Annual Financial Report

The Weir Group PLC

2012 Annual Report and 2013 Annual General Meeting

The following documents have today been posted or otherwise made available to shareholders:

1. Annual Report and Financial Statements for the 52 weeks ended 28 December 2012 (the "2012 Annual Report"); 

2. Notice of 2013 Annual General Meeting; and 

3. Form of Proxy for the 2013 Annual General Meeting 

In accordance with Listing Rule 9.6.1 a copy of each of these documents has been uploaded to the National Storage Mechanism and will be available for viewing shortly at www.hemscott.com/nsm.do.

The documents are also available on the Company's website at www.weir.co.uk and in hard copy to shareholders upon request to Investor Relations, The Weir Group PLC, Clydesdale Bank Exchange, 20 Waterloo Street, Glasgow G2 6DB.

The Company's 2012 Annual General Meeting will be held at the Radisson Blu Hotel, 301 Argyle Street, Glasgow, G2 8DL, on Wednesday 1 May 2012, at 2.30pm.

The Company's full year results announcement of 27 February 2013 contained a management report as well as the audited financial statements which were prepared in accordance with the applicable accounting standards.  The 2012 Annual Report submitted to the National Storage Mechanism today also contains information regarding the Company's principal risks and uncertainties, related party transactions and a responsibility statement relating to the content of the 2012 Annual Report; an extract of this information is provided below as required under paragraph 6.3.5 of the DTR, however this material should be read in conjunction with and is not a substitute for reading the full 2012 Annual Report. Page numbers and cross-references in the following appendices refer to page numbers and cross-references in the 2012 Annual Report.

APPENDICES

Appendix A: Principal risks & uncertainties
A description of the principal risks and uncertainties that the Company faces is extracted from pages 44 and 45 of the 2012 Annual Report.

As in any business, there may be unforeseen issues which could impact the Group's ability to achieve its objectives in the future.  However, we believe the Group's risk management framework makes this less likely. The key risks set out below are those which we believe have the greatest potential to impact our ability to achieve the Group's strategic objectives.

Risk	Why we think this is important	How we are mitigating the risk
Global and economic conditions
Changes in key markets and/or political conditions have an adverse impact on customers' expenditure plans.	We need to remain sufficiently flexible to allow us to meet growth in demand when our customers' markets are buoyant and therefore capital investment is high, and equally foresee downturns and/or instability in territories, to allow us to adjust our operations accordingly. Otherwise, we are at risk of not maximising our potential for growth in buoyant markets, and incurring unnecessary costs during downturns.	We maintain regular engagement with our customers to understand their needs and challenges.  Our strategic planning utilises extensive market intelligence to assist in forecasting opportunities and dips in markets, as well as potential political and social instability in regions.  We maintain contingency plans for downturns and exits from unstable regions.
Technology and innovation
We fail to drive innovation to ensure that the business continues to deliver sustainable and attractive solutions for our customers.	The strength of our business is built upon a history of delivering innovative and sustainable solutions for our customers. If we fail to keep abreast of market needs or to innovate solutions we are at risk of losing market share to our competitors and reducing margins as demand decreases.	Continual investment in research and development, including the Weir Advanced Research Centre in conjunction with the University of Strathclyde.  Global design centres of origin, dedicated technology centres for pump and materials development and a commitment to creating patent protected technologies.  We have dedicated governance teams (Engineering and Manufacturing Excellence Committees) focused on the delivery of our strategic objectives for technological advances and innovation in manufacturing practices to meet the needs of our customers.
Environment, health and safety (EHS)
We fail to adequately protect our people and other stakeholders from harm associated with a breach in EHS standards.	We have a fundamental duty to protect our people and other stakeholders from harm whilst conducting our business. As well as the personal impact on our people resulting from a failure to meet this obligation, we would also be at risk of: reputational damage leading to a loss of customers;  legal action from regulators including fines and penalties; and  exclusion from markets important for our future growth.	The Weir behavioural safety system is in place to reduce the risk of safety incidents. In addition, there are initiatives to prevent the most common accident types. The Weir global EHS standards are continually reviewed.  The EHS Excellence Committee is responsible for monitoring performance and compliance with Group objectives, policies and standards relating to EHS.  There is a formal EHS assurance programme with issues escalated as required through the reporting structures.
Ethics and governance
Interactions with our people, customers, suppliers and other stakeholders are not conducted with the highest standards of integrity, which devalues our reputation.	We are unwilling to accept dishonest or corrupt behaviour from our people, or external parties acting on our behalf, whilst conducting our business. If we fail to act with integrity we are at risk of: reputational damage leading to a loss of customers;  increased scrutiny from regulators;  legal action from regulators including fines, penalties and imprisonment; and  exclusion from markets important for our future growth.	The Code of Conduct, supplemented with Group policies on related topics, provides a clear benchmark for how we expect our business will be conducted.  Regular training is provided using a range of mechanisms including 'Town Hall' style sessions, on-line and induction training.  The financial control framework is continually monitored for effectiveness.  Internal Audit's remit includes regular review of the anti-bribery and corruption and financial controls across the Group. The Group Legal team is responsible for monitoring compliance with the Code of Conduct.
Supply chain
We fail to adequately manage the supply chain thereby reducing our ability to meet customer demand in an economic and efficient manner.	Our supply chain is dependent upon a number of factors including sufficient manufacturing capacity, access to raw materials and key components, integrated sales and production planning, and skilled people. If we fail to meet the delivery targets agreed with customers as a result of a failure in the supply chain we risk: damaging our reputation and as a consequence losing customers and market share;  incurring penalties as a result of late delivery contractual clauses; and  reducing margins by incurring unnecessary additional costs associated with late remedial actions taken to avoid missing delivery targets.	Established engagement framework in place with key suppliers.  Regular KPI monitoring of the supply chain throughout the organisation.  The Purchasing Excellence Committee monitors performance and compliance with Group objectives, policies and standards relating to procurement.  Centres of Excellence are established for key components to drive efficiencies and enhance delivery standards whilst maintaining quality.  Consistent Group-wide approach to inventory control and sales and operational planning.
Acquisitions and expansion into new territories
Inadequate planning and management of the integration and expansion processes impacts the ability to generate growth opportunities, synergies and cost savings within expected timescales	Acquisitions and expansions into new territories are only undertaken after rigorous review and identification of expected synergies, cost savings and growth opportunities. However, there is a risk that these benefits may not be achieved, or may not be achieved within the anticipated timescales, thereby tying up the Group's funds in investments with insufficient return. There is also a risk that we could be left liable for past acts or omissions of the acquired businesses without adequate right of redress.	The strategic planning process includes market and competitive position assessments to drive the acquisition agenda.  Comprehensive due diligence is performed on all potential acquisitions.  We have a formal 100 day integration plan with dedicated integration directors and managers appointed to oversee and manage the full integration programme.

Appendix B: Directors statement of responsibilities
The following statement is repeated here solely for the purpose of complying with DTR 6.3.5.  This statement relates to and is extracted from page 63 of the 2012 Annual Report and is signed for and on behalf of the Board by Keith Ruddock, Company Secretary.  Responsibility is for the full 2012 Annual Report and not the extracted information presented in this announcement or the full year results announcement.

The Directors are responsible for preparing the Annual 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 (IFRS) as adopted by the European Union and the Company financial statements in accordance with UK Accounting Standards and applicable law.

In preparing those financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently; 

• make judgements and estimates that are reasonable and prudent; 

• state that the Group financial statements have complied with IFRS as adopted by the European Union, subject to any material departures being disclosed and explained; 

• state for the Company financial statements whether the applicable UK Accounting Standards have been followed, subject to any material departures being disclosed and explained. 

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

Each of the Directors, as at the date of this Report, confirms to the best of his or her knowledge that:

• the financial statements give a true and fair view of the assets, liabilities, financial position and profit of the Group; 

• the Directors' Report 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 that it faces. 

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the Group financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Appendix C: Related Party Transactions
The following statements regarding related party transactions are set out on page 126 of the 2012 Annual Report.  The following is extracted in full and unedited form from the 2012 Annual Report.

The following table provides the total amount of significant transactions which have been entered into with related parties for the relevant financial year and outstanding balances at the period end.

		Sales to related parties - goods	Sales to related parties - services	Purchases from related parties - goods	Purchases from related parties - services	Amounts owed to related parties
Related party		£m	£m	£m	£m	£m
Joint ventures	2012	1.0	0.2	1.7	2.6	-
	2011	0.5	0.2	0.8	1.6	-
Group pension plans	2012	-	-	-	-	1.4
	2011	-	-	-	-	1.5

Contributions to the Group pension plans are disclosed in note 24.

Terms & conditions of transactions with related parties
Sales to and from related parties are made at normal market prices. Outstanding balances at the period end are unsecured and settlement occurs in cash. There have been no guarantees provided or received for any related party balances. For the 52 weeks ended 28 December 2012, the Group has not raised any provision for doubtful debts relating to amounts owed by related parties as the payment history has been excellent (2011: £nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Compensation of key management personnel	2012	2011
	£m	£m
Short-term employee benefits	6.5	6.6
Share-based payments	2.7	2.0
Post-employment benefits	0.1	-
	9.3	8.6

Key management comprises the Board and the Group Executive. Further details of the Board remuneration can be found in the Remuneration report on pages 66 to 80.

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Source: The Weir Group PLC via Thomson Reuters ONE

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