Chemring Group PLC |Annual Report and Accounts 2012

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70 Financial statements Notes to the group financial statements 7. Staff costs The average monthly number of employees within each category (including executive directors) was: 2012 Number 2011 Number Production 3,332 3,445 Administration, sales and marketing 883 847 4,215 4,292 At the year end the number of employees was 4,193 (2011: 4,679). The costs incurred in respect of these employees (including share-based payments) were: 2012 £m 2011 £m Wages and salaries 160.3 150.9 Social security costs 21.9 20.6 Other pension costs 7.6 7.8 189.8 179.3 There has been an increase in wages and salaries expense since 2011, despite a slight fall in average staff numbers. This is largely due to the acquisition of Chemring Detection Systems part way through the prior year. This company has higher than average staff costs compared to the Group as a whole, increasing average wages and salaries accordingly for the second half of 2011 and all of 2012. 8. Finance income 2012 £m 2011 £m Bank interest 0.1 0.1 9. Finance expense 2012 £m 2011 £m Bank overdraft and loan interest 4.0 1.6 Loan notes interest 15.1 15.5 Medium term loan interest 1.0 0.5 Finance lease interest 0.3 0.4 Amortisation of debt finance costs 1.6 1.5 Unwinding of discount on provisions (see note 25) 0.2 0.3 Interest cost of retirement benefit obligations (see note 34) 0.8 0.7 Capitalised interest on qualifying assets (see note 15) (4.6) (4.7) 18.4 15.8 Borrowing costs included in the cost of qualifying assets during the year are calculated by applying a capitalisation rate of 7% (2011: 7%) to expenditure on such assets. 10. Tax 2012 £m 2011 £m Current tax charge (5.7) (12.5) Deferred tax credit/(charge) (see note 26) 0.1 (2.9) Current year tax charge for continuing operations (5.6) (15.4) The tax charge relating to discontinued operations amounted to £0.5 million (2011: £1.5 million). Income tax in the UK is calculated at 24.9% (2011: 26.8%) of the estimated assessable profit for the year. Tax for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. Chemring Group PLC Report and Accounts 2012
71 The total charge for the year can be reconciled to the income statement as follows: Profit before tax for the year for continuing operations 18.8 85.4 Tax at the UK corporation tax rate of 24.9% (2011: 26.8%) (4.7) (22.9) (Expenses not deductable)/income not chargeable for tax purposes (2.5) 1.0 Changes in tax rates 2.1 2.1 Research and development tax relief 1.3 1.2 Utilisation and recognition of tax losses (3.0) 5.1 Non-taxable disposal of subsidiaries 5.2 - Prior period adjustment 3.5 - Overseas profits taxed at rates different to the UK standard rate (7.5) (1.9) Total current year tax charge for continuing operations (5.6) (15.4) In addition to the income tax expense charged to the income statement, a tax credit of £1.4 million (2011: tax credit of £1.4 million) has been recognised in equity in the year. The effective rate of tax incurred by the Group is 28.4% (2011: 18.6%), and the underlying* effective rate of tax incurred by the Group is 21.5% (2011: 22.9%). The increase in the statutory effective rate since 2011 is a result of the tax treatment of exceptional items and goodwill amortisation. * Before acquisition and disposal related costs, business 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 2012 £m 2011 £m Business review Corporate governance Financial statements Other information 11. Dividends 2012 £m 2011 £m Dividends on ordinary shares of 1p each Final dividend for the year ended 31 October 2011 10.8p (2010: 8.4p) 20.8 14.9 Interim dividend for the year ended 31 October 2012 5.3p (2011:4.0p) 10.3 7.8 Total dividends 31.1 22.7 The proposed final dividend in respect of the year ended 31 October 2012 of 4.2p per share will, if approved, absorb approximately £8.1 million of shareholders’ funds. The dividend is subject to approval by shareholders at the Annual General Meeting and accordingly has not been included as a liability in these financial statements. Chemring Group PLC Report and Accounts 2012
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Chemring Group PLC | Annual Report
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1 Financial performance Revenue - c
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3 Business review Corporate governa
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5 Balance sheet, cash flow and debt
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7 Secondly, we will maintain a stro
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9 evaluation of its RVIS remote vis
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11 for flight-tests on the Typhoon
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13 A400 is a thermite incendiary gr
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15 US Energetic Materials Qualifica
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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
Page 49 and 50: 47 Directors’ shareholdings To re
Page 51 and 52: 49 The appointment and removal of t
Page 53 and 54: 51 Nomination Committee Mr P Hickso
Page 55 and 56: 53 Independent auditors’ report t
Page 57 and 58: 55 Consolidated statement of compre
Page 59 and 60: 57 Consolidated balance sheet as at
Page 61 and 62: 59 Notes to the consolidated cash f
Page 63 and 64: 61 Accounting convention The financ
Page 65 and 66: 63 Deferred tax liabilities are rec
Page 67 and 68: 65 that no impairment has occurred
Page 69 and 70: 67 A segmental analysis of revenue
Page 71: 69 Operating profit is stated after
Page 75 and 76: 73 movements on derivatives, net of
Page 77 and 78: 75 14. Other intangible assets Deve
Page 79 and 80: 77 If stated under historical cost
Page 81 and 82: 79 The average credit period taken
Page 83 and 84: 81 22. Obligations under finance le
Page 85 and 86: 83 Liquidity risk The table below d
Page 87 and 88: 85 Analysed as: Included in current
Page 89 and 90: 87 26. Deferred tax The following a
Page 91 and 92: 89 The following awards were outsta
Page 93 and 94: 91 33. Discontinued operations The
Page 95 and 96: 93 Amounts recognised in the income
Page 97 and 98: 95 The principal assumptions used i
Page 99 and 100: 97 Independent auditors’ report o
Page 101 and 102: 99 Parent company statement of tota
Page 103 and 104: 101 2. Tangible assets Land and bui
Page 105 and 106: 103 6. Creditors due within one yea
Page 107 and 108: 105 12. Staff costs 2012 Number 201
Page 109 and 110: Notes 107 Business review Corporate
Page 111 and 112: Business review Corporate governanc
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