Financial Statements - Chemring Group PLC
Financial Statements - Chemring Group PLC Financial Statements - Chemring Group PLC
C H E M R I N G G R O U P P L CDirectors’ Remuneration Report- continuedShare OptionsThe holdings by the executive directors of share options granted under The Chemring 1998 Executive Share Option Schemeat 1 November 2002 and 31 October 2003 are shown below.At1 Nov2002GrantedduringtheyearNumber of share optionsLapsedduring Exercisedthe during theyear yearAt31 Oct2003Exerciseprice (p)Marketprice atdate ofexercise (p)DatefromwhichexercisableExpirydateD R Evans100,000---100,000236-3 Feb 20032 Feb 2010T W Hayter54,000---54,000380.5-23 Jan 200522 Jan 2012P A Rayner50,000---50,000236-3 Feb 20032 Feb 2010The market price of the Company’s ordinary shares at 31 October 2003 was 378.5p. During the year, the ordinary shares tradedwithin the range 218.5p to 433.5p.PensionsThe following table sets out the pension benefits accrued by the executive directors during the year.Totalaccruedbenefit at31 Oct 2002Transfervalue ofaccruedbenefit at31 Oct2002Increase in accruedbenefit during yearbefore inflationTotalaccruedbenefit at31 Oct 2003Transfervalue ofaccruedbenefit at31 Oct2003Increase in accruedbenefit during yearafter inflationTransfervalue ofincreasein accruedbenefit afterinflation(lessmembers’contributions)Increase intransfervalueduringyear (lessmembers’contributions)Pension(£p.a.)Cash(£)(£)Pension(£p.a.)Cash(£)Pension(£p.a.)Cash(£)(£)Pension(£p.a.)Cash(£)(£)(£)D R Evans81,476108,8041,340,9965,6537,17487,129115,9781,495,9903,0394,34553,181154,066T W Hayter---2,4757,4252,4757,42518,9542,4757,42514,03114,031P A Rayner9,51928,556107,3972,1346,40311,65334,959134,9761,8875,6608,69627,084i) Transfer values represent liabilities of the applicable scheme, and do not represent sums paid to the individuals.ii) Transfer values have been calculated on the basis of actuarial advice. During the year, the basis on which transfer values are calculated was updated.For consistency, all transfer values have been calculated on the new basis, based on financial conditions at the respective dates.iii) As referred to previously, Mr Hayter only joined the Staff Pension Scheme on 1 October 2003 but his benefits have been backdated to 1 November 2001.The figures above represent his total accrued benefits.Approval of the Directors’ Remuneration ReportThe Directors’ Remuneration Report was approved by the Board on 2 February 2004.Signed on behalf of the BoardK C Scobie - Chairman of the Remuneration CommitteeP 18
2 0 0 3 F I N A N C I A L S T A T E M E N T SStatement on Corporate GovernanceThis statement sets out how theCompany has applied the fourteenprinciples of good governance set outin Part 1 of the Combined Code, andwhether or not the Company hascomplied throughout its accountingperiod with the provisions set out inPart 2 of the Combined Code.Application of thePrinciples of theCombined CodeThe Board of DirectorsThe Board currently comprises threeexecutive and three non-executivedirectors. The Board, which meetsformally at least ten times a year,approves the Group’s long term goalsand strategies and provides overallfinancial and organisational control.Matters specifically reserved to theBoard include acquisitions anddisposals, financing, major capitalexpenditure and approval of annualbudgets.All directors are entitled to takeindependent advice in furtherance oftheir duties at the Company’s expenseif the need should arise, and eachdirector has full access to the adviceand services of the Company Secretary.The Company meets the cost ofappropriate training for directors andnewly-appointed directors are providedwith detailed information on theirduties and responsibilities.The Company separates the roles ofChairman and Chief Executive inaccordance with the recommendationsof the Combined Code. TheCombined Code requires that themajority of non-executive directorsshould be independent of managementand free from any business or otherrelationship which could materiallyinterfere with the exercise of theirindependent judgment. The Boardbelieves that all three non-executivedirectors currently satisfy theserequirements.The non-executive directors performan essential role in safeguardingshareholders’ interests by monitoringthe Group’s performance and itsexecutive management. In addition toparticipating in Board meetings, theyare the members of the standingcommittees set up to deal with auditand the remuneration of executivedirectors and senior management.The Board is satisfied that the presentbalance of executive andnon-executive influence which existsis appropriate for the Company, takinginto account its size and status.Directors’ RemunerationDetails of the Company’s policy ondirectors’ remuneration are set out inthe Directors’ Remuneration Reporton pages 14 to 18.Relations with ShareholdersThe Company encourages dialoguewith institutional shareholders throughregular briefing meetings and formalpresentations following the release ofinterim and annual results.Communication with private investorsis achieved largely through themedium of the interim report and thefinancial statements. The Company’swebsite (www.chemring.co.uk) alsoprovides financial and businessinformation on the Group.All directors are available to takequestions from shareholders or addressany concerns at the AGM. At othertimes of the year, the directors can becontacted via the Company’s headoffice.Financial ReportingThe statement of directors’responsibilities in respect of thefinancial statements and accountingrecords maintained by the Company isset out on page 13.Internal ControlThe Combined Code has introduced arequirement that the directors reviewthe effectiveness of the Group’s systemsof internal control at least annually.This extends the previous requirementsin respect of internal financial controlsto cover all controls includingoperational controls, compliance andrisk management.The Board acknowledges itsresponsibility for the Group’s systems ofinternal control and attachesconsiderable importance to thesesystems, which are designed to meet theGroup’s particular needs and identifythose risks to which it is exposed.However, the systems can only providereasonable, not absolute, assuranceagainst material misstatement, loss ormismanagement of the Group’s assets.In carrying out its review of theeffectiveness of the Group’s systems ofinternal control, the Board has takeninto consideration the following keyfeatures of the Group’s riskmanagement systems and controlprocedures which operated duringthe year:P 19
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C H E M R I N G G R O U P P L CDirectors’ Remuneration Report- continuedShare OptionsThe holdings by the executive directors of share options granted under The <strong>Chemring</strong> 1998 Executive Share Option Schemeat 1 November 2002 and 31 October 2003 are shown below.At1 Nov2002GrantedduringtheyearNumber of share optionsLapsedduring Exercisedthe during theyear yearAt31 Oct2003Exerciseprice (p)Marketprice atdate ofexercise (p)DatefromwhichexercisableExpirydateD R Evans100,000---100,000236-3 Feb 20032 Feb 2010T W Hayter54,000---54,000380.5-23 Jan 200522 Jan 2012P A Rayner50,000---50,000236-3 Feb 20032 Feb 2010The market price of the Company’s ordinary shares at 31 October 2003 was 378.5p. During the year, the ordinary shares tradedwithin the range 218.5p to 433.5p.PensionsThe following table sets out the pension benefits accrued by the executive directors during the year.Totalaccruedbenefit at31 Oct 2002Transfervalue ofaccruedbenefit at31 Oct2002Increase in accruedbenefit during yearbefore inflationTotalaccruedbenefit at31 Oct 2003Transfervalue ofaccruedbenefit at31 Oct2003Increase in accruedbenefit during yearafter inflationTransfervalue ofincreasein accruedbenefit afterinflation(lessmembers’contributions)Increase intransfervalueduringyear (lessmembers’contributions)Pension(£p.a.)Cash(£)(£)Pension(£p.a.)Cash(£)Pension(£p.a.)Cash(£)(£)Pension(£p.a.)Cash(£)(£)(£)D R Evans81,476108,8041,340,9965,6537,17487,129115,9781,495,9903,0394,34553,181154,066T W Hayter---2,4757,4252,4757,42518,9542,4757,42514,03114,031P A Rayner9,51928,556107,3972,1346,40311,65334,959134,9761,8875,6608,69627,084i) Transfer values represent liabilities of the applicable scheme, and do not represent sums paid to the individuals.ii) Transfer values have been calculated on the basis of actuarial advice. During the year, the basis on which transfer values are calculated was updated.For consistency, all transfer values have been calculated on the new basis, based on financial conditions at the respective dates.iii) As referred to previously, Mr Hayter only joined the Staff Pension Scheme on 1 October 2003 but his benefits have been backdated to 1 November 2001.The figures above represent his total accrued benefits.Approval of the Directors’ Remuneration ReportThe Directors’ Remuneration Report was approved by the Board on 2 February 2004.Signed on behalf of the BoardK C Scobie - Chairman of the Remuneration CommitteeP 18
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