TIDMMGGT
RNS Number : 8582H
Meggitt PLC
27 March 2020
Date: 27 March 2020
Meggitt PLC
("the Company")
Publication of Annual Report and Accounts 2019 and the Notice of
the 2020 Annual General Meeting
The Company has today published the following documents:
- Annual Report and Accounts for the year ended 31 December 2019; and
- Notice of the 2020 Annual General Meeting ("AGM").
In compliance with LR 9.1.7R, the Annual Report and Accounts for
the year ended 31 December 2019 and the Notice of the 2020 Annual
General Meeting have been submitted to the UK Listing Authority via
the National Storage Mechanism and will shortly be available for
public inspection at www.morningstar.co.uk/uk/NSM . Both documents
are available on the Group's website at
https://www.meggitt.com/investors/ .
As announced this morning, the directors of the Company are no
longer recommending a final dividend for the year ended 31 December
2019 and therefore intend to withdraw resolution number 4 as set
out in the Notice of AGM.
Shareholders should continue to monitor the Company's website
and announcements for updates in relation to the AGM.
Annual General Meeting
When we approved our AGM notice and went to print earlier this
month, we had anticipated being able to convene our AGM in a way
which would have allowed shareholders attend in person (albeit with
certain measures in place to protect our shareholders and
employees). However, in light of the coronavirus (COVID-19)
pandemic and, in particular, following the announcement by the UK
Prime Minister on 23 March 2020 prohibiting public gatherings, the
Company advises that only the formal business set out in the notice
of meeting will be considered at the AGM and attendance will be
limited to a bare quorum comprised of three officers or employees
of the Company. The Company regrets that these are necessary steps
to take, but it is important to comply with the law and take the
steps necessary to slow the spread of coronavirus (COVID-19) and
protect the health and safety of shareholders, employees and the
wider community, while maintaining the efficient functioning of the
Company in these challenging times.
The directors of the Company strongly encourage shareholders to
vote by proxy on all of the matters of business by appointing the
Chairman of the Meeting as their proxy by submitting a proxy
appointment in accordance with the instructions in the notice of
meeting. Questions can be sent to shareholders@meggitt.com and the
answers will appear in the AGM section of our shareholder centre
https://www.meggitt.com/investors/shareholder-centre/ as soon as
practicable after the meeting.
The results of the AGM will also be announced as soon as
practicable following the meeting.
The directors of the Company hope that all its members and
stakeholders remain safe and well and thank you for your
co-operation and understanding during these challenging and
unprecedented times.
Additional information
The appendices to this announcement contain further information
required by Disclosure Guidance and Transparency Rule 6.3.5. This
information is drawn entirely from Meggitt's full-year results for
the year ended 31 December 2019/Annual Report and Accounts for 2019
which are available at https://www.meggitt.com/investors/ and were
published on 25 February 2020 , and consequently did not address
all of the risks associated with coronavirus (COVID-19) .
References in the appendices below refer to the page and note
references in the Annual Report and Accounts for 2019.
Enquiries:
Meggitt PLC
Marina Thomas, Group Company Secretary (
marina.thomas@meggitt.com )
Katie Lewis, Senior Assistant Company Secretary (
katie.lewis@meggitt.com )
Simon Grant, Assistant Company Secretary (
simon.r.grant@meggitt.com )
APPIX A
Principal risks and uncertainties (reproduced from Meggitt's
Annual Report and Accounts for 2019)
The Group's strategic objectives can only be achieved if certain
risks are taken and managed effectively. We have listed below the
most significant risks that may affect our business, although there
may be other risks - of which the Group is unaware or are
considered less significant - which may affect our performance. The
potential impacts of each of our principal risks were considered as
part of the viability stress testing and considered to be
consistent with, analogous to or less significant than the
scenarios modelled.
Strategic priorities
1 Strategic Portfolio
2 Customers
3 Competitiveness
4 Culture
Change in risk
- Increase
- No change
-- Decrease
Risk velocity
H High: Impact within 6 months of risk occurring
M Medium: Impact between 6 and 36 months of risk occurring
L Low: Impact after more than 36 months of risk occurring
KPIs
-- Financial performance (organic revenue growth, underlying
operating profit, ROTA, ROCE, underlying EPS growth and free cash
flow)
-- R&D investment
-- TRIR (total recordable incident rate)
-- Inventory turns
Strategic risks
Risk Description Impact How we manage it
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Business model Failure to respond Decreased
2 - M to fundamental revenue * Alignment of Group, divisional and functional
changes and profit. strategy processes.
KPIs: in our aerospace
* Financial performance business model,
primarily * Dedicated full-service aftermarket organisation.
the evolving
* R&D investment aftermarket.
This includes more * Long-term customer agreements including SMART
durable parts Support(R) packages to create tailored solutions for
requiring customers throughout the product lifecycle enabling
less frequent more effective performance monitoring and more
replacement, predictable pricing.
a growing supply
of surplus parts,
OE customers seeking * Investment in research and development to maintain
greater control of and enhance Meggitt's intellectual property.
their aftermarket
supply chain and
accelerated pace
of new aircraft
deliveries
leading to the
earlier
retirement of older
aircraft.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Industry changes Significant variation Volatility
1 - M in demand for air in underlying * Demand is managed by monitoring external economic and
KPIs: travel and/or our profitability. commercial environment and long-lead indicators
* Financial performance products due to whilst maintaining focus on balanced portfolio.
aerospace
and defence business
downcycles * EASA (European Aviation Safety Agency) has issued
coinciding; "third country" certification to allow continued
serious political, trading with our European customers post-Brexit.
economic, pandemic
or terrorist events;
greenhouse gas * Reduction in Group carbon footprint through new
emission facilities and more efficient production processes.
regulations or
shifting
societal attitudes * Maintaining sufficient headroom in committed credit
to air travel; or facilities and against covenants in those facilities
industry whilst implementing appropriate cost-base contingency
consolidation plans.
that materially
changes
the competitive
landscape.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Technology strategy Failure to develop Restriction
1 - L and implement of ability * Management of technology development plans that align
KPIs: meaningful to compete technology readiness, market needs and financial
* Financial performance technology strategies on new returns using a gated process.
to meet evolving programmes
industry, customer with consequent
* R&D investment and societal demands. decrease * Recruiting and training first-class engineers and
in revenue scientists with appropriate technology skills.
and profit.
* Budgets focused on longer-term technology
developments.
* Leveraging our R&D budget through partnerships
including government, academia and other companies.
* Allocation of 2/3rds of innovation budget to
sustainable solutions.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Operational risks
------------------------------------------------------------------------------------------------------------------------------------------
Quality escape/ Defective product Decreased
equipment failure leading to in-service revenue * System safety analysis, verification and validation
3 - H failure, accidents, and profit, policy and processes, combined with quality and
the grounding of damage to customer audits and industry certifications.
KPIs: aircraft or prolonged operational
* Financial performance production shut-downs performance
for the Group and and reputation. * Meggitt Production System.
its customers.
* Supplier quality assurance process.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Business interruption A catastrophic event Decreased
3 - H such as natural revenue * Group-wide business continuity and crisis management
KPIs: disasters, and profit, plans, subject to regular testing.
* Financial performance including earthquake damage to
(the Group has a operational
significant performance * Comprehensive insurance programme, renewed annually
operational and reputation. and subject to property risk assessment visits.
presence in Southern
California),
hurricane
or fire; military
conflict or terrorist
activity; or a
pandemic
could lead to
infrastructure
disruption and/ or
property damage which
prevents the Group
from fulfilling its
contractual
obligations.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Project/programme Failure to meet new Failure
management product development to deliver * Rigorous commercial and technological reviews of bids
3 - M programme milestones financial and contractual terms before entering into
KPIs: and certification returns programmes.
* Financial performance requirements and against
successfully investment
transition and/ or * Continuous review of programme performance through
* R&D investment new products into significant the Programme Lifecycle Management (PLM) process
manufacturing as financial including:
production rates penalties
increase. This also leading
covers lower than to decreased * regular monitoring of the end-market performance of
expected production profit and key OE programmes;
volumes, including damage to
programme reputation.
cancellations * internal review process, to stress-test readiness to
or delays, notably proceed at each stage of key programmes; and
the 737 MAX.
* regular monitoring of the financial health of
customers.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Customer satisfaction Failure to meet Failure
2 - M customers' to win future * Creation of a customer-facing organisational
cost, quality and programmes, structure including a dedicated aftermarket division.
KPIs: delivery standards decreased
* Financial performance or qualify as revenue
preferred and profit. * Regular monitoring of customer scorecards and
suppliers. ensuring responsiveness to issues via Voice of the
* Inventory turns Customer process.
* Functional excellence in operations, project
management and engineering.
* Increased utilisation of low-cost manufacturing base.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Acquisition integration/ Failure to Decreased
performance effectively revenue * Internal pre-acquisition due diligence supplemented
3 - M integrate and profit. by external experts.
KPIs: acquisitions
* Financial performance and failure to
realise * Increase in local capabilities to manage production
financial returns ramp-up and delivery of the financial model,
from the advanced including cost synergies, under Group project
composites management office (PMO) oversight.
acquisitions.
* Standard Meggitt processes implemented as part of a
proven post-merger process led by incumbent
divisional management, supported by experienced
dedicated operational teams with a senior oversight
committee.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Cyber breach A breach of IT Decreased
1 - H security revenue * IT security infrastructure, policies and procedures.
KPIs: due to increasingly and profit,
* Financial performance more sophisticated damage to
cyber crime/terrorism operational * Group--wide intellectual property protection
resulting in performance programme.
intellectual and reputation.
property or other
sensitive information * Management of third--party service providers and
being lost, made risks, including resilience and disaster recovery
inaccessible, processes.
corrupted
or accessed by
unauthorised * Rolling programme of system upgrades (including SAP
users. This also implementation) to replace legacy systems.
includes the loss
of critical systems
such as SAP due to * Defined patching schedule and policy with monitoring
poorly executed capability to ensure that vulnerabilities are
implementation identified and appropriately patched.
or change of control;
poor maintenance,
business continuity
or back--up
procedures
and the failure of
third parties to
meet service level
agreements.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Supply chain Failure or inability Decreased
1 - M of critical suppliers revenue * Supplier excellence framework combined with
KPIs: to supply unique and profit, integrated commercial and procurement approach to
* Financial performance products, damage to contractual terms and conditions including
capabilities operational development of long--term agreements.
or services performance
* Inventory turns preventing and reputation.
the Group from * Local sourcing strategy to improve operational
satisfying efficiency and minimise potential impacts and
customers or meeting disruption from cross--border tariffs.
contractual
requirements.
* Maintenance of buffer inventory for critical and
sole--source suppliers.
* Implementation of measures to mitigate counterfeit
and fraudulent parts at high--risk facilities.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Group change management Failure to Decreased
3 - M successfully, revenue * PMO oversight of large capital projects.
KPIs: simultaneously, and profit,
* Financial performance deliver increased
the significant costs, damage * Dedicated site consolidation and property management
change to operational teams for Ansty Park.
* Inventory turns programmes currently performance
in process and and reputation.
planned, * Regular monitoring by Executive Leadership Team
including site through operational and project reviews.
consolidation
activity such as
Ansty Park and * MPS implementation at new/expanded sites.
investments
in new carbon
manufacturing
facilities in the
USA.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
People Failure to attract, Decreased
4 - H retain or mobilise revenue * Roll--out of High Performance Culture.
KPIs: people due to factors and profit,
* Financial performance including industrial damage to
action, workforce operational * Employee engagement programmes.
demographics, lack performance.
* Inventory turns of training,
availability * Graduate and apprentice programmes in partnership
of talent and with schools and universities.
inadequate
compensation.
* Regular oversight by Executive Leadership Team.
* Creation of Employee Resource Groups to foster
diversity, boost employee engagement and enable
global collaboration.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Corporate risks
------------------------------------------------------------------------------------------------------------------------------------------
Legal and compliance Significant breach Damage to
3 - H of increasingly reputation, * Continuing investment in compliance programmes
KPIs: complex loss of including Board--approved policies and roll out of
* Financial performance trade compliance, supplier training and IT solutions.
bribery and accreditations,
corruption, suspension
* TRIR US Government of activity, * Regular monitoring by Corporate Responsibility
contracting, fines from Committee, supported by on--going trade compliance
ethics, intellectual civil and programme including third--party audits.
property, data criminal
protection proceedings.
or * Comprehensive ethics programme including training,
competition/antitrust anti--corruption policy and Ethics line.
laws and facilitation
of tax evasion.
* Third--party audits including HS&E and the Criminal
Finance Act.
* MPS implementation to enhance safety measures,
validated by third--party audits.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Financial risks
------------------------------------------------------------------------------------------------------------------------------------------
Taxation Tax legislation is Higher
3 - H complex and effective * Monitoring international tax developments to assess
KPIs: compliance tax rates implications of future legislation.
* Financial performance can be subject to resulting
interpretation. in decreased
Events profit. * Seeking to achieve either a low or medium risk rating
such as the OECD in each country in which we operate through open
BEPS programme, the dialogue and, where possible, pre--agreement of
US tax and tariff arrangements to confirm compliance with legislation.
changes and the
impact
of Brexit create * Assessment of options to mitigate impact of
uncertainty which legislative changes on the Group's effective tax
could diminish the rate.
tax effectiveness
of the Group's
international * Use of multiple expert third--party tax advisors.
structures, including
those used to finance
acquisitions.
--------------------------- ----------------------- ----------------- -----------------------------------------------------------------
Oversight of risk and internal control
The Board is responsible for risk management and internal
control and for maintaining and reviewing its financial and
operational effectiveness. The Board has taken into account the
guidance provided by the FRC on Risk Management and Internal
Control in carrying out its duties. The system of internal control
is designed to manage, but not to eliminate, the risk of failure to
achieve business objectives and to provide reasonable, but not
absolute, assurance against material misstatement or loss.
The Group's functions are responsible for determining Group
policies and processes. The businesses are responsible for
implementing them, with internal and/or external audits to confirm
business unit compliance. The key features of the risk management
and internal control system are described below, including those
relating to the financial reporting process, as required under the
Disclosure Guidance and Transparency Rules (DGTR):
-- Group policies - key policies are approved by the Board and
other policies are approved by Group functions;
-- Process controls - for example financial controls including
the Group Finance Policies and Procedures Manual, the bid approval
process, programme lifecycle management reviews, IT security
framework and risk management; and
-- The forecasting, budget and strategic plan processes.
The Group's programmes for insurance and business continuity
form part of our risk management and internal control
framework.
The following features allow the Group to monitor the effective
implementation of policies and process controls by business
units:
-- A business performance review process (including financial,
operational and compliance performance);
-- Semi-annual business unit and divisional sign-off of
compliance with Group policies and processes;
-- Compliance programmes and external audits (including trade
compliance, ethics, anti-corruption, health, safety and
environmental);
-- An effective internal audit function which, primarily,
performs business unit reviews by rotation (including finance,
programme management, IT, HR, ethics and business continuity);
and
-- A whistleblowing line to enable employees to raise concerns.
To review the effectiveness of the system of internal controls,
the Board and Audit Committee applied the following processes and
activities in 2019 and up to the date of approval of the Annual
Report:
-- Reviews of the risk management process, risk register and risk appetite;
-- Written and verbal reports to the Audit Committee from
internal and external audit on progress with internal control
activities, including:
-- Reviews of business processes and activities, including
action plans to address any identified control weaknesses and
recommendations for improvements to controls or processes;
-- The results of internal audits;
-- Internal control recommendations made by the external auditors; and
-- Follow-up actions from previous internal control recommendations.
-- Regular compliance reports from the Executive Director, Commercial and Corporate Affairs;
-- Regular reports on the state of the business from the Chief
Executive and Chief Financial Officer;
-- A presentation on IT security activities and plans;
-- Strategy reviews, review of the ten-year financial plan and
review and approval of the 2020 budget;
-- Written reports to the Corporate Responsibility Committee on
the effectiveness and outcomes of whistleblowing procedures;
and
-- Reports on insurance coverage and uninsured risks.
The risk management and internal control systems have been in
place for the year under review and up to the date of approval of
the Annual Report, and are regularly reviewed by the Board. The
Board monitors executive management's action plans to implement
improvements in internal controls that have been identified
following the above mentioned reviews and reports. The Board
confirms that it has not identified any significant failings or
weaknesses in the Group's systems of risk management or internal
control as a result of information provided to the Board and
resulting discussions.
Viability statement
In accordance with the provision 31 of the 2018 Code, as part of
their assessment of the Group's viability, the directors have
assessed the prospects of the Group and its ability to meet its
liabilities as they fall due.
Assessment of prospects
The Board continues to believe that the prospects for the Group
are favourable in the medium to long term.
We supply into a growing sector
-- Aviation is growing at 4-5%; we provide equipment to all
major new platforms entering service in the near future;
-- The Group has equipment on over 73,000 in service aircraft; and
-- With an average aircraft lifespan of 25 years, our
aftermarket annuity will be providing meaningful revenues to the
Group for decades to come.
We are diversified by end market and by customer
-- We supply into both civil (54% revenue) and defence (36%)
aircraft markets, and into selected energy markets (10%);
-- Our revenues are split evenly between equipment sales and aftermarket; and
-- We work with a diverse group of customers from across the
globe. Our top 10 customers generate less than 50% of our
revenue.
We invest for the long-term and protect our know-how
-- We invest in market leading technology. We spend, on average,
5-7% of revenue on R&D through the cycle;
-- Our physical capital base is renewed regularly. Around 20% of
underlying operating profit is re-invested into the physical
capital base of the Group each year;
-- We grow, manage and defend our intellectual property portfolio robustly;
-- We invest in next generation technologies to support a
sustainable future for aviation; and
-- We seek to attract and retain colleagues who can enable the extraordinary.
We manufacture based on quality, consistency and value
-- We manage our manufacturing facilities using MPS, a tiered
improvement programme, providing a roadmap to best in class Legal
and compliance failure is, again, a risk which has a significant
manufacturing; and
-- We operate a globally distributed manufacturing
infrastructure, producing both in the OECD and in lower cost
locations.
We have a strong financial position
-- The Group is growing revenues above market rates, whilst
continuing to deliver post tax-cash conversion in line with
peers;
-- Gearing, at < 2x EBITDA, is in line with expectations for sustainable debt levels; and
-- We have GBP1.6bn of committed facilities as at 31 December
2019; we delivered post tax free cash flow of GBP268m in 2019.
Assessment period
The Board considered the Group's principal risks as detailed in
our risk register, and assessed the impact, likelihood and
timeframe over which the risks might crystallise. It also
considered over what timeframe certain business and sector changes
currently impacting the Group would be likely to be resolved:
-- Global aviation fleet: By when will a substantial portion of
new A220, A321neo and 737 MAX jets be flying?
-- Evolution of Meggitt: By when will the Group's current change
initiatives be expected to be finished?
-- Refinancing: By when will the Group have refinanced the
majority of its private placement portfolio (USD700m) and its
USD750m revolving credit facility?
-- Programme investment: Over what timeframe would the Group
typically expect to see investments into new aircraft platform
generating cash?
The Board concluded that these four major activities would be
largely resolved within five years and as such, this was the
correct timeframe over which to assess viability and risk
impact.
Assessment of viability and risk stress tests
Using the output of the Group's long-term planning activity, the
Group created two materially adverse downside scenarios which were
unlikely but plausible, and modelled the financial impact should a
number of risks within those scenarios actually crystallise within
a five- year period.
1. Major business disruption event:
As has been observed in the past, the aviation sector is exposed
to events which have a material adverse impact on the world's
willingness to fly. Events such as the 9/11 attacks in 2001, SARS
outbreak in 2003 and the global financial crisis in 2008-9 all saw
a material drop off in flight demand and aircraft deliveries which
in turn impacted both OE deliveries and aftermarket sales.
On the Group's risk matrix, business disruption is one of the
highest impacting risks on the Group's financial performance, and
also can impact the way in which the Group's business model works,
trigger major M&A events and disrupt relationships with both
major customers and suppliers.
The Group used knowledge of previous business disruption events
to model the impact on the Group's future plans.
2. Loss of a major customer
The aviation sector is reliant on a well-developed system of
global regulations and equipment qualifications to ensure
confidence in the sector's functioning. In addition, particularly
when working with the defence arms of governments, security of data
and adherence to military protocols is critical.
The Group has modelled the impact of a significant loss of
revenue following a regulatory or compliance failure from Meggitt.
Censure for non-compliance is severe, whether through the loss of
access to government contracts, or the grounding of fleet which are
deemed to be unsafe.
Legal and compliance failure is, again, a risk which has a
significant impact on the Group's financial performance. In
addition, customer satisfaction, the Group's change management
programme and its people strategy would all be impacted by such an
event.
The Group has also modelled the above scenarios at the same time
as assuming a partial inability to refinance a proportion of its
debt up for renewal, in order to fully understand the impact of
these events should the Group ever be unable to access debt
markets.
When modelling the above, the Group has considered mitigating
levers available to it such as materially cutting its investment in
capital equipment or R&D, sharply reducing its level of
indirect expenditure, or reducing or suspending its dividend for a
short period of time in such atypical and unplanned circumstances.
Given the Group's business model, its long-dated aftermarket
annuity, diverse technology and customer base, and the scale of the
potential mitigating levers available to it in the event of either
of these events occurring, the Group is reassured that it could
mitigate the impact of these scenarios.
Statement of viability
Based on the results of the analysis, the Board has a reasonable
expectation that the Group will continue in operation and be able
to meet its liabilities as they fall due over the five-year period
of assessment.
APPENDIX B
Statement of directors' responsibilities in respect of the
financial statements (reproduced from Meggitt's Annual Report and
Accounts for 2019)
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulation.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have prepared the Group financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union and Company financial statements in accordance
with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 "Reduced
Disclosure Framework", and applicable law). Under company law the
directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss of the
Group and Company for that period. In preparing the financial
statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable IFRSs as adopted by the European
Union have been followed for the Group financial statements and
United Kingdom Accounting Standards, comprising FRS 101, have been
followed for the Company financial statements, subject to any
material departures disclosed and explained in the financial
statements;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The directors are also responsible for safeguarding the assets
of the Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and enable
them to ensure that the financial statements and the Directors'
Remuneration Report comply with the Companies Act 2006 and, as
regards the Group financial statements, Article 4 of the IAS
Regulation.
The directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Directors' confirmations
The directors consider that the annual report and accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group and
Company's position and performance, business model and strategy.
Each of the directors, whose names and functions are listed in the
Board of directors confirm that, to the best of their
knowledge:
-- the Company financial statements, which have been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 101
"Reduced Disclosure Framework", and applicable law), give a true
and fair view of the assets, liabilities, financial position and
profit of the Company;
-- the Group financial statements, which have been prepared in
accordance with IFRSs as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
profit of the Group; and
-- the Strategic report and this Directors' Report includes a
fair review of the development and performance of the business and
the position of the Group and Company, together with a description
of the principal risks and uncertainties that it faces.
In the case of each director in office at the date the
Directors' Report is approved:
-- so far as the director is aware, there is no relevant audit
information of which the Group and Company's auditors are unaware;
and
-- they have taken all the steps that they ought to have taken
as a director in order to make themselves aware of any relevant
audit information and to establish that the Group and Company's
auditors are aware of that information.
Fair, balanced and understandable
The directors as at the date of this report consider that the
Annual Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Group's position, performance, business
model and strategy. The Board has made this assessment on the basis
of a review of the accounts process, a discussion on the content of
the Annual Report assessing its fairness, balance and
understandability, together with the confirmation from executive
management that the Annual Report is fair, balanced and
understandable.
APPENDIX C
16. Related party transactions (reproduced from Meggitt's Annual
Report and Accounts for 2019)
During the year, the Group made sales to the joint venture of
GBP2.9m (2018: GBP3.3m) and purchases from the joint venture of
GBP0.1m (2018: GBP0.2m). Transactions between the Company and its
subsidiaries have been eliminated on consolidation.
The remuneration of key management personnel of the Group, which
is defined for 2019 as members of the Board and the Group Executive
Committee, is set out below.
2019 2018
GBP'm GBP'm
------------------------------------------------ ----- -----
Salaries and other short-term employee benefits 10.8 11.1
Share-based payment expense 2.5 4.1
------------------------------------------------ ----- -----
Total 13.3 15.2
------------------------------------------------ ----- -----
Full details of all elements in the remuneration package of each
director, together with directors' share interests and share
awards, are disclosed in the Directors' remuneration report on
pages 92 to 116 which forms part of these consolidated financial
statements.
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END
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