Chemring Group PLC |Annual Report and Accounts 2012

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A world-leading defence company Chemring is a global group that specialises in the manufacture of energetic material products and countermeasures. We provide solutions for highly demanding customer requirements in defence, security and safety markets. We are a world‐leading defence company involved in advanced development programmes in the UK, USA, Europe and Australia. Highlights $579 million HMDS IDIQ contract award The most significant contract of the year was NIITEK’s $579 million HMDS IDIQ contract. This three year contract, with an initial order worth $161 million, provides the US Department of Defense with the means to procure spares and replacement systems to replenish theatre sustainment stock, as well as providing new systems for the US Army, the US Marine Corps, and US Government supported Foreign Military Sales. A second delivery order worth $32 million was awarded to NIITEK in December 2012. For more information see page 8 Key orders for Chemring Detection Systems In the US, Chemring Detection Systems won two key orders for its chemical and biological detection systems. The first, announced in February 2012, was a $29 million contract to supply over one hundred Joint Services Lightweight Stand-off Chemical Agent Detectors (JSLSCAD) for the US Army’s Stryker Nuclear Biological Chemical Reconnaissance Vehicle (NBCRV). The second was a $49 million contract award to supply Joint Biological Point Detection Systems (JBPDS) for installation on Stryker NBCRVs and US Navy ships such as the USS Ross (DDG 71). For more information see page 9 Chemring Australia’s new facility opened Chemring Australia opened its new manufacturing facility at its site near Melbourne, which creates a sovereign capability to manufacture flares for Australia’s aircraft, and ensures a surge capacity to meet operational requirements in the future. The facility was commissioned in June 2012 and, by the end of the year, had successfully delivered 50,000 flares to the Commonwealth of Australia. This facility will also produce flares for the F-35 Joint Strike Fighter when it enters service, and will operate as a second source to Kilgore for this product. For more information see page 10 Chemring Group PLC Report and Accounts 2012
1 Financial performance Revenue – continuing operations 2011 £740.3m +2% £597.1m Underlying profit before tax* 2012 2010 2009 £70.1m -42% 2010 Underlying earnings per ordinary share* 2009 £503.9m £740.3m ** £724.1m ** 2012 £70.1m ** £118.7m 2011 £120.2m ** £105.5m 2012 2011 50.0p 28.5p -43% ** 2010 2009 28.5p ** * Before acquisition and disposal related costs, restructuring and incident costs, profit on disposal of business, impairment of goodwill, intangible amortisation arising from business combinations and gain on fair value movements on derivatives ** Excluding discontinued operations 43.5p 49.8p Business review Corporate governance Financial statements Other information Contents Business review Chemring at a glance 2 Chairman’s statement 4 Our strategy 6 • Counter-IED 8 • Countermeasures 10 • Pyrotechnics 12 • Munitions 14 Financial review 16 Key performance indicators 20 Principal risks and uncertainties 21 Corporate responsibility review 24 Corporate governance Directors and corporate information 28 Directors’ report 30 Directors’ remuneration report 33 Statement on corporate governance 48 Financial statements Independent auditors’ report to the members of Chemring Group PLC 53 Consolidated income statement 54 Consolidated statement of comprehensive income 55 Consolidated statement of changes in equity 56 Consolidated balance sheet 57 Consolidated cash flow statement 58 Notes to the consolidated cash flow statement 59 Notes to the group financial statements 60 Independent auditors’ report on the parent company financial statements 97 Parent company balance sheet (under UK GAAP) 98 Parent company statement of total recognised gains and losses 99 Reconciliation of movements in shareholders’ funds 99 Notes to the parent company financial statements 100 Other information Glossary 106 Chemring Group PLC Report and Accounts 2012
Page 1: Chemring Group PLC | Annual Report
Page 5 and 6: 3 Business review Corporate governa
Page 7 and 8: 5 Balance sheet, cash flow and debt
Page 9 and 10: 7 Secondly, we will maintain a stro
Page 11 and 12: 9 evaluation of its RVIS remote vis
Page 13 and 14: 11 for flight-tests on the Typhoon
Page 15 and 16: 13 A400 is a thermite incendiary gr
Page 17 and 18: 15 US Energetic Materials Qualifica
Page 19 and 20: 17 addition, profit at Alloy Surfac
Page 21 and 22: 19 Overall working capital decrease
Page 23 and 24: 21 Principal risks and uncertaintie
Page 25 and 26: 23 Risk description Competitive ris
Page 27 and 28: 25 to 0.80 this year. In absolute t
Page 29 and 30: 27 The Group is involved with a num
Page 31 and 32: 29 The Rt Hon Lord Freeman*~ Non-Ex
Page 33 and 34: 31 All holders of ordinary shares a
Page 35 and 36: 33 Directors’ remuneration report
Page 37 and 38: 35 The Committee aims to align the
Page 39 and 40: 37 Element Non-executive directors
Page 41 and 42: 39 Planned application of the polic
Page 43 and 44: 41 Service contracts and policy on
Page 45 and 46: 43 Implementation section (audited)
Page 47 and 48: 45 Long term incentives Details of
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51 Nomination Committee Mr P Hickso
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53 Independent auditors’ report t
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55 Consolidated statement of compre
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57 Consolidated balance sheet as at
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61 Accounting convention The financ
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63 Deferred tax liabilities are rec
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65 that no impairment has occurred
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67 A segmental analysis of revenue
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69 Operating profit is stated after
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71 The total charge for the year ca
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73 movements on derivatives, net of
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75 14. Other intangible assets Deve
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77 If stated under historical cost
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79 The average credit period taken
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81 22. Obligations under finance le
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83 Liquidity risk The table below d
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85 Analysed as: Included in current
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87 26. Deferred tax The following a
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89 The following awards were outsta
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91 33. Discontinued operations The
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93 Amounts recognised in the income
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95 The principal assumptions used i
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97 Independent auditors’ report o
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99 Parent company statement of tota
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101 2. Tangible assets Land and bui
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103 6. Creditors due within one yea
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105 12. Staff costs 2012 Number 201
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Notes 107 Business review Corporate
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Business review Corporate governanc
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Chemring Group PLC |Annual Report and Accounts 2012

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