Annual Report and Accounts - Hemscott IR

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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
TRAVIS PERKINS ANNUAL REPORT AND ACCOUNTS 2012 Substantial shareholdings As at 31 December 2012, the Company had been notified of the following interests amounting to 3% or more of the voting rights in the issued ordinary share capital of the Company. Number % Scottish Widows Investment Partnership Ltd 14,858,234 6.08% Sprucegrove Investment Management Ltd 13,506,856 5.53% Pzena Investment Management LLC 10,080,127 4.13% Investec Ltd. 9,159,663 3.75% Dimensional Fund Advisors LP 9,022,439 3.69% Sanderson Asset Management Ltd 8,926,940 3.65% Legal & General Investment Management Ltd (UK) 8,735,399 3.57% Standard Life Investments Ltd 7,891,153 3.23% AXA Investment Managers UK 7,559,946 3.09% As at 27 March 2013, the Company had been notified of the following interests amounting to 3% or more of the voting rights in the issued ordinary share capital of the Company. Number % Nominations Committee report. The Company has an equal opportunities policy aimed at ensuring that employment decisions are based on ability and potential regardless of gender, race, colour, ethnic origin, sexual orientation, age or disability. In particular, applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the person concerned. In the event of a member of staff becoming disabled, every effort is made to ensure that their employment with the Group continues and that appropriate training is arranged. It is the policy of the Company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees. The Group’s policies and practices have been designed to keep employees informed on matters relevant to them as employees through regular meetings and newsletters. Employee representatives are consulted regularly on a wide range of matters affecting their interests. All employees with more than three months’ service are eligible to participate in the Company’s Sharesave and Buy As You Earn plans. Details are provided in the Directors’ Remuneration Report. Political donations The Group did not give any money for political purposes nor did it make any donations to political organisations or incur any political expenditure during the year. Scottish Widows Investment Partnership Ltd 16,068,747 6.56% Sprucegrove Investment Management Ltd 13,413,946 5.48% TIAA Group 10,058,410 4.11% Pzena Investment Management LLC 9,298,675 3.80% Dimensional Fund Advisors LP 9,097,983 3.71% Sanderson Asset Management Ltd 8,949,207 3.65% Legal & General Investment Management Ltd (UK) 8,569,743 3.50% AXA S.A. 8,404,654 3.43% Investec Ltd 7,751,263 3.16% Morgan Stanley & Co Inc 7,435,324 3.04% Close company status The close company provisions of the Income and Corporation Taxes Act 1988 do not apply to the Company. Employees and charitable donations Statements on these matters are contained in the Chief Executive’s review of the year on pages 20 to 28 and in the Deputy Chief Executive’s review of the year on page 35. Details of the number of employees and related costs can be found in note 7 to the financial statements. The Company is committed to equality of opportunity and recognises the benefit of diversity within its workforce. Its approach to the matter of diversity on company boards is set out in the Supplier payment policy The Group’s policy is to pay all of its suppliers in accordance with established terms. Group trade creditors at 31 December 2012 represented 53 days (31 December 2011: 57 days) of average purchases of goods and services. The Company’s trade creditors at 31 December 2012 represented 30 days (2011: 30 days). Auditor Resolutions to re-appoint Deloitte LLP as the Company’s auditor and to authorise the Directors to fix the auditor’s remuneration will be proposed at the Annual General Meeting. Statement on disclosure of information to the auditor Each of the persons who is a director at the date of approval of this report confirms that: • So far as the director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and • The director has taken all reasonable steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006. Share capital and change of control As at 31 December 2012 the Company had an allotted and fully paid share capital of 244,853,057 ordinary shares of 10 pence each, with an aggregate nominal value of £24,485,306 (including shares owned by the employee share ownership trust). The ordinary shares are GOVERNANCE 77
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Chairman’s Statement FOR THE YEAR
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Annual Report and Accounts - Hemscott IR

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