Annual Report and Accounts - Hemscott IR

Directors’ Report
FOR THE YEAR ENDED 31 December 2012
The Directors present their annual report and audited accounts
for the year ended 31 December 2012. The Corporate Governance
statement on pages 57 to 60 forms part of the Directors’ report.
Principal activities
Travis Perkins is one of the largest builder’s merchants and home
improvement retailers in the UK. The principal activities of the Group
are the sale of timber, building materials, and plumbing and heating
products, and the hiring of tools, to the building trade, industry
generally and the general public, within the United Kingdom. The
Directors are not aware, at the date of this report, of any likely major
changes in the Group’s activities in the next year.
Business review
A review of the Group’s position, developments and future prospects
is contained in the Chairman’s statement on pages 18 and 19, the
Chief Executive’s review of the year on pages 20 to 28, the Deputy
Chief Executive’s review of the year on pages 30 to 36 and the Finance
Director’s review of the year on pages 38 to 43. A review of the Group’s
environmental performance is on pages 46 to 49.
Results and dividends
The Group results for the year ended 31 December 2012 and dividends
for the year ending 31 December 2012 are set out on page 82. If
approved, the final dividend will be paid on 30 May 2013 to those
shareholders on the register at the close of business on 3 May 2013.
Balance sheet and post balance sheet events
The balance sheet on pages 84 and 85 shows the Group’s financial
position. No significant events have occurred since the balance
sheet date.
Principal risks and uncertainties
A review of the Group’s principal risks and uncertainties are on pages
44 and 45.
Financial risk management
Details of the Group’s approach to capital management and the
alleviation of risk through the use of financial instruments are
given in the Finance Director’s Review of the Year on pages 38 to
43. Specific quantitative information on borrowings and financial
instruments is given in notes 23 and 24 on pages 112 to 118 of the
annual financial statements.
Directors and their interests
In accordance with the Company’s Articles of Association, Tony
Buffin will be standing for election by shareholders at the Annual
General Meeting, having been appointed to the Board since the last
Annual General Meeting. The Board believes that Tony Buffin’s
exceptionally strong track record in financial management, corporate
finance and in creating and achieving organic growth strategies will
greatly benefit the Company, complement the skills of the other
Board members, and make him an excellent choice as Group Finance
Director. His biographical details are set out on page 54.
The UK Corporate Governance Code (‘the Code’) requires that
all directors of FTSE 350 companies are subject to re-election at
the Company’s Annual General Meeting each year, and therefore
executive directors, Geoff Cooper and John Carter, and non executive
directors Robert Walker, Chris Bunker, John Coleman, Andrew
Simon and Ruth Anderson will all seek re-election at the Annual
General Meeting. Philip Jansen will not seek re-election because as
explained on page 58 he will be retiring from the Board at the end of
the meeting.
After 22 years in senior finance roles, including the last 17 years
as the Company’s Group Financial Director, Paul Hampden Smith
resigned as a director on 28 February 2013. He has agreed to continue
in our employment until September 2013, to ensure a smooth and
complete handover to his successor, Tony Buffin.
The names of the Directors at 31 December 2012, together with
their biographical details are set out on pages 54 and 55. All of these
Directors held office throughout the year. Tony Buffin was appointed
with effect from 8 April 2013. The executive directors have rolling 12
month notice periods in their contracts. The non executive directors
do not have service contracts. In the light of the formal evaluation of
their performances as a result of the process described on page 58,
Robert Walker, Chairman, confirms on behalf of the Board that all
directors continue to be effective in, and committed to, their roles.
Directors and officers of the Company are entitled to be
indemnified out of the assets of the Company in respect of any
liability incurred in relation to the affairs of the Company, or any
associate company, to the extent the law allows. In this regard,
the Company is required to disclose that under article 140 of the
Company’s Articles of Association, the Directors have the benefit of
an indemnity, to the extent permitted by the Companies Act 2006
against liabilities incurred by them in the execution of their duties
and exercise of their powers. This indemnity is currently in force. In
addition, if proceedings against directors are instituted subsequent
to any person acquiring control of the Company, the Company has
agreed with each of the Directors that pursuant to article 140(D) of
the Company’s Articles of Association, the Company shall provide
a Director with funds (subject to certain restrictions) to meet
expenditure incurred by that Director in defending any criminal or
civil proceedings.
A copy of the Company’s Articles of Association (which contains
this indemnity) is available for inspection at the Company’s
registered office during normal business hours and will be available
for inspection at (and during the period of 30 minutes prior to) the
Company’s forthcoming Annual General Meeting.
None of the Directors had an interest in any contract to which the
Company or any of its subsidiaries was a party during the year.
The Company has undertaken to comply with the best practice
on approval of directors’ conflicts of interests in accordance with the
Company’s Articles of Association. These provisions have operated
effectively. Under the Companies Act 2006, a director must avoid a
situation where he has, or can have, a direct or indirect interest that
conflicts, or possibly may conflict, with the Company’s interests.
The disclosable interests of Directors at 31 December 2012,
including holdings, if any, of spouses and of children aged under 18,
were as detailed in the Directors’ Remuneration Report on pages 72
to 74.
76