REG-PZ CUSSONS PLC Annual Financial Report
Released: 25/08/2009
com:20090825:RnsY7610X
.
RNS Number : 7610X
PZ CUSSONS PLC
25 August 2009
25 August 2009
PZ Cussons Plc
Annual Financial Report
PZ Cussons Plc has today submitted copies of the 2009 Annual Report and
Accounts, Notice of the 2009 Annual General Meeting, Shareholder Proxy Form and
proposed new Articles of Association to the Financial Services Authority. These
will shortly be available for inspection at the UK Listing Authority's Document
Viewing Facility which is situated at:
The Financial Services Authority
25 The North ColonnadeCanary WharfLondon
E14 5HS
The Annual Report and Notice of Annual General Meeting are also available on the
Company's website www.pzcussons.com
At the Annual General Meeting on 5 October 2009 it is proposed that the Company
adopts new Articles of Association. A summary of the material differences
between the current articles of association and the proposed new articles of
association is set out in the Notice of the Annual General Meeting. The proposed
new Articles of Association are available for inspection during normal business
hours at the registered office of the Company and at the offices of Addleshaw
Goddard LLP, Milton Gate, 60 Chiswell Street, London, EC1Y 4AG.
A condensed set of PZ Cussons' financial statements and information on important
events that have occurred during the financial year and their impact on the
financial statements were included in the Company's preliminary results
announcement released on 28 July 2009. That information, together with the
information set out below, which is extracted from the 2009 Annual Report,
constitute the material required by Disclosure and Transparency Rule 6.3.5 which
is required to be communicated to the media in unedited full text through a
Regulatory Information Service. This announcement is not a substitute for
reading the full 2009 Annual Report. Page numbers and cross-references in the
extracted information below refer to references in the 2009 Annual Report.
PRINCIPAL RISKS AND UNCERTAINTIES (page 24)
The principal risks facing the Group, which have been considered by the board,
are detailed below. The Group's well developed risk management process is
detailed in the Corporate Governance section.
Description of risk Measures to reduce the risks
The Group conducts a substantial proportion of its operations The Group has a diverse geographic portfolio, however, in
outside the UK in developing markets which have significant developing its corporate strategy and in order to help
capacity for profitable growth but which also have an mitigate the risk that could arise in any one particular
increased risk of political and economic instability. territory, the Board seeks to maintain an appropriate
balance both between developed and developing markets and,
within the developing world, between its operations in
different territories. In addition, the Group has extensive
and long established experience in all key markets and the
Board continually monitors those markets to ensure that any
specific risks (or opportunities) may be identified and
addressed as they arise.
Demand for the Group's products may be adversely impacted by Extensive knowledge of the Group's selected markets is a
changes in consumer preferences. The increasingly competitive core strategic pillar and the Group actively monitors the
environment and continued growth of discounters could needs and aspirations of consumers on a regular and ongoing
adversely impact the rate of sales growth and profit margins. basis and is continuously developing new products to satisfy
them. The Group will continue to invest in selected brands
and selected markets in order to drive profitable sales
growth and the Board believes that competition is healthy as
it encourages and motivates the Group's operations across
the world to do their best to serve the interests of
consumers and our brands.
Description of risk Measures to reduce the risks
In common with other companies within its sector, the The Group takes measures to protect against the short-term
Group's profitability is affected by price and supply impact of these fluctuations and shortfalls; however, failure
fluctuations in raw materials used in the manufacture of its to recover higher costs or shortfalls in availability could
products. Key items, such as oils and fats, packaging have a negative impact on profits. The Group continually
materials and energy are subject to fluctuations in price monitors the price and availability of materials against
and availability. forecast demand to ensure that there are adequate resources to
continue in production throughout the world and during the year
the Group has further strengthened its raw material forecasting
and procurement capabilities.
The international nature of the Group's activities gives The Group requires its operating units to hedge their material
rise to both transactional exchange rate risk (with the main transaction exposures on sales and purchases conducted in
exposure relating to US Dollar trade balances) and currencies other than their functional currencies. The Group
translation exposure when the results, assets and does not actively hedge its translation exposures as these are
liabilities of foreign subsidiaries are translated into of an accounting rather than a cash nature; however, the
Sterling. international spread of the Group's operations itself reduces
dependence on individual currencies.
The Group maintains a centralised treasury function which
operates on a non-speculative basis in accordance with policies
and procedures approved by the Board of Directors and reviewed
during the year by the Board and the Audit Committee. The aim
of this function is to mitigate the effects of any adverse
movements in exchange rates and interest rates on the Group's
financial results.
The Group recognises that in order to deliver sustained The Board believes that there is in place an attractive
strong results it requires the right calibre of people at employment proposition across the Group which will continue to
all levels of the business. In particular, the Group must attract capable recruits and that key management and personnel
compete to recruit and retain capable individuals within the are sufficiently well incentivised and challenged in order to
business including training them in the skills and retain them as far as possible.
competencies which are required to deliver profitable
growth.
Should the Group fail to meet high product safety, social, Product safety, social, environmental and ethical standards
environmental and ethical standards in all operations and continue to be the cornerstones on which our business is based
activities, there is the risk that its corporate reputation and during the year the Board has established the Corporate
could be damaged, leading to the rejection of our products Social Responsibility Committee as a standing sub-committee of
by consumers, damage to brands and diversion of management the Board with responsibility for the development of policies
time into rebuilding our reputation. in respect of each of these focus areas. Should any issues
arise in these areas, the Group has processes in place to
enable a quick response.
RELATED PARTY TRANSACTIONS
Notes 31 and 32 to the consolidated financial statements on page 88 details the
following related party transactions.
31. Related party transactions
The following related party transactions were entered into by subsidiary
companies during the year under the terms of a joint venture agreement with
Glanbia Plc:
At 31 May 2009 the outstanding balance receivable from Milk Ventures (UK) Ltd
was £23.7 million (2008: £23.2 million). At 31 May 2009 the Group had no
outstanding balance payable to Milk Ventures (UK) Ltd (2008: nil).
The Group sourced and then sold fixed assets and raw materials to Nutricima Ltd
to the value of £41.8 million (2008: £43.8 million). At 31 May 2008 the amount
outstanding from Nutricima Ltd was £3.6 million (2008: £4.4 million).
Nutricima Ltd sold £60.2 million (2008: £43.4 million) of goods to PZ Cussons
Nigeria Plc. The amount outstanding from PZ Cussons Nigeria Plc at 31 May 2009
was £1.3 million (2008: £2.7 million).
All trading balances will be settled in cash.
There were no provisions for doubtful related party receivables at 31 May 2009
(2008: nil) and no charges to the income statement in respect of doubtful
related party receivables (2008: nil).
32. Subsidiaries and joint ventures
Details of the Company's principal subsidiaries at 31 May 2009 are as follows:
Parent Proportion
Incorporated in Company's of voting
Company Operation interest interest
PZ Cussons Australia Pty Ltd Manufacturing Australia +100% +100%
PZ Cussons Middle East and South Distribution Dubai +100% +100%
Asia FZE
Charles Worthington Hair & Beauty Ltd Holding company England *100% *100%
FC Ltd Manufacturing England +100% +100%
PZ Cussons (Holdings) Ltd Holding company England *100% *100%
PZ Cussons (International) Ltd Provision of services to Group companies England *100% *100%
PZ Cussons (UK) Ltd Manufacturing England +100% +100%
The Sanctuary Spa Holdings Ltd Provision of spa services and product distribution England +100% +100%
PZ Cussons Ghana Ltd Manufacturing Ghana +90% +90%
Minerva SA Manufacturing Greece *100% *100%
PT PZ Cussons Indonesia Manufacturing Indonesia +100% +100%
PZ Cussons East Africa Ltd Manufacturing Kenya +100% +100%
HPZ Ltd1 Manufacturing Nigeria +48% +48%
PZ Cussons Nigeria Plc Manufacturing Nigeria +64% +64%
Harefield Industrial Nigeria Ltd Distribution Nigeria +100% +100%
PZ Cussons Polska SA Manufacturing Poland +99% +99%
PZ Cussons (Thailand) Ltd Manufacturing Thailand +100% +100%
Parent
Company's
Joint venture companies Operation Incorporated in interest
Milk Ventures (UK) Ltd Holding company England +50%
Nutricima Ltd Manufacturing Nigeria +50%
Parent
Company's
Other investments Operation Incorporated in interest
Norpalm Ghana Ltd Manufacturing Ghana +31%
1 HPZ Ltd is 74.99% owned by PZ Cussons Nigeria Plc and is therefore
consolidated.
* Shares held by the parent company
+ Shares held by a subsidiary
STATEMENT OF DIRECTORS' RESPONSIBILITIES (page 52)
The Directors are responsible for preparing the Annual Report, the Report on
Directors' remuneration and the Group and Parent financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the Group
financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union, and the parent company
financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards 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 the Company and of the profit or loss of the Group for
that period.
In preparing these financial statements, the Directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and accounting estimates which are reasonable and prudent;
* state whether IFRSs as adopted by the European Union and applicable UK
Accounting Standards have been followed, subject to any material departures
disclosed and explained in the Group and parent company financial statements
respectively; and
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and the
Group and enable them to ensure that the financial statements and the Report on
Directors' remuneration comply with the Companies Act 2006 and, as regards the
Group financial statements, Article 4 of the IAS Regulation. They are also
responsible for safeguarding the assets of the Company and the Group and hence
for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity of the Company's
website, www.pzcussons.com. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Each of the Directors, whose names and functions are listed on page 36, confirm
that, to the best of their knowledge:
* the Group financial statements, which have been prepared in accordance with
IFRSs as adopted by the EU, give a true and fair view of the assets,
liabilities, financial position and profit of the Group; and
* the Report of the Directors includes a fair review of the development and
performance of the business and the position of the Group, together with a
description of the principal risks and uncertainties which it faces.
Name of contact and telephone number for queries:
Sam Plant
Company Secretary, PZ Cussons Plc
(T) (00) 44 (0)161 491 8000
Date: 25 August 2009
This information is provided by RNS
The company news service from the London Stock Exchange
END
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