Preliminary Results

RNS Number : 8241A

Croda International PLC

25 February 2014

 



25 February 2014

Croda International Plc

Preliminary results for the year to 31 December 2013 (unaudited)

Innovation and improving product mix help drive strong EPS growth

Highlights	2013			2012 restated2	Change
Sales - continuing operations	£1,077.0m			£1,051.9m	+2.4%
-     Consumer Care	£593.2m			£586.4m	+1.2%
-     Performance Technologies	£387.1m			£382.8m	+1.1%
-     Industrial Chemicals	£96.7m			£82.7m	+16.9%
Adjusted operating profit1		£264.6m		£255.1m	+3.7%
-     Consumer Care	£191.3m			£185.3m	+3.2%
-     Performance Technologies	£63.0m			£59.5m	+5.9%
-     Industrial Chemicals	£10.3m			£10.3m	0.0%
Operating profit	£263.3m			£254.9m	+3.3%
Adjusted profit before tax1	£251.4m			£238.5m	+5.4%
Profit before tax	£250.1m			£238.3m	+5.0%
Adjusted earnings per share1			132.2p	122.1p	+8.3%
Earnings per share - continuing operations			131.2p	121.9p	+7.6%
Earnings per share - basic	131.2p			112.1p	+17.0%
Dividends per share	64.5p			59.5p	+8.4%

·     Adjusted profit before tax¹ increased 5.4% to £251.4m despite demanding market conditions.

·     Strong sales growth of 10.8% in new and protected products (NPP) supported a record return on sales in both Consumer Care (32.2%) and Performance Technologies (16.3%). Profits were flat in Industrial Chemicals.

·     The improved product mix helped to increase the Group's return on sales¹ to 24.6% (2012: 24.3%).

·     Two acquisitions added valuable new technologies and further expanded our geographical footprint:

o  Acquired specialty product business from Arizona Chemical in May;

o  Acquired 65% stake in Sichuan Sipo (China) in August.

·     Very strong cash generation, free cash flow of £249.0m (2012: £180.5m).

·     Full year dividend increased by 8.4% to 64.5p

¹ Continuing operations before exceptional items, acquisition costs and amortisation/write off of intangible assets arising on acquisition

² Restated for the impact of IAS19 (revised)

Commenting on these results, Chairman Martin Flower said:

"In another year of demanding market conditions, Croda continued its track record of pre-tax profit and earnings per share growth. From a strategic perspective, we have made real progress, maintaining our focus on innovation and developing our business in both existing and emerging markets. With record sales of new and protected products across the business, acquisitions in North America and China, three more R&D laboratories, two more customer training centres and further investment in our global sales force, our platform for sustainable, organic growth is much stronger.

While the current year has started in line with our expectations, global trends are unpredictable and our forward visibility remains limited. Currency translation is expected to have an adverse impact on profit growth in 2014. If last year's results had been translated using closing rates as at December 2013, pre-tax profits for 2013 would have been approximately £9m lower. However, we still expect to achieve constant currency sales and profit growth in 2014 characterised by:

-     Improvement in margins in Performance Technologies, progressing towards our target of 20% return on sales

-     NPP sales growth

-     Strong cash generation

The Board is confident that Croda has the right strategy in place to deliver its medium term growth targets."

Highlights - Fourth Quarter	2013	2012	Change
Sales - continuing operations	£246.4m	£240.1m	+2.6%
-     Consumer Care	£135.0m	£136.3m	-1.0%
-     Performance Technologies	£88.9m	£83.9m	+6.0%
-     Industrial Chemicals	£22.5m	£19.9m	+13.1%

Adjusted operating profit1	£63.3m	£61.9m	+2.3%
-    Consumer Care	£46.5m	£44.5m	+4.5%
-    Performance Technologies	£14.6m	£13.4m	+9.0%
-    Industrial Chemicals	£2.2m	£4.0m	-45.0%
Operating profit	£62.8m	£61.8m	+1.6%
Adjusted profit before tax1	£59.5m	£57.6m	+3.3%
Profit before tax	£59.0m	£57.5m	+2.6%
Sales reconciliation
Volume			+2.0%
Price/mix			-1.1%
Underlying sales			+0.9%
Acquisition			+2.6%
Currency translation			-0.9%
Continuing sales			+2.6%

·     Fourth quarter underlying sales growth similar to quarter three

·     Good margin progression meant profits grew at a faster rate than sales in both Consumer Care and Performance Technologies

·     Adverse price/mix is due to the higher sales growth in Performance Technologies and Industrial Chemicals which have lower average selling prices than Consumer Care

·     Adverse currency translation in Latin America, Asia and the United States

For further information, please contact:

Steve Foots, Group Chief Executive	Tel: [phone]
Sean Christie, Group Finance Director
Charlie Armitstead / Rosie Oddy Pendomer Communications	Tel: [phone]

The company will broadcast the meeting with analysts in a live audiocast commencing at 9:00 AM on the company's website at www.croda.com.

Chairman's Statement

In another year of demanding market conditions, Croda continued its track record of pre-tax profit and earnings per share growth. From a strategic perspective, we have made real progress, maintaining our focus on innovation and developing our business in both existing and emerging markets. With record sales of new and protected products (NPP) across the business, acquisitions in North America and China, three more R&D laboratories, two more customer training centres and further investment in our global sales force, our platform for sustainable, organic growth is much stronger.

Full Year Results

Despite 2013 seeing little change to the demanding market environment that we experienced throughout 2012, Croda continued to make further progress with sales, margins and profits reaching record levels. Turnover from continuing operations increased by 2.4% to £1,077.0m (2012: £1,051.9m). Adjusted operating profit¹ grew by 3.7% to £264.6m (2012: £255.1m) and we saw Group return on sales on the same basis increase to 24.6% (2012: 24.3%). Sales performance was mixed with strong growth seen in NPP, slower growth in areas where we have less differentiation from our competitors and declines in commodity sales. Our ongoing success in being able to improve the quality of our business mix can be clearly seen in robust margins and the overall increase in profitability. 

Adjusted pre-tax profit¹ increased 5.4% to £251.4m (2012: £238.5m) and earnings per share on the same basis¹ increased by 8.3% to 132.2p (2012: 122.1p), boosted by a lower tax charge. On an unadjusted basis, pre-tax profit increased 5.0% to £250.1m (2012: £238.3m) and earnings per share from continuing operations improved by 7.6% to 131.2p (2012: 121.9p).

Sector Performance

Consumer Care sales increased by 1.2% over the year to £593.2m (2012: £586.4m) with good growth in Western Europe being the highlight and weak trading in EEMEA* together with adverse currency translation in Asia being the major negatives. Health Care had the highest increase in turnover. We saw marginal growth in Personal Care whilst in Crop Care sales for the year as a whole were flat versus 2012 but were much stronger in the second half, reversing the declines seen at the interim stage. Overall, higher margin NPP sales saw double-digit growth, helping achieve a 3.2% rise in adjusted operating profit¹ to £191.3m (2012: £185.3m). The improving quality of our product mix helped increase return on sales to 32.2% (2012: 31.6%).

In Performance Technologies, sales rose by 1.1% to £387.1m (2012: £382.8m) with a very strong performance in Asia eroded by declines in EEMEA* and Europe. Again we achieved double-digit NPP growth, supporting an adjusted operating profit¹ increase of 5.9% to £63.0m (2012: £59.5m). Return on sales improved to 16.3% (2012: 15.5%), representing further progress towards our medium term target of 20%. All business areas apart from Coatings & Polymers achieved sales growth.

The acquisition of Sichuan Sipo Chemical Co Ltd (Sipo) was the main reason behind Industrial Chemicals' 16.9% sales increase to £96.7m (2012: £82.7m). As expected, Sipo made only a small contribution to profit in the second half, and adjusted operating profit¹ for the year was flat at £10.3m (2012: £10.3m). Consequently return on sales reduced to 10.7% (2012: 12.5%).

Foundations for Sustainable Growth

During 2013, we have placed significant emphasis on expanding our resources in two key strategic areas, both of which continue to set Croda apart from the competition and help us to increase customer trust and loyalty.

The first is innovation which, whether in our ingredients, processes or the mindset of our people, has always been at the heart of Croda's business; we want customers to partner with us because they value our innovation. In 2013, we have made significant progress to enhance our offering by both developing our own technologies and successfully acquiring new technology. We are in a strong position to generate future growth through innovation.

The second is bringing our business closer to our customers, both in terms of understanding their needs and how we position our sites globally. Increasingly, this has meant focusing on the emerging markets of Asia, Latin America and EEMEA*. We have made significant progress in expanding our business in all these markets, increasing our operational capability in terms of new and expanded R&D facilities, sales and customer training centres and manufacturing sites. We have also continued to recruit and retain people with excellent commercial and technical expertise. All of this will allow us to achieve faster growth in these emerging markets in the future.

Acquisitions

During 2013, we acquired a 65% share in Chinese speciality chemicals manufacturer Sipo for £30.3m.Sipo has brought with it new technology within an excellent facility, and moved us closer to our customers in this key territory, strengthening our existing operations and overall position in Asia. We also acquired, for £7.8m, the global Specialty Chemicals business of Florida-based Arizona Chemical and with it world-leading technology that enhances our leadership in speciality ingredients from renewable resources. We look forward to generating value from the combination of these exciting new businesses and Croda's established global sales and marketing network.

Sustainability

Customers and consumers are putting an ever-greater value on sustainability, which means there is a strong commercial justification for our long-established commitment to increasing our sustainability credentials in every area of our business. We were delighted to be listed as one of the top Global 100 Most Sustainable Corporations in the World for a second consecutive year. This result is testament to Croda's commitment to sustainability and the central role it plays in the Group's growth strategy. We are proud of our performance in this area and it has brought us new business, illustrating how our strategy is good for growth as well as for the environment.

Board appointments

In January 2014, we announced the appointment of Dr Helena Ganczakowski as a Non-Executive Director with effect from 1 February 2014. Helena spent 23 years at Unilever and brings with her a wealth of experience in consumer marketing and innovative product development. We are delighted to welcome her to the Croda Board.  Stanley Musesengwa will retire from the Board on 24 April 2014 following the AGM after seven years as a Non-Executive Director, at which point Steve Williams will take over as Chairman of the Remuneration Committee. We wish Stanley well and thank him for the valuable role he has played over the last seven years.

Dividend

We continue to be a highly cash generative business. This has allowed us to maintain our progressive dividend policy whilst also funding the significant investment and operational needs of the business. Effective management of these cash flows has led to net debt reducing slightly over the course of the year, despite spending £38.1m on acquisitions and over £40m of pension deficit funding. In line with our dividend policy, we propose a final dividend of 35.5p making the total dividend payable in respect of 2013 64.5p, an increase of 8.4% in line with the underlying growth in earnings per share.

Outlook

While the current year has started in line with our expectations, global trends are unpredictable and our forward visibility remains limited. Currency translation is expected to have an adverse impact on profit growth in 2014. If last year's results had been translated using closing rates as at December 2013, pre-tax profits for 2013 would have been approximately £9m lower. However, we still expect to achieve constant currency sales and profit growth in 2014 characterised by:

-     Improvement in margins in Performance Technologies, progressing towards our target of 20% return on sales

-     NPP sales growth

-     Strong cash generation

The Board is confident that Croda has the right strategy in place to deliver its medium term growth targets.

Martin Flower

Chairman

¹ Continuing operations before exceptional items, acquisition costs and amortisation/write off of intangible assets arising on acquisition

* Eastern Europe, Middle East and Africa

  

Chief Executive's Statement

Despite a weak macro global economic environment, Croda delivered a solid result in 2013. This performance underlines the resilience of our business model, which focuses on using our global reach to target fast-growing niche, mature and emerging markets with our high-value, highly innovative products.

Real Progress Against our Strategy

In Martin's Statement, he talks about how, in 2013, we focused on innovation and emerging markets as two key strategic areas to drive future sustainable growth. We made real progress with our strategy, in particular with our new product development as evidenced by a record number of launches in both our Consumer Care and Performance Technologies business segments. I would like to provide some more detail to emphasise the progress we have made.

In innovation, we have seen a significant acceleration in new product development resulting in more product launches than ever before. In particular, we saw a double-digit increase in sales of our new and protected products (NPP) in both Consumer Care and Performance Technologies. The acquisition of Arizona Chemical's polymer business has provided us with valuable new technologies and a rich patent portfolio, which we expect to have a very positive impact on our business around the world. Technology capture is on the increase. Our Technology Investment Group has identified a number of new technologies that we would like to acquire to satisfy unmet needs, and the team is now working hard to make this a reality.

In emerging markets, we have significantly increased our presence with the acquisition of Sipo, our first manufacturing investment in China. One of the main attractions of Sipo is the newly commissioned but not yet fully utilised site. In an important market, this has given us the local footprint we need to support our sales growth, primarily in Performance Technologies. We have also opened three new R&D laboratories and two sales offices and customer training centres in Asia, Latin America and Africa, which will allow us to be more responsive to our fast-growing customer base in these markets.

Continued Strong Demand for our Products

So, we have seen a year of increased innovation, global co-ordination and investment into emerging markets. The continuing strong demand for our new and protected products bears witness to the effectiveness of our strategy, which continues to focus on differentiation, innovation and investment for a sustainable future.

Solid Sector Performance

Consumer Care 

Sales increased by 1.2% over the year to £593.2m (2012: £586.4m), with good underlying growth and favourable currency translation in Western Europe countered by extremely weak sales in EEMEA*, adverse currency translation in Asia and only marginal growth overall in other markets. Higher margin NPP sales saw double-digit growth, supporting a 3.2% rise in adjusted operating profit¹ to £191.3m (2012: £185.3m). The improving quality of our product mix helped increase return on sales to 32.2% (2012: 31.6%). Looking at each business area in turn:

·     Health Care had the highest increase in turnover, with a strong performance in excipients offsetting a weak Omega 3 market in nutritional supplements.

·     Personal Care was mixed, with only marginal growth overall:

o  Sederma skin actives, IRB plant stem cells and Arizona polyamides all made excellent progress and sales activity for our new acrylic polymers platform was encouraging.

o  Performance elsewhere was disappointing, caused by lower levels of customer reformulation activity.

·     Crop Care sales were flat, characterised by:

o  A tough first half of the year due to inclement weather in the USA and Northern Europe restricting the early planting season.

o  Improving demand in the second half.

Performance Technologies

Sales rose by 1.1% to £387.1m (2012: £382.8m) with a very strong underlying performance in Asia eroded by declines in EEMEA* and Western Europe. Again, growth was enhanced by a double-digit improvement in sales of innovative new products, helping achieve an adjusted operating profit¹ increase of 5.9% to £63.0m (2012: £59.5m). Geo Technologies led the sales growth, and improvements were seen in all business areas apart from Coatings & Polymers. Return on sales improved to 16.3% (2012: 15.5%), representing further progress towards our medium term target of 20%.

Industrial Chemicals

Another year of progress helped by the acquisition of Sipo, sales of speciality products and an increase in volume availability of our co-streams. We saw a 16.9% sales increase to £96.7m (2012: £82.7m), adjusted operating profit¹ was flat at £10.3m (2012: £10.3m) and with Sipo having little time to make a meaningful contribution to profit, return on sales reduced to 10.7% (2012: 12.5%).

Our Global Performance

In 2013, we saw sales growth in all of our five geographical reporting regions, with the exception of EEMEA*. Supported by favourable currency translation, the strongest growth was achieved in Western Europe, which was up 3.6%, and North America, up 3.0%. Adverse currency translation reduced our reported turnover growth in Asia and Latin America. It is pleasing to see healthy sales progress in China, Brazil and Mexico where we have targeted recent investment but this was offset by weak sales across EEMEA* and in Argentina and Venezuela.

A Sustainable Business

Yet again, we have made excellent progress against a number of our sustainability targets. More and more, as customer and consumer demand for renewable ingredients continues to increase, our sustainable approach is becoming an important differentiator for our business and therefore a significant means of generating growth.

We were extremely pleased to achieve a number of new sustainability accreditations in 2013, including:

·     CDP Climate Disclosure Leader 2013: one of 41 businesses who have demonstrated leadership in climate change transparency through good internal data management and understanding of climate-change-related issues affecting the company.

·     Gold EcoVadis CSR Rating which recognises our environmental and social practices, and our influence within our supply chain.

We also maintained our Global 100 Most Sustainable Corporations and FTSE4Good accreditations.

Our People... at the heart of everything we do

Croda is a global company with a presence in 34 countries and one extremely talented and dedicated team of individuals. As a knowledge business, our dependence on the expertise of our people is particularly high and we work hard to attract, recruit and retain the best. I am once again pleased to report that our retention rates around the world remain very high and our people continue to show their commitment to long-term careers with Croda through, for example, increasing participation in our savings-related share schemes.

I would like to take this opportunity to thank my colleagues around the world for their continued hard work and dedication to our business. We could not have achieved these results without them.

Steve Foots

Group Chief Executive

Financial Review

2013 has been another year characterised by strong financial performance, with good growth in pre-tax profits and earnings per share, a reduced pension deficit and lower borrowings; all achieved in the context of a demanding marketplace that looks set to continue. After concerted efforts last year to expand our resources, we now have the people and facilities we need to support our growth plans and expect to see steady improvements in sales growth in the future.

Improved Sales and Business Mix

Continuing sales increased by 2.4% in 2013 compared to the year before, with a decline in underlying sales of 0.2% masked by favourable currency translation and acquisitions. Our overall mix of business improved, with a 10.8% increase in new and protected product (NPP) sales. We also experienced slightly stronger sales progress in the second half of the year than the first.

Increased Profitability Overall

Adjusted operating profit grew 3.7% to £264.6m (2012: £255.1m) with return on sales reaching 24.6% (2012: 24.3%). We saw profit growth in both our Consumer Care and Performance Technologies business segments, achieving our highest ever return on sales figures in each sector. Compared to 2012, Industrial Chemicals profits were flat.

The reduced pension deficit led to a lower funding cost and borrowings reduced slightly. As a result, net interest costs were £3.4m lower than in 2012.

The result of this increase in operating profit and reduction in financing costs has been an increase in adjusted pre-tax profit of 5.4% to £251.4m (2012: £238.5m). Total pre-tax profit, including acquisition costs and amortisation of acquired intangible assets, grew by 5.0% to £250.1m (2012: £238.3m).

Earnings per Share and Dividend Performance

Falling corporation tax rates in the UK and a more favourable mix of overseas earnings further reduced our tax rate to 28.7% (2012: 31.1%). Consequently, adjusted earnings per share from continuing operations grew a little more than profits, up 8.3% to 132.2p. On an unadjusted basis, earnings per share from continuing operations increased by 7.6% to 131.2p.

Dividends were increased in line with earnings growth.

Accounting for Acquisitions

The acquisitions of Sipo and Arizona's Specialty Chemicals business increased acquisition costs and amortisation of acquired intangible assets. If the right targets can be found, these costs are likely to increase in the future. To avoid distorting the underlying trend in profitability we have chosen to introduce the definitions "Adjusted operating profit", "Adjusted pre-tax profit" and "Adjusted earnings per share". In each case we exclude acquisition costs, amortisation or write off of intangible assets arising on acquisition and exceptional items. The Group Income Statement has been produced in a columnar format to further aid this analysis.

Goodwill

This year's acquisitions have increased the carrying amount of goodwill in the Group balance sheet to £229.3m (2012: £206.5m). The goodwill relates predominantly to the value in the commercial and other synergies arising from the combination of the acquired technologies and products with Croda's established global sales, marketing and R&D networks.

Debt and liquidity

Free cash flow was up 38.0% at £249.0m (2012: £180.5m) helped by tight control of working capital. Net debt reduced by £5.5m in 2013 to £202.2m (2012: £207.7m), despite significantly increasing our pension deficit funding contribution to £41.2m (2012: £24.7m). Capital expenditure was £46.6m (2012: £52.7m), the cash effect of our targeted mergers and acquisitions was £54.9m, including inherited borrowings, and dividend pay-outs totalled £83.6m. Our main banking facilities run to May 2015, however we plan to refinance these loans during 2014.

Capital Expenditure

Capital expenditure was 1.4 times depreciation at £46.6m (2012: £52.7m), with the biggest spends resulting from enhancing our manufacturing capability in North America and Singapore. The amount of expenditure was lower than originally planned for 2013. This was due, in part, to project phasing, but also because of our response to the lower than expected market demand we encountered in 2012 and 2013. We do expect to spend significantly more on capital expenditure in 2014, as the phasing benefits seen in 2013 reverse and we commence work on a number of major new capital projects.

Retirement Benefits

We made deficit funding contributions in 2013 totalling £41.2m (2012: £24.7m). This, along with strong equity markets and slightly increased discount rates, has resulted in the IAS19 pension deficit falling to £135.8m at 31 December 2013 (2012: £165.8m). The major element behind the £41.2m deficit funding contribution was a payment into the UK fund of £38.4m. The amount of funding for the UK scheme will be lower in the next two years at around £20m per annum.

KPIs

We made further progress during 2013 towards our medium term target for Performance Technologies of 20% return on sales. All other financial targets were again achieved in 2013. Performance against our KPIs is shown in the following table:

	Target	2013	2012
Return on sales1	^	24.6%	24.3%
EPS growth1	+5-10%	+8.3%	+8.2%
Post tax ROIC	>WACC*+	23.8%	23.8%
Debt/EBITDA	<3x	0.7x	0.7x

¹ Continuing operations before acquisition costs and amortisation of intangible assets arising on acquisition

^ Separate targets for Consumer Care (maintain at current levels), Performance Technologies (achieve 20% in the medium term) and Industrial Chemicals (maximise profitability)

+ WACC: Weighted average cost of capital. 2013 average 6.3% (2012:6.8%)

* Excluding IAS19 credit

Sean Christie

Group Finance Director

Croda International Plc

Preliminary announcement of trading results for the year ended 31 December 2013

Group income statement

	Note	2013	2013	2013	2012		2012	2012
		£m	£m	£m	£m		£m	£m
		Before Adjustments	Adjust-ments1	Total	Before Adjust-ments (restated2)		Adjust-ments1	Total (restated2)
Revenue	2	1,077.0	-	1,077.0	1,051.9		-	1,051.9
Cost of sales		(713.9)	-	(713.9)	(695.0)		-	(695.0)
		_______	_______	_______	_______		_______	_______
Gross profit		363.1	-	363.1	356.9		-	356.9
Operating costs		(98.5)	(1.3)	(99.8)	(101.8)		(0.2)	(102.0)
		_______	_______	_______	_______		_______	_______
Operating profit	2	264.6	(1.3)	263.3	255.1		(0.2)	254.9
Financial costs	3	(14.5)	-	(14.5)	(17.8)		-	(17.8)
Financial income	3	1.3	-	1.3	1.2		-	1.2
		_______	_______	_______	_______		_______	_______
Profit before tax		251.4	(1.3)	250.1	238.5		(0.2)	238.3
Tax	4	(72.2)	-	(72.2)	(74.1)		-	(74.1)
		_______	_______	_______	_______		_______	_______
Profit after tax from continuing operations		179.2	(1.3)	177.9	164.4		(0.2)	164.2
Loss after tax from discontinued operations	7	-	-	-	(1.8)		(11.4)	(13.2)
		_______	_______	_______	_______		_______	_______
Profit for the year		179.2	(1.3)	177.9	162.6		(11.6)	151.0
		_______	_______	_______	_______		_______	_______
Attributable to:
Non-controlling interests		0.4	-	0.4	-		-	-
Owners of the parent		178.8	(1.3)	177.5	162.6		(11.6)	151.0
		_______	_______	_______	_______		_______	_______
		179.2	(1.3)	177.9	162.6		(11.6)	151.0
		_______	_______	_______	_______		_______	_______
1 Adjustments = exceptional items, acquisition costs and amortisation or write off of intangible assets arising on acquisition
2 Restated for the impact of IAS19 (revised)
		Pence per		Pence per	Pence per			Pence per
		share		share	share			Share
		Adjusted		Total	Adjusted			Total
Earnings per 10p share	5
Basic
Total				131.2				112.1
Continuing operations		132.2		131.2	122.1			121.9
		_______		_______	_______			_______
Diluted
Total				130.1				110.6
Continuing operations		131.0		130.1	120.5			120.3
		_______		_______	_______			_______
Ordinary dividends	6
Interim				29.00				26.75
Final				35.50				32.75

Group statement of comprehensive income and expense

for the year ended 31 December 2013

	2013 £m			2012 £m restated
Profit for the year	177.9			151.0
Other comprehensive (expense)/income:
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of post-employment benefit obligations	(6.4)			14.1
Tax on items that will not be reclassified	(4.1)			(7.5)
	______			______
	(10.5)			6.6
Items that may be reclassified subsequently to profit or loss:
Currency translation differences	(19.4)			(8.2)
	______			______
Other comprehensive expense for the year net of tax	(29.9)			(1.6)
	______			______
Total comprehensive income  for the year	148.0 ______			149.4 ______
Attributable to:
Non-controlling interests	-		-
Owners of the parent	148.0		149.4
	______		______
	148.0		149.4
	______		______
Total comprehensive income arising from:
Continuing operations	148.0		162.6
Discontinued operations	-		(13.2)
	______		______
	148.0		149.4
	______		______

Group balance sheet at 31 December 2013

Note		2013 £m		2012 £m
Assets
Non-current assets
Intangible assets		239.5		213.1
Property, plant and equipment		362.6		338.3
Investments		0.8		0.9
Deferred tax assets		47.1		64.0
		______		_____
		650.0		616.3
		______		_____
Current assets
Inventories		192.8		170.5
Trade and other receivables		136.7		162.9
Cash and cash equivalents		37.5		53.8
		______		______
		367.0		387.2
		______		______
Liabilities
Current liabilities
Trade and other payables		(126.5)		(136.5)
Borrowings and other financial liabilities		(26.6)		(5.4)
Provisions		(6.8)		(7.9)
Current tax liabilities		(31.9)		(24.3)
		______		______
		(191.8)		(174.1)
		______		______
Net current assets		175.2		213.1
		______		______
Non-current liabilities
Borrowings and other financial liabilities		(213.1)		(256.1)
Other payables		(2.6)		(2.7)
Retirement benefit liabilities	8	(135.8)		(165.8)
Provisions	8	(12.3)		(17.3)
Deferred tax liabilities		(42.0)		(43.2)
		______		______
		(405.8)		(485.1)
		______		______
Net assets		419.4		344.3
		______		______
Total equity attributable to owners of the parent		413.1		344.2
Non-controlling interests in equity		6.3		0.1
		______		______
Total equity		419.4		344.3
		______		______

Group statement of changes in equity

for the year ending 31 December 2013

	Share Capital £m	Share Premium Account £m	Other Reserves £m	Retained Earnings £m	Non- Controlling Interests £m	Total £m
At 1 January 2012	15.1	93.3	27.5	130.2	0.1	266.2
Profit for the year attributable to equity shareholders	-	-	-	151.0	-	151.0
Other comprehensive expense	-	-	(8.2)	6.6	-	(1.6)
Transactions with owners:
Dividends on equity shares	-	-	-	(76.8)	-	(76.8)
Share based payments	-	-	-	4.4	-	4.4
Consideration received for sale  of own shares held in trust	-	-	-	1.1	-	1.1
	_____	_____	_____	_____	_____	_____
Total transactions with owners	-	-	-	(71.3)	-	(71.3)
	_____	_____	_____	_____	_____	_____
Total equity at
31 December 2012	15.1	93.3	19.3	216.5	0.1	344.3
	_____	_____	_____	_____	_____	_____
At 1 January 2013	15.1	93.3	19.3	216.5	0.1	344.3
Profit for the year attributable to  equity shareholders	-	-	-	177.5	0.4	177.9
Other comprehensive expense	-	-	(19.0)	(10.5)	(0.4)	(29.9)
Transactions with owners:
Dividends on equity shares	-	-	-	(83.6)	-	(83.6)
Share based payments	-	-	-	3.6	-	3.6
Consideration received for sale of own shares held in trust	-	-	-	0.9	-	0.9
	_____	_____	_____	_____	_____	_____
Total transactions with owners	-	-	-	(79.1)	-	(79.1)
	_____	_____	_____	_____	_____	_____
Transactions with non-controlling interests:
Recognition of non-controlling interest on acquisition	-	-	-	-	6.2	6.2
	_____	_____	_____	_____	_____	_____
Total transactions with non-controlling interests	-	-	-	-	6.2	6.2
	_____	_____	_____	_____	_____	_____
Total equity at
31 December 2013	15.1	93.3	0.3	304.4	6.3	419.4
	_____	_____	_____	_____	_____	_____

Other reserves include the Capital Redemption Reserve of £0.9m (2012: £0.9m) and the Translation Reserve of £(0.6)m (2012:  £18.4m).

Group statement of cash flows

for the year ended 31 December 2013

Note			2013 £m		2012 £m
Cash generated by operations
Continuing operations
Operating profit			263.3	114.7	254.9
Adjustments for:
Depreciation and amortisation			33.9	32.7	31.1
Other provisions			(1.0)	0.4	1.3
Cash paid against operating provisions			(1.8)	(17.1)	(1.6)
Movement in inventories			(17.0)	(4.9)	(13.1)
Movement in receivables			27.7	(4.9)	(25.6)
Movement in payables			(13.7)	(4.9)	(16.4)
Pension fund contributions in excess of service cost			(41.2)	(8.9)	(24.7)
Share based payments			0.9	1.6	1.8
			______		_____
Cash generated by continuing operations			251.1		207.7
Discontinued operations			-		0.4
Interest paid			(9.7)		(9.3)
Tax paid			(50.1)		(60.6)
			______		______
Net cash generated by operating activities			191.3		138.2
Cash flows from investing activities
Acquisition of subsidiaries			(38.1)		(7.1)
Purchase of property, plant and equipment			(44.5)		(50.4)
Purchase of intangible assets			(1.7)		(1.9)
Proceeds from sale of property, plant and equipment			0.7		0.5
Proceeds from sale of businesses (net of costs and cash in businesses)			-		1.3
Proceeds from sale of other investment			-		15.8
Cash paid against non-operating provisions			(3.4)		(1.6)
Interest received			1.3		1.2
			_____		_____
Net cash absorbed by investing activities			(85.7)		(42.2)
Cash flows from financing activities
New borrowings			-		0.2
Repayment of borrowings			(47.7)		(6.7)
Capital element of finance lease repayments			(0.4)		(0.4)
Sale of own shares held in trust			0.9		1.1
Dividends paid to equity shareholders	6		(83.6)		(76.8)
			______		_
Net cash absorbed by financing activities			(130.8)		(82.6)
Net movement in cash and cash equivalents			(25.2)		13.4
Cash and cash equivalents brought forward			50.2		37.5
Exchange differences			(2.0)		(0.7) 2)0
			____		_____
Cash and cash equivalents carried forward			23.0		50.2
Cash and cash equivalents carried forward comprise
Cash at bank and in hand			37.5		53.8
Bank overdrafts			(14.5)		(3.6)
			_____		_____
			23.0		50.2
Reconciliation to net debt
Net movement in cash and cash equivalents			(25.2)		13.4
Movement in debt and lease financing			48.1		6.9
			___		_____
Change in net debt from cash flows			22.9		20.3
Loans in acquired businesses			(16.8)		(0.9)
New finance lease contracts			(0.4)		(0.4)
Exchange differences			(0.2)		4.4
			___		_____
			5.5		23.4
Net debt brought forward			(207.7)		(231.1)
			_____		_____
Net debt carried forward			(202.2)		(207.7)
			___		_____

Notes to the preliminary announcement

1.    Basis of preparation

       In preparing this financial information, management has used the principal accounting policies that will be detailed in the Group's Annual Report and which are unchanged from the prior year.  The results shown for 2013 are unaudited.  The financial information contained in this announcement does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006.  Statutory accounts of the Company in respect of the financial year ended 31 December 2012, upon which the Company's auditors have given a report which was unqualified and did not contain a statement under Section 237(2) of the Companies Act 2006, have been delivered to the Registrar of Companies.

Changes in accounting policy and disclosures 

(a) New and amended standards adopted by the Group

The following standards have been adopted by the group for the first time for the financial year beginning on or after 1 January 2013 and have a material impact on the Group:

IAS 19, 'Employee benefits' was revised in June 2011. The Group's accounting policy in this area has been changed to (1) replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability, and (2) recognise all costs associated with the administration of the pension schemes within operating expenses. 2012 results have been restated resulting in an increase of £0.5m in operating costs and £14.4m in net finance costs with compensating adjustments to other recognised expense such that net assets at 31 December 2012 were unchanged.

There are no other IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on 1 January 2013 that have had a material impact on the Group.

(b) New standards and interpretations not yet adopted

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2013. There has been no early adoption of these standards in the preparation of the 2013 consolidated financial statements - IFRS13, IFRS9, IAS36, IFRS10 and IFRS12.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

2.    Segmental information

The Group is organised on a worldwide basis into three main business segments, relating to the manufacture and sale of the Group's products which are destined for the markets of Consumer Care, Performance Technologies or Industrial Chemicals. These are the segments for which summary management information is presented to the Group's Executive Committee, which is deemed to be the Group's Chief Operating Decision Maker.

        There is no material trade between segments. Segmental results include items directly attributable to a specific segment as well as those that can be allocated on a reasonable basis. Segment assets consist primarily of property, plant and equipment, goodwill, inventories and trade and other receivables.

2.    Segmental information (continued)

       Income statement

	2013 £m		2012 £m
			restated
Revenue - continuing operations
Consumer Care	593.2		586.4
Performance Technologies	387.1		382.8
Industrial Chemicals	96.7		82.7
	______		______
	1,077.0		1,051.9
	______		______
Adjusted operating profit - continuing operations
Consumer Care	191.3		185.3
Performance Technologies	63.0		59.5
Industrial Chemicals	10.3		10.3
	______		______
	264.6		255.1
Acquisition costs and amortisation of intangible assets arising on acquisition	(1.3)		(0.2)
	______		______
Total Group operating profit from continuing operations	263.3		254.9
	______		______

Total assets

	2013 £m		2012 £m
Consumer Care	560.4		592.5
Performance Technologies	266.8		227.7
Industrial Chemicals	104.4		64.6
	_____		______
Total segment assets	931.6		884.8
Deferred tax assets	47.1		64.0
Cash and investments	38.3		54.7
	______		______
Total assets	1,017.0		1,003.5
	______		______

3.    Net financial expense

	2013 £m		2012 £m
			restated
Financial expenses
$100m US loan note due 2020	3.8		3.7
2010 Club facility due 2015	4.7		5.0
Net interest on retirement benefit liabilities (note 8)	4.8		8.5
Other bank loans and overdrafts	1.2		0.6
	_____		_____
	14.5		17.8
Financial income
Bank interest receivable and similar income	(1.3)		(1.2)
	_____		_____
	(1.3)		(1.2)
	_____		_____
Net financial expenses	13.2		16.6
	_____		_____

4.    Tax on continuing operations

	2013 £m		2012 £m
Analysis of tax charge for the year
United Kingdom current tax	13.9		11.6
Overseas current tax	46.0		50.8
Deferred tax	12.3		11.7
	_____		_____
	72.2		74.1
	_____		_____

5.    Earnings per share

	2013 p		2012 p
Adjusted earnings per share1	132.2		122.1
Impact of exceptional items, acquisition costs and amortisation of intangible assets arising on acquisition	(1.0)		(0.2)
	_____		_____
Earnings per share - continuing operations	131.2		121.9
Impact of discontinued operations' trading	-		(9.8)
	_____		_____
Earnings per share - basic	131.2		112.1
	_____		_____

        All exceptional items relate to discontinued operations.

¹ Basic earnings per share from continuing operations before exceptional items, acquisition costs and amortisation of intangible assets arising on acquisition. Acquisition costs of £1.0m (2012: £nil) and intangible asset amortisation of £0.3m (2012: £0.2m) were charged in the year.

6.    Dividends paid

	Pence per share	2013 £m		2012 £m
Ordinary
2011 Final - paid June 2012	30.25	-		40.7
2012 Interim - paid October 2012	26.75	-		36.0
2012 Final - paid May 2013	32.75	44.3		-
2013 Interim - paid October 2013	29.00	39.2		-
		_____		_____
		83.5		76.7
Preference (paid June and
December)		0.1		0.1
		_____		_____
		83.6		76.8
		_____		_____

The directors are proposing a final dividend of 35.5p per share (£48.0m) in respect of the financial year ended 31 December 2013.  Subject to shareholder approval, the dividend will be paid on 30 May 2014 to shareholders registered on 2 May 2014.  The total proposed dividend for the year ended 31 December 2013 is 64.5p per share (£87.2m).

7.    Discontinued operations

There were no operations discontinued in 2013.

In November 2012, the Group sold its Italian manufacturing assets based at Cremona, along with the associated business, to GreenOleo SpA for a consideration of £3.9m, generating a loss on disposal of £11.5m net of a deferred tax credit of £1.7m.

In January 2012, the loan note of £16.1m arising from the sale of the Group's Chicago site was repaid early by HIG Capital, the purchasers of the site. This early settlement gave rise to an exceptional profit of £1.6m.

The environmental provision relating to sites previously occupied by discontinued businesses was increased in 2012 by £2.6m in recognition of further information received relating to potential future liabilities.

The Group closed its Bromborough site in 2009. During 2012 the final deferred consideration of £0.8m was received in relation to the disposal of the site. Other exceptional income of £0.3m was received in respect of other dormant sites.

7.    Discontinued operations (continued)

The impact of the operations discontinued in 2012, which resided predominantly within the Industrial Chemicals segment, is as follows:

	2013 £m	2012 £m
Pre-tax operating results from discontinued operations	-	(2.5)
Tax	-	0.7
	______	______
Post-tax operating results from discontinued operations	-	(1.8)
	______	______
Loss before tax on disposal	-	(10.5)
Exceptional environmental provision	-	(2.6)
Tax	-	1.7
	______
Net exceptional loss on disposal	-	(11.4)
	______	______
Total loss after tax from discontinued operations	-	(13.2)
	______	______

8.    Accounting estimates and judgements

The Group's critical accounting policies under IFRS have been established by management with the approval of the Audit Committee.  The application of these policies requires estimates and assumptions to be made concerning the future and judgements to be made on the applicability of policies to particular situations.  Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Under IFRS an estimate or judgement may be considered critical if it involves matters that are highly uncertain, or where different estimation methods could reasonably have been used, or if changes in the estimate that would have a material impact on the Group's results are likely to occur from period to period.  Critical judgement has been required when preparing the Group's accounts as follows:

 Provisions

At 31 December 2013, the Group has an environmental provision of £13.9m (2012: £16.9m) in respect of soil and potential ground water contamination on a number of sites. 

Provisions for remediation costs are made when there is a present obligation, it is probable that expenditures for remediation work will be required and the cost can be estimated within a reasonable range of possible outcomes. The costs are based on currently available facts and prior experience. Environmental liabilities are recorded at the estimated amount at which the liability could be settled at the balance sheet date. Remediation of environmental damage typically takes a long time to complete due to the substantial amount of planning and regulatory approvals normally required before remediation activities can begin. In addition, increases in or releases of environmental provisions may be necessary whenever new developments occur or additional information becomes available. Consequently, environmental provisions can change significantly. The level of environmental provision is based on management's best estimate of the most likely outcome for each individual exposure. Management has also assessed the worst possible case for each exposure and is confident that the Group's financial position would not be significantly affected if each case were to require this worst case settlement. The Group has also considered the impact of discounting on its provisions and has concluded that, as a consequence of the significant utilisation expected in a relatively short timescale, the impact is immaterial.

8.    Accounting estimates and judgements (continued)

Goodwill and fair value of assets acquired

The Group tests annually whether goodwill has suffered any impairment and the carrying value of goodwill in the Group balance sheet has been supported by detailed value-in-use calculations relating to the recoverable amounts of the underlying cash generating units. These calculations require the use of estimates and judgements, such as those around future trading and cash flows, however as recoverable amounts significantly exceed carrying values including goodwill, there is no impairment within a wide range of assumptions.

Retirement benefit liabilities

The Group's principal retirement benefit schemes are of the defined benefit type. Recognition of the liabilities under these schemes and the valuation of assets held to fund these liabilities require a number of significant assumptions to be made, relating to levels of scheme membership, key financial market indicators such as inflation and expectations on future salary growth. These assumptions are made by the Group in conjunction with the schemes' actuaries and the directors are of the view that any estimation should be prudent and in line with consensus opinion. The discount rate applied to the Group's UK scheme is based on Towers Watson's Rate: link model. Total Group retirement benefit liabilities have reduced by £30.0m in 2013 to £135.8m. This movement is made up of £41.2m of contributions in excess of service cost, offset by experience losses on liabilities of £0.2m, £4.8m of net financial expense and £6.2m due to changes in actuarial assumptions.

In 2013 we adopted the revised IAS19 standard which reduced 2012 reported pre-tax profit by £14.9m, primarily as a result of the change in the pension funding credit to a debit, resulting in a higher interest charge.

9.    Principal risks and uncertainties

We implement a structured risk management framework across the Group, which includes a standard set of risk definitions and categories that are interpreted at all levels of the organisation. The resultant risk profiles are updated at least annually and fall into two main areas:

Fundamental risks: those that, if we did not successfully manage them, would mean we would not have a business at all. They refer to our ability to operate a sustainable, safe and legal business.

Strategic risks: those that arise as a result of our strategic objectives.

The table below shows the key risks that we have identified in 2013 and the change in risk ranking (if any) compared with 2012. These risks represent the Board and Executive Committee's view of the risks posing the biggest threat to our business, scoring highest on our pre-control risk table. They can fall into either the fundamental or strategic risk categories and are related closely to the business model. Of course we face other risks and uncertainties, but these have either been assessed as lower risk and so are not included here, or are beyond the direct control of the Group. All risks remain under regular review by the Board and the Risk Management Committee and if their possible impact or the likelihood of occurrence changes they would be reclassified as a key risk.

Key risk	How it could impact our business	How we respond	Risk change since 2012
Product and technology innovation	We operate in competitive markets where product innovation is key to our success. Failing to deliver innovation could result in a lack of competitive products, erosion of margins and/or loss of market share.	We have unrivalled understanding of, and contact with, our customers. This allows us to ensure that our innovation is market led and relevant to our customers' needs. We have 18 R&D centres globally to ensure that innovation can take place close to the customer.	Unchanged
Identification and integration of merger and acquisition targets	To meet our strategic objectives we must pursue acquisitions. Realising anticipated benefits from these acquisitions depends on how well we integrate them and how well they perform in relation to our expectations.	We have established policies and put processes in place to: • manage acquisitions and the associated due diligence prior to acquisition; • integrate acquired businesses; and • monitor performance.	Unchanged
Revenue generation in established markets	Our core markets are subject to increasing competition.  Loss of business to competitors resulting from failure to adequately differentiate ourselves in these markets could have an adverse effect on our financial position.	We have specialised commercial sales teams worldwide and a commitment to protect existing business with competitive and considered pricing policies.  Each market sector prepares and regularly updates a strategic plan to review potential new opportunities.	Increased
Revenue generation in emerging markets	One of our key strategic aims is for rapid growth in emerging markets.  Failure to deliver on this objective may have an adverse effect on our growth.	Each market sector prepares a strategic plan to review potential new opportunities. Resource levels in sales, marketing and R&D are being increased in the fastest growing regions.  We are committed to moving manufacturing closer to our target customers in those regions.	Increased
Product liability claims	We sell into a number of highly regulated markets.  Non-compliance with quality regulations could expose the Group to liability and reputational damage.	Quality management procedures are in place for each site and all manufacturing sites hold ISO9001 standards.  Major sites have also been audited against GMP (Good Manufacturing Practice) standards.	Unchanged
Chemical regulatory compliance	As a global chemical producer, we operate in a highly regulated environment.  Violation or incomplete knowledge of these regulations could limit the markets into which we can sell, or subject the Group to fines or penalties.	We have a highly knowledgeable global regulatory team who work to a single set of policies and procedures, and ensure that forthcoming changes to both regional and application regulations are well understood and applied.	Reduced
Bribery act breach by us or our agents or distributors	This risk has moved into our key risks since 2012 as a result of our business strategy to continue to move into emerging (and therefore potentially higher risk) regions and markets.	Policies and procedures have been rolled out globally which are monitored and their effectiveness covered in audit reviews.  Global training has been given.	Increased
Major site safety incident resulting in loss of a site	Significant operational problems could have an adverse effect on Croda's financial position.  We rely on the continued operation of our manufacturing sites.	We operate strict internal safety and maintenance programmes which are audited by our Group SHEQ internal audit team and are considered by the Group SHEQ Steering Committee (Executive level). We also have business continuity plans in place.	Unchanged
Major environmental incident	Violations of safety, health and environmental regulations could limit operations and expose the Group to liability, cost and reputational impact.	We maintain compliance with national and international safety standards and strict environmental policies and procedures.  These are audited by both our Group SHEQ internal audit team and external organisations.	Unchanged
Global raw material shortage resulting from supply or legislation change	Interruption in the supply of key raw materials would significantly impact operations and our financial position.  This could arise from implementation of new, more rigorous legislation or from market shortage.	Wherever possible we multisource our key raw materials and/or purchase them under medium to long-term contracts.  We manage our raw material stock levels taking these considerations into account.	Increased
Employee recruitment, retention and motivation	We rely on knowledgeable and specialised employees whose vision and experience is critical to our success.  The lack of an appropriately skilled workforce or comprehensive succession plans would adversely impact our ability to perform.	Our Global Talent Review process continues to identify employees in key roles for succession planning, and succession planning is considered by the Board annually.  To reward and motivate staff, we also have in place: • People development programmes • Remuneration policies	Increased
Security of business information and assets	We face increased threat of loss of electronically stored business information as we continue to expand our use of mobile technology and move into emerging markets.	We have a highly experienced Global IT Security Manager. We have policies, procedures and systems in place to restrict access which we monitor and report on regularly and which are subject to internal audit annually.	Unchanged
IT application or system infrastructure failure	Croda relies heavily on IT systems to operate efficiently and to communicate globally.  Failure of these systems for a prolonged period of time would have an impact on operations and ultimately our financial position.	Our Global IT Group is highly experienced in network, system and project management.  Key systems run on high availability mirrored hardware and there are documented, tested recovery plans for key locations.	Unchanged
Ineffective management of pension fund assets	We have legal commitments relating to the provision of pensions and the operation of our pension schemes. In volatile market conditions, increased future funding requirements may have an adverse effect on our financial position.	The Group's pension schemes are overseen by the Trustees of the funds who take professional actuarial and investment advice, as necessary.  Where appropriate, we appoint professional trustees to our schemes.	Unchanged

Additional priority change since 2012

This year, the risk of currency exchange rate movements has been removed from the list of key risks but remains on the risk register and under regular review. Exchange rate movements can have a significant impact on reported results but, given the nature of currency fluctuations, it is unlikely there would be a sustained, material impact over a period of years. Whilst we believe we have put in place a pragmatic means of managing this currency exposure, we also recognise that to a large extent currency risk, in common with other macroeconomic risks, is largely outside our control. For these reasons, currency risk is no longer viewed as a key risk.

The risk management programme can only provide reasonable but not absolute assurance that key risks are managed to an acceptable level.

Risk initiatives 2013

The mitigation of our key risks is always a business priority and to help us do this in 2013 we introduced a number of key risk management initiatives, including:

•      Increasing focus in emerging markets by appointing an MD of Eastern Europe, Middle East and Africa (EEMEA), as part of broader strategy to create new director positions in other key markets.

•      Increasing chemical regulatory compliance by rolling out SAP Environment, Health and Safety software globally, and reviewing the impact of the K-REACH chemicals management system.

•      Addressing the risk of increasing raw material shortage through ongoing review of sustainable supply arrangements for key raw materials.

•      Ensuring that we have the talent our business depends upon by training and developing new regional sales and marketing teams to support our growth in emerging markets, and holding regular network meetings for our engineers.

•      Establishing the Technology Investment Group (TIG) to explore new and exciting ways of bringing new technologies into the Group.

•      Strengthening our product portfolio by acquiring Sipo and the Specialty Chemical business of Arizona Chemical.

•      Working towards ISO27001 certification (Information Security Management standard).

10.  Related Party Transactions

The Group has no related party transactions, with the exception of remuneration paid to key management and Directors.

Responsibility Statement of the directors on the Annual Report

The Directors are responsible for preparing the Annual Report and Accounts, the Directors' Remuneration Report and the 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 prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, and the Company financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). 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 those financial statements, the Directors are required to:

•      select suitable accounting policies and apply them consistently;

•      make judgements and estimates that 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 Company financial statements respectively; and

•      prepare the financial statements on a going concern basis unless it is inappropriate to assume that the Company will continue in business.

The Directors are responsible for keeping proper 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 to enable them to ensure that the Group 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. They are also responsible for safeguarding the assets of the Group and the Company 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. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors confirms 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;

•      the Directors' Report and Strategic Report contained in the Annual Report include 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 that it faces; and

•      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's performance, business model and strategy.

 

END

 

 

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