The principal activities
of the company and its subsidiaries are the development,
manufacture, sale and support of:
| • |
integrated aerospace systems, including
electronic and actuation systems and precision components,
for civil and military aircraft; |
| • |
advanced security equipment, using
the power of trace detection and x-ray imaging, to detect
and identify explosives, chemical and biological agents,
weapons and contraband; |
| • |
medical devices and critical care
equipment aligned to specific therapies, principally
airway, pain and temperature management and infusion.
Also needle protection, critical care monitoring, women's
healthcare and vascular access; and |
| • |
mechanical seals used in industries
ranging from petrochemical processing to aerospace; interconnect
products to connect and protect safety-critical electrical
and electronic equipment; navigational radar, marine
electronics and charts; and rigid tubular and flexible
hose assemblies. |
The main manufacturing operations are in the United Kingdom,
the Americas and Continental Europe.
RESULTS AND DIVIDENDS
The results for the year to 31 July 2003 are set out
in the summary consolidated profit and loss account on
page 30. Sales for the year amounted to £3,056m, against £3,223m
last year. The profit for the year after taxation, minority
interests and goodwill amortisation amounted to £112m
(2002 £185m).
An interim dividend of 8.75p per ordinary share of 25p
was paid on 17 April 2003. The directors recommend for
payment on 14 November 2003 a final cash dividend on each
ordinary share of 17.25p, making a total dividend of 26p
for the year.
BUSINESS REVIEW AND FUTURE DEVELOPMENTS
The Chairman's statement, Chief Executive's review and
the financial review (pages 4 to 19) report on the company's
operations and development during the year, the year-end
position and likely future development.
CHANGES DURING THE YEAR
Acquisitions
Heimann Systems GmbH (acquired 29
November 2002 for £236m
cash). General Seals S.A. (Chile) (acquired 8 May 2003 for £1.7m
cash).
Disposals
Precision Handling Systems business (sold 18 October
2002 for £2.3m cash).
Lodge Ignition business (sold 4 November 2002 for £33m
cash).
Air Movement and Cable Management businesses (sold 3
December 2002 for £125m cash).
C & F Millier Limited (sold 1 April 2003 for £0.3m
cash).
Issues
US$250m Senior Notes private placement.
POST BALANCE SHEET EVENTS
Disposals
Matzen & Timm division (sold 29 August 2003 for €11.35m
cash).
Polymer Sealing Solutions business (agreement for sale
for £495m cash became unconditional on 22 September
2003, with completion expected by the end of September).
CHARITABLE AND POLITICAL DONATIONS
Charitable donations – £708,000.
Political donations – None.
DIRECTORS
The directors at the end of the financial year are shown
in the Board of Directors.
Mr J M Hignett retired at the 2002 Annual General Meeting.
The Rt Hon. Lord Robertson
of
Port Ellen
has been
appointed as a non-executive director with effect from
15 February 2004. Mr K O Butler-Wheelhouse, Dr J Ferrie
and Mr J M Horn-Smith will retire at the Annual General
Meeting and seek reappointment. A summary of the executive
directors' service contracts and the directors' remuneration
and interests in share options are contained in the summary
directors' remuneration report.
DIRECTORS' INTERESTS IN THE COMPANY'S SHARES
 |
|
|
| Ordinary shares of 25p |
|
|
| |
31 July 2003 |
31 July 2002 |
|
|
|
| Sir Nigel Broomfield |
103 |
103 |
| K O Butler-Wheelhouse |
156,715 |
117,537 |
| Sir Colin Chandler |
8,778 |
8,778 |
| J Ferrie |
32,911 |
22,438 |
| J M Horn-Smith |
6,682 |
6,682 |
| L H N Kinet |
2,152 |
0 |
| J Langston |
63,270 |
60,270 |
| D P Lillycrop |
67,144 |
65,144 |
| E Lindh |
68,887 |
38,189 |
| R W O'Leary |
2,642 |
2,642 |
| K Orrell-Jones |
3,226 |
3,226 |
| A M Thomson |
62,178 |
51,526 |
|
|
|
These interests include beneficial interests of the directors
and their families in the company's shares held in PEPs
and ISAs and holdings through nominee companies. Except
as reported below, none of the directors has disclosed
any non-beneficial interests in the company's shares.
Mr J Langston and Mr D P Lillycrop also both have a technical
interest in 438,569 ordinary shares in the company as discretionary
beneficiaries under the TI Group Jersey Employee Share
Trust and the TI Group Employee Share Trust. These shares
may be transferred to employees who exercise options granted
under the TI Group share option schemes. In addition, Mr
Langston has a contingent interest in 125,000 ordinary
shares and Mr Lillycrop has a contingent interest in 100,000
ordinary shares, arising from contractual arrangements
which followed the merger of TI Group plc with the company.
The company has not been notified of any changes to the
holdings of the directors, their families and any connected
persons between 31 July and 23 September 2003.
SHARE OWNERSHIP
It is the company's policy that executive directors should
over time acquire a shareholding with a value equal to
at least one and a half years' gross salary.
CORPORATE GOVERNANCE
The company complies and has during the year complied
with the Combined Code appended to the April 2002 edition
of the Listing Rules of the UK Listing Authority, except
that no senior independent non-executive director is recognised.
A detailed statement on how the company complies with the
Combined Code is set out in the Directors' Report and Financial
Statements.
PAYMENT OF CREDITORS
The company's policy is to pay promptly in accordance
with agreed terms. The average time to pay an invoice was
37 days (2002: 37 days) for the parent company and 50 days
(2002: 51 days) for the group as a whole.
CORPORATE AND SOCIAL RESPONSIBILITY
The corporate and
social responsibility review includes
information on the company's employment and environmental
policies.
SHAREHOLDERS' RESOLUTIONS
Shareholders will be asked to pass resolutions as special
business at the Annual General Meeting:
| • |
to authorise the directors to allot
new shares and to renew the power granted to the directors
under section 95 of the Companies Act 1985; and |
| • |
to authorise the company to make
market purchases of the company's shares. |
An ordinary resolution will be proposed at the Annual
General Meeting to approve the directors' remuneration
report.
INTERESTS IN SHARES
As at 23 September 2003 the company had been notified,
pursuant to the Companies Act 1985, of the following material
or notifiable interests in its issued share capital:
AUDITORS' REPORT
The report of the auditors on the accounts for the year
ended 31 July 2003 was unqualified and did not contain
a statement under either of sections 237(2) and 237(3)
of the Companies Act 1985.
REPORTS AND ACCOUNTS 2003
The statutory Reports and Accounts for 2003 comprise
this Annual Review 2003 (a summary financial statement)
and the Directors' Report and Financial Statements 2003.
Both documents are available in electronic form on www.smiths-group.com.
Printed copies of these documents may be obtained, free
of charge, by writing to the Deputy Group Secretary, Smiths
Group plc, 765 Finchley Road, London NW11 8DS (e-mail:
secretary@smiths-group.com). Shareholders who wish to receive
the statutory Reports and Accounts (free of charge) in
future years should write to Lloyds TSB Registrars, The
Causeway, Worthing, West Sussex BN99 6DA, quoting Reference
0282.
By Order of the Board
DAVID P LILLYCROP
DIRECTOR AND SECRETARY 765 Finchley Road
London NW11 8DS
24 September 2003 |
