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ANNUAL REPORT 2012 1
ANNuAl REPORTFOR THE yEAR
ENDED 31 MARCH 2012
JDR Cable Systems (Holdings) limited
littleport Innovation ParkWisbech Road
littleportCambridgeshire
Cb6 1RA
7906 N. Sam Houston Parkway WestSuite 201HoustonTx 77064
lITTlEPORT | HARTlEPOOl | HOuSTON | AbERDEEN | THAIlAND
ANNUAL REPORT 2012 2
JDR is a leading provider of technology connecting the global energy industry. Our products and services enable vital control and power delivery to offshore oil, gas and renewable energy systems.
The world’s major energy companies and subsea service providers depend on high performance subsea control umbilicals and subsea power cables that operate in the world’s harshest offshore environments. JDR invests in state-of-the-art manufacturing facilities, technology and people to deliver these world-class subsea products.
We have a proven track record of delivering client expectations and are totally committed to lifecycle customer service. We achieve this through our specialist engineering teams, experienced project management, integrated safety systems and a global service network that ensures 24/7 aftermarket support.
ANNUAL REPORT 2012 3
JDR’s Markets, Products and Capabilities 5
Chairman’s Report 7
Chief Executive Officer’s Report 9
Health, Safety and the Environment 11
Directors’ Report 13
Independent Auditor’s Report 18
Financial Statements 19
Notes to the financial statements 24
Advisers 46
The JDR team is focussed on being• A world leading supplier of
IWOCS (Intervention Workover Control Systems), subsea production umbilicals and subsea power cables for global oil, gas and renewable energy markets
• A global supplier with regional, sales, engineering, operations, project management and service capabilities
• Customer focussed, driven by strategic customer relationships, product management, technology leadership, performance measurement and delivery of solutions
• An industry leader in quality, on-time performance, environmental, health and safety compliance and cost effectiveness
• Recognised as one of the best places to work in the oil and gas and renewables industries
Our values drive us to • Develop and work in world class
facilities where we innovate, adapt and embrace change to produce products that we are proud of
• Work together within a safe, communicative and transparent organisation
• Invest in our team to encourage personal responsibility, development, leadership and equality
CONTENTSTHE JDR MISSION STATEMENT AND VAluES
ANNUAL REPORT 2012 4HIgHlIgHTS
SATTAHIP, THAIlAND
HOuSTON, uSA
HARTlEPOOl,lITTlEPORT,AbERDEEN,
uK
buSINESS HIgHlIgHTS FINANCIAl HISTORy
We now look forward with confidence into 2013 and beyond, as demand in our subsea energy markets is projected to reach an all-time high.
Pat Herbert | Executive Chairman
OuR glObAl PRESENCE
• Significantgrowthinsubseaproductionumbilical,subseapowercableandrenewablearraycablerevenues
• Recordrevenueswitha100%increaseinrevenuesfromcontinuingoperations
• MarineCablesbusinesssoldinApril2011
• Allseniorbankdebtrepaid
• Strongorderbacklogat£80msupportsfurtherrevenuegrowthin2013
OPERATIONAl HIgHlIgHTS
•Coreoilandgasmarketsperformingwell,withordersaccelerating
• Offshorewindmarketremainsbuoyant
• Newmanagementteamappointedin2011,withPatHerbertbecomingExecutiveChairman
• Hartlepoolmanufacturingfacilitynowfullyoperational,manufacturingoutputcapacitydoubled
• Investmentinmanufacturinginfrastructureandbusinesssystemsbetween2008and2011hasimprovedbusinessefficiencyin2012
• Implementedworldclassengineering,designandproductionsystems
• ContinuetobemarketleaderinIWOCS
ORDER INTAKE REVENuE
EbITDA SENIOR DEbT
0
20
40
60
80
100
120
45 46
62
94102
(£’M
)
FY08
FY09
FY10
FY11
FY12
0
20
40
60
80
100
120
34
51 55
111
(£’M
)
FY08
FY09
FY10
FY11
FY12
50
0
2
4
6
8
10
8.6
10.0 10.2
2.9
5.5
(£’M
)
FY08
FY09
FY10
FY11
FY12
0
5
10
15
20
25
30
35
21.925.3 26.8
29.6
0
40
(£’M
)
FY08
FY09
FY10
FY11
FY12
ANNUAL REPORT 2012 5JDR’S MARKETS, PRODuCTS AND SERVICES
Oil & gasJDRleadsthefieldinengineeredproductsfortheoffshoreoilandgasindustry.Ithasdevelopedtechnologiesthatmaximisetheefficientdeliveryofpower,controlandcommunicationsthroughumbilicalsandpowercables.Usingitsstate-of-the-artengineeringandmanufacturingcapabilities,JDRdevelopsanddeliverscustombuiltsystemsforsubseainstallationsateverincreasingwaterdepths.
RenewablesJDRhasembracedthegrowinginternationalmarketforalternativeandsustainableenergydelivery.TheGroup’sUKeastcoastlocationsmakesitideallylocatedtoprovide,engineering,manufacturingandinstallationservicesfortheevolvingrenewablesmarket,whichisparticularlystronginEurope.
AftermarketGlobalaftermarket,installationandmaintenanceservicesareprovidedbytheGroup’sAIMServicesdivision.AIMhasanetworkofexperiencedandcertifiedtechniciansandservicesupportfacilities,available24/7tomanagecustomerprojects,forJDRandnon-JDRproducts,onoroffshore.Theteamhascreatedperiodicmaintenanceandinspectionroutinesthatincludeproductlifecyclepreventativemaintenanceandassuranceprogrammes.
OuR MARKETS
Subsea Production umbilicalsUmbilicalsprovidecriticalpower,controlandmonitoringlinks,connectingmultipleelementsofanoffshoreoilandgasfield.Typicallyfrom300mto30kminlength,theyaredesignedtooperatelong-terminchallengingsubseaenvironments.JDR’sumbilicaldesignsincorporateconduitsforhydraulicfluids,processchemicalsorelectricalcablesthattransmitpowerandenablecommunication.
IWOCS (Installation and Workover Control System)JDRisglobalmarketleaderinIWOCSumbilicalsystems,usedbyoilandgasoperatorstomonitorandcontrolsubseatreesduringinstallationandforinterventionactivities.Umbilicalsarespooledfromareelerandusuallyoperateforthreetosevendays,beforerecoverybackontothereelerforre-use.JDRhasledthedevelopmentofnew‘openwater’umbilicaltechnologythatsignificantlyreducesoffshoreoperatingcosts.
Subsea Power CablesJDR’sSubseaPowerCablesareusedtodistributeelectricalpowerbetweenoffshoreinstallations.Cabledesignstypicallycontainthreepowercorephases,eachcomprisingalargecopperoraluminiumconductorinsulatedwithcross-linkedpolyethylene.SubseaPowerCablescovergreatdistancesandareexpectedtooperateinhostilesubsealocationsformanyyears.
Renewable Energy CablesJDRisaleadingproviderofrenewableenergycablesystems,usedforoffshorewind,waveandtidalenergyprojects.Theseproductsconnectpowergenerationdevices,suchaswindturbineswithinawindfarm,andenablepowertobetransferredtoanoffshoreoronshoresubstation.
Aftermarket: Installation repair, maintenance, healthcare & upgradesAteamdedicatedtoinstallation,repair(includingemergencyresponse),equipment&productmaintenance(onshore&offshore),assethealthcare&assuranceandequipmentandproductupgrades,coveringkeyoil,gasandrenewableregions.
OuR PRODuCTS
JDR’S MARKETS, PRODuCTS AND CAPAbIlITIES
ANNUAL REPORT 2012 6JDR’S MARKETS, PRODuCTS AND SERVICES
Aftermarket: specialist equipment & testingJDR’sAIMServiceshasaportfolioofspecialisttoolingandtestequipmentthatcanbemobilisedalongsidespecialisttechnicians,anywhereintheworld,tosupportJDRandnon-JDRproducts.Thisisarentalserviceandincludesmechanical,hydraulicpowercableandfibreopticcapabilities.
Aftermarket: Spares & Asset ManagementTheteamprovidessparepartsandsparepartsmanagementoutofLittleportintheUKandHoustonservicecentre.Otherservicesincludeequipmentassetmanagement,storage,pre-mobilisationtestingandpostjobinspectionandmaintenance.ForinstanceIWOCScanbemanagedtoensureongoingoperationaleffectiveness.
OuR CAPAbIlITIESPartnershipJDRworkscloselywithcustomerstocreateinnovativeproductandserviceresponsestoindividualprojectandlong-termindustrydevelopments.CustomersvalueJDR’sexpertiseinthedesign,manufacture,deploymentandmanagementofadvancedproductsinremoteanddemandingsituations.
TechnologyJDRoperatesattheforefrontofsubseatechnology,workingalongsidecustomerstosolvecomplexchallenges.ThistechnologyfocusenablesJDRtoengineerproductsthatoperatereliablyindynamic,deep-waterenvironmentsanddeveloptechnologyaheadoffutureindustryrequirements.
Project management Day-to-dayworkingrelationshipsandprojectdeliveryaremanagedbyJDR’steamofhighly-skilledprojectmanagers.ProjectmanagersarethelinkbetweenaclientandtherangeofJDR’sservicesfromproductdesignthroughtomanufacturing,procurement,installationandservice.
Design engineeringJDR’steamofspecialistengineersareexperiencedinallaspectsofsubseacableandumbilicaldevelopment.Theydesigncustom-configuredproductstotherequirementsofindividualcustomerprojects,integratingstandardprovenandqualifiedsub-componentstoreducetheclient’soverallprojectrisk.ThisenablesJDRtodelivercost-effectiveandreliableproductsthatexceedinternationalstandards.
Manufacturing Manufacturingfacilitiesarestrategicallylocatedtodeliverhigh-qualityproductstoglobaloil,gasandrenewablesmarkets.JDRhasinvested£30mtodevelopitscapabilities:inHartlepoolforlarge-scalesubseaproductionumbilicalsandpowercables,basedalongsideadeep-waterport;Littleport,whichspecialisesinIWOCSandmediumsizedumbilicalsandcables;Thailand,alongsideadeep-waterport,forAsianmarkets;andHoustonforservicingandtopsideproducts.
Offshore supportJDR,aspartofitspartnershipapproach,providespeople,testequipment,trainingandsupervisionforcustomerinstallationandcablehandlingprocesses.Unlikemanycompetitors,JDRcansupportitscustomersrightthroughtofinalsitecommissioning.
ANNUAL REPORT 2012 7CHAIRMAN’S REPORT
CHAIRMAN’S REPORT
ItiswithgreatpleasurethatIamabletointroducethefirstJDRannualreport,followingayearofstrongbusinessperformanceandsoundunderlyingstrategicprogress.
ANNUAL REPORT 2012 8CHAIRMAN’S REPORT
ThisyearmarkedtheturningpointofaneweraforJDRinmanyways.Itbeganwithconsciousinvestmentdecisionsmadein2008,supportedbyourownersVisionCapitalandourbankersHSBC,andrealizedinJuly2009withtheopeningofournewquaysidemanufacturingfacilityindeep-waterportfacilitiesinthecoastaltownofHartlepoolintheNorthEastofEngland.In2008JDRwasatacrossroads:eitherstaywithinournichemarketsandproductsorcreatealargerandbettercompany,thatwouldfocusonbuildingmarketleadershipinsubseaumbilicalsystemsandsubseapowercablesfortheoffshoreoilandgasandrenewableenergyindustries.
Wechosethelatter!
Aspartofourstrategytofocusoninvestmentsinsubseamarkets,wesoldourMarineCablesbusinessinRotterdamtoFugroN.V.Thefinancialgainrealisedthroughthistransactionenabledtheretirementofallseniordebtincurredasaresultofthegrowthinvestmentsmadeinthecompanysince2008.OurfriendsatMarineCablesarenowpartofalargeparentorganisation,withopportunitiesforpersonalaswellasbusinessgrowth.Thisstrategy,thecommitmentbytheBoardofDirectorsandshareholdersandthecontributionofourpeople,havemadeitpossibletosignificantlyincreaseourcapacityandgrowourrevenuesfrom£34min2008to£111min2012.
gROWTH STARTS HERE
WehavemadeorganisationalchangesthatwillsupportourstrategyandenableustopositionJDRforcontinuedgrowth.InSeptember2011ourNon-executiveChairman,BobSolbergmovedtoanon-executiveDirectorroletomakewayformyappointmentasExecutiveChairman,fromGroupCEO.IwouldliketothankBobforhisguidanceandwisdomasourChairmanduringthislongperiodofgrowthandchangeinourbusinessandIlookforwardtocarryingonhistradition.ImportantlywehavebroughtinanewChiefExecutiveOfficer,AndrewNorman,ChiefOperatingOfficer,PeterSayles,andChiefFinancialOfficer,MartinBoden.Thesethreenewexecutiveofficersarestrengtheningourabilitytostayonourchosenpathofbuildingabusinessunmatchedbyanyothercompetitor.
Wenowlookforwardwithconfidenceinto2013andbeyond,asdemandinoursubseaenergymarketsisprojectedtoreachanall-timehigh.Wewillupdateourreportingcycleandmoveourfinancialyearendto31December,startinginDecember2012.Iwouldberemissnottotakethisopportunitytothankallofouremployees,bothpastandpresent,foryourhardwork,dedicationandaboveall,thedeliveryofworld-classperformancethatwillensureJDRcontinuestobetheVitalConnectiontoourcustomersallovertheworld.
Pat HerbertExecutiveChairman,JDRCableSystems
23October2012
ORgANISATIONAl CHANgES
ANNUAL REPORT 2012 9CEO’S REPORT
CHIEF ExECuTIVE OFFICER’S REPORT
IthasbeenanexcitingfirstyearasChiefExecutiveOfficerofJDR.Wehavetargetedgrowthanddeliveredacrossallofourcoresubseamarkets,winningnewbusinessfrombothoilandgasandrenewableenergycustomersanddeliveringequipmentandservicesforhighprofileprojectsaroundtheworld.WehavedeliveredapositivereturnonthesignificantinvestmentmadeinJDRoverthelastfiveyears,expandingourmarketshareinsubseaproductionumbilicalsandpowercablesandmaintainingourleadershippositioninIWOCS.
ANNUAL REPORT 2012 10CEO’S REPORT
Ourresultsfortheyearended31March2012showastrongimprovementon2011performance,withrevenuesupby48%to£111m.Growthwaspredominantlydrivenbyincreasedcustomerdemandforlongerandlargersubseaumbilicalandpowercables,whichwearenowabletosupplyfollowingthe£30millioninvestmentinourmanufacturingfacilityinHartlepool.Revenueforourcontinuingoperationsincreasedby101%andearningsbeforeinterest,tax,depreciationandamortisation(EBITDA)roseto£5.5m,anincreaseof94%on2011.EBITDAgrowthoutpacedrevenuegrowthasaresultofachangeinmixandoperationalefficiencies.NetdebtatMarch2012fellby28%to£31.1m.
TheinvestmentinHartlepoolisenablingustomeetcustomerdemandforincreasedcapacityanddeliveryperformance.Tosupportourgrowthwehavemadesignificantinvestmentsinourbusinessmanagementsystems,mostimportantlyinsalessupporttools,EnterpriseResourcePlanningandquotationandengineeringautomation.Thesedevelopmentsenableouremployeestodeliverevenhigherlevelsofperformanceandmaximiseourcapabilitytosupplytheproductsourcustomersrequire,onscheduleandtothehighestqualitystandards.Wehaveoptimisedoursupplychaintoincreasethroughputandcapacityinourthreemanufacturingfacilitieswhilereducingourtotalcostofqualitytoindustryleadinglevels.Wehavestrengthenedourprojectmanagementandengineeringteamsinrecognitionoftheincreasedcontractvalueandcomplexityoftheprojectsbeingwon.Ourcommitmenttoenvironmentalandhealth&safetyperformanceimprovementprogrammescontinuesandhasbeenrecognisedas‘bestinclass’bycustomers,manyofwhomareindustryleadersintheirfield.
IMPROVINg RESulTS
Ourproductsareanessentialelementofthesubseainfrastructurethatenablesenergytoreachend-usersinacost-effective,safeandenvironmentallyresponsibleway.Whileoursalesandengineeringteamsworkwithcustomerstoidentifyuniquesolutionstotheirspecificsubseaprojectchallengesincludingjointdevelopmentprojects,ourproductdevelopersareinnovatingtoimprovelong-termperformanceandaddressfutureindustryrequirements.Forexample,wehavebeengrantedapatentforJDR’sproprietarycablehang-offsystemusedinoffshorerenewableenergycabling.Ourhang-offsystemsavessignificantoffshoreinstallationtimeandreducesoverallprojectcostforourclients.Wehavealsointroducedmediumvoltagefieldjointproductsandqualifiedthesetothemoststringentinternationalstandards,exceedingthecurrentqualificationlevelsofothercommerciallyavailableproducts.
Theproductdevelopmentteamhasotherpatentsinapplication,includinganewtypeofIWOCSumbilicalterminationthatcomplementsournewself-supportingopenwaterIWOCSumbilicaltechnology.ThisdevelopmentenablesasignificantlyreducedumbilicalinstallationtimeanddemonstratesJDR’scontinuingcommitmenttoprovidethetechnologyleadintheIWOCSumbilicalsystemmarket.JDR’scultureofinnovationandcontinuousimprovement,combinedwithourworld-classmanufacturingcapabilityhasresultedinanumberofsignificantnewcontracts,includingsomeofthelargestwindfarmarrayordersintheUKandGermanyandmajorumbilicalandpowercableawardsfromcustomersinChina,WestAfricaandtheMiddleEast.
Weareseeingincreasedcustomerspendonourproductrangeasmoreoilandgasandrenewableenergyproductionmovesoffshore.IamconfidentthatJDR’scombinationoftechnology-ledproductdevelopment,state-of-the-artmanufacturinginfrastructureandhighlyskilledanddedicatedemployeeswillenableustomaintainthegrowthtrajectoryestablishedoverthelastyear.
Andrew NormanChiefExecutiveOfficer,JDRCableSystems
23October2012
WIDENINg MARKET REACH
11HEAlTH, SAFETy AND THE ENVIRONMENT
HEAlTH, SAFETy AND THE ENVIRONMENTAtJDRwearetotallycommittedtoensuringallofouremployees,visitorsandcontractors,wherevertheymaybeinourglobalorganisation,returnfromworkuninjured.Wearealsofocussedonensuringthatweminimiseanyadverseenvironmentalimpactsofourbusinessactivitiesbycontinuallyreviewingproductdesignandmanufacturingmethodologies.
ApreventativehealthandsafetystrategyisatopprioritywithintheJDRbusiness,workingfromtheprinciplethatallincidents–bothlargeandsmall–canbeprevented.Ourapproachisintegratedintoourculture,managementsystemsandpractices.Forexamplewecontinuallyinvestinstructuredemployeetrainingprogrammesandinitiatives.Asaresultallemployees‘own’HSEandareempoweredtopreventunsafeactivity.
Weensurethatourpracticesareindependentlyverified.ForexampleourSafetyManagementSystemisregularlyverifiedbyLloyd’sRegisterQualityAssurance(LRQA),aUKAS-accreditedproviderofmanagementsystemcertification,verificationandtraining.
FollowingtheintroductionofourSafetyManagementSystemin2008,thenumberofaccidentshasdeclineddramatically.
AllofourglobalfacilitieshavetheirmanagementsystemscertifiedtoOHSAS18001:2007andwearerollingoutISO14001:2004,followingsuccessfulverificationofourLittleportfacility.WealsoparticipateinindustryorganisationssuchastheUmbilicalManufacturersFederation(UMF)wherewehavechairedtheHealthandSafetyCommitteeforthelastthreeyears.WearenowworkingtofurtherimproveourSafetyManagementSystemandareinvolvingouremployees,clientsandsupplierstoidentifyandimplementindustrybestpractice.
A SAFE PlACE TO WORK
Fully INTEgRATED
SySTEMS & PROCEDuRES
ANNUAL REPORT 2012 12ExECuTIVE MANAgEMENT TEAM
Paul GahmExECuTIVE VICE-PRESIDENT SAlES & MARKETINg
Pat herbertExECuTIVE CHAIRMAN
CraiG ewinG buSINESS SySTEMS DIRECTOR
andrew normanCHIEF ExECuTIVE OFFICER
louise CliftongROuP HEAD OF HR
martin bodenCHIEF FINANCIAl & COMPlIANCE OFFICER
James YounGENgINEERINg DIRECTOR
Peter saYlesCHIEF OPERATIONS OFFICER
martin CharlesDIRECTOR, AIMS SERVICES
PauljoinedJDRin2005withresponsibilityforbusinessdevelopment,marketingandstrategicplanning.FormerlywithOceaneering’sMultiflexDivision,PaulhasheldvariousseniormanagementpositionsthroughoutEuropeandtheUS.
PatjoinedJDRin2002asChiefExecutiveOfficerandbecameExecutiveChairmanin2011.AsCEO,hehasoverseentheGroup’smostdramaticgrowthperiod.Hiscareerbeganin1976atSmithInternational,becominganOfficerofthecorporationin1986.HejoinedBakerHughesasanExecutiveOfficerin1988withglobalP&Lresponsibility,leadingmarketandtechnologydevelopmentandcorporategovernanceactivity.
CraigjoinedJDRin2011fromTNTPostUKwherehewasITDirector.Craig’sITexperiencespansanumberofworldclassorganisationsintheB2B,logisticsandconstructionsectorsandhasincludedroleswithParcelforceWorldwide,WalleniusWilhelmsenLogisticsandtheMillerGroup.
AndrewjoinedJDRin2011following15yearsintheenergyindustrywithDresserIncasDivisionPresidentControlValvesandRegionalPresident,Europe.Andrew’scareerhasfocussedoninternationalbusinessdevelopmentintechnology-drivenmanufacturingandengineeringcompanies,withleadershiprolesinMarconiSpaceandDefenceSystems(UK),MARSElectronics(UK),PhilipsElectronics(NL)andSchindlerElevatorCorp,Switzerland.
LouisejoinedJDRfromPPGIndustrieswheresheheldanumberofrolesincludingHRDirector,IndustrialCoatings,EMEAandHROperationsDirector,EMEA.PriortoPPG,LouiseheldkeyHRpositionsinRandomHouse,GrampianFoods,BritishSteelandBosch.
MartinjoinedJDRin2011fromBetty’s&TaylorswherehewasChiefFinancialOfficerfor18months.MartinpreviouslyworkedasGroupFinanceDirectoratGenusplc,andforGreatUniversalStores,ZurichFinancialServices(UKISA),NatWestUKandWHSmith.
JamesjoinedJDRinApril2000asaseniordesignengineerfornewproductdevelopment.HewasappointedEngineeringDirectorinNovember2011afteraseriesoftechnicalmanagementroleswithinthebusiness.PriortoJDR,JamesworkedforBICCandDowty.Jameshasadegreeinmechanicalengineering,isacharteredengineerandhasanMBAfromCranfield.
PeterjoinedJDRin2011after12yearsinbusinessturnaroundrolesincludingworkwithOceaneeringinBrazilandassignmentsinChinaandtheUSA.Hewasinstrumentalinthe1992managementbuyoutofSignatureIndustriesLtd,servingasDirectorandGeneralManager,andbeforethishewasManagingDirectorofVBandplcandGroupOperationsManagerforTCCplc.HiscareerbeganintheRoyalNavy.
MartinjoinedJDRin2008astheGroup’sfirstaftermarketservicesdirector,leadingaglobalserviceandsupportteam.BeforeJDRhewasAftermarketDirectorfortheSubseaControlsgroupofGEOil&Gas.Martinhasbeenactiveintheoilandgasindustryforover28years,includingroleswithABBandBakerHughes.
JDR ExECuTIVE MANAgEMENTTEAM
ANNUAL REPORT 2012 13DIRECTORS’ REPORT
DIRECTORS’ REPORTThedirectorspresenttheirreportandtheauditedfinancialstatementsoftheGroupandofthecompanyfortheyearended31March2012.
TheprincipalactivityoftheGroupisthedesignandmanufactureofumbilicalsystemsandsubseapowercablesfortheoffshoreoilandgasandrenewableenergyindustries.Theseproductsaresomeoftheessentialcomponentsforthedevelopmentandproductionofoffshoreoilandgasandthedeliveryofenergyderivedfromoffshorewindfarms.TheGrouphasaninternationalmanufacturingfootprintwithfacilitiesinLittleport(Cambridgeshire)and
HartlepoolintheUKandSattahipinThailand.Duringtheyear,theGroupinvestedfurtherinitsstate-of-the-artfacilityinHartlepoolwiththefacilitynowhavingthedeliverycapacityforumbilicalsandpowercablesequaltothetoptierofindustrysuppliers.TheMarineCablesdivisionwassoldtoFugroN.V.inApril2011.
Theprincipalactivityofthecompanyistoactasaholdingcompany.
PRINCIPAl ACTIVITIES
Thedirectorsarepleasedtoreportthatrevenuesincreasedsubstantiallyintheyearto£111m(up101%on2011forthecontinuingbusiness).TherevenuemixduringtheyearwasIWOCS,20%(25%in2011),subseapowerumbilicals(SPU)/subseapowercables(SPC)36%(28%in2011)andrenewableenergycables(REC)37%(38%in2011).
TheGrouphaschangeditspolicyonrevenuerecognitionin2012,torecogniserevenueoverthelifeofsignificantcontractsratherthanoncompletionofthecontract.Theeffectofthischangeistoincreaserevenueby£5,890,000in2012(£1,816,000in2011)andtoincreaseoperatingprofitby£2,086,000in2012(£435,000in2011).
TheGrouphasincurredsignificanttradinglossesinprioryearsandnodeferredtaxassetshavebeenrecognisedontheselosses.Giventhereturn
toprofitsintheyearandtheforecastedfutureprofitability,theDirectorshaverecogniseddeferredtaxassetsinrelationtolossesforthefirsttimethisyear.Thisrecognitionhasgivenrisetoataxcreditof£1,018,000thisyear.
Operatingresultsbeforegoodwillamortisationimprovedfromalossof£3,510,000in2011toalossof£632,000in2012,afteraccountingfor£2,238,000ofexceptionaloperatingexpensesincurredduringtheyear,(£2,498,000inthepreviousyear).Theexceptionalexpensesrelatedtothewrite-offofsurplusstocks,consultingcostsassociatedwithare-engineeringoftheERPsystemandredundancycosts.EarningsbeforeInterest,Tax,DepreciationandAmortisation(EBITDA)increasedfrom£2,819,000in2011to£5,462,000in2012,largelyasaresultofthesharpincreaseinrevenuesandthebenefitsofoperationalimprovements.
FINANCIAl REVIEW
Theyearto31March2012hasbeenanimportantperiodintheevolutionofJDR.WehavemadesignificantinvestmentsinourmanufacturingfacilitiesinHartlepool,inbusinessinformationsystemsandthedevelopmentofnewproducts.ThisplacesJDRinanexcellentpositiontocapitaliseontheopportunitiesinboththeoilandgasandwindandrenewableenergymarketsgoingforward.
Theoilandgasindustryhasreboundedconsiderablysince2008whentheprevailingweakglobaleconomicenvironmentdepressedupstreamactivities.Tooffsetthesloweractivityinthesetraditionalmarkets,theGroupsuccessfullysecurednewbusinessforoffshorepowercablesfortheUKrenewableenergymarket,helpedbythe
timingoftheconstructionandcommissioningofitsHartlepoolfacility.TheGroupwontheprestigiousarraycableorderfortheworld’slargestoffshorewind-farmprojectatthetime(GreaterGabbard),whichwasfollowedinDecember2009byanarraycableorderfortheLondonArrayproject.InMarch2012,JDRsecuredanorderforarraycablesforalargeGermanoffshorewindproject.
Groupordersforthecontinuingbusinessroseintheperiodby9%,reflectingtheGroup’sfocusonlongerlengththermoplasticcablesandumbilicalsmanufacturedinHartlepool.
FollowingthedisposaloftheMarineCablesdivisioninApril2011,theconsiderationwasusedtorepayalloftheGroup’sseniordebt.
REVIEW OF buSINESS AND FuTuRE DEVElOPMENTS
ANNUAL REPORT 2012 14DIRECTORS’ REPORT
OrderIntake
102,090
£’000
93,524
THIS yEAR
9% UmbilicalSystemsdivisionorderintakewaswellaheadoftheprioryearwithanincreaseof9%.Thisismainlyduetoa128%increaseinrenewableenergyorders.
PREVIOuS yEAR
(CONTINuINg)
gROWTH
TheGroupiswellpositionedtodeliverstableandreliableearningsgrowthfromitsdiverseportfolioofproductsandrecentplantandequipmentinvestments.
JDRoperatesinahighlyspecialisedglobalmarket,andisoneofasmallnumberofcompaniesthatmanufacturesumbilicalsandpowercablesthatprovidetheVitalConnectionbetweenoffshorefacilities.Significantnewenergyresourcesarepredominantlyfoundoffshoreinincreasinglydeeperwater,underpinningdemandfortheGroup’sproductsandservices.WebelievenewdiscoveriesofoilandgasoffshoreinWestAfrica,Australia,Asia,BrazilandtheMiddleEastwilloffersignificantgrowthopportunitiesfortheGroup.
JDRhasanexcellentpipelineofopportunitiesthathavebeenmadeavailablebythesubstantialinvestmentinplantandequipmentinHartlepool.Inthemediumtolongterm,thedesireforenergysecurityinboththedevelopedanddevelopingworldisdrivingtheindustrytowardsdeepwaterexploration,whichwillsupportcontinuedgrowthoftheGroup.Inaddition,themovebyEuropeangovernmentsandutilitiestowardoffshorewindandwaveenergyprojectspresentstheGroupwithexcitingopportunitiesforgrowth.ThereisemergentdemandintheFarEastandMiddleEastforumbilicalrelatedproducts.TherearesignificantprospectsintheUKoffshorerenewableenergymarketfollowingrecentgovernmentpledgesforahigherelementofnon-fossilenergysources.JDRisideallypositionedtocapitaliseuponthisgovernmentsupportinthetwomostimportantenergymarketsofthefuture.TosupportJDRinthedeliveryofreliableearningsgrowth,additionalshareholderfundingof£5mofsharecapitalwasobtainedinMay2011,withafurtherinjectionofloanstockfundingof£5.3mbeingobtainedinOctober2011.
Revenue
111,092
£’000
55,283
THIS yEAR
101% Revenuesincreasedby101%duetoanincreaseinrenewableenergysalesof99%,anexcellentperformanceinthecontextofthemacro-economicclimate.
PREVIOuS yEAR
(CONTINuINg)
INCREASE
EBITDA
5,462
£’000
2,819
THIS yEAR
94% EBITDAisacommonmeasureofunderlyingeconomicperformanceanditisreconciledtooperatingprofitinthetablebelow.ThisincreasedduringtheyearduetohigherrevenuesandrealisationoftheoperationalleverageintheHartlepoolfacility.
PREVIOuS
yEAR
INCREASE
Operatingprofit
Exceptionaladministrationexpenses
Amortisationofgoodwill
Amortisationofdevelopmentcosts
Depreciationcharge
EBITDA
RECONCIlIATION OF OPERATINg PROFIT TO EbITDA
(996)
2,238
364
166
3,690
5,462
(5,070)
2,498
1,560
114
3,717
2,819
2012
£’000
2011
£’000
KEy gROuP KPIS OuTlOOK
ANNUAL REPORT 2012 15DIRECTORS’ REPORT
(a) Foreign exchange riskTheGroupoperatesinanumberofdifferentcountries.WiththeexceptionofThailand,revenuesandcostswithineachcountryareconsistent.Groupcompaniesseektocoveranyforeignexchangeexposureoncustomercontractsbyuseofforwardcontractstakenoutonorderacceptance.
(b) Credit riskTheGrouphasnosignificantconcentrationsofcreditrisk.TheGrouphasimplementedpoliciesthatrequireappropriatecreditchecksonpotentialcustomersbeforesalescommence.Themajorityofenduserclientsaremajormultinationaloilcompanies,theirprimeengineeringcontractorsorfullyfundedrenewableenergyprojects.
(c) Execution riskAllGroupmanufacturingfacilitiesareapprovedtothestandardforQualityManagementSystems;ISO9001:2008byLloydsRegisterQualityAssurance.Thecompliancecoversalldesign,development,manufacturing,testingandservicingactivitiesandisunderthecontrolofaGroupQualityManager.TheGroupworkswithitsemployees,customers,suppliersandinsurerstoidentifyandreducetheriskofaccidentaldamageorinjurytoemployeesandproperty.AGroupHealthandSafetyManagerisemployedtosuperviseandtrainemployeesinthemanufacturingfacilitiestoassessandmanagerisksandworksafety.TheUK,USandThailandfacilitiesareapprovedtoOHSAS18001:2007.TheLittleportfacilityalsoholdsISO14001-2004approvalandallothersitesareworkingtowardsthisstandard.
RISK MANAgEMENT
TheGroup’sprofitforthefinancialyearamountedto£17,480,000(2011:lossof£10,722,000)andhasbeentransferredtoreserves.Thecompany’sprofitfortheyearamountedto£15,621,000(2011:lossof£3,369,000)andhasbeen
transferredtoreserves.Thedirectorsdonotrecommendthepaymentofadividend(2011:£nil).
TheGroupyear-endwillbechangedto31DecemberfromDecember2012.
RESulTS AND DIVIDENDS
(a) Remuneration CommitteeTheRemunerationCommitteeischairedbyMrHerbertandcompriseshimself,MrRich,MrSolberg,MrVandeSteenandMrNorman.TheRemunerationCommitteeisresponsibleforsettingthepayandbenefitsofthedirectorsandsenioremployeesinthecompany.TheRemunerationCommitteemettwiceintheperiod.
(b) Audit Committee TheAuditCommitteeischairedbyMrRichandcompriseshimself,MrHerbertandMrNorman.TheAuditCommitteeisresponsibleforreviewingawiderangeofmattersincludingtheannualfinancialstatementsbeforetheirsubmissiontotheBoardaswellasmonitoringtheinternalcontrolsinforcetoensuretheintegrityoftheinformationreportedtotheshareholders.TheAuditCommitteecontributetotheBoard’sreviewoftheeffectivenessofinternalcontrolsandriskmanagementsystems.TheAuditCommitteeadvisestheboardontheappointmentofexternalauditorsandontheirremunerationbothforauditandnon-auditwork,anddiscussesthenature,
scopeandresultsoftheauditwithexternalauditors.TheAuditCommitteekeepsunderreviewthecosteffectivenessandtheindependenceandobjectivityoftheauditors.TheauditorshaveprovidedservicesinrelationtotheannualauditoftheGroupandtaxcompliance.TheAuditCommitteemettwiceintheperiod.
(c) Health, Safety and Environmental (HSE) CommitteeTheHSECommitteeischairedbyMrSolbergandcompriseshimself,MrNorman,MrVandeSteenandMrSayles.TheHSECommitteehasamandatetomaintainacomprehensiveoverviewofthepoliciesandperformanceofJDRwithrespecttoHealth,Safety&Environment.ConclusionsandrecommendationsmadebytheCommitteearereporteddirectlytotheBoard.TheCommitteefulfilsitsresponsibilitiesbyreviewingthemanagementofhealth,safety,securityandenvironmentalimpactsofprojectsandoperations.Italsomonitorsemergingenvironmentalissues.TheHSECommitteemetonceintheperiod.
CORPORATE gOVERNANCE
ANNUAL REPORT 2012 16DIRECTORS’ REPORT
HSBCarethesolebanklendertotheGroupandfurtherdetailsoftheHSBCbankfacilitiesareprovidedinNote16tothefinancialstatements.UndertheGroup’sarrangementswithHSBC,theshareholderloansarenotrepayableandarenotto
payinterestuntilthebankdebtexpires.Alllongtermbankloans,comprisingtheAmortisingandBulletfacilities,wererepaidinApril2011,subsequenttothesaleoftheMarineCablesdivision.
lONg TERM lOANS
TheBoardbelievesthattheGroup’ssuccessisduetothequalityandcommitmentofitsworkforce.TheGroup’semployeemanagementpriorities,includingitsremunerationstrategies,arebasedonrecruitingandretainingthebestpeopleintheindustryandonencouragingworkingpracticesthatimproveproductivity,reducecosts,developtalentandprovidejobsatisfaction.Further,theBoardrecognisestheneedforcommunicationwithemployeesateverylevelandiscommittedtoongoinginteractionwithallofitsemployees.Thisisachievedinanumberofways,includingmonthlynewslettersfromtheGroupChiefExecutive,whicharecirculatedtoall
employees,andfrequent“allhands”presentationsbytheExecutiveManagementTeamtogroupsofstaffatallcompanylocations.During2011JDRemployed,onaverage,513employees,includingcontractors,whowerebasedinUK,Norway,Houston,ThailandandSingapore.
TheGroupiscommittedtoapolicyofequalopportunityinmattersrelatingtoemployment,trainingandcareerdevelopmentandisopposedtoanyformoflessfavourabletreatmentaffordedonthegroundsofage,disability,sex,maritalstatus,sexualorientation,nationality,raceorreligion.
EMPlOyEES
AsdescribedmorefullyintheStatementofdirectors’responsibilitiesbelow,thedirectorshaveareasonableexpectationthattheGrouphasadequateresourcestocontinueinoperational
existencefortheforeseeablefuture.Forthisreason,theycontinuetoadoptthegoingconcernbasisinpreparingthefinancialstatements.gOINg CONCERN
The directors who held office during the period and at the date of this report are given below:
P. Herbert ExecutiveChairmanfromSeptember2011
R. Solberg Non-executiveDirector(ChairmanuntilAugust2011)
J. Van de Steen InvestorDirector
A. Rich InvestorDirector
A. Mackie DirectorandCompanySecretary
A. Norman AppointedOctober2012
P. Sayles AppointedJuly2011
M. Boden AppointedSeptember2011
H. van Veen ResignedMay2011
G. Koral ResignedJuly2011
P. Phelan ResignedDecember2011
A. Hawkins ResignedDecember2011
DIRECTORS
ThesharecapitalofthecompanyisownedbyfundsadvisedbyVisionCapitalLLP,GoldmanSachsandmanagement.
SHARE CAPITAl
ANNUAL REPORT 2012 17DIRECTORS’ REPORT
ThedirectorsareresponsibleforpreparingtheAnnualReportandthefinancialstatementsinaccordancewithapplicablelawandregulations.
Companylawrequiresthedirectorstopreparefinancialstatementsforeachfinancialyear.UnderthatlawthedirectorshaveelectedtopreparefinancialstatementsinaccordancewithUnitedKingdomAccountingStandards(UnitedKingdomGenerallyAcceptedAccountingPractice).ThefinancialstatementsarerequiredbylawtogiveatrueandfairviewofthestateofaffairsoftheGroupandParentCompanyandoftheprofitorlossoftheGroupforthatperiod.Inpreparingthesefinancialstatements,thedirectorsarerequiredto:
• selectsuitableaccountingpoliciesandthenapplythemconsistently
• makejudgmentsandestimatesthatarereasonableandprudent
• statewhetherapplicableUKAccountingStandardshavebeenfollowed,subjecttoanymaterialdeparturesdisclosedandexplainedinthefinancialstatements,and
• preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheGroupwillcontinueinbusiness.
ThedirectorsareresponsibleforkeepingadequateaccountingrecordsthatdisclosewithreasonableaccuracyatanytimethefinancialpositionoftheGroupandenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct2006.TheyarealsoresponsibleforsafeguardingtheassetsoftheGroupandhencefortakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.
In so far as each of the directors is aware:• thereisnorelevantauditinformationofwhichtheGroup’sauditorsareunaware;and
• thedirectorshavetakenallstepsthattheyoughttohavetakentomakethemselvesawareofanyrelevantauditinformationandtoestablishthattheauditorsareawareofthatinformation.
ThedirectorsareresponsibleforthemaintenanceandintegrityofthecorporateandfinancialinformationincludedontheGroup’swebsite.LegislationintheUnitedKingdomgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromlegislationinotherjurisdictions.
STATEMENT OF DIRECTORS’ RESPONSIbIlITIES
Theauditors,GrantThorntonUKLLP,haveindicatedtheirwillingnesstocontinueinofficeandappropriatearrangementshavebeenputinplaceforthemtobedeemedreappointedasauditorsintheabsenceofanannualgeneralmeeting.
AuDITORS
Thisreporthasbeenpreparedinthecontextofthereportdated20November2007,GuidelinesforDisclosureandTransparencyinPrivateEquity.
ByorderoftheBoard
Alistair MackieSecretary
23October2012
WAlKER REPORT
ANNUAL REPORT 2012 18INDEPENDENT AuDITOR’S REPORT
REPORT OF THE INDEPENDENT AuDITOR TO THE MEMbERS OF JDR CAblE SySTEMS (HOlDINgS) lIMITED
WehaveauditedthefinancialstatementsofJDRCableSystems(Holdings)Limitedfortheyearended31March2012whichcomprisetheGroupandcompanyprofitandlossaccount,theGroupandparentcompanybalancesheets,theGroupcashflowstatement,theGroupstatementoftotalrecognisedgainsandlosses,theGroupandparentcompanyreconciliationofmovementinshareholders’fundandtherelatednotes.ThefinancialreportingframeworkthathasbeenappliedintheirpreparationisapplicablelawandUnitedKingdomAccountingStandards(UnitedKingdomGenerallyAcceptedAccountingPractice).
Thisreportismadesolelytothecompany’smembers,asabody,inaccordancewithChapter3ofPart16oftheCompaniesAct2006.Ourauditworkhasbeenundertakensothatwemightstatetothecompany’smembersthosematterswearerequiredtostatetotheminanauditor’sreportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthanthecompanyandthecompany’smembersasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.
Respective responsibilities of directors and auditorsAsexplainedmorefullyintheDirectors’ResponsibilitiesStatementonpage19,thedirectorsareresponsibleforthepreparationofthefinancialstatementsandforbeingsatisfiedthattheygiveatrueandfairview.OurresponsibilityistoauditandexpressanopiniononthefinancialstatementsinaccordancewithapplicablelawandInternationalStandardsonAuditing(UKandIreland).ThosestandardsrequireustocomplywiththeAuditingPracticesBoard’s(APB’s)EthicalStandardsforAuditors.
Scope of the audit of the financial statementsAdescriptionofthescopeofanauditoffinancialstatementsisprovidedontheAPB’swebsiteatwww.frc.org.uk/apb/scope/UKNP.
Opinion on financial statementsInouropinionthefinancialstatements:
• giveatrueandfairviewofthestateoftheGroup’sandtheparentcompany’saffairsasat31March2012andoftheGroup’sandCompany’sprofitfortheyearthenended;
• havebeenproperlypreparedinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice;and
• havebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006.
Opinion on other matters prescribed by the Companies Act 2006InouropiniontheinformationgivenintheDirectors’Reportforthefinancialyearforwhichthefinancialstatementsarepreparedisconsistentwiththefinancialstatements.
Matters on which we are required to report by exceptionWehavenothingtoreportinrespectofthefollowingmatterswheretheCompaniesAct2006requiresustoreporttoyouif,inouropinion:
• adequateaccountingrecordshavenotbeenkeptbytheparentcompany,orreturnsadequateforouraudithavenotbeenreceivedfrombranchesnotvisitedbyus;or
• theparentcompanyfinancialstatementsarenotinagreementwiththeaccountingrecordsandreturns;or
• certaindisclosuresofdirectors’remunerationspecifiedbylawarenotmade;or
• wehavenotreceivedalltheinformationandexplanationswerequireforouraudit.
Paul NaylorSeniorStatutoryAuditor
for and on behalf of Grant Thornton UK LLP, Statutory Auditor, Chartered Accountants, Cambridge
25October2012
ANNUAL REPORT 2012 19FiNANciAl StAteMeNtS gROuP P&l
gROuP PROFIT AND lOSS ACCOuNT FOR THE yEAR ENDED 31 MARCH 2012
Revenue
Costofsales
Gross profit
Administrativeexpenses
Administrativeexpenses-exceptional
Operating (loss)/profit before goodwill amortisation
Goodwillamortisation
Operating (loss)/profit
Profitonsaleofsubsidiary
Netinterestpayable
Profit/(loss) on ordinary activities before taxation
Taxcredit/(charge)onprofitonordinaryactivities
Retained profit/(loss) for the financial year
2,3
3
4
4
9
4
5
7
8
21
NOTE
111,092
(87,963)
23,129
(21,523)
(2,238)
(632)
(364)
(996)
19,865
(2,407)
16,462
1,018
17,480
2012
£’000
19,598
(10,140)
9,458
(6,869)
(31)
2,558
(1,196)
1,362
-
-
-
-
-
2011DIS-
CONTINUED£’000
55,283
(44,022)
11,261
(14,862)
(2,467)
(6,068)
(364)
(6,432)
-
-
-
-
-
2011CONTINUING(ADJUSTED)
£’000
74,881
(54,162)
20,719
(21,731)
(2,498)
(3,510)
(1,560)
(5,070)
-
(4,579)
(9,649)
(1,073)
(10,722)
2011(ADJUSTED)
£’000
gROuP STATEMENT OF TOTAl RECOgNISED gAINS AND lOSSES FOR THE yEAR ENDED 31 MARCH 2012
Retainedprofit/(loss)forthefinancialyear
Exchangerategain/(loss)
Total gains and losses recognised since the last financial statements
17,480
6
17,486
2012
£’000
(10,722)
(67)
(10,789)
2011(ADJUSTED)
£’000
ANNUAL REPORT 2012 20FiNANciAl StAteMeNtS COMPANy P&l
COMPANy PROFIT AND lOSS ACCOuNT FOR THE yEAR ENDED 31 MARCH 2012
Netoperatingpayments
Administrativeexpenses-exceptional
Netinterestpayable
Operating loss
Profitonsaleofsubsidiary
Profit/(loss) on ordinary activities before taxation
Taxonlossonordinaryactivities
Profit/(loss) for the financial year
Alloperationsarecontinuing.
Thecompanyhasnorecognisedgainsandlossesotherthanthoseincludedintheaboveprofitandlossaccountandthereforenoseparatestatementoftotalrecognisedgainsandlosseshasbeenpresented.
Thereisnomaterialdifferencebetweentheprofitonordinaryactivitiesbeforetaxationandtheretainedprofitforthefinancialyearstatedaboveandtheirhistoricalcostequivalents.
4
7
4
5
8
21
NOTE
(925)
(822)
(1,869)
(3,616)
19,237
15,621
-
15,621
2012£’000
(724)
-
(2,645)
(3,369)
-
(3,369)
-
(3,369)
2011£’000
ANNUAL REPORT 2012 21FiNANciAl StAteMeNtS gROuP bAlANCE SHEET
gROuP bAlANCE SHEET AT 31 MARCH 2012
Fixed assets
Intangibleassets
Tangibleassets
Current assets
Stock
Debtors
Cashatbankandinhand
Creditors – amounts falling due within one year
Net current assets/(liabilities)
Total assets less current liabilities
Creditors – amounts falling due after more than one year
Provisions for liabilities
Net assets
Capital and reserves
Calledupsharecapital
Sharepremiumaccount
Profitandlossaccount–accumulateddeficit
Total equity shareholders’ funds
Thefinancialstatementsfrompages21to47wereapprovedbytheboardofdirectorson23October2012andweresignedonitsbehalfby:
Martin BodenDirectorRegisteredNumberSC186919
9
10
11
13
14
15
18
19
20
21
22
NOTE
2,891
34,943
37,834
11,443
37,755
2,471
51,669
(36,372)
15,297
53,131
(30,895)
(2,836)
19,400
28,360
904
(9,864)
19,400
2012
£’000
11,979
39,414
51,393
18,187
20,351
4,992
43,530
(44,671)
(1,141)
50,252
(47,416)
(922)
1,914
28,360
904
(27,350)
1,914
2011(ADJUSTED)
£’000
ANNUAL REPORT 2012 22FiNANciAl StAteMeNtS COMPANy ONly bAlANCE SHEET
COMPANy bAlANCE SHEET AS AT 31 MARCH 2012
Fixed assets
Tangibleassets
Investments
Current assets
Debtors–amountsfallingduewithinoneyear
Debtors–amountsfallingdueafteroneyear
Cashatbankandinhand
Creditors – amounts falling due within one year
Net current assets
Total assets less current liabilities
Creditors – amounts falling due after more than one year
Net assets
Capital and reserves
Calledupsharecapital
Sharepremiumaccount
Profitandlossaccount
Total equity shareholders’ funds
Thefinancialstatementsfrompages21to47wereapprovedbytheboardofdirectorson23October2012andweresignedonitsbehalfby:
Martin BodenDirectorRegisteredNumberSC186919
10
12
13
13
14
15
19
20
21
22
NOTE
2
21,222
21,224
8,552
45,537
72
54,161
(7,343)
46,818
68,042
(28,548)
39,494
28,360
904
10,230
39,494
2012
£’000
2
30,893
30,895
8,419
25,209
607
34,235
(6,886)
27,349
58,244
(34,371)
23,873
28,360
904
(5,391)
23,873
2011(ADJUSTED)
£’000
ANNUAL REPORT 2012 23FiNANciAl StAteMeNtS gROuP CASH FlOW
gROuP CASH FlOW STATEMENT FOR THE yEAR ENDED 31 MARCH 2012
Net cash (outflow)/inflow from operating activities
Returns on investments and servicing of finance
Interestpaid
Interestreceived
Netcashoutflowfromreturnsoninvestmentsandservicingoffinance
Taxation
Capital expenditure and financial investments
Purchaseofintangibleassets
Disposaloftangiblefixedassets
Purchaseoftangiblefixedassets
Netcashinflow/(outflow)fromcapitalexpenditureandfinancialinvestments
Financing
(Decrease)/increaseinborrowings
GovernmentGrantReceived
SaleofSubsidiary
Repaymentoffinanceleases
Netcashinflowfromfinancing
Decrease in net cash
23
NOTE
NOTE
(15,164)
(2,407)
-
(2,407)
309
(92)
7,405
(6,616)
697
(11,689)
380
28,424
(3,071)
14,044
(2,521)
2012£’000
2012£’000
9,500
(4,588)
9
(4,579)
(914)
(130)
-
(11,148)
(11,278)
5,703
1,605
-
(485)
6,823
(448)
RECONCIlIATION TO NET DEbT
Netdebtat1April2012
Decreaseinnetcashintheyear
Movementinborrowings
Othernon-cashchanges
Net debt at 31 March 2012
24
24
24
(43,316)
(2,521)
14,760
-
(31,077)
(37,670)
(448)
(5,219)
21
(43,316)
2011£’000
2011£’000
ANNUAL REPORT 2012 24FiNANciAl StAteMeNtS NOTES
ThefinancialstatementshavebeenpreparedunderthehistoricalcostconventionandinaccordancewiththeCompaniesAct2006andinaccordancewithapplicableaccountingstandards.Theprincipalaccountingpoliciesaresetoutbelow.
going concern basisThecompany’sbusinessactivities,togetherwiththefactorslikelytoaffectitsfuturedevelopment,performanceandpositionaresetoutintheDirectors’Report.Thefinancialpositionofthecompany,itscashflows,liquiditypositionandborrowingfacilitiesaredescribedintheDirectors’Report.Inaddition,notes(a)to(c)intheDirectors’Reportincludethecompany’sobjectives,policiesandprocessesformanagingitscapital;itsfinancialriskmanagementobjectives;detailsofitsfinancialinstrumentsandhedgingactivities;anditsexposurestocreditriskandliquidityrisk.
Thecompanyhasconsiderablefinancialresourcestogetherwithlong-termcontractswithanumberofcustomersandsuppliersacrossdifferentgeographicalareasandindustries.ThecompanyhasalsobenefittedfromthecontinuedsupportofbothVisionCapitalLLPandHSBCandthedirectorsareconfidentthatthissupportwillcontinueinthefuture.Asaconsequence,thedirectorsbelievethatthecompanyiswellplacedtomanageitsbusinessriskssuccessfullydespitethecurrentuncertaineconomicoutlook.
Thedirectorshaveareasonableexpectationthatthecompanyhasadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.Thustheycontinuetoadoptthegoingconcernbasisofaccountinginthepreparingtheannualfinancialstatements.
basis of consolidationTheGroupfinancialstatementsincorporatethefinancialstatementsofthecompanyandallofitssubsidiaryundertakingsuptotheendofthefinancialyear.Theresultsofthesubsidiariesacquiredordisposedofintheyearareincludedintheconsolidatedprofitandlossaccountfromthedateofacquisitionoruptothedateofdisposal.
RevenueRevenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivableandrepresentsamountsreceivableforgoodsandservicesprovidedinthenormalcourseofbusiness.
Significantcablesandumbilicalsareaccountedforusingthepercentage-of-completionmethod.Underthepercentage-of-completionmethod,werecogniseestimatedcontractrevenuebasedoncostsincurredtodateasapercentageoftotalestimatedcosts.
Whentheoutcomeofasignificantcablecontractcannotbeestimatedreliably,contractrevenueisrecognisedtotheextentofcontractcostsincurredthatareexpectedtoberecoverable.Contractcostsarerecognisedasexpensesintheperiodinwhichtheyareincurred.
Whenitisprobablethatthetotalcontractcostswillexceedtotalcontractrevenue,theexpectedlossisrecognisedasanexpenseimmediately.
The preconditions for revenue recognition for non-significant umbilicals are: (i) Acompletedeliverableproductorservice
existsandcorrespondswithapriceditemonthecustomercontractorpurchaseorder;
(ii) Theproducthaspassedthecontractualfinalfactoryacceptancetestagreedwiththeclientortheservicedeliverablehasbeencompletedtotheclient’ssatisfaction;
(iii) Theproductorserviceisavailableforclientuplift,orhasbeendispatchedifthisiswithinJDR’sscopeofsupply;and
(iv) Collectabilityoftherevenueisreasonablyassured.
Revenueisstatednetofassociatedsalestax.
1 ACCOuNTINg POlICIES
NOTES TO THE FINANCIAl STATEMENTS FOR THE yEAR ENDED 31 MARCH 2012
ANNUAL REPORT 2012 25FiNANciAl StAteMeNtS NOTES
goodwill Goodwillisdisclosedasanintangibleassetstatedatcostlessaccumulatedamortisation.Amortisationisprovidedinequalinstalmentsover20years.Goodwillbalancesareassessedforpossibleimpairmentwhenevereventsorchangesincircumstancesindicateimpairmentmayhavearisenandarewrittendowntothedirectors’estimatesoftheirfairvaluesaccordingly.
Research and developmentExpenditureonnewproductdevelopmentiscapitalisedwherethecostincurredhasresultedinaproductthatthedirectorsbelievehasacommerciallyviablefuture.Capitaliseddevelopmentcostsaredisclosedasintangibleassetsstatedatcostlessaccumulatedamortisation.Amortisationisprovidedinequalinstalmentsover5years,theexpectedeconomiclifeofthenewproducts.
Tangible assetsTangibleassetsarestatedatcostanddepreciationisprovidedinequalinstalmentsovertheirestimatedusefullivesbyusingthefollowingrates:
Plantandmachinery 5-10%Officeequipment 20%Computerequipment 50%Motorvehicles 20%
Thecompanyundertakesareviewforimpairmentoffixedassetsifeventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecoverable.Totheextentthatthecarryingamountexceedstherecoverableamount,thatisthehigherofnetrealisablevalueandvalueinuse,thefixedassetiswrittendowntoitsrecoverableamount.
Employee benefit TrustAsrequiredinUITF38,thefinancialstatementsincludetheEmployeeBenefitTrustsincethedirectorsconsiderthatthecompanycontrolstheTrustandbearsthebenefitsandrisksassociatedwiththeTrust.SharesheldbytheTrustaredeductedfromshareholders’funds.
Stock Stockisstatedatthelowerofcostandnetrealisablevalue.
Financial instrumentsFinancialLiabilitiesandequityinstrumentsareclassifiedaccordingtothesubstanceofthecontractualarrangementsenteredinto.Anequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsoftheentityafterdeductingallofitsfinancialliabilities.
Wherethecontractualobligationsoffinancialinstruments(includingsharecapital)areequivalenttoasimilardebtinstrument,thosefinancialinstrumentsareclassedasfinancialliabilities.Financialliabilitiesarepresentedassuchinthebalancesheet.Financecostsandgainsorlossesrelatingtofinancialliabilitiesareincludedintheprofitandlossaccount.Financecostsarecalculatedsoastoproduceaconstantrateofreturnontheoutstandingliability.
Wherethecontractualtermsofsharecapitaldonothaveanytermsmeetingthedefinitionofafinancialliabilitythenthisisclassifiedasanequityinstrument.Dividendsanddistributionsrelatingtoequityinstrumentsaredebiteddirecttoequity.
InvestmentsInvestmentsarestatedatcostlessprovisionforimpairmentwherenecessarytoreducebookvaluetorecoverableamount.Costispurchasepriceincludingacquisitionexpenses.
Finance leases and hire purchase agreementsAssetspurchasedunderfinanceleasesorhirepurchaseagreementsarecapitalisedinthebalancesheetandaredepreciatedoverthelesseroftheirestimatedusefullivesandtheperiodoftheagreement.Theinterestelementoftherentalobligationsischargedtotheprofitandlossaccountovertheperiodofthecontractonastraightlinebasisandthecapitalelementoffuturerentalsistreatedasaliability.
Operating leasesExpenditureonoperatingleasesischargedtotheprofitandlossaccountonabasisrepresentativeofthebenefitderivedfromtheasset,normallyonastraight-linebasisovertheleaseperiod.
1 ACCOuNTINg POlICIES (CONT.)
ANNUAL REPORT 2012 26FiNANciAl StAteMeNtS NOTES
Foreign currenciesAssetsandliabilitiesofoverseassubsidiariesandassociatedundertakingshavebeenexpressedinsterlingatthemarketraterulingattheendofeachfinancialyear.Tradingresultsaretranslatedattheaverageratesfortheyear.Exchangedifferencesarisingontranslationofthefinancialstatementsofoverseassubsidiariesaretakentoreserves.
Tradingactivitiesdenominatedinforeigncurrenciesaretranslatedattheaverageratefortheperiod.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedattherateofexchangerulingatthebalancesheetdateanddifferencesonexchangeareincludedintheprofitandlossaccount.
Pension costsContributionsmadetopersonalpensionschemes,whichareadministeredindependentlyofthecompany,arechargedtotheprofitandlossaccountasincurred.
Related party disclosuresThecompanyisexemptunderthetermsofFinancialReportingStandard8fromdisclosingrelatedpartytransactionswithentitiesthatarepartoftheGroup.
TaxationCurrenttax,includingUKcorporationtaxandforeigntax,isprovidedontaxableprofitsatcurrentratesintherespectivetaxationjurisdictions.
Deferredtaxisrecognisedinrespectofalltimingdifferencesthathaveoriginatedbutnotreversedatthebalancesheetdatewheretransactionsoreventsthatresultinanobligationtopaymoretaxinthefutureorarighttopaylesstaxinthefuturehaveoccurredatthebalancesheetdate.Timingdifferencesaredifferencesbetweenthecompany’staxableprofitsanditsresultsasstatedinthefinancialstatementsthatarisefromtheinclusionofgainsandlossesintaxassessmentsinperiodsdifferentfromthoseinwhichtheyarerecognisedinthefinancialstatements.
Adeferredtaxassetisregardedasrecoverableandthereforerecognisedonlywhen,onthebasisofallavailableevidence,itcanberegardedasmorelikelythannotthattherewillbesuitabletaxableprofitsfromwhichthefuturereversaloftheunderlyingtimingdifferencecanbededucted.Deferredtaxismeasuredonanon-discountedbasis.
Deferredtaxismeasuredatthetaxratesthatareexpectedtoapplyintheperiodsinwhichthetimingdifferencesareexpectedtoreverse.
government grantsGovernmentgrantsareofacapitalnatureandarereleasedtotheprofitandlossaccountovertheexpectedusefullifeoftherelatedassetinaccordancewithSSAP4.
1 ACCOuNTINg POlICIES (CONT.)
ANNUAL REPORT 2012 27FiNANciAl StAteMeNtS SEgMENTAl REPORTINg
2 SEgMENTAl REPORTINg
Turnover by originContinentalEuropeUnitedKingdomUnitedStatesAsiaPacific
Turnover by destinationContinentalEuropeUnitedKingdomUnitedStatesRestoftheWorld
403
106,191 4,348
150
111,092
15,228 48,066 9,064
38,734
111,092
2012
£’000
GROUP
20,40051,1542,0121,315
74,881
17,99627,21911,39918,267
74,881
2011(ADJUSTED)
£’000
Additionalsegmentaldisclosureshavenotbeenprovidedasthedirectorsconsiderthattheprovisionofsuchinformationcouldbeprejudicialtothebusiness.
ANNUAL REPORT 2012 28FiNANciAl StAteMeNtS PRIOR yEAR ADJuSTMENT
THE EFFECTS OF THE CHANgE IN POlICy ON THE gROuP ACCOuNTS ARE SuMMARISED bElOW
Profit and loss accountRevenueCostofSalesGrossProfitOverheadsIncreaseinOperatingProfitinYearIncreaseinTax
Balance sheetWorkInProgressAmountsRecoverableonContractsIncreaseinNetAssetsinYear
5,890
(3,804) 2,086
- 2,086 (542)
(3,804)
5,890 2,086
2012£’000
1,816(1,381)
435-
435(122)
(1,381)1,816435
2011£’000
Thereisnoeffectonthecompanyaccountsfromthechangeinpolicy.
TheGrouphaschangeditspolicyonrevenuerecognition.Previouslyallrevenuewasrecogniseduponcompletionofcontract.However,assomelargecontractstakeasignificantlengthoftime,apolicyofrecognitionoverthelifeofthesesignificantcontractshasbeenimplemented.ThedirectorsconsiderthatthenewpolicyprovidesafairerpresentationoftheresultandofthefinancialpositionoftheGroupbecausethisensuresthattheprofitonlongtermcontractsisrecognisedoverthelifeofthecontractandnotentirelyoncompletion.
3 PRIOR yEAR ADJuSTMENT
ANNUAL REPORT 2012 29FiNANciAl StAteMeNtS OPERATIONAl PROFIT
TheprofitonsaleofasubsidiaryrelatestothedisposalofthegroupsinterestintheordinarysharecapitalofJDRHoldingsBV.5 ExCEPTIONAl
ITEMS REPORTED AFTER OPERATINg PROFIT
4 OPERATINg PROFIT/(lOSS)
Operating profit/(loss) is stated after charging/(crediting)GoodwillamortisationAmortisationofdevelopmentcostsDepreciation-ownedassets-leasedassetsOperatingleasecharges-plantandmachinery-otherLossonthesaleoffixedassets
Auditors’ remunerationServicestotheGroupanditssubsidiaries-feespayabletotheCompany’sauditorfortheaudit
ofthefinancialstatements-auditofthefinancialstatementsoftheCompany’s
subsidiaries(associates)pursuanttolegislation-otherservicessuppliedpursuanttolegislationForeignexchangeloss/(gain)
364 166
3,690
-
180 2,270
114
18
20 6
64
2012£’000
-------
----
2011£’000
COMPANY
1,560114
3,395322
285
2,75314
20
566
(25)
2011£’000
GROUP
- - - - - - -
- - - -
2012£’000
TheGroup’sUKsubsidiaryincurredexceptionaladministrationexpensesof£2,238,000(Company£822,000)in2012relatingtothewrite-offofsurplusstocks,consultingcostsassociatedwithare-engineeringoftheERPsystemsandredundancycosts.
TheGroup’sUKsubsidiaryincurredexceptionaladministrationexpensesof£2,498,000in2011,relatingtotheestablishmentofitsnewfacilityinHartlepool,includingemployee,property,equipmentrelocation,insurance,utilityandotherexpensespayableduringtheperiodfromtheconceptionofthefacilitytotheinstallationoftheequipment.
ANNUAL REPORT 2012 30FiNANciAl StAteMeNtS EMPlOyEE COSTS
6 EMPlOyEE COSTS
WagesandsalariesSocialsecuritycostsOtherpensioncosts(Seenote30)
16,399 1,784
473
18,656
2012£’000
6582710
695
2011£’000
COMPANY
16,4571,988849
19,294
2011£’000
GROUP
978 48 17
1,043
2012£’000
Details of directors’ emoluments are as follows
AggregateemolumentsCompanycontributionstodefinedcontributionpensionschemes
Highest paid directorTotalamountofemolumentsandamounts(excludingshares)receivableunderlongtermincentiveschemes
1,176 45
1,221
277
2012£’000
51715
532
479
2011£’000
COMPANY
1,012227
1,239
479
2011£’000
GROUP
517 14
531
277
2012£’000
The average number of employees (including executive directors) during the year was
By activityProductionSellinganddistributionAdministration
361 15 57
433
2012NUMBER
--5
5
2011NUMBER
COMPANY
3421661
419
2011NUMBER
GROUP
- - 6
6
2012NUMBER
Retirementbenefitsareaccruingtofour(2011:five)directorsunderdefinedcontributionpersonalpensionschemes.
ANNUAL REPORT 2012 31FiNANciAl StAteMeNtS NET INTEREST
7 NET INTEREST PAyAblE
BankloanBankinterestOtherinterest&chargesNetexchangedifferenceonforeigncurrencyborrowings
Total interest payable and similar charges
InterestduefromGroupundertakingsOtherinterest
Total interest receivable and similar income
Net interest payable
(331) (9)
(2,067) -
(2,407)
- -
-
(2,407)
2012£’000
(1,216)(593)
(2,036)(250)
(4,095)
1,450-
1,450
(2,645)
2011£’000
COMPANY
(1,703)(8)
(2,877)-
(4,588)
-9
9
(4,579)
2011£’000
GROUP
(331) (146)
(1,850) (86)
(2,413)
544 -
544
(1,869)
2012£’000
ANNUAL REPORT 2012 32FiNANciAl StAteMeNtS TAx NOTE CONTINuED
The tax assessed for the period varies from the standard rate of corporation tax in the uK (26%). The differences are explained below
Profit/(loss) on ordinary activities before taxation
Profit/(loss)onordinaryactivitiesmultipliedbystandardrateintheUK26%(2011:28%)
Effectsof:
(Income)/expensesnotdeductiblefortaxpurposes
Foreigntax
Utilisationofbroughtforwardlosses
Acceleratedcapitalallowances
Othershorttermdifferences
Currenttaxchargefortheyear
16,462
4,280
(4,618)
2
1,021
(683)
-
2
2012
£’000
(3,369)
(943)
-
-
946
25
(28)
-
2011
£’000
COMPANY
(9,649)
(2,702)
(633)
1,001
4,219
(856)
(28)
1,001
2011(ADJUSTED)
£’000
GROUP
15,622
4,062
(4,983)
-
922
(1)
-
-
2012
£’000
8 TAx ON PROFIT/(lOSS) ON ORDINARy ACTIVITIES
Current taxForeigntax
TotalCurrenttax
Deferred taxCurrentyear
Tax (credit) / charge for the year
2
2
(1,020)
(1,018)
2012£’000
-
-
-
-
2011£’000
COMPANY
1,001
1,001
72
1,073
2011£’000
GROUP
-
-
-
-
2012£’000
ANNUAL REPORT 2012 33FiNANciAl StAteMeNtS INTANgIblE ASSETS
9. INTANgIblE ASSETS
Cost
At1April2011
Additions
Disposal
Foreignexchangerevaluation
At 31 March 2012
Accumulated amortisation
At1April2011
Chargefortheyear
Disposal
Foreignexchangerevaluation
At 31 March 2012
Net book value
At 31 March 2012
At31March2011
32,016
92
(21,915)
-
10,193
(20,037)
(530)
13,284
(19)
(7,302)
2,891
11,979
TOTAL
£’000
31,175
-
(21,915)
-
9,260
(19,619)
(364)
13,284
-
(6,699)
2,561
11,556
GOODWILL
£’000
841
92
-
-
933
(418)
(166)
-
(19)
(603)
330
423
DEVELOPMENTCOST£’000
Thecompanyhasnointangiblefixedassets(2011:nil).
ANNUAL REPORT 2012 34FiNANciAl StAteMeNtS TANgIblE ASSETS
10. TANgIblE FIxED ASSETS
Cost
At1April2011
Additions
Disposal
Foreignexchangerevaluation
At 31 March 2012
Accumulated depreciation
At1April2011
Chargefortheyear
Disposal
Foreignexchangerevaluation
At 31 March 2012
Net book value
At 31 March 2012
At31March2011
54,185
6,616
(11,362)
14
49,453
(14,771)
(3,690)
3,955
(4)
(14,510)
34,943
39,414
TOTAL
£’000
53,995
3,402
(11,362)
14
46,049
(14,581)
(3,690)
3,955
(4)
(14,320)
31,729
39,414
PLANTANDMACHINERY
£’000
-
3,214
-
-
3,214
-
-
-
-
-
3,214
-
ASSETSINTHECOURSEOFCONSTRUCTION
£’000
GROUP
190
-
-
-
190
(190)
-
-
-
(190)
-
-
OFFICEEQUIPMENT
£’000
Asset held under finance leases and included in plant and machinery are as follows
Cost
Additions
Aggregatedepreciation
Net book value
4,285
-
(1,186)
3,099
2011£’000
-
-
-
-
2012£’000
ANNUAL REPORT 2012 35FiNANciAl StAteMeNtS TANgIblE ASSETS
10. TANgIblE FIxED ASSETS (CONTINuED)
Cost
At1April2011
Additions
At 31 March 2012
Accumulated depreciation
At1April2011
Chargefortheyear
At 31 March 2012
Net book value
At 31 March 2012
At31March2011
COMPANY
53
-
53
(51)
-
(51)
2
2
OFFICEEQUIPMENT
£’000
11 STOCK
Rawmaterials
Workinprogress
Finishedgoods
8,768
9,111
308
18,187
4,939
6,504
-
11,443
2011(ADJUSTED)
£’000
2012
£’000
GROUP
ANNUAL REPORT 2012 36FiNANciAl StAteMeNtS INVESTMENTS
12 INVESTMENTS
Shares in subsidiary undertakings
Cost
At1April
Disposals
Additions
At31March
Provisions for impairment
At1April
Disposals
At31March
Net Book Value
A1April
At31March
30,893
-
-
30,893
-
-
-
30,893
30,893
30,893
(9,671)
-
21,222
-
-
-
30,893
21,222
COMPANY2011£’000
COMPANY2012£’000
The company’s principal trading subsidiary operating undertakings at 31 March 2012 were as follows
JDRCableSystemsLtd
JDRCableSystemsInc
JDRCableSystems(Thailand)Ltd
JDRCableSystemsAS
100%
100%
100%
100%
Scotland
UnitedStates
Thailand
Norway
Offshoreoil&gasservices
Offshoreoil&gasservices
Offshoreoil&gasservices
Offshoreoil&gasservices
PERCENTAGEOF NOMINALSHARE CAPITAL
NAMEOFSUBSIDIARY
NATUREOFBUSINESS
COUNTRYOFREGISTRATION/INCORPORATION
ThesharesinJDRCableSystemsIncareheldbyJDRCableSystems(Holdings)Inc.
ANNUAL REPORT 2012 37FiNANciAl StAteMeNtS DEbTORS
Tradedebtors
TaxationRecoverable
Prepaymentsandaccruedincome
Deferredtaxasset
AmountsowedbyGroupundertakings
Otherdebtors
Prepaymentsandaccruedincome
AmountsowedbyGroupundertakings
27,333
-
8,919
867
-
533
37,652
103
-
103
2012
£’000
2012£’000
AMOUNTSFALLINGDUEWITHINONEYEAR
AMOUNTSFALLINGDUEAFTERONEYEAR
-
-
64
-
8,355
-
8,419
-
25,209
25,209
2011
£’000
2011£’000
COMPANY
16,370
356
2,602
-
-
920
20,248
103
-
103
2011(ADJUSTED)
£’000
2011£’000
GROUP
-
-
98
-
8,405
49
8,552
-
45,537
45,537
2012
£’000
2012£’000
13. DEbTORS
RevolvingCreditFacility(RCF)(note16)
Tradecreditors
Accrualsanddeferredincome
Othertaxandsocialsecurity
Paymentsonaccount
Financeleases(note16)
AmountsduetoGroupundertakings
5,000
14,957
7,373
126
8,916
-
-
36,372
2012£’000
AMOUNTSFALLINGDUEWITHINONEYEAR
2,221
142
522
-
-
-
4,001
6,886
2011£’000
COMPANY
2,619
18,921
5,837
140
16,725
429
-
44,671
2011£’000
GROUP
5,000
121
1,098
-
-
-
1,124
7,343
2012£’000
14 CREDITORS
AmountsowedbyGroupundertakingsareunsecuredandhavenofixeddateofrepayment.Thedirectorsdonotintendtodemandrepaymentoftheseamountswithin12monthsofthebalancesheetdate.
AmountsduetoGroupundertakingsareunsecured,andarerepayableondemand.
ANNUAL REPORT 2012 38FiNANciAl StAteMeNtS CREDITORS
Bankloanandaccruedinterest(note16)
Amountduetoparentcompany(note16)
Financeleases(note16)
Other
GovernmentGrant
5,000
23,548
-
7
2,340
30,895
2012£’000
AMOUNTSFALLINGDUEAFTERMORETHANONEYEAR
21,244
13,127
-
-
-
34,371
2011£’000
£’000
COMPANY
29,491
13,127
2,642
-
2,156
47,416
2011£’000
GROUP
5,000
23,548
-
-
-
28,548
2012£’000
15 CREDITORS
At1April2011
Receivedduringtheyear
March 2012
Amortisation
At1April2011
Chargeduringtheyear
March 2012
Carryingvalue
At 31 March 2012
At31March2011
2,245
380
2,625
89
196
285
2,340
2,156
government grants are as follows
AmountsduetoparentcompanyarenotpayableuntiltheexpiryofBankdebtin2015.
ANNUAL REPORT 2012 39FiNANciAl StAteMeNtS bORROWINg COSTS
16 bORROWINgS AND OblIgATIONS uNDER FINANCE lEASES
BoRRowings aRe RepayaBle as follows
Within one year
Bankloansandaccruedinterest
Financeleases
Within 2 – 5 years
Bankloan
Financeleases
After 5 years
Bankloan(a)
Loanduetoparentundertaking
Financeleases
Total borrowings
5,000
-
5,000
5,000
-
5,000
-
23,548
-
23,548
33,548
2012£’000
2,221
-
2,221
21,244
-
21,244
-
13,127
-
13,127
36,592
2011£’000
COMPANY
2,619
429
3,048
29,491
1,647
31,138
-
13,127
995
14,122
48,308
2011£’000
GROUP
5,000
-
5,000
5,000
-
5,000
-
23,548
-
23,548
33,548
2012£’000
(a) HSBCisthesolebanklendertoJDR.BankloanscompriseofaRevolvingCreditFacility(RCF)(£10.0m).TheloansaredenominatedinSterling.TheRCFexpiresinJune2015.HSBCchargeafeefornon-utilisationoftheRCFandinterestischargedatafixedratewhenthefacilityisutilised.TheGroupbankloansatbalancesheetdateweresecuredbyabondandfloatingchargeovertheassetsoftheGroup.
(b) TheLoansduetoparentundertakingareultimatelyprovidedbytheshareholdersofJDREnterprisesLtd.NointerestischargedonLoansduetoparentundertaking.PaymentofanyaccruedinterestontheparentcompanyloansandrepaymentofprincipalisnotpermittedundertheTerm&RevolvingFacilitiesAgreementbetweenJDRCableSystems(Holdings)Ltd,JDREnterprisesLtd,theshareholdersofJDREnterprisesandHSBC,priortothedischargeoftheBank’sdebt.TheBank’sdebtisnotfullydischargeduntil31March2015.
ANNUAL REPORT 2012 40
17 DEFERRED TAxATION The deferred tax asset/(liability) that has been recognised is as follows
FiNANciAl StAteMeNtS DEFERRED TAxATION
Acceleratedcapitalallowances
Losses
Othershorttermtimingdifferences
(2,086)
2,942
11
867
2012£’000
-
-
-
-
2011£’000
COMPANY
(1,755)
1,411
17
(327)
2011£’000
GROUP
-
-
-
-
2012£’000
The potential deferred tax asset which has not been recognised is as follows
Acceleratedcapitalallowances
Losses
Othershorttermtimingdifferences
2
2,191
-
2,193
2012
£’000
25
1,429
-
1,454
2011
£’000
COMPANY
25
4,405
-
4,430
ADJUSTED2011£’000
GROUP
2
2,191
-
2,193
2012
£’000
Theunrecogniseddeferredtaxassetisbasedonacorporationtaxrateof24%(2011:26%).
ANNUAL REPORT 2012 41FiNANciAl StAteMeNtS PROVISIONS FOR lIAbIlITIES AND CHARgES
19 CAllED uP SHARE CAPITAl
authoRised
Equity
26,450,000Ordinarysharesof£0.10each
22,600,121,895DeferredSharesof£0.001each
4,800,000PreferenceSharesof£1.00each
allotted, called up and fully paid
Equity
Ordinarysharesof£0.10each
27,600,121,985DeferredSharesof£0.01each
4,800,000Preferencesharesof£1.00
GROUPANDCOMPANY
GROUPANDCOMPANY
2,645
22,600
4,800
30,045
960
22,600
4,800
28,360
2011£’000
2011£’000
2,645
22,600
4,800
30,045
960
22,600
4,800
28,360
2012£’000
2012£’000
DividendsTheprofitsoftheCompanyavailablefordistributionshallbeappliedinpayingtotheholdersoftheOrdinarySharesprorata,accordingtotheamountspaiduporcreditedaspaidupontheordinarysharesheldbythemrespectively,suchamountasthedirectorsmaydecide,subjecttotheconsentofanInvestorMajorityandtheCompany’sbankers.TheDeferredSharescarrynorighttoadividend.
Voting RightsAmemberhasonevoteforeveryordinaryshareheld.Thedeferredshareshavenovotingrights.
CapitalOnareturnofassetsonliquidationorcapitalreductionorotherwise,theassetsofthecompanyremainingafterthepaymentofitsliabilitiesshallbedistributedtotheholdersoftheordinaryshares.Theholdersofthedeferredsharesarenotentitledtoanyshareofthesurplusassetsuntileachoftheordinaryshareholdershasreceived£10,000,000perordinaryshare.
18 PROVISIONS FOR lIAbIlITIES AND CHARgES
At1April2011
(Utilised)/providedintheyear
At 31 March 2012
595
(595)
-
WARRANTY
£’000
922
1,914
2,836
TOTAL
£’000
327
(327)
-
DEFERREDTAxATION
£’000
-
2,836
2,836
OTHER
£’000
ThewarrantyprovisionarisesinrespectofguaranteesprovidedinthenormalcourseofbusinessrelatingtoproductperformancefortheMarineCablesdivisionofthebusiness.Thewarrantyprovisionwasdisposedofaspartofthesubsidiarysale.
Theotherprovisionrelatestoanumberofexcesscontractualcostswhichthecompanybelievesitmayincuronprojectswhichhavebeendeliveredtoclients.
Thesecostsarenotfullyknown,subjecttonegotiationandareunlikelytobeoffsetbyadditionalrevenues.Itisexpectedthatthemajorityofexpenditureswillbeincurredinthenextfinancialyearandthatallwillbeincurredwithintwoyears.Theprovisionhasbeenestimatedinaccordancewiththeappropriatecontractdocuments.
Thecompanyhasnoprovisionforliabilities(2011:nil).
ANNUAL REPORT 2012 42FiNANciAl StAteMeNtS SHARE PREMIuM ACCOuNT
20 SHARE PREMIuM ACCOuNT
At 1 April 2011 and 31 March 2012 904
COMPANY2012£’000
904
GROUP2012£’000
21 PROFIT AND lOSS ACCOuNT
At1April2011–deficit
PriorYearAdjustment
At1April2011–restated
Profitforthefinancialyear
Exchangeadjustments
At 31 March 2012 – deficit
(5,391)
-
(5,391)
15,621
-
10,230
COMPANY2012£’000
(27,785)
435
(27,350)
17,480
6
9,864
GROUP2012£’000
22 RECONCIlIATION OF MOVEMENTS IN SHAREHOlDERS’ FuNDS
Profit/(loss)forthefinancialyear
Exchangeadjustments
Netadditionto/(reductionin)shareholders’funds
Openingshareholders’funds
Prioryearadjustment
Openingshareholders’funds–restated
Closing shareholders’ funds
17,480
6
17,486
1,479
435
1,914
19,400
2012
£’000
(3,369)
-
(3,369)
27,242
-
27,242
23,873
2011
£’000
COMPANY
(10,722)
(67)
(10,789)
12,703
-
12,703
1,914
2011(ADJUSTED)
£’000
GROUP
15,621
-
15,621
28,873
-
23,873
39,494
2012
£’000
ANNUAL REPORT 2012 43FiNANciAl StAteMeNtS CASH FlOW FROM OPERATINg ACTIVITIES
23 CASH FlOW FROM OPERATINg ACTIVITIES
Operatingloss
Amortisationofgoodwill
Amortisationofdevelopmentcosts
Depreciationcharge
Amortisationofgrant
Lossonsaleoffixedassets
Decrease/(increase)instocks
(Increase)indebtors
(Decrease)/Increaseincreditors
Increaseinprovisions
Prioryearadjustment(Note3)
Othernon-cashmovements
Net cash (outflow)/inflow from operating activities
(996)
364
166
3,690
(196)
114
8,125
(18,711)
(10,378)
2,241
435
(18)
(15,164)
2012
£’000
(5,070)
1,560
114
3,717
(64)
14
(3,616)
(2,569)
15,417
198
-
(201)
9,500
2011(ADJUSTED)
£’000
GROUP
ANNUAL REPORT 2012 44FiNANciAl StAteMeNtS ANAlySIS OF NET DEbT
24 ANAlySIS OF NET DEbT
Cashatbankandinhand
Debtlessthanoneyear
Debtmorethanoneyear
Financeleases
-
-
-
-
-
-
4,992
4,992
(2,619)
(42,618)
(3,071)
(43,316)
OTHERNON-CASH
£’000
2011
£’000
2,471
2,471
(5,000)
(28,548)
-
(31,077)
(2,521)
(2,521)
(2,381)
14,070
3,071
12,239
2012
£’000
CASHFLOW£’000
25 OPERATINg lEASE COMMITMENTS
At 31 March 2012 the group has lease agreements in respect of properties, & plant & equipment
Annualcommitmentsundernon-cancellableoperatingleasesexpiring:
Within1year
Within2to5years
After5years
119
-
2,280
2,399
77
856
1,922
2,855
PROPERTY
£’000
PROPERTY
£’000
GROUP
134
238
-
372
81
96
-
177
PLANTANDEQUIPMENT
£’000
20112012
PLANTANDEQUIPMENT
£’000
26 CAPITAl COMMITMENT
Contractplacedforfuturecapitalexpenditurenotprovidedinthefinancialstatements 531
2012£’000
4,134
2011£’000
ANNUAL REPORT 2012 45FiNANciAl StAteMeNtS ulTIMATE PARENT uNDERTAKINg
DuringthenormalcourseofbusinesstheGrouphasgivenbankguaranteestotalling£15,228,000(2011:£19,011,000).
TheGroupreceivesgovernmentgrantstoassistinthefundingofcapitalexpenditure.Theaggregateamountofsuchgrantsreceivedintheyearto31March2012was£380,000(2011:£1,605,000)
Intheeventofanybreachofgrantconditionsthefullamountofthegrantreceivedwouldberepayable.TheGroupisnotawareofanyactual,orpotential,breachofconditions,noprovisionisrequiredforrepayment.
JDRCableSystems(Holdings)LtdisaguarantorforallGroupborrowingfacilitiesundertheagreementbetweenthecompanyanditsbankers.Totalsumsoutstandingunderthisagreementat31March2012were£10,000,000(2011:£32,110,000).
29 CONTINgENT lIAbIlITIES
TheGroupcontributestopersonalpensionschemesonbehalfofcertainemployees.TheseschemesareadministeredindependentlyoftheGroup.ThetotalpensioncostwhichischargedagainstprofitrepresentscontributionspayablebytheGroupandamountedto£473,000(2011:£849,000).
30 PENSION COMMITMENTS
TheultimateparentcompanyandcontrollingpartyisJDREnterprisesLimited,whichistheparentcompanyofthelargestGrouptoconsolidatethesefinancialstatements.CopiesoftheGroupfinancialstatementscanbeobtainedfromtheCompanySecretaryatJDRCablesSystems(Holdings)Limited,LittleportInnovationPark,WisbechRoad,Littleport,Ely,Cambridgeshire,CB61RA.
27 ulTIMATE PARENT uNDERTAKINg
MrRich,MrHawkinsandMrVandeSteenwererepresentativedirectorsforVisionCapitalLLP.FundsundermanagementofVisionCapitalLLParethelargestshareholderinJDREnterprisesLtd.28 RElATED PARTy
TRANSACTIONS
ANNUAL REPORT 2012 46ADVISERS
JDR Cable Systems Ltd SaltireCourt20CastleTerraceEdinburghEH12ENRegisteredcompanynumber:SC186919
REgISTERED HEAD OFFICE
HSBC Bank plc Home&EasternCountiesCorporateBankingCentreLevel6MetropolitanHouse,CBx3321AveburyBoulevardMiltonKeynesMK92GA
bANKERS
Eversheds LLPKettHouseStationRoadCambridgeCB12JY
Bird and Bird LLPTaunusanlage160329FrankfurtamMainGermany
lEgAl ADVISERS
Grant Thornton UK LLP101CambridgeScienceParkMiltonRoadCambridgeCB4OFY
AuDITORS
Lazard & Co., Limited50StrattonStreetMayfairLondonW1J8LL
FINANCIAl ADVISERS
Brunswick Group LLP16Lincoln’sInnFields,London,WC2A3ED
COMMuNICATIONS ADVISERS
ADVISERS AND REgISTERED HEAD OFFICE
ANNUAL REPORT 2012 47
ANNUAL REPORT 2012 48
ANNuAl REPORTFOR THE yEAR
ENDED 31 MARCH 2012
JDR Cable Systems (Holdings) limited
littleport Innovation ParkWisbech Road
littleportCambridgeshire
Cb6 1RA
7906 N. Sam Houston Parkway WestSuite 201HoustonTx 77064
lITTlEPORT | HARTlEPOOl | HOuSTON | AbERDEEN | THAIlAND
