
| Disposals | (8) | - | - | - | (8) |
| At 30 September 2012 | 189 | 145 | - | 97 | 431 |
| Net book value at 30 September 2012 | 504 | 151 | 78 | 41 | 774 |
| At 30 September 2011 | 305 | 122 | 78 | 81 | 586 |
The Group has contractual commitments for computer software costs of £nil (2011 - £31,000). All assets have an average useful economic life of 4.2 years (2011 3.6 years) except for Goodwill which has an indefinite useful economic life.
The Directors are not aware of any events or changes in circumstances during the year which would have a significant impact on the carrying value of the Group's intangible assets at the balance sheet date.
A list of the investments in subsidiaries, including the name, country of incorporation and proportion of ownership is given in note 5 to the Parent Company's separate financial statements.
The following entity meets the definition of an associate, the Group considers it has power to exercise significant influence, and have been equity accounted in these consolidated financial statements:
| Name of associate | Country of incorporation |
Proportion of voting rights held at 30 September 2011 and 2012 |
|---|---|---|
| Browntech Sales Co. Ltd | South Korea | 49% |
The remaining 51% shareholding of Browntech Sales Co. Ltd is held by South Korean investors who, through their voting shares, have operational control of the company.
The Group's share of the aggregated amounts relating to associates is as follows:
| 2012 £'000 |
2011 £'000 |
|
|---|---|---|
| Total Assets | 436 | 464 |
| Total Liabilities | 477 | 466 |
| Revenues | 1,386 | 1,509 |
| Loss | (39) | (7) |
The associate Browntech Sales Co. Ltd has been included based on audited financial statements drawn up to for the year to 30 September 2012. Transactions between the associate and the Group are set out in note 25.
The Group's investment in the associate at 30 September 2012 includes £197,000 (2011: £197,000) of goodwill.
| 14 Inventories | 2012 £'000 |
2011 £'000 |
|---|---|---|
| Raw materials and consumables Work in progress Finished goods and goods for resale |
899 111 1,568 |
772 120 1,701 |
| 2,578 | 2,593 |
No inventories (2011: £nil) are carried at fair value less costs to sell.
The carrying value of inventory represents cost less appropriate provisions. During the year there was a net debit of £33,000 (2011: net debit of £8,000) to the Consolidated Income in relation to the inventory provisions. The movements in the inventory provisions are included within cost of sales in the Consolidated Income Statement.
| 15 Trade and other receivables | 2012 £'000 |
2011 £'000 |
|
|---|---|---|---|
| Trade receivables Related parties receivables Loans to related parties Other receivables Prepayments and accrued income |
2,314 537 112 77 93 |
2,498 482 109 109 85 |
|
| Total trade and other receivables | 3,133 | 3,283 |
Other than the amounts due from related parties there were no significant concentrations of credit at either 30 September 2012 or 30 September 2011.
The average credit period taken on sale of goods by trade debtors is 62 days (2011: 56 days).
The Directors are confident that the loans to related parties will be repaid and therefore the carrying amount of the loans are approximate to their fair value.
The carrying amount of a financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of a provision account. When a trade receivable is considered uncollectible, it is written off against the provision account. Subsequent recoveries of amounts previously written off are credited against the provision account. Changes in the carrying amount of the provision account are recognised in the income statement.
| Movement on the provision for impairment of trade | 2012 | 2011 |
|---|---|---|
| receivables are as follows: | £'000 | £'000 |
| At the beginning of the year | 67 | 78 |
| Provision for receivables impairment | 68 | 92 |
| Receivables written off during the year as uncollectible | (44) | (88) |
| Unused amounts reversed | (2) | (15) |
| At the end of the year | 89 | 67 |
As at 30 September 2012 trade receivables of £1,006,000 (2011: £937,000) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these receivables is as follows:
| 2012 £'000 |
2011 £'000 |
||
|---|---|---|---|
| Up to 3 months 3 up to 6 months |
989 17 |
935 2 |
|
| 1,006 | 937 |
As at 30 September 2012 trade receivables of £89,000 (2011: £67,000) were past due and impaired. These relate to a number of customers. The ageing analysis of these receivables is as follows:
| 2012 £'000 |
2011 £'000 |
|
|---|---|---|
| Up to 3 months | 44 | 54 |
| 3 up to 6 months | 6 | - |
| 6 up to 12 months | 39 | 13 |
| 89 | 67 |
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 23% (2011: 25%). The movement on the deferred tax account is as shown below:
| Accelerated capital allowances |
Trading losses |
Other temporary differences |
Total | |
|---|---|---|---|---|
| £'000 | £'000 | £'000 | £'000 | |
| At 1 October 2010 | 477 | - | (28) | 361 |
| Deferred tax arising on business combination | - | 35 | 35 | |
| Charge / (credit) to the income statement | (33) | - | (59) | (92) |
| At 1 October 2011 | 444 | - | (52) | 392 |
| Credit to the income statement | (53) | (98) | (31) | (182) |
| At 30 September 2012 | 391 | (98) | (83) | 210 |
| 2012 £'000 |
2011 £'000 |
|
|---|---|---|
| Trade payables Other payables Other tax and social security taxes Accruals |
1,394 251 390 443 |
1,747 203 386 287 |
| 2,478 | 2,623 |
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. Year end trade payables represent 50 days (2011: 56 days) average purchases.
The Directors consider that the carrying amount of trade payables is approximate to their fair value.
| 2012 £'000 |
2011 £'000 |
|
|---|---|---|
| Authorised 13,600,000 ordinary shares of 10p each |
1,360 | 1,360 |
The Company's issued and fully paid ordinary shares of 10p during the year is:
| 2012 Number |
2012 £'000 |
2011 Number |
2011 £'000 |
||
|---|---|---|---|---|---|
| At the beginning and end of the year | 10,555,650 | 1,056 | 10,555,650 | 1,056 |
Options have been granted over the following number of ordinary shares which were outstanding:
| Date granted | Exercise Price |
Number of shares |
Exercisable between | |||
|---|---|---|---|---|---|---|
| 21.05.04 | 91.0p | 18,150 | 21.05.07 | and | 21.05.14 | |
| 18.05.05 | 99.0p | 16,300 | 18.05.08 | and | 18.05.15 | |
| 18.05.06 | 91.0p | 35,300 | 18.05.09 | and | 18.05.16 | |
| 16.05.07 | 127.5p | 3,150 | 17.05.10 | and | 17.05.17 | |
| 09.06.11 | 48.0p | 259,950 | 09.06.14 | and | 09.06.21 | |
| At 30 September 2012 | 332,850 | |||||
| At 30 September 2011 | 442,150 |
No share options were exercised between 30 September 2012 and 13 December 2012
The Group has floating rate financial assets which comprise treasury deposits, cash to finance its operations together with the retained profits generated by operating companies (refer to the 'Financial Assets' note on page 32 for further details).
The Group has no long term borrowings and any available cash surpluses are placed on deposit. The Group uses cash on deposit to manage short term liquidity risks which may arise.
The Group's floating rate financial assets net of overdrafts (see below) at 30 September were:
| Currency | 2012 £'000 |
2011 £'000 |
|
|---|---|---|---|
| Sterling | 1,612 | 2,653 | |
| US Dollar | 179 | 105 | |
| Euro | 14 | 56 | |
| South Korean Won | 8 | 33 | |
| 1,813 | 2,847 | ||
The Sterling financial assets had a weighted average interest rate of 1.1% (2011: 1.1%), which was arranged monthly. The remainder comprise bank current accounts.
The Group's floating rate financial liabilities at 30 September 2012 comprise solely of a Sterling bank overdraft in the sum of £27,000 (2011: £17,000) repayable on demand. This liability is offset against bank deposits for the purposes of interest payment calculation.
The Board considers the fair value of the Group's financial assets and liabilities to be the same as their book value.
The group is exposed through its operations to credit risk, foreign exchange risk and liquidity risk.
In common with other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note, read in conjunction with the 'Capital Management' section of the Directors' Report on page 8, describes the Group's objectives, policies and processes for managing those risks. Further quantitative information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks from previous periods unless otherwise stated in this note.
The principal financial instruments used by the Group, from which financial instrument risks arise are trade receivables, cash at bank, bank overdrafts, trade and other payables and loans to related parties.
The Board has overall responsibility for the determination of the Group's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group's finance function. The Audit Committee reviews and reports to the Board on the effectiveness of policies and processes put in place. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out over the page.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from credit sales. It is Group policy, implemented locally, to assess the credit risk of new customers before entering contracts. Such credit ratings are taken into account by local business practices.
The Group's finance function has established a credit policy under which each new customer is analysed individually for creditworthiness before the Group's standard payment and delivery terms and conditions are offered. The Group's review includes external ratings, when available, and trade references. Purchase limits are established for each customer, which represents the maximum open amount without requiring senior management's approval. These limits are reviewed on a on-going basis. Customers that fail to meet the Group's benchmark creditworthiness may transact with the Group on a prepayment basis.
Credit risk also arises from cash and cash equivalents and deposits with banks. The Group has cash and cash equivalents with banks with a minimum "A" rating.
Quantitative disclosures of the credit risk exposure in relation to Trade and other receivables, which are neither past due nor impaired, are disclosed in note 15.
Liquidity risk arises from the Group's management of working capital in that the Group may encounter difficulty in meeting its financial obligations as they fall due. The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain cash balances to meet expected requirements for a period of 90 days or longer. The Board receives cash flow projections as well as information regarding cash balances. At the balance sheet date, these projections indicated that the Group expected to have sufficient liquid resources to meet its obligations under all reasonably expected circumstances.
The liquidity risk of each Group entity is managed locally. Each operation has a facility with the Group, the amount of the facility being based on budgets. The budgets are set locally and agreed by the Board in advance, enabling the Group's cash requirements to be anticipated. Where facilities of Group entities need to be increased, approval must be sought from the Board.
Foreign exchange risk arises because the Group has operations located in various parts of the world whose functional currency is not the same as the functional currency in which the Group companies are operating. Although its global market penetration reduces the Group's operational risk in that it has diversified into several markets, the Group's net assets arising from such overseas operations are exposed to currency risk resulting in gains or losses on retranslation into Sterling. Only in exceptional circumstances would the Group consider hedging its net investments in overseas operations as generally it does not consider that the reduction in foreign currency exposure warrants the cash flow risk created from such hedging techniques.
Foreign exchange risk also arises when individual Group entities enter into transactions denominated in a currency other than their functional currency.
The Group's policy is, where possible, to allow Group entities to settle liabilities denominated in their functional currency (primarily Pound Sterling or US Dollar) with the cash generated from their own operations in that currency. Where Group entities have liabilities denominated in a currency other than their functional currency (and have insufficient reserves of that currency to settle them) cash already denominated in that currency will, where possible, be transferred from elsewhere within the Group.
The Group has two overseas subsidiaries in the USA and the South Korea. Their revenues and expenses, other than those incurred with the UK business, are primarily denominated in their functional currency. The Board does not believe that there are any significant risks arising from the movements in exchange rates with these companies due to the insignificance to the Group of their net assets.
More than 95% of sales from the Group's UK business are invoiced in Sterling. Purchases made by the UK business from four overseas suppliers are invoiced to the Group in the local currency of that supplier.
The Group leases its headquarters offices in Stanway, Essex on a tenant repairing lease basis. The Group has the option to renew the lease at its expiry in March 2014. The two year tenancy of the factory unit in South Korea ends in February 2014. The Group also leases cars as lessee under non-cancellable operating leases with various terms, escalation clauses and renewal rights.
At the year end the Group had total commitments under non-cancellable operating leases, principally in respect of properties, as set out below:
| Operating leases which expire within: | 2012 £'000 |
2011 £'000 |
|---|---|---|
| Not later than one year | 4 | 114 |
| Later than one year and not later than five years | 278 | 130 |
| 282 | 244 |
The table below provides an analysis of net cash and cash equivalents during the year ended 30 September:
| 2012 £'000 |
2011 £'000 |
|
|---|---|---|
| Cash available on demand | 1,580 | 273 |
| Short-term deposits | 260 | 2,591 |
| Cash at bank | 1,840 | 2,864 |
| Overdraft | (27) | (17) |
| 1,813 | 2,847 | |
| Net decrease in cash equivalents | (1,034) | (263) |
| Cash and cash equivalents at beginning of year | 2,847 | 3,110 |
| Cash and cash equivalents at end of year | 1,813 | 2,847 |
The acquisition of certain intangible assets during 2011 constituted a significant non-cash transaction.
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in independently administered funds. The pension cost charge represents contributions payable by the Group to these funds during the year (see note 4). The unpaid contributions outstanding at the year end, included in accruals (note 17) are £26,000 (2011: £26,000).
The Group provides share option schemes for Directors and for other members of staff.
There are presently two equity settled share option schemes; one Inland Revenue approved and the other unapproved in which employees may be invited to participate. Both of these schemes were introduced in March 2010. The exercise of options granted under these schemes is dependent upon the growth in the earnings per share of the Group, over any three consecutive financial years following the date of grant, exceeding the growth in the retail price index over the same period by at least 9 per cent.
In accordance with IFRS 2, the fair value of outstanding equity settled share based option awards to employees, which have been granted after 7 November 2002, but not vested as at 1 January 2005, are recognised as an expense to the income statement.
The vesting period of all share option schemes is three years. If the options remain unexercised after a period of ten years from the date of grant, or on an employee leaving the group, the options expire.
Details of the share options outstanding during the year are as follows:
| 2012 | 2012 | 2011 | 2011 | |
|---|---|---|---|---|
| Number of share options |
Weighted average exercise price (pence) |
Number of share options |
Weighted average exercise price (pence) |
|
| Outstanding at beginning of year | 442,150 | 63.3p | 192,200 | 99.8p |
| Granted during the year | - | - | 259,950 | 48.0p |
| Lapsed during the year | (109,300) | 103.1p | (10,000) | 103.5p |
| Outstanding at the end of the year | 332,850 | 58.2p | 442,150 | 69.3p |
There were no share options which met the conditions of exercise, mentioned above, during the year (2011: nil).
The options outstanding at 30 September 2012 had a weighted average price of 58.2p (2011: 69.3p) and a weighted average remaining contractual life of 7.4 years (2011: 6.4 years). No share options were granted in the year to 30 September 2012. The charge to the income statement for the options granted in previous years was £11,000 (2011: £3,000).
The Black-Scholes option pricing model has been used for calculating the fair value of the Group's share options. The calculated fair values of the share option awards are adjusted to reflect actual and expected vesting levels.
at 30 September 2012
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
Key management who hold the authority and responsibility for planning, directing and controlling activities of the Group are comprised solely of the Directors. There were no transactions, agreements or other arrangements, direct or indirect, during the year in which the Directors had any interest. Their remuneration is disclosed in the Remuneration Report on page 15 of this document.
The Non-executive Directors receive a fee for their services to the Titon Holdings Plc Board as disclosed in the Directors' Remuneration Report.
Transactions for the year between the subsidiary companies and the associate company, which is a related party, were as follows:
| Sale of goods | Amount owed by related party |
||||
|---|---|---|---|---|---|
| 2012 £'000 |
2011 £'000 |
2012 £'000 |
2011 £'000 |
||
| Browntech Sales Co. Ltd | 1,916 | 2,282 | 537 | 482 |
The Group expects trading debts between subsidiaries and associates to be settled on a standard commercial basis. In addition, Titon Holdings Plc has provided Browntech Sales Co. Ltd with a £100,000 unsecured loan (see note 11 of the Parent company financial statements).
at 30 September 2012
| 2012 | 2011 | ||
|---|---|---|---|
| Note | £'000 | £'000 | |
| Fixed assets | |||
| Tangible assets | 4 | 2,440 | 2,514 |
| Investments in subsidiaries | 5 | 550 | 550 |
| Investments in associates | 5 | 225 | 225 |
| 3,215 | 3,289 | ||
| Current assets | |||
| Debtors | 6 | 3,951 | 2,846 |
| Cash at bank and in hand | 1,470 | 2,591 | |
| 5,421 | 5,437 | ||
| Creditors: amounts falling due within one year | 7 | (93) | (96) |
| Net current assets | 5,328 | 5,341 | |
| Total assets less current liabilities | 8,543 | 8,630 | |
| Capital and reserves | |||
| Called up share capital | 9 | 1,056 | 1,056 |
| Share premium account | 10 | 865 | 865 |
| Capital redemption reserve | 10 | 56 | 56 |
| Profit and loss account | 10 | 6,566 | 6,653 |
| Equity shareholders' funds | 10 | 8,543 | 8,630 |
The notes on pages 50 to 54 form part of these financial statements.
These financial statements were approved and authorised for issue by the Board on 13 December 2012 and signed on its behalf by:
Chairman
at 30 September 2012
Titon Holdings Plc (the Company) is incorporated in the United Kingdom under the Companies Act 2006. The address and the registered office are given on page 60.
The separate financial statements of the Company are presented as required by the Companies Act 2006. They have been prepared under the historical cost convention, except for the treatment of certain financial instruments, in accordance with applicable United Kingdom Generally Accepted Accounting Principles (UK GAAP) and law.
Items of property and other fixed assets are stated at cost or deemed cost less accumulated depreciation (see below).
Depreciation is provided to write off the cost, less estimated residual values, of all tangible fixed assets, except freehold land, over their expected useful lives. It is calculated, on a straight line basis, at the following annual rates:
Freehold buildings - 2% Motor vehicles - 25%
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exception:
Deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than
The Company provides share option schemes for Directors and for other Group employees.
The fair value of the employee services received in exchange for the grant of options is recognised as an expense to the profit and loss account. The amount expensed to the profit and loss account over the vesting period is determined by reference to the fair value of the options, excluding the impact of any nonmarket vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each
Fixed asset investments are held at cost less any provision for impairment.
The Company has taken advantage of the exemption allowed under FRS 26 'Financial Instruments: Recognition and Measurement', not to restate within the parent company accounts details of financial instruments as these are included within the Group's consolidated financial statements.
The carrying values of tangible fixed assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If there is any impairment to the value of tangible fixed assets a charge is recognised in the profit and loss account.
not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
balance sheet date the Company revises its estimates of the number of options awards that are expected to vest. The impact of the revision of original estimates, if any, is recognised in the profit and loss account, with a corresponding adjustment to equity shareholders' funds. No adjustment is made for failure to achieve market vesting conditions.
Disclosures in respect of share-based payments are made in note 24 of the Group Consolidated Financial Statements.
As permitted by section 408(3) of the Companies Act 2006 the Company has elected not to present its own profit and loss account for the year. Titon Holdings Plc reported a profit after tax for the financial year ended 30 September 2012 of £113,000 (2011: £134,000).
| Staff costs, including Directors, were as follows: | £'000 | £'000 | |
|---|---|---|---|
| Wages and salaries | 536 | 499 | |
| Employer's social security costs and similar taxes | 67 | 57 | |
| Defined contribution pension cost | 68 | 64 | |
| Share based payment expense - equity settled | 11 | 3 | |
| 682 | 623 | ||
| The average monthly number of employees during the year | Number | Number | |
| was as follows: | 9 | 9 |
The Directors' emoluments for the period are disclosed in the Directors' Remuneration Report on page 15 of this document.
| Freehold land and buildings |
Motor vehicles |
Total | |
|---|---|---|---|
| Cost | £'000 | £'000 | £'000 |
| At beginning of year | 3,454 | 83 | 3,537 |
| Additions | - | 31 | 31 |
| Disposals | - | (53) | (53) |
| At end of year | 3,454 | 61 | 3,515 |
| Depreciation | |||
| At beginning of year | 978 | 45 | 1,023 |
| Charge for the year | 64 | 13 | 77 |
| Disposals | - | (25) | (25) |
| At end of year | 1,042 | 33 | 1,075 |
| Net book value at 30 September 2012 |
2,412 | 28 | 2,440 |
| At 30 September 2011 | 2,476 | 38 | 2,514 |
Investments comprise direct shareholdings of the ordinary share capital in the following principal subsidiaries, all of which are included in the Consolidated Financial Statements:
| Name of subsidiary | Principal activity | Country of incorporation |
Proportion of voting rights held at 30 September 2011 & 2012 |
|---|---|---|---|
| Titon Hardware Limited | Design, manufacture and marketing of window fittings and ventilators |
England | 100% |
| Titon Inc. | Distribution of Group products | USA | 100% |
| Titon Korea Co. Ltd | Manufacture of window ventilators | South Korea | 51% |
For the subsidiaries listed above, the country of operation is the same as the country of incorporation.
| 2012 £'000 |
2011 £'000 |
|
|---|---|---|
| At the beginning and end of the year | 550 | 550 |
The following entities meet the definition of an associate company and have been equity accounted in the consolidated financial statements:
| Name of associate | Principal activity | Country of incorporation |
rights held at 30 | Proportion of voting September 2011 & 2012 |
|---|---|---|---|---|
| Browntech Sales Co. Ltd | Marketing of window ventilators | South Korea | 49% | |
| 2012 £'000 |
2011 £'000 |
|||
| At the beginning and end of the year | 225 | 225 |
| 2012 £'000 |
2011 £'000 |
|
|---|---|---|
| Other debtors | 7 | 13 |
| Deferred tax (note 8) Amounts owed by subsidiaries |
9 3,823 |
5 2,719 |
| Amounts owed by associated undertakings (note 11) | 112 | 109 |
| 3,951 | 2,846 |
Amounts owed by subsidiaries are repayable on demand.
| 2012 £'000 |
2010 £'000 |
|---|---|
| Accruals and deferred income 93 |
96 |
| 93 | 96 |
Deferred tax is calculated in full on timing differences under the liability method using a tax rate of 23% (2011: 27%). The movement on the deferred tax account is as shown below:
| At 30 September 2012 | 9 | |
|---|---|---|
| Credit to the income statement | 4 | |
| At 1 October 2011 | 5 | |
| £'000 | ||
| Accelerated capital allowances |
The movement during the year on the Company's issued and fully paid ordinary shares of 10p each was as follows:
| 2012 Number |
2012 £'000 |
2011 Number |
2011 £'000 |
||
|---|---|---|---|---|---|
| At the beginning and end of the year | 10,555,650 | 1,056 | 10,555,650 | 1,056 |
| Share capital |
Share premium reserve |
Capital redemption reserve |
Profit and loss account |
Total equity |
|
|---|---|---|---|---|---|
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| At 30 September 2011 | 1,056 | 865 | 56 | 6,653 | 8,630 |
| Profit for the year | - | - | - | 113 | 113 |
| Share-based payment expense | - | - | - | 11 | 11 |
| Dividends paid | - | - | - | (211) | (211) |
| At 30 September 2012 | 1,056 | 865 | 56 | 6,566 | 8,543 |
Included within retained earnings is £111,000 of goodwill (2011: £111,000) arising on business combinations in prior years, and prior to the implementation of FRS 10.
The Company provided Browntech Sales Co. Ltd with a £100,000 unsecured loan in September 2008 which was repayable with interest at 3% p.a. within 3 years. The period of the loan has been extended with repayment due in October 2013. The gross amount receivable at 30 September 2012 was £112,000 (2011: £109,000)
The Company has taken advantage of the exemption conferred by FRS8 not to disclose transactions with whollyowned members of the Group.
| 2012 £'000 |
2011 £'000 |
2010 £'000 |
2009 £'000 |
2008 £'000 |
||
|---|---|---|---|---|---|---|
| Results | ||||||
| Revenue | 14,548 | 15,995 | 15,609 | 14,053 | 16,375 | |
| Gross Profit | 2,880 | 3,619 | 4,171 | 3,060 | 3,572 | |
| Operating (loss) / profit | (971) | 5 | 668 | (219) | (148) | |
| Finance income | 26 | 36 | 29 | 37 | 101 | |
| Share of losses from associate | (39) | (7) | (91) | (28) | (12) | |
| (Loss) / profit before tax | (984) | 34 | 606 | (210) | (59) | |
| Income tax credit / (expense) | 247 | 155 | (199) | 8 | (205) | |
| (Loss) / profit after tax | (737) | 189 | 407 | (202) | (264) | |
| Dividends | 211 | 237 | 211 | 211 | 301 | |
| Basic (loss) / earnings per share | (6.83p) | 1.62p | 3.85p | (1.91p) | (2.50p) | |
| Assets Employed | ||||||
| Property, plant & equipment | 3,484 | 3,682 | 3,744 | 3,972 | 4,395 | |
| Net funds | 1,813 | 2,847 | 3,110 | 3,096 | 2,546 | |
| Net current assets | 5,101 | 6,156 | 6,304 | 5,811 | 5,827 | |
| Financed by | ||||||
| Shareholders' funds : all equity | 9,066 | 9,981 | 10,013 | 9,806 | 10,230 |
The five year summary does not form part of the audited financial statements.
If you are in any doubt as to what action to take, you should consult your stockbroker, solicitor, accountant or other appropriate independent professional adviser authorised under the Financial Services and Markets Act 2000. If you have sold or otherwise transferred all of your shares in Titon Holdings Plc, please forward this document and the accompanying documents to the person through whom the sale or transfer was effected, for transmission to the purchaser or transferee.
Notice is hereby given that the Annual General Meeting of Titon Holdings Plc ("the Company") will be held at the Titon Factory and Showroom premises at Falconer Road, Haverhill, Suffolk, CB9 7XU on 19 February 2013 at 11.00 a.m. for the following purposes:
To resolve as Ordinary Resolutions:
To re-elect Mr David Alan Ruffell, who retires from the Board in accordance with Article 104, as a Director of the Company.
To re-appoint BDO LLP as Auditors of the Company and to authorise the Directors to determine their remuneration.
To consider and, if thought fit, to pass the following resolutions, of which Resolutions 6 and 7 will be proposed as an Ordinary Resolution and Resolutions 8 and 9 will be proposed as Special Resolutions.
8.2 otherwise than pursuant to paragraph 8.1 up to an aggregate nominal amount of £50,000 (representing approximately 4.7% of the nominal value of the ordinary shares in issue on 13 December 2012);
but the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after this power expires and the Directors may allot equity securities in pursuance of such offer or agreement as if this power had not expired.
This power applies in relation to a sale of shares which is an allotment of equity securities by virtue of section 560(2)(b) of the Companies Act 2006 as if in the first paragraph of this resolution the words "pursuant to the authority conferred by Resolution 6" were omitted.
13 December 2012
Registered Office International House Peartree Road Stanway Colchester Essex CO3 0JL
K A Ritchie (Group Chairman) D A Ruffell (Chief Executive) T N Anderson N C Howlett C S Jarvis
J N Anderson (Deputy Chairman) P W E Fitt P E O'Sullivan
D A Ruffell International House Peartree Road Stanway Colchester Essex CO3 0JL
1604952 (Registered in England & Wales)
www.titonholdings.com
BDO LLP Lockton House Clarendon Road Cambridge CB2 8FH
Boodle Hatfield LLP 80 New Bond Street London W1S 1DA
Capita Registrars Ltd Northern House Woodsome Park Fenay Bridge Huddersfield HD8 0LA
Barclays Bank Plc Witham Business Centre Witham, Essex CM8 2AT
T I T O N H O L D I N G S P L C International House, Peartree Road, Stanway, Colchester, Essex CO3 0JL Tel: +44 (0)1206 713800 Fax: +44 (0)1206 543126 Email: [email protected] Web: www.titonholdings.com
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