2009 Annual Report - CRH

which mature after more than one
year. In addition, at year-end the
Group held €1.6 billion of undrawn
committed facilities, which had an
average maturity of 2 years.
At year-end 2009, 96% of the
Group’s cash, short-term deposits
and liquid resources had a
maturity of six months or less.
Shareholders’ Equity
The increase of €1.55 billion in total
shareholders’ equity (capital and
reserves attributable to CRH’s equity
shareholders) during 2009 reflects the
proceeds of €1.24 billion from the
March 2009 Rights Issue. The total
movements in equity for the year
are analysed in the Consolidated
Statement of Changes in Equity
(a new primary financial statement)
on page 64 of this Report.
Employee Benefits
The assets and liabilities (excluding
related deferred tax) of the defined
benefit pension schemes operated by
various Group companies, computed
in accordance with IAS 19, have been
included on the face of the balance
sheet under retirement benefit
obligations. At end-2009, the net
deficit on these schemes amounted
to €454 million (2008: €414 million);
after deducting the related deferred
tax asset, the net liability amounted to
€351 million (2008: €320 million). The
net liability expressed as a percentage
of market capitalisation decreased
from 3.4% at year-end 2008 to 2.6%
at year-end 2009, reflecting primarily
the impact of the March 2009 Rights
Issue.
Share Price
The Company’s Ordinary Shares
traded in the range €12.55 to €20.70
during 2009. The year-end share price
was €19.01 (2008: €16.10 restated).
Shareholders recorded a gross return
of 22% (dividends and capital
appreciation) during 2009 following
returns of -22% in 2008, -23% in
2007, +29% in 2006, +28% in 2005
and +23% in 2004.
CRH is one of six building materials
companies included in the FTSE
Eurotop 300, a market capitalisationweighted
index of Europe’s largest
300 companies. At year-end 2009,
CRH’s market capitalisation of
€13.3 billion (2008: €9.5 billion)
placed it among the top 3 building
materials companies worldwide.
Insurance
Group headquarters advises management
on different aspects of risk and
monitors overall safety and loss
prevention performance; operational
management is responsible for the
day-to-day management of business
risks. Insurance cover is held for all
significant insurable risks and against
major catastrophe. For any such events,
the Group generally bears an initial
cost before external cover begins.
Legal Proceedings
Group companies are parties to
various legal proceedings, including
some in which claims for damages
have been asserted against the
companies. The final outcome of all
the legal proceedings to which Group
companies are party cannot be
accurately forecast. However, having
taken appropriate advice, we believe
that the aggregate outcome of such
proceedings will not have a material
effect on the Group’s financial
condition, results of operations or
liquidity.
Financial Risk Management
The Board of Directors sets the
treasury policies and objectives of the
Group, which include controls over
the procedures used to manage
financial market risks. These are set
out in detail in note 21 to the financial
statements.
Financing Activity
In March 2009, the Group issued
approximately 152 million new
Ordinary Shares at €8.40 per share
under the terms of a 2 for 7 Rights
Issue. The total proceeds from this
issue, net of expenses, amounted to
€1.24 billion.
In May 2009, as part of its ongoing
financing strategy, CRH completed its
first transaction in the Eurobond
market with the successful issue of
€750 million notes with a coupon of
7.375% and expiring in May 2014.
This issue further enhances the
Group’s debt maturity profile.
These actions, combined with the
Group’s strong focus on cash
generation, excellent working capital
management and restrained capital
expenditure, leave CRH wellpositioned
in terms of debt facilities
and maturity profile. CRH remains
committed to maintaining an
investment grade credit rating.
Currency Management
The bulk of the Group’s net worth
(capital and reserves attributable to
equity holders) is denominated in the
world’s two largest currencies – the
US Dollar and the euro – which
accounted for 37% and 34%
respectively of the Group’s net worth
at end-2009.
2009 saw a negative €96 million
currency translation effect on foreign
currency net worth which includes a
€120 million favourable translation
impact on net foreign currency debt.
Sarbanes-Oxley Act
As a result of its NYSE Listing, CRH is
subject to the provisions of Section 404
of the Sarbanes-Oxley Act of 2002,
which requires management to
perform an annual assessment of the
effectiveness of internal control over
financial reporting and to report its
conclusions in the Company’s Annual
Report on Form 20-F, filed with the
Securities and Exchange Commission.
For the year ended 31st December
2008, management concluded that the
Company’s internal control over
financial reporting was effective. As
required by US law, Ernst & Young
audited the effectiveness of the
Company’s controls over financial
reporting for 2008 and issued an
unqualified opinion thereon.
Management’s assessment and the
auditors’ report on the effectiveness
of internal controls for the year ended
31st December 2009 will be included in
the 2009 Annual Report on Form 20-F.
CRH 39