Document NGv90eY0b92qXzeyz43bYVQJ8

FILE NAME Cape Asbestos CAPE DATE 1986 DOC CAPE188 DOCUMENT DESCRIPTION Charter Consolidated Profit and Loss Account Legal - Tibbs Case Exhibit 86 Year ended 31March1986 1986 . Bo arcana Note 28 : a . serating: profit 3 Dividends interest received Surplus realizations profits 53. related ; Shareof retainedprofits of related companies Revenue from investments Other interestreceivable andsimilarincome oe 1986 : 1985 | 000 000 14,400 . 13,336 . : centralactivities Administration of _me Prospecting a fo a lo 887 : : " Interst charges Group payable oe profitbefore interestint_erest eos eee 4 Interest andsimilar : ; 40,157 . ae > a 11,403 8 Profit on ordinary activities before taxation 4 28,754 a . 6 Taxation on opnrofit on ordinary activities 8,967 : Profit on ordinary activities after taxation 19,787 I5nteresotf outside shareholders in subsidiaries Profit sharing scheme 36 47 11 . 9,046 y 1,496 - 1,496 - Profit attributable to shareholders 10 : Earnings per share 18.8p 1985 - 10.0p 11 Dividends paid and proposed wo 12 : Extraordinary charges : 25 Deficit for the year > Notes i Profit for the financial year after extraordinary charges totalled 10,585,000 1985 - loss 42,332,000 . ii The movements on reserves are set out in note 25 on page 45 s; The information on pages 34 to 53 forms part of these accounts 19,776 12,095 7,681 9,191 1,510 .. 10,542 : : 11,568 93 2 ~ 1,026 * 52,874 53,900 balance CHARTER CONSOLIDATEDCONSOLIDATED P.L.C.P.L.C. AND ITS SUBSIDIARY COMPANIES Co31nsolidated sheet 31 March 1986 1986 wy Fixed assets Intangible assets - Tangible assets Investments Valuation204,642,000204,642,0 0204,642,1000 985 -150,209,000150,209,010050,209,000 1986 000 fee 000 8,490 119,884 94,104 - 222,478 = 1985 000 1985 000 ~ 10,695 126,600 88,186' 225,481 : Current assets wos : Bo . a y Stocks Jo.008 0 2: bats : 136,424 thirdparties Debtors w ae Assets under finance leases to Investments at valuation oy 2 130,087 21,615 vn 24,976 4 Short term loans and in deposits Cash at bank and inhand elo 34,503 & aa = 6,329 ~" due within one year | 353,934 119,426 21 Deposit accounts -: oer = 20,320 ' 3,283 - Short term borrowings SP boa es, 14,190 157,219 417,915 136,330 31,277 3,754 45,067 45,067 set Bee +_: 216,438 Net current assets : Total assets less current liabilities 196,715 419,193 201,477 426,958 Creditors due after one year Long term borrowings Other long term creditors Provisions for liabilities and charges 80,562 2,235 38,010 72,981 517 39,129 Capital and reserves Called up share capital Share premium account Revaluation reserves Other reserves Profit and loss account Total capital and reserves Interest of outside shareholders in subsidiaries 298,386 _ 2,105 12,526 25,181 120,149 114,039 274,000 24,386 314,331 2,105 12,513 25,602 129,268 113,987 283,475 30,856 298,386 314,331 Approved by the board of directors on 3 July 1986 N. CLARKE E.J. A. HOWARD } DIRECTORS The information on pages 34 to 53 forms part of these accounts CHARTER CHARTCEHRARTERCHARTERCHARTER CONSOLIDATED P.L.C. Balance sheet 31 March 1986 . Note ; Fixed assets _ - 14 Investment in subsidiaries at cost less provision Current assets - Corporation tax recoverable Amount due from subsidiary . Cash at bank Creditors due within one year : Amount due to a subsidiary Proposed final dividend Other creditors Net current assets Total assets less current liabilities Creditors due after one year 27 Amount due to subsidiary Capital and reserves 24 Called up share capital 25 Share premium account 25 Profit and loss account 1985 30, 00 000 96,788 16,691 . 1,710 7,561 9,958 6,733 15,292 76,888 61,796 15,092 2,105 543 12,444 15,092 83,000 _ Approved by the board of directors on 3 July 1986 \ DIRECTORS N. CLARKE EJ.A. HOWARD The information on pages 34 to 53 forms part of these accounts Se OE CHARTER CHARTER CONSOLIDATED P.L.C. AND SUBSIDIARY COMPANIES Source and application offunds Year ended 31 March 1986 oh Note o> . OPERATING CASH FLOW Profit before interest payable and taxation Share of retained profits of related companies Provisions against current asset investments Operating cash flow from revenue sources Funds applied to maintenance of operations 29 : Working capital Fixed assets intangible and tangible Purchases for normal replacements and enhancements less capital expenditure grants Book value of disposals Depreciation - oa 29 Cost of current asset investments 7 net sales : Operating cash flow : Taxation paid ~~ Interest payable and similar charges Dividends paid 1986 000 000 40,157 - 6,987 1,357 34,527 1985 000 000 34,176 = 6,888 21 21,844 4,098 - 21,612 12,796 31,754 3,866 12,627 2,250 7 14,174 4,209 11,664 9,581 11,403 11,568 48,701 32,552 38,973 7,263 17,656 11,568 36,487 Cash flow after taxation and service of capital Extraordinary taxation items before and minority interest less provisions and other items OVERALL CASH FLOW FOR THE YEAR CAPITAL RECEIPTS LESS NEW INVESTMENT 29 29 Disposal of subsidiaries Fixed asset investments net purchases Decrease in assets under finance leases Proceeds from sale of subsidiaries Fixed assets intangible and tangible acquired for expansion Capital subscribed by minority shareholders Tax paid on prior year investment disposals 16,149 11,368 4,781 1,505 5,642 1,053 16,603 9,221 3,272 8,686 2,486 10,429 12,915 16,464 10,493 443 8,375 Net cash inflow 29 REPRESENTED BY Increase in liquid funds Increase in long term borrowings The information on pages 34 to 53 forms part of these accounts CHARTER Charter Consolidated P.L.C.P.L.C. Annual report and accounts for theyear ended 31 March 1986 Financial summary Notice of meeting Directorate Statement by the chairman and the chief executive Report of the directors - Report of the auditors . Consolidated profit and loss account . Consolidated balance sheet Balance sheet Source and application of funds ee Notes on the accounts PO CR Principal interests ee Analysis of revenue and assets iseYn Seven year financial record Share ownership Management at pal nein CHARTER CAPITAL EMPLOYED TURNOVER 250.7m CAPITAL EMPLOYED 57.7m TURNOVER 81.4m Charter Consolidated is the parent company of a British group engaged in manufacturing construction mining and finance and investment Charter has undergone a major change in recent years The business has been extensively reshaped and much of the capital employed is now in operating companies The strategy is to maximize return on capital In further developing the business emphasis will continue to be placed on companies having a strong market position a competitive technology base and thus the potential for sustained earnings growth Besides the operating companies the group has interests in the marketing refining and fabrication of precious metals the manufacture of automotive and industrial catalysts in natural resources and in financial services The group employs 15,178 people 9,881 of them in the United Kingdom and most of the others in western Europe and North America + i 4 ft z 4 ars Ps oe 4 q % E 4 i go: 5 S. d^' i c ^' ^' PES Adeb NS tes ~ CHARTER Financial summary Turnover of operating susidiaries Profit before taxation Attributable earnings Extraordinary charges Capital employed Net assets * including appreciation of investments Earnings per share Dividends per share Net assets per share 1986 million 1985 million 567.1 28.8 . 19.8 754.5 16.5 10.5 ag ti menttim - Kingdom Europe sate 1 CAPITAL EMPLOYED 31 March 1996 CHARTER Notice of meeting a GIVEN NOTICE IS HEREBY that the twenty annual general meeting of members of Charter Consolidated PLC will be held in the Caxton suite at the London International Press Centre 76 Shoe Lane London EC4A 3.JB New Street Square entrance on Tuesday 5 August 1986 at 12 noon for the following purposes to be in the interest of the company and to a maximum amount of shareholders up 25,000 per annum member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and on a poll to vote instead of him A proxy need not member of the company A form of proxy 1. To consider the accounts and the report of the directors for the year to 31 March 1986 accompanies this notice by order of the board 2. To declare a final dividend G. RUDLAND secretary A 3. To reappoint as directors Mr G. W. Mr C. D. Burnell and Sir Robert Registered office Relly . 40 Holborn Viaduct a Hunt London ECIPI^ J a 4. To reappoint Coopers & Lybrand as auditors and authorize the board to fix their 10 July 1986 remuneration 5. To consider the following resolution which will be proposed as an ordinary resolution That pursuant to section 80 of the Companies Act 1985 the directors of the company be hereby authorized for a period of five years ending on 4 August 1991 to allot all or any of the 29,658,226 unissued shares of the company and to grant any right to subscribe for or to convert any security into shares in the company to such persons at such times and upon such terms and conditions as the directors may determine 6. To consider the following resolution which will be proposed as an ordinary resolution That the directors be authorized for period of five years ending on 4 August 1991 to approve contributions by the company for political purposes as defined in the Companies Act 1985 where they are judged ; NOTES 1. To be valid the form of proxy must reach the company's registrars in the United Kingdom Hill Samuel Registrars Limited 6 Greencoat Place London SWIP IPL not less than 48 hours before the meeting 2. Holders of share warrants to bearer who wish to attend in person or by proxy or to vote the meeting must comply with the relevant conditions governing share warrants to bearer copies of which are available from the registered office of the company and the office ofits registrars in the United Kingdom and from the company's overseas paying agents 3. A director's service contract is available for inspection at the registered office of the company during usual business hours until the date of the meeting and may be inspected at the place of the meeting for at least 15 minutesprior to and during the meeting IMPORTANT DATES 1986 Annual general meeting Final dividend paid Interim dividend and half yearly report published Interim dividend paid Tuesday 5 August Thursday 7 August Wednesday 10 December Thursday 8 January GS S TNT SOS BHD GAS ty cay Chairman O. Hambro MC Deputy chairman and chief executive N. Clarke Directors D. Burnell J. W. Herbert Industry G A. Higham Industry M. B. Hofmeyr E A. Howard Finance Sir Robert Hunt CBE A. E. Oppenheimer N. F. Oppenheimer A J. W. Owston Mining G. H. Relly J. G. Richardson J. Ogilvie Thompson members of executive committee Alternate directors ., R. Armitage J. V. Cleasby M. J. Statham Secretary E. G. Rudland Jocelyn Hambro chairman of Charter Charter and Neil Clarke chief executive Achievements of the year For the year ended 31 March 1986 the group's profits improved significantly Profit before interest and taxation increased by 18 cent to 40.2 million The action taken per to reduce debt together with the improvement of the pound against the United States dollar contributed to a sharp reduction in interest charges Profit before tax improved by 74 per cent to 28.8 million The profit attributable to shareholders and earnings per share increased by 88 per cent An increased final dividend of 7.75p per share is recommended to give a total dividend of 11.5p The better profits of Charter reflect continued progress in reshaping the group reducing the level of borrowing and seeking higher returns on capital Progress has been made in all three areas during the past year and although more needs to be done and is in hand in civil engineering the advances made by the operating companies in the manufacturing sector where the bulk of our operating capital is now invested are encouraging The group debt has been reduced by 44 million since 31 March 1984 and at 31 March 1986 stood at 95 million Operations The operations of the Charter group are centred on manufacturing industry mining civil engineering and construction and finance and investment Manufacturing industry Our operating subsidiaries engaged in manufacturing industry achieved a significant profit recovery in the year Operating profits rose from 8.7 million to 19.9 million The improvement was more marked after taking into account the benefits of the sale or closure of underperforming operations The profits of the continuing businesses were 22.4 million compared with 13.8 million last year Anderson Strathclyde improved steadily during the year as the home market returned to more normal conditions following the ending of the NUM Bm ES tgif th RO he eh NR LAA dispute In export markets a good level of business continued with China now the world's largest coal producer and a most important customer where shearers from the Anderson range of coal cutting equipment are widely used The success in exports is founded on continued product development the long established reputation for excellence in shearers now being complemented by the company's advanced roadheading equipment The results of Cape Industries building products division and of Pandrol International were satisfactory in demanding conditions reflecting the good market position and product excellence of both companies Pandrol maintained the profitability of its worldwide rail fastening business initiating new plants in Indonesia and Italy Pandrol has also continued its investment to increase the fleet of high performance rail grinding trains operated by the Speno joint venture in the United States and the benefits of this capital expenditure should be seen more fully in the current year Each of our principal manufacturing companies - Anderson Strathclyde Cape's building products division and Pandrol has a strong market position founded on products having an advanced and competitive technology We intend to continue the emphasis placed on these criteria in the future development of our manufacturing business Mining The group's mining operations include Beralt's wolfram mine in Portugal and opencast coal contracting for British Coal in the United Kingdom and in Indiana in the United States In Portugal the mining operations achieved excellent improvements in grade and metallurgical recoveries leading to record production The demand for Beralt's high purity concentrates particularly for electrical components remained firm Market prices through the year were increasingly affected by the disruption caused by excessive dumping of tungsten both in concentrates and beneficiated products by Chinese exporters which significantly reduced profitability compared with the previous year Action is being taken at Beralt to reduce the unit cost of production further in order to meet these adverse market conditions Beralt is a long life high quality orebody with a premium product which will ensure a good return in less abnormal market In coal contracting the results of the United Kingdom operations despite an increased level of production were affected by the extremely wet weather and by continuing difficult ground conditions at two sites These are the subject of claims negotiations with British Coal In Indiana the operations of Shand Mining Inc. SMI service term contracts with electricity utilities Demand was down compared with the previous year's very buoyant conditions leading to some downward pressure prices SMI successfully opened up its new contract operations in Greene County and overall produced satisfactory results CAPITAL EMPLOYED BY ACTIVITY 31 March / OPERATING 0 85 Cash 86 assers sok less nel centre Statement by the chairman and the chief executive continued aa Civil engineering and construction The results of Shand Limited were bad The progress made in many parts of this group was obscured by the necessity to make significant provision against the cost a to completion of contract to construct a series of dams in Oman and by losses in regional building operations in Scotland and the south of England The civil engineering and construction Gulf industry is depressed both in the United Kingdom and now in the where Shand have operated successfully for some years Tendering is extremely competitive and margins fine At Shand we have taken steps throughout the group to reduce central overhead and operating costs to close unprofitable units to sell small operations and to strengthen management and controls This should ensure an improvement in the current year mining machinery division Since Anderson Strathclyde acquired its 51 per cent interest much had been done to reduce costs and improve the product range but it was concluded that the division was unlikely to _ produce in the foreseeable future the : returns we require We refer later to the agreement now reached for the sale of this division of The major reconstruction of the business of Cape Industries was completed during the year leading to debt reduction of 24 million and to the concentration the company around its core businesses of fire protection and specialized building products and insulation services The strong market position of the building products group was demonstrated by a further increase in profits despite depressed demand The programme of vigorous rationalization in the insulation contracting group continued with the disposal of unprofitable businesses and the Finance and investment Charter's interests centre on trading in restructuring of management MKR Holdings completed the sale of the small Paterex unit through a management securities leasing and cash management where we act as banker for the group and on the major longer term investment holdings buyout and the rationalization of Gaskell and Chambers The costs of rationalization are reflected in Securities trading after a poor first half the charge to extraordinary items of achieved very good results in the stronger market conditions of the last six months We refer elsewhere to the performance of two major investments Johnson Matthey and Rowe & Pitman The market value of our 9.2 million which reflects mainly provisions for losses on the disposal of the NMS mining machinery division of 5.8 million and our share of 2.3 million of similar charges incurred by Johnson Johnson holding in Malaysia Mining Corporation MMC has been affected by the collapse of the tin market and of prices The tin dredging operations of MMC are in essence low cost producers but recovery in prices will depend on the speed with which excess stocks of tin are absorbed by the consuming countries Overall the asset backing and cash generation of our central finance and investment interests will contribute to the resources available for further development of our operating businesses both organically and by acquisition Matthey We are pleased to report excellent progress in the continuing recovery at Johnson Matthey The strategic assessment of the company's business made early in 1985 has been applied during the last year leading to a significant rationalization of nonperforming operations and a reorganization of the company around its core business of catalysts precious metals refining and marketing and the chemical and fabricated applications of precious metals technology The programme to reduce the amount of working capital particularly in precious metals produced a further material Major events The process of sale closure or reconstruction of underperforming business units has continued during the year The results of National Mine Service Company NMS have been poor since early 1983 stemming from the performance of the reduction in debt and in interest charges and provided the foundation for the agreement of medium term financing arrangements The profit after taxation increased by 79 per cent to 21.6 million and the company has resumed the payment of dividends The costs of rationalization Let OA pm aa hh ee eT Mey Singers ge t rene Pe a eee te cae ee ee A a tm gente ae i go tc aA are reflected in the charge to extraordinary items of 8.2 million The progress of the company is reflected in the value of our investment which at the time of writing is 133 million Immediately prior to the crisis at the end of September 1984 our holding was valued at 89 million and the day afterwards at as little as 24 million to which should be added our further investment of 20 million as underwriter of the rescue package and in support of the later refinancing We have concluded two significant _ transactions since the end of the financial year In May 1986 we placed the greater part of our holding in Mercury International Group realizing proceeds of 48.3 million and a profit before tax of 15.1 million The holding was derived from our participation in Rowe & Pitman which produced excellent profits during the two years of our partnership The merger of Rowe & Pitman Akroyd &Smithers Mullens & Co. and Mercury Securities to form Mercury International Group was completed in April 1986. In June agreement was reached between NMS a subsidiary of Anderson Strathclyde and Baker International Corporation for the sale by NMS of the assets of its mining machinery division product This division whose main line is continuous miners for the underground coal and potash industries has been loss making for some years and its future had been closely assessed The sale which is conditional on the receipt of the appropriate consents from United States government agencies will release substantial funds and in turn markedly reduce long term debt NMS will continue with its profitable distribution and hydraulics divisions Industry as one ofa group of young British managers charged with the task of drawing the chart which industry will use to navigate : into the next century On behalf of shareholders and the board we express our thanks to all employees who have worked with energy and determination to improve performance in a busy and demanding year Outlook Last year was one of considerable progress and despite the continuation of very competitive trading conditions the action taken to improve profitability should provide further growth in earnings in the current year J.O. HAMBRO chairman J.N. CLARKE chief executive ee London 3 July 1986 Directorate and staff Sandy Shand who had been a member of the board since 1981 and the chairman of Alexander Shand Holdings for many years retired from the board on 31 March 1986. We wish him well in his retirement The Charter group employs 15,000 people throughout the world primarily in the United Kingdom the rest of Europe and North America We would like to congratulate Malcolm Heald formerly a member of Charter's staff and now financial controller of Shand Limited who has been selected by the Confederation of British CHARTER Report of the directors Review of results in results at Johnson Matthey ibemipnrgovmeamtecnhted by the cost of a full year's capital Profits of Charter Consolidated showed a sharp improvement in the year to 31 March payments 1986. Revenue increased and interest were much lower Profit before tax cuhpa7r4gepser cent rose to 28.8 million from 16.5 million After taxation at lower effective rate profit after tax more than _ doubled to 19.8 million from last year's 9.0 million and earnings per share were 18.8p compared with 10p profits for the year were 14.4 Operating million compared with 13.3 million for the to 31 March 1985 which included 1.8 pmeirlliioodn in respect of the results for an additional three months for certain businesses The year saw a strong recovery in operating profits at Anderson StrathclydeStrathclyde Strahclyde in the results of other and improvement However these companies manufacturing proportionately gains were partly offset by increased losses from civil engineering and construction activities by lower profits from contract coal mining and by a move into loss at Beralt's wolfram mine in Portugal Dividends and interest received rose by Excellent 2.9 million to 11.5 million results from Rowe & Pitman and much dividend income from Johnson payment of dividends on preference issued in 1984 and of resumption of ordinary dividend Total revenue of the group rose from 40.5 million to 46.0 million Interest paid on borrowings was reduced by 6.3 million to 11.4 million reflecting a further reduction in group debt from 118 million to 95 million the absence of the extra quarter included in last year's results in respect of and the reduction in certain companies occurred notably in interest rates that has respect of United States dollars in which a large part of group debt is denominated A further reduction in administrative costs was made at head office Overall P before tax increased by 74 per cent from 16.5 million to 28.8 million for taxation at 9.0 million was The charge less this year returning to a more normal level The share of profitosf attributable to minority shareholders Cape Industries and BeraltreTlienvaanntdshare of Wolfram was offset by the losses of National Mine Service Company NMS Earnings attributable to 88 shareholders of Charter improved by per from 10.5 million to 19.8 million cent improved Matthey were offset in part by lower dividends from the reduced shareholding in Minerals and Resources Corporation and from other sources Profits MINORCO in securities increased but the from trading much the overall surplus on realizations was same at 4.1 million The company's share of profits retained by related companies was little changed the Extraordinary items Companies of the group further concentrated their business on profitable core activities Several smaller and losasn-d making businesses were sold Losses costs associated with these transactions and of 5.8 million relating to the provision reached since the conditional agreement REVE3N1 U MarEch 55 8 8 CONTRIBUTION TO REVENUE Em OPERATING 24- OTHER monthtos31 March ET Interest Income [EJ Surplus on Realizations (EF Related Companies Retained Profits Includes of disconditscionntuineuedd busses fully diluted basis would represent an of that end for the sale of the mining year of amounted to interest of 0.5 per cent in the capital NMS machinery division credits company 8.2 million Against this there were arising from provisions no longer required On June 1986 NMS announced agreement Corporation for International and from minor disposals of investments with Baker of its 1.3 million Charter's share the sale by NMS of the business totalling items of Johnson Matthey mining machinery division subject to extraordinary Federal was 2.3 million bringing the group charge million clearance by the United States Trade Commission The proceeds of this for extraordinary items to 9.2 will substantially eliminate the long Litigation staelrem debt of NMS which will continue to continued to defend itself in a own and operate its distribution and United Charter has actions in the divisions serving the hydraulics number of asbestos United States in which it has been named States and international mining industries the basis that it is allegedly liable for the on directors have A large reduction in debt was acrcesoumlptloifshitesd acts of Cape Industries The advised that Charter should be able at Cape Industries mainly as shares and of convertible preference made in successfully to defend the actiomnussbtroexuigshttas placing the implementation of agreements certain against it but that uncertaintthye trials of any the preceding year to dispose of to the eventual outcome of and assets This was the such actions It is not practicable to estimate operations leading to further fall in case the amount of any in any particular were if liability pcroinnscoilpiadlaftaecdtodrebt from 118 million to 95 1986. Of this total damages which mightBaesns eudeon advice the million at 31 March to imposed obnelCiheavrettehrat the aggregate of any directors material of 39 million relates equivalent Industries and NMS borrowings by Cape such liability is unlikely to have a and which are partly owned and make their own effect on Charter's financial position financing arrangements have accordingly concluded that it is not to make any provision in debt includes borrowings in United appropriate such actions The position is more Group of US million respect of fully set out in note 23 on the accounts on States currteonc6y1 million of which US equivalent the balance being page 44 million relates to NMS short term and dollar maintained to finance developments Major assets subject to amortization Group cash As reported last year in April 1985 Charter and short term deposits fell by million to subscribed its 67.3 per cent share of a 41 million at 31 March 1986. Since the year placing by Cape Industries of 10shmairlelsioann8d.4 preference have been augmented end cash resources from the 30 million net arising per cent convertible variable in August subscribed millilonoan stock of by some for and sale of shares in MIG subscription rate unsecured subordinated Johnson Matthey carrying a warrant to Dividends subscribe for one million ordinary shares in to recommend The directors have decided & PROFIT OPEROAPERTATIING NG that company final dividend of 7.75p which with the m Exclo uden s bt buusisneissenh seMsass reschsold or closed Em On 12 April 1986 shortly after the year end ainterim dividend of 3.75p per share paid on Sm Turnover Operating Profil -30 of Rowe & Pitman Akroyd & the merger 9 January 1986 makes 11.5p carrying a tax Smithers Mullens & Co. and Mercury credit of 4.77263p per share After providing Securities was implemented In terms of the for the cost of these dividends of 12.1 arrangements Charter exchanged its million and for the net extraordinary in Rowe & Pitman for shares in of 9.2 million there was a deficit of interest International Group MIG and Mercury for additional charges 1.5 million met from reserves subscribed 17.7 million On 14 May 1986 the majority of this all the 1985 turnover and shares sold in the market for a total To assist comparison shown in this directors report icnotnesriedsetrw aa tison of 48.3 million giving rise to of 15.1 operating profit figures 31 March 1985 and exclude the for the 12 months to 31 March 1984 of those are for the three months to an extraordinary profit before tax results which changed their year ends from million A holding of convertible preference retained which on a subsidiaries 31 December to 31 March shares of MIG has been ReportReport Report Report of ofthethe the directorsdirectors directorsdirectorsdirectors directors continuedcontinued continuedcontinuedcontinued continued Centre MANUFACTURING MANUFACTURING MINING EQUIPMENT / Anderson Strathclyde L NationalMine Service CompanyCompany 51.2 PerardTorque Tension ) / / Industries Cape IndustIrndiuestsries 67.3 InternIantetrnaitionoal nal Capital employedemployed123.0m \ Turnover 250.7m eg er Sie A RE gtys ne be Sh FY oe SUMMARY OF RESULTS million Mining equipment Mining equipment Anderson Strathclyde National Mine Service Anderson Strathclyde group Perard Torque Tension MANUFACTURING MANUFACTURING closed m Capital Employed Operating Profil = m 125 -25 Building products Cape Rail track equipment Pandrol Licensed trade equipment MKR Discontinued businesses TOTAL Turnover 1985 82.9 51.0 138.8 133.9 6.2 140.1 55.8 34.3 36.8 14.1 14.7 247.4 39.1 101.3 348.7 Operating profit 1986 1985 1986 9.2 2.0 11.2 0.2 11.0 6.2 4.1 1.1 22.4 2.5 19.9 2.2 2.1 57.4 18.0 4.3 1.4 2.9 5.9 4.0 1.0 75.4 3.6 79.0 22.3 13.7 8.0 13.8 5.1 123.0 23.3 8.7 = 146.3 MINING EQUIPMENT - Anderson Strathclyde PLC Chief executive J. M. Little Anderson Strathclyde is one ofthe largest manufacturers of underground coal mining equipment in the world and a market leader in the production of power loaders of advanced design for longwall mining The company also produces other mining and tunnelling equipment including armoured face conveyors belt conveyors and roadheaders It operates in the United Kingdom and through subsidiaries in a number of major coal producing countries Sales by Anderson Strathclyde and its wholly owned subsidiaries for the year to 31 March 1986 were 97.8 million 1985 82.9 million and operating profit was 9.2 million 1985 - 2.2 million With the ending of the mineworkers strike in the United Kingdom the year was one of | CHARTER Report of the directors continued SIAT NN E A LT OR marked recovery for the company Sales increased in home and export markets and despite an uneven pattern of demand which adversely affected production costs profits improved sharply The coal face equipment division was again the major contributor to profits and maintained its position as leading supplier Extensive programmes for product development and productivity improvement continued particularly The engineering division achieved a much improved performance with the tunnelling equipment unit successful in gaining widespread acceptance for its new roadheader the RH25 The Hoy division which manufactures cutting tools also had a satisfactory year Reorganization within the National Coal Board now British Coal involved a number of pit closures but demand for capital goods and spares improved and Anderson Strathclyde met British Coal's growing requirement for repair work a wide range of mining equipment spares and supplies Including discontinued businesses sales by NMS for the year to 31 March 1986 were 115.5 million 1985 108.1 million and the operating loss 0.2 million 1985 0.2 million profit Although both the distribution and hydraulics divisions remained profitable the mining machinery division continued to sustain losses Demand for mining machinery of the type supplied by the company remains at historically low level A modest recovery in the market apparent in the earlier part of the year was not maintained and conditions worsened in the second half No short term improvement seems likely In view of this a decision was taken to sell the assets of the mining machinery division and agreement has been reached with Baker International Corporation The sale is conditional upon receiving consent from the United States authorities The proceeds of the sale will be used to substantially reduce debt Export sales reached a record level despite mixed conditions in overseas markets In the United States demand was modest and of prices and conditions sale remained very competitive South African and Australian markets were both depressed although there was some improvement in the latter towards the end of the year China is a important market for the and the Chinese prime minister company Mr Zhao Ziyang was welcomed at the Motherwell factory during the year The technology transfer agreement for shearers is operating well and negotiations for a similar agreement for roadheaders are now taking place A further advance in profits is in prospect for the current year National Mine Service Company Perard Torque Tension Limited Managing director W. L. Pavry Perard Torque Tension produces drilling equipment for hard rock mining and a range of coal face equipment The company made a marked recovery after the substantial losses of the previous two years Perard was successful in winning a major portion of the roof bolting contract from British Coal whose wider acceptance of this method of strata control emphasizes its importance The company continues to develop its comprehensive range of drilling equipment and there are good prospects both at home and abroad for a further improvement in sales This increase together with a cost which will lead to reduction programme significant savings is expected to result in a return to profit in the current year President and chief executive officer . H. F. Gerhard BUILDING PRODUCTS National Mine Service Company NMS a 51.2 per cent owned subsidiary of Anderson Strathclyde manufactures and supplies products and services to the coal and potash mining industries Its principal products are continuous miners shuttle cars and locomotives used in the room and pillar system of mining The company distributes Cape Industries PLC - Cape Building Products Limited Managing director T. M. McKain Cape Building Products manufactures high performance products covering fire external cladding and internal protection mt Be Ati. Hace thin pa TemE linings for the construction industry internationally and specialist products and systems for the marine offshore oil power generating molten metal and electrical engineering industries The company has eight manufacturing plants in the United Kingdom and has been restructured into four specialist operating divisions - Cape Boards Industrial Products Cape Durasteel and Cape Metal Products The company had another good year Operating profit rose to 6.2 million 1985 - 5.9 million despite static sales of 55.3 million 1985 - 55.8 million Sales to the United Kingdom building and construction market were affected by poor weather conditions including the severe winter but this was offset by an increase in exports The boards division was the most affected by the adverse weather conditions in the United Kingdom This together with continuing overcapacity in the market reduced profitability Major investment programmes were completed at the Uxbridge Bowburn and Germiston factories to modernize plant and to eliminate asbestos fibre The successful introduction of a full range of asbestos products follows several years of research and development and investment in plant and equipment The full benefit from these investments will flow through to profits in 1986/87 Work to improve and refine these new technologies continues The company successfully developed and marketed a new range of suspended ceilings and additional capital investment will be made to meet the good demand for these products Sales and profits in the industrial products division were well ahead of the previous year especially for export markets The metal products division continued to improve profitability despite lower sales and further investment to improve the product range has been initiated The Durasteel division sales were affected by reduced demand from the power generating and offshore oil sectors but the division secured a further share of the industrial and commercial markets which will ensure a substantial workload for the coming year The United Kingdom building and construction market will remain stable with continued pressure on public sector spending The company will seek growth for its specialist products through further exports RAIL TRACK EQUIPMENT Pandrol International Limited Managing director J. A. Pool Pandrol is the world leader in the manufacture and supply of resilient rail fastenings to railways mines and industry Group sales were 34.3 million 1985 36.8 million and operating profits 4.1 million 1985 - 4.0 million With manufacturing operations in ten countries Pandrol sells to 40 national railways Important new markets secured this year were Italy and Yugoslavia and major export orders were won in Sweden =: Singapore New Zealand Iraq and Jordan Manufacturing facilities have been established in Indonesia and are being built in Italy The company's position as a market leader is sustained by a research and development programme concentrating on new equipment and techniques for the production of high performance rail support systems The company has developed equipment to measure accurately the dynamic performance of rail track New component designs have been tested in- ~ track in the United Kingdom and Canada In conjunction with the Canadian National Railway and the Genstar Tie Company Pandrol has developed a new concrete sleeper assembly which is scheduled for trials in Canada in the * autumn In North America Speno Rail Services Company operates the world's most advanced computer controlled rail grinding train to be joined this autumn by a second and further enhanced unit In the current year the availability of substantial international contracts is expected to lead to increased profits for the fastening business subject to the spending plans of government railways which form the majority of Pandrol's clients Speno is likely to benefit from increased demand for its improved technology and from greater operating efficiency Report ofthe directors continued ' AEH uwanr SAT HT Ait} 4 | ] * iit } at a Ge pina ony ay cen GSAR ARR LICENSED TRADE EQUIPMENT MKR Holdings Limited Managing director J. B. Andrew The MKR group manufactures and markets comprehensive range of products for the licensed catering and hotel trades In Leicester drink cooling and storage cabinets are produced by MK Refrigeration and Gaskell and Chambers manufactures spirit measures MK Refrigeration Ireland serves the Irish market and Morgan Furniture has a factory near Portsmouth The MKR group returned to profitability in 1985/86 Sales were 14.1 million for the year and operating profit 1.1 million excluding Paterex This specialist supplier to the aerospace and defence industries made a loss of 0.4 million and in February this year was the subject ofmangemntmanagement buyout Provision has been made for the losses associated with this divestment Marketing successes by MK Refrigeration this year a included further contract from Coca to supply refrigeration cabinets for use in retail outlets from Budweiser beer for cooling units and from the Whitbread group for Multicirc line coolers Gaskell and Chambers were awarded a contract by Martini to supply spirit measures for European markets while Morgan Furniture supplied furniture for use in the Campaign for Real Ale's Best Pub of the Year 1985 The development of improved and new products is a permanent feature of MKR's marketing strategy and despite strong competition and stable market conditions results the current year are expected to show some improvement over those of 1985/86 ~ , : 5 i : i ^' z I y } i i i t Report ofthe directors continued igntye Rae ae jms pac yo CONSTRUCTION AND RELATED ACTIVITIES CONSTRUCTION INDUSTRIAL CONTRACTING Capital employed 27.8m - Turnover 186.3m SUMMARY OF RESULTS million Industrial contracting Cape Civil engineering and construction Shand Discontinued businesses TOTAL 1986 81.9 Turnover 1985 89.6 104.4 186.3 6.8 193.1 93.7 183.3 21.3 204.6 Operating profit 1986 1985 0.3 0.2 1986 Capital employed 1985 15.7 17.7 5.6 5.3 0.3 5.6 1.3 12.1 1.5 3.4 27.8 1.0 4.9 28.8 16.1 33.8 1.2 35.0 INDUSTRIAL CONTRACTING Cape Industries PLC - Cape Contracts Managing director J. P. Farrell Cape Contracts is a major supplier of insulation services to the power petrochemical marine and offshore construction industries The group has maintained its market leadership in Britain while Cape Scaffolding has established a strong position in industrial contract scaffolding particularly for station and petrochemical work The group had a difficult trading year with turnover at 81.9 million 1985 - 89.6 . million and operating profits of 0.3 million 1985 - 0.2 million loss There was strong competition particularly for offshore module work while losses arose on disposal of unprofitable businesses and from provisions against contracts brought forward from the previous year Cape Contracts International obtained major supply contracts for insulation materials for a megawatt boiler in Rihand India and for similar material to a power station in Iraq The group has rationalized its management structure to reduce overheads and to make the company more effective in its business While further cost reductions may be necessary to reflect market conditions prospects for the current year are for further recovery in profits CIVIL ENGINEERING AND CONSTRUCTION Shand Limited - civil engineering and construction division Managing director S. McLoughlin Shand companies are engaged internationally in building and civil engineering Group turnover for the year to 31 March 1986 was 104.4 million against 93.7 million for 1985 and there was an operating loss of 5.6 million 1985 - 1.3 million loss In civil engineering in the United Kingdom there was steady progress in a very competitive market The mains and services division in particular had a good workload and should continue to improve - CHARTER CHARTER ofof directors CHARTER ca profitability Action has been completed to remedy profitability profitability Action been completed completed building in remedy suffered contracting operations operations bya contracting .. Overseas contracting been marred marred work decline decline contracting the Arabia need need make significant against the outcome outcome of significant significant provision in Oman Oman contracts have project project Cyprus Gibraltar contracts have Good results were achieved achieved property Private achieved property property development some buoyancy Scotland experienced buoyancy buoyancy buoyancy the emarilienr ee arlier r insyebaurt fhoalvleowbienegn affected the the drop drop the the price = -: Action has been taken to streamline and reduce overheads and to management activity on the profitable areas concentrate ~ should ensure a return areas of business This and in civil engineering profitability in the current year construction ge Pe ee tps PES FN Gh peny Sapte TB ge gre bo apap See eae gweh l Cony pm OnLy gi nen ming yy par a Ro Day 81.4m Turnover ' SUMMARY OF RESULTS million mining Contract coal mining United Kingdom Shand United States SMI Wolfram Beralt Metal marketing Discontinued businesses TOTAL 1986 Turnover 1985 33.7 39.5 73.2 8.0 0.2 81.4 - 25.6 35.9 61.5 11.2 1.4 74.1 8.0 81.4 82.1 Operating profit 1986 1985 1.1 | 1.9 0.6 - 0.5 4.2 4.7 2.4 0.3 1.3 - 7.4 0.5 1.3 7.9 Capital employed 1986 1985 19.2 28.2 47.4 9.9 0.4 57.7 - 24.6 28.6 53.2 9.6 0.5 63.3 - 57.7 63.3 MINING Excludes sola D CAD businesses S - tCaapr itc alhEmployed OpOepreartaitnigngProfMiatrch 70 60 50 40- 30- 20- 0 0 1986 1985 AY) Coal BR Wodram MarkMeetaltMairknetigng 1986 1985 CONTRACT COAL MINING Shand Limited - mining division Managing director S. McLoughlin Shand operates four opencast sites as a contractor to British Coal three in south Wales and one in Leicestershire Coal is also produced from a small private tip reclamation site Output for the year increased to 2.0 million tonnes compared with 1.8 million tonnes for the previous 12 months Certain of the contracts are the subject of negotiation with British Coal for recovery against the cost of extra work Turnover for the 12 months of the mining division including quarrying operations was 33.7 million 1985 - 25.6 million with an operating loss of 1.1 million 1985 0.5 million profit Trading results suffered because of increased costs arising from the extremely wet summer and continuing ground instability at two of the sites Tender activity during the year was low and no new coal contracts were obtained However there are encouraging signs in the current year of an increased level of activity Shand Mining Inc. President F. O. Clayton Shand Mining Inc. SMI carries out opencast coal mining operations on contract and for its own account in Indiana in the United States Turnover for the year was 58.4 million 1985 - 44.2 million and the operating profit was 4.4 million 1985 - US million The market for coal in Indiana has continued to be competitive with some downward pressure on coal prices due Report ofthe directors continued Top Tungsten metal products by Nippon Tangsten walfram concentrate concentrate Beralt Tin & Wolfram Portugal Clochicise from top left Heagy metal tungsten counterweights applications applications Tungsten carbwa ear f partse for forming metal Lamps using tungsten plaments Tungsten rod and thortated Hogsten rud for inert gas welding Filaments for and tungsten lamps and heaters rods for electrodes Coalfield Bottom left major opencast under operated contract from British Coal Close attention is paid and the to the environment site will be executive Shand mining division carcntive Ciaran Frristal chir Frristal Bottom centre Miller Creek mine in Greene County Indiana is major coal contract operation of Shand Mining Ine Bottom right SME's SME's president president and director Fred Clayton Bud Sargeatntthe company's rail loading facility in Greene County where trains of up to 10.000 TONS capacity are linded for delivering electricity utilities 1980 Tifa, * 3 UpS,s 1980 4 i $ ae t V t | 4 fi rf : Sb to overcapacity and high stock levels and to lower demand by the electricity utilities partly as a result of unusually clement weather conditions The company is well situated near the Indiana power stations andis able to compete effectively with supplies from outside the state The Apraw contract operations mined 1.1 million tons including a high percentage of : sulphur coal which a commands price premium for environmental reasons Although the mine is approaching the end of its economic life opportunities for its extension are being investigated supplement the reducing Apraw tonnage an operation of 0.5 million tons a year was opened at Prairie Creek Further contract mining operations have started in Greene County During the year the rail siding and rail system connecting lines were completedtogether with the wash plant Operations reached an annual production rate of 1.2 million tons and achieved excellent profitability Portuguese currency against the United States dollar The demand for wolfram has remained relatively firm but market prices have been increasingly depressed by the excess supply of Chinese concentrates and beneficiated products Beraltis one of the most competitive mines in the western world with a high quality product Actionis being taken to further reduce the unit cost of production EXPLORATION Charteris currently evaluating a silver deposit near Aracenain south Spain to bringing determine the potential for mine into production small WOLFRAM MINING Beralt Tin and Wolfram Limited 75 owns 80.5 per centr centr Beralt Tin & Wolfram General Portugal - de Sa manager A. Correia Beralt Tin & Wolfram Portugal operates the Panasqueira mine in northern Portugal producing wolfram concentrate of a high degree of purity Summary of production Year to 31 March 1986 Year to 31 March 1985 Ore treated tonnes 784,061 Yield grade tonne 3.3 Metallurgical recovery % 79.9 Wolfram concentrate tonnes 2,619 Tin concentrate tonnes 71 Copper concentrate tonnes 898 694,535 3.1 76.9 2,147 153 1,228 Turnover for the year was 8.0 million 1985 - 11.2 million with an operating loss of 0.6 million 1985 - 2.4 million profit Good production levels were maintained during the year with the majority of tonnage now being produced from the new deeper level of operations Sales volumes were maintained at high levels but revenue came under increasing pressure due to the falling wolfram price and the strength of the Report ofthe directors continued gen im Ee eg pine yg Ng a BT - 4 i 3 4 + f * 3 4 ' ; 4 e Somes FINANCE AND INVESTMENT FINANCE & an Capital employed243.8m Cash and other items 51.4m million Related companies and partnership interest Passive and other investments Trading portfolios Currency and other items TOTAL INVESTMENTS oy Finance leases less deferred tax TOTAL Investments at market or directors directors valuation 1986 1985 148.6 58.6 22.4 - 74.8 84.3 18.3 - 229.6 14.2 243.8 177.4 14.7 192.1 Income including surplus on realizations 1986 15.7 1.0 6.0 0.1 22.6 2.1 1985 10.4 3.7 3.1 2.0 19.2 2.6 24.7 21.8 RELATED COMPANIES AND PARTNERSHIP INTEREST Johnson Matthey Public Limited Company 27.9 fully diluted 35.2 Market valuation of Charter's interest 114.3 million Johnson Matthey are specialists in - advanced materials and precious metals technology Principal activities include the manufacture ofcatalysts and pollution control systems speciality chemicals pharmaceutical compounds and intermediates electronic components and equipment and the fabrication of precious metals the marketing and refining of precious metals and the production of pigments ceramic colours and transfers Profit before taxation for the year ended 31 March 1986 increased by 50 per cent to 30.1 million compared with 20.1 million for the equivalent period last year and dividends of 2.5p per share have been paid or recommended Borrowings of money and metal were reduced in the year by 159 million with net money debt reducing by 108 million and metal by 51 million The improved results for the year reflected the success of operating units in reducing working capital and a major rationalization of underperforming activities within core businesses Good progress was maintained in strengthening the company's market position in catalytic systems for the reduction of pollution caused by automobiles and certain industrial activities Speciality chemicals showed substantial growth and good profits In biomedical products a new cancer drug carboplatin was ~~ launched Sales ofproducts for the electronics industries were depressed mainly in the United States due to weak market conditions Precious metal fabrication activities made a higher contribution in the United Kingdom where considerable rationalization has taken place Although up in volume sales of platinum group metals were little changed in sterling the results of this activity however benefited from the sale of surplus stocks While profits from refining showed a useful improvement in difficult trading conditions the priority has been to reduce the levels of metal tied up in the refineries Results for colours were depressed by weak Report of the directors continued markets Ceramic transfers were level with MIG group which it believes will benefit from the long term development of the the previous year London financial markets Net extraordinary losses amounted to 8.2 million Refinancing and restructuring costs totalling 10.2 million were incurred as the company continued to eliminate loss- 'making and inadequately performing activities Refinery assets in New Jersey in the United States have been written by US million in recognition of their having been built on a scale incompatible with the secondary platinum refining Johnson Matthey revised its industry accounting policy I relation to its metal holdings and as result metal revaluation gains net of tax of 9.5 million have been credited to revaluation reserves and 12.1 million to extraordinary items Covenant Industries Limited 33.9 Covenant Industries COVIL is the United Kingdom based parent of a group with manufacturing and trading operations in Africa Chemical and Allied Products in Nigeria 40 cent owned by COVIL had successful per year with profits up 40 per cent despite difficulties in obtaining import licences Profits of Twiga Chemical Industries in Kenya 60 per cent owned advanced ' Dukon COVIL's wholly owned paint manufacturer in Zambia increased profits in 1985 in spite of difficult trading The operating structure of the group has been reorganized into four new divisions - catalytic systems materials technology precious metals and colours and printing to enable greater emphasis to be placed on worldwide activities A great deal has been done to concentrate the Johnson Matthey group on its strong core businesses some farther rationalization will be necessary future The group has achieved a strong recovery and should be well placed for the conditions Due to the receipt of accumulated dividends from Nigeria pre profits of COVIL for the year 30 September 1985 rose by million to 1.7 million A dividend was also received from Kenya uncertain Prospects for the current year are due to economic difficulties in the countries in which COVIL's companies operate Rowe & Pitman 29.9 The firm shared fully in the buoyant financial market conditions that were experienced during the year and notably the second half including the high level of and acquisition activity Record merger last year of profits were earned during this the partnership of which Charter's share FINANCIAL OPERATIONS Capital employed in trading in securities increased during the year and the strong markets that prevailed in the second half- in the United Kingdom and abroad led year to an excellent result represented by realization surpluses and dividend income The overall surplus on realization of investments was little changed at 4.1 was 4.9 million million On 12 April 1986 shortly after the year end the merger of Rowe & Pitman Akroyd & Smithers Mullens & Co. and Mercury Securities was implemented In terms of the arrangements Charter exchanged its interest Rowe & Pitman for shares in Mercury International Group MIG and subscribed 17.7 million for additional shares On 14 May 1986 the majority of this interest was sold in the market for an aggregate consideration of 48.3 million giving rise to an extraordinary profit before tax of 15.1 million Charter has retained a holding of convertible preference shares equivalent to 0.5 per cent of the equity of MIG on fully diluted basis as a continuing interest in the OTHER INVESTMENTS Minerals and Resources Corporation Limited 3.8 Market valuation of Charter's interest 39.8 million Minerals and Resources Corporation MINORCO is an investment company with holdings in companies principally engaged in financial services the marketing of commodities the mining and marketing of precious and base metals and diamonds industrial operations and the coal and petroleum industries f Q t e Ta Og eg py er Cepek oT PETE SEES Earnings from operations for the year to 30 June 1985 were 45.2 million 1984 53.1 million the reduction being due to lower interest received and to conversion of the company's sterling and rand dividends into a strong United States dollar MINORCO's accounting currency Increased dividends were received from Engelhard Corporation and the South American investments while MINORCO's other investments maintained their rates of dividend distribution MINORCO's share of the retained earnings of its investments accounted for on an equity basis fell by 11.6 million to 66.0 million MINORCO's net earnings for the year were 104.6 million 0.61 per share compared with 217.1 million 1.28 per share in the previous year and the dividend was unchanged at 22 cents per share In June 1985 MINORCO realized 402 million from the sale of 10 million PhibroSalomon shares reducing its interest from 22 per cent to 14.5 per cent In the six months to 31 December 1985 MINORCO acquired further investments in the United States for 215 million in cash including a major holding in Adobe Resources Corporation an oil and gas producer MINORCO's earnings from operations for the six months to 31 December 1985 were 41.1 million the share of the retained earnings of its investments 28.0 million and its net earnings 64.7 million 0.38 per share Malaysia Mining Corporation Berhad 13.8 Market valuation of Charter's interest 11.2 million Malaysia Mining Corporation MMC and its subsidiaries undertake mining operations in Malaysia producing tin and products in concentrate form and the marketing of tin metal and other minerals Through Ashton Mining MMC has significant interest in the Argyle Diamond Mines jot venture whose process plant is expected to be running at an annual diamond production capacity of approximately 25 million carats by the end of 1986 to 17.3 million 1985 - 35.4 million The main factors were production cutbacks of and restrictions on the sale tin concentrate as a result of the tin export controls which were in force between 27 April 1982 and 1 April 1986. In the final quarter of MMC's financial year the tin metal price itself collapsed following the withdrawal of the Buffer Stock Manager from the market on 24 October 1985. The company paid an interim dividend of two sen a share but has announced that no final dividend will be recommended The MMC group has made extraordinary provisions of 69 million 1985 - 221 million due principally to a diminution in the value of investments liabilities arising from cessation of the business of overseas based trading subsidiaries and abortive prospecting expenditure The tin dredging operations of MMC are low cost producers but MMC's prospects depend almost entirely on a resolution of the tin crisis and how long it takes the world market to absorb the substantial stocks that overhang the market Anglo American Corporation Zimbabwe Limited 33.5 Anglo American Corporation Zimbabwe AMZIM holds & wide portfolio of interests in Zimbabwe including coal nickel and copper mining ferrochrome agriculture maize and flour milling forestry and timber processing and finance The company achieved a profit after taxation of 7.2 million for the year to 30 June 1985 compared with 2.8 million the previous year Following the relaxation of exchange control regulations in Zimbabwe AMZIM paid a dividend of 3.5 million in respect of the year ended 30 June 1985 MMC's group profit after tax and minority interests for the year to 31 January 1986 fell CHARTER Report of the directors continued STATUTORY AND OTHER INFORMATION Directorate A list of the directors of the company Herbert on page 5. As reported last year appears the board on 9 April Mr J. W. joined 1985. Mr A. T. B. Shand retired as a director on 31 March 1986 and Mr S. McLoughlin ceased to be an alternate director on that date In accordance with the company's articles of association Mr G. W. Relly Mr C. D. Burnell and Sir Robert Hunt retire by rotation but offer themselves for reappointment none of these directors has a service contract of more than one year's duration with the company or any of its subsidiaries The interests of the directors in the shares of the company and a subsidiary are shown on page 56 No director had at any time during the financial year a material interest in any contract of significance as defined by The Stock Exchange ; Authority to allot shares In accordance with the requirements of the of 57,000 Shareholders are being asked at the forthcoming annual general meeting to authorize the directors for a period of five years to approve politoifcatlhceobnotrairbduatrieonisn the which in the opinion interests of the company and its shareholders up to a maximum amount of 25,000 per annum Tangible fixed asssets professional buildings The book value of the tangible fixed assets decreased during the year from 126.6 million to 119.9 million Details are shown in note 13 on the accounts on page 40. No valuation of land and was undertaken during the year Sp Substantial shareholding On 10 June Minerals and Resources Corporation held 37,860,075 shares of 2p each representing 36.0 per cent of the share capital of the company Anglo American and De Corporation of South Africa Limited Beers Consolidated Mines Limited were deemed under section 203 of the Companies Act 1985 to be interested in that 7 general Companies Act 1985 a resolution is being submitted to the forthcoming annual meeting to extend for a further five the authority approved by years shareholders on 11 August 1981 for the directors to allot unissued shares shareholding Taxation : The company is not a close company within the provisions of the Income and Corporation Taxes Act 1970. and this position has not changed since the end of Employees Charter's policy is to encourage effective communication and consultation between employees and management Each subsidiary develops its own consultative and communication procedures as part of its the financial year For capital gains tax purposes the market of the company's shares on 6 April price effect of restructuring 1965 adjusted for the of the group in 1979 was Registered shares - 68.73p employment practices Shares represented by renounceable letters Charter and its subsidiary companies give of allotment - 69.60p full consideration to applications for disabled people Share warrants to bearer - 69.17p allowance for employment made by having regard to their aptitudes and In calculating the indexation March abilities Should employees become longer capital gains on shares held at 31 1982 the company's shares whether disabled during employment and no ee work for which or bearer were then valued at be capable of performing the registered they were engaged they would be 214.25p a considered for any available alternative For the by order of the board work within their capabilities G. RUDLAND e of training career development purposes are secretary and promotion disabled employees treated in the same way as other employees Registered office Lp 40 Holborn Viaduct Charitable and political contributions London EC1P 1AJ During the year the company and its subsidiaries made charitable contributions 3 July 1986 ef OE ~ CHARTER eS et UE ge t g aire yen Report of the auditors To the members of A Charter Consolidated P.L.C. ye We have audited the accounts on pages 30 to 53 in accordanwicteh approved Auditing AFOT Standards ~ In our opinion the accounts give a true and fair view of the state ofaffairs of the company and the group 31 31 March 1986 and of the results and source and -- application of funds of the group for the year | then ended and comply with the Companies Act 1985 . ~ & COOPERS LYBRAND Chartered Accountants London 3 July 1986 CHARTER CONSOLIDATED P.L.C. AND ITS SUBSIDIARY COMPANIES Consolidated profit and loss account Year ended 31 March 1986 =~ SOAS. 1986 000 1985 000 2 - Turnover 2,5 2,5 Operating profit 567,089 14,400 754,528 13,336 3 ii Dividends and interest received , Surplus on realizations a Share of retained profits of related companies Revenue from investments 22,674 19,477 5 Other interest receivable and similar income 8,971 7,709 46,045 40,522 Revenue . Administration of central activities Prospecting 5,001 887 5,500 3 846 Group profit before interest 4 Interest payable and similar charges 5 Profit on ordinary activities before taxation 6 Taxation on profit on ordinary activities Profit on ordinary activities after taxation Interest of outside shareholders in subsidiaries sharing scheme ;/ 40,157 11,403 28,754 8,967 19,787 34,176 . 17,656 16,520 fi iH 7,474 ih 9,046 1,496 K 10 11 Profit attributable to shareholders Earnings per share 18.8p 1985 - 10.0p Dividends paid and proposed ' 12 Extraordinary charges 19,776 12,095 7,681 9,191 1,496 4 , 10,542 11,568 1,026 52,874 a 25 Deficit for the year 1,510 53,900 y Notes finacil ) Profit for the financial year after extraordinary charges totalled 10,585,000 1985 - loss 42,332,000 ii The movements on reserves are set out in note 25 on page 45 The information on pages 34 to 53 forms part of these accounts CHARTER CHARTER CONSOLIDATED P.L.C. AND ITS SUBSIDIARY COMPANIES Consolidated balance sheet 31 March 1986 oe : i Py . . x 5 . : 7 et = .. As * Pa as & s ^' i e ' 3 C 4 } . > iL L ^' i oS . f i Note 13 13 14 Fixed assets . Intangible assets : Tangible assets . - Investments Valuation 204,642,000 1985 - 150,209,000 1986 000 : 000 8,490 119,884 94,104 1985 000 000 . n 10,695 126,600 88,186 Current assets 16 Stocks 17 Debtors 15 Assets under finance leases to third * 18 Investments at valuation Short term loans and deposits Cash at bank andin hand Creditors Creditors due within one year : : 19 Creditors . 20 Taxation 21 Deposit accounts 22 Short term borrowings 222,478 . 225,481 136,424 130,087 21,615 . 24,976 34,503 * 6,329 . ; 353,934 157,782 160,880 22,668 27,224 43,391 5,970 .. : 417,915 | 119,426 20,320 3,283 14,190 136,330 : 31,277 _ fe : 3,764 45,067 15- 7,219 216,438 Net current assets 196,715 201,477 Total assets less current liabilities 419,193 426,958 Creditors due after one year 26 Long term borrowings 27 Other long term creditors 28 Provisions for liabilities and charges Capital and reserves 24 Called up share capital 25 Share premium account 25 - Revaluation reserves 25 Other reserves . 25 Profit and loss account - . Total capital and reserves Interest of outside shareholders in subsidiaries 80,562 2,235 38,010 298,386 2,105 12,528 25,181 120,149 114,039 274,000 24,386 298,388 72,981 517 39,129 314,331 2,105 12,513 25,602 129,268 113,987 283,475 30,856 . 314,331 Approved by the board of directors on 3 July 1986 N. CLARKE J. A. HOWARD } DIRECTORS i The information on pages 34 to 53 forms part of these accounts a a vb . 7 om CHARTER CHARTER CHARTER CONSOLIDATED CONSOLIDATED P.L.C. sheet Balance Investment 14 in subsidiaries at cost less provision 1986 000 000 70,155 | 1985 000 96,788 Corporation tax recoverable Amount due from subsidiary * Creditors due within one year Amount due to subsidiary Proposed final dividend 16,691 1,710 8,151 97 Net current assets Total assets less current liabilities n 27 Creditors due after one year Amount due to subsidiary 9,958 6,733 76,888 . iy 61,796 15,092 97,503 83,000 _ 14,503 _ _ _ Capital and reserves 24 Called up share capital 25 Share premium account 25Profitand loss account H 2,105 543 12,444 15,092 oe 2,105 530 11,868 14,503 Approved by the board of directors e ri 34 to 53 forms part of these accounts The information on pages vo : via CHARTER CHARTER CONSOLIDATED P.L.C. AND ITS SUBSIDIARY COMPANIES Source and application of funds Year endedMarch 1986 Saras n a % _ 4 rf 3 N } au 7 SATAN EER Note . OPERATING CASH FLOW Profit before interest payable and taxation Share of retained profits of related companies Provisions against current asset investments 1986 000 ' 000 S 40,157 6,987 1,357 29 Operating cash flow from revenue sources Funds applied to maintenance of operations Working capital L a 8,058 assets intangible and tangible FPurcihasesxed . ( Purchases for normal replacements and ~ enhancements less capital expenditure grants 21,844 Book value of disposals 4,098 Depreciation 21,612 34,527 : . 1985 000 000 34,176 6,888 21 . 5,172 * 27,309 : 31,923 12,796 31,754 29 ne Cost of current asset investments - net sales i Operating cash flow Taxation paid Interest payable and similai charges Dividends paid 3,866 2,250 : 9,581 11,403 11,568 o 14,174 48,701 32,552 12,627 : , 4,209 . 11,664 7,263 17,656 11,568 38,973 : 36,487 Cash flow after taxation and service of capital Extraordinary items before taxation and minority interest less provisions and other items 16,149 11,368 2,486 10,429 OVERALL CASH FLOW FOR THE YEAR 4,781 12,915 29 29 CAPITAL RECEIPTS LESS NEW INVESTMENT Disposal of subsidiaries Fixed asset investments - net purchases Decrease in assets under finance leases Proceeds from sale of subsidiaries Fixed assets intangible and tangible acquired for expansion Capital subscribed by minority shareholders Tax paid on prior year investment disposals 1,505 5,642 1,053 16,603 9,221 3,272 8,686 16,464 10,493 443 - 8,375 A' - 1,116 = - 2,847- Net cash inflow 3,665 10,068 REPRESENTEBDY 29 Increase in liquid funds Increase in long term borrowings . 21,256 17,591 3,665 35,785 45 853 10,068 The information on pages 34 to 53 forms part of these accounts . 33 CHARTER " Notes on the accounts 1. Accounting policies Basis of consolidation ( The accounts are prepared on the historical cost basis of accounting except for certain fixed and current assets included at valuation ii The results of subsidiaries acquired or disposed of during the year are includedin the consolidated profit and loss account from their effective dates of acquisition or disposal premium or to The or discountbetween the purchase consideration and the fair value of net assets acquiredis dealt with through reservas while the difference between sale consideration and book value of net assets at the date of disposal is shown as an extraordinary item Foreign currencies . Foreign currency assets and liabilities of United Kingdom companies and the accounts of overseas subsidiary and related companies are translated into sterling at the rates of exchange ruling at the dates of their respective balance * sheets The differences arising from the translation of net equity interests in overseas subsidiary and related companies and of foreign currency borrowings used to finance these interests are dealt with through reserves All other exchange differences are dealt with in the profit and loss account Income from investments i Income from investments including where applicable the imputed tax creditis accounted for on a received basis with the exception that companies income from related and listed fixed interest stocks and bondsis accounted for on receivable basis ii No accountis taken of investment income which is held in the country of origin pending approval for remittance from that country Investments comprise i Current asset investments portfolio investments which are includedin the balance sheet at market value or directors valuation The aggregateof surpluses less deficits on valuation over cost less the related deferred taxation provision is dealt with through the revaluation reserves except that any net aggregate deficitis taken to profit and loss account ii Fixed asset investments are included at cost less provision for anypermanent lossin value iii Profits less losses arising arising on disposal of current asset investments are includedin the _ profit and loss account as surplus on realizations of investments Profits and losses from the permanent disposal of fixed asset investments and provisions for lossin value are dealt with as extraordinary items in the profit and loss account Turnover Turnover is the invoiced value of sales and services of the operating subsidiaries of the group and excludes sales turnover taxes Depreciation Fixed assets are written off evenly over their expected useful lives with the exception that no depreciationis provided on mineral freehold land are normally Depreciation and amortization provided as follows . Freehold building-s 2 per cent per annum Leasehold property - the period of the lease or 2 per cent per annum for leases in excess of - cent 50 years Plant furniture and fittings 10 to 33 per fipat either by per annum - Mining properties leases and rights equal instalments over their expected useful lives or on a depletion basis comparing production with total ore reserves Technical development expenditure Expenditure on research and development patents and trade marksis written off when incurred Deferred taxation Provisionis made for deferred taxation on the liability method to the extent thatit is probable that a liability or asset willcrystallizein the . foreseeable future Stocks and work in progress Stocks and work in progress including short term contract work are valued at the lower of cost and net realizable value while long term contract work in progress is valued at cost plus attributable profit Both short and long term contract values are reduced by foreseeable losses and progress payments received and receivable Cost includes expenditure whichis incurred in the normal course of business in bringing the product or service to its present location and condition Net realizable value is the estimated selling price less all costs to be incurred Prospecting exploration and development expenditure ) Development of existing mines expenditure a General development against operating profits iis s charged b Expenditure on development of long term infrastructure for future mining is capitalized as fixed asset under mining properties leases and rights oo a : ut ~ ae . Sr ^' & ^' : is % b, i ii General prospecting and exploration a Exiditure Exiditure during the initial stages of exploration is written off in full to the profit and loss account b Further expenditure on prospects showing development potential is carried forward as an asset in the balance sheet pending the determination of commercial reserves Should the exploration work be unsuccessful such costs are written off as prospecting expenditure in the - profit and loss account , iii Development of new mines When is decided to develop a prospect into a mine the relevant expenditure under b above is transferred to fixed assets Related companies The group follows acounts for related companies as ) receivable from related companies companies Dividends and the group share retained profits less of losses for the year are accounted for separately in the profit and loss account The accounts used to calculate the group share of retained profits less losses of related companies are normally the latest audited accounts available to the group = ii Interests in related companies are included in the consolidated balance sheet as fixed asset investments and are stated at the group share of their assets less net discount on acquisition Finance leases and leased plant and machinery ) Finance leases Income receivable from finance leases is credited to the profit and loss account to give a constant periodic rate of return after taxation on the net cash investment In compliance with SSAP 21 assets under finance leases are stated in the balance sheet as debtors at the total rentals receivable less profit allocated to future 4 periods ii Leased plant and machinery || Where assets are financed under leasing agreements that give rights approximating to ~ ownership the amount representing the outright purchase price of such assets less capital expenditure grants is capitalized capitalized under the heading of tangible fixed assets and corresponding leasing commitments are shown as obligations the lessor The relevant assets are depreciated in accordance with the group's charges depreciation policy Net finance balance calculated on the reducing method are included in interest costs iii Operating leases eases The annual rentals of operating eases are charged to the profit and loss account i 'CHARTER Notes theaccounts continued 2. Operating profit and administrative expenses a " Turnover Cost of sales 7 o . q ' Gross profit 792 - : ~ Selling and distribution costs ' i Administrative expenses wey Deduct Relating to central activities stated separately: 7 ee : . : Operating or profit e: Seeley BUN Maes .1986 000 000 567,089 488,767 78,322 . B -1985 000 : 000 oo 45,382 1 66,904 754,528 634,406 120,122 aaa it 2 5,500 : 61,404 : ; 63,922 0. 106,786 5 shah 14,400 5 52 13,336 i . oe NOTES soe . a - : The results 1985 subsidiaries been ) for of the operating * Anderson other than the Strathclyde group and ** go the metal marketing companies were for the 15 months to 31 March 1985. The contributions to months of additional three to profits the 31 March 1984 were as follows 000 om 116,043 Turnover Operating profit Profit before taxation 1,819 1,209 771 a Profit after taxation ' Profit attribtousthaa rehbolldeers 1,047 Operating ii profit for 1986 includes a surplus of 1,2 million arising in the year in respect of National Mine Service Company's pension plan ns e , : a 3. Revenue from investments . . i Dividends and . INVESTMENTS INVESTMENTS TOTAL TOTAL ASSET CURRENT ASSET RELATED COMPANIES FIXED INVESTMENTS 1986 1986 1986 1986 1985 i : 000 000 000 000 000 oan 2 : \ . : : interest received Listed investments Unlisted investments : 3,004 5,757 880 8,761 1,852 46 5,733 5,806 5,407 5,407 3,204 1,898 11,539 8,611 : iN 1986 1985 : 000 000 : companies i ~ x : 2 ii Share of results of related companies Profits on ordinary activities before taxation : Deduct Dividends declared y 15,748 - 10,679 8,761 9 = 3,791 6,987 6,888 Retained profits before taxation : 2,447 3,154 Taxation UE . : Retained profits after taxation ! i Extraordinary charges see note 12 . . ' Net surplus for the year Principal related companies are listed on i pages 50 and 51 : i 74, 4,540 2,268 3,734 49,387 2,272 = 45,653 > : * . \ 2 36 4. Interest payable and : similar charges Loans repayable after more than five years Loans wholly repayable within five years Finance leases : Amounts deposited with the group { i cf tb t b: 4 You 5. Profit on ordinary ; activities before taxation Profit is stated after charging or crediting the following items Charges 00 Sees Auditors remuneration a see Directors emoluments note 7 Depreciation of intangible fixed assets --* S Be Depreciation of tangible fixed assets ae < Operlaeat se i renntalgs -hire of plant and machinery - other operating leases . Credits receivable Rents receivable Income from finance leases included under other interest receivable and similar income j 4 . 6. Taxation on profit on ordinary activities COMPANIES on profit for the year United Kingdom Corporation tax see note below Deferred taxation Double taxation relief Advance corporation tax written off by subsidiary Taxation on franked investment income Overseas Taxation Deferred taxation Adjustments in respect of previous years RELATED COMPANIES NOTE The rate of United Kingdom corporation tax is 40 per cent The rate for the comparative figures was 45 per cent for companies accounting for the 12 months to companies 31 March 1985 and 46 per cent for accounting for the 15 months to 31 March 1985 1986 5,328 11,403 963 430 1,824 19,788 18,137 532 302 2,065 CHARTER Notes the accounts continued os a any tis 4G - 1986 1985 = i = 000 000 7. Directors emoluments _ wey ws > oS \ : \ | Pension payable to widow weyus ! a Bea : 55 58 Directors of the parent company ; a . 7 pension $ Fees ' |: remuneration including pension . 453 408 6 Salaries and other remuneration on co : 3 : contributions : director : Os eee 3 of former director : 469 511 ee: ee companies Bata a Deduct Fees received from other companies and o ree funsded es 81 88 ore 2 : ; : ~ the group | rn . sa : Net cost to the group Amounts paid to: directors has " ES we 430 381 en ee: & 1986 1985 oat 15,000 ., 15,000 a 98,653 . Chairman mag ere 107,508 Sey oes : ea : ne : cee BLE te et paid Highedis recttor : bo Others 75,001- | ye Seo =: 60,001- 9 55,001- | . L of up to 5,000 Be St . NOTE waive emoluments due to to Six directors have agreed and its them from Charter ConsolidwaatievdePdLbCy these directors subsidiary companies Fees five during the year amounted to 32,000 1985 directors 34,000 8. Employees including executive directors below oo AGGREGATE AMOUNTS PAYABLE see note below Wages and salaries Social security costs Other pension costs NUMBER EMPLOYED AVERAGE OF PERSONS BY THE - BY CATEGORY Manufacturing Construction Mining Corporate - GEOGRAPHICALLY United Kingdom Overseas 1986 000 . 1985 000 an aa 158,227 16,375 9,204 218,504 | 23,341 10,982 -< 183,806 252,827 : 1986 - 7,420 7 6,303 2,507 | 235 ae 1985 | 11,253 6,807 2... 3,077 | 16,465 11,081 5,384 NOTE amounts payable in 1985 were for the The aggregate31 March 1985 except for the Anderson 15 months to and Charter Consolidated Services Swthriacthhcwleyrdee fgorrotuhpe 12 months to 31 March 1985 eS 9. Pension funding 10. Earnings per share 11. Dividends paid and ee proposed Pension schemes for head office employees and employees of the United Kingdom operating subsidiaries are administered by trustees and : the assets of the schemes are invested respect of past service based on regular actuarial valuations The actuaries have my valuation confirmed that at the last dates of the -.- 2 respective schemes they were adequately gc2. - -- independently of the finances of the group The schemes are funded by annual contributions over the period of employment at rates based on advice from actuaries to the schemes these to funded meet the benefits provided under the rules of such schemes Pensions for employees of overseas subsidiaries are provided in accordance with local requirements and provide for future pension entitlements in : -. practices : which share is calculated on earnings of Ishares subject to restricted rights ceased Earnings per and |= to be restricted during the year had been free of 19,776,000 10,542,000 on restriction for the whole year and the 4,521 105,174,065 1985-105,165,943 shares as the =. to shares which Soo"! 1985 11,16o9ptions subscribe for fully paid 2,500 1985-500 partly paid the became fully paid during the year had been fully shares exercised durinyegar had been Be feet paid for the whole year the 1985-220 . exercised for the whole year Interim dividend of 3.75p 1985-3.75p per share i paid on 9 January 1986 *- Proposed final dividend of 7.75p 1985-7.25p per share 1986 = 1985 000 000 . : > 8,151 7,624 ' 12,095 11,568 12. Extraordinary items ie serinacer pe pe g Sent weny oe Income Investment disposals and provisions no longer required Charges Disposal and rationalization costs of operating subsidiaries Provision against investment Legal costs in respect of asbestos litigation Other items Extraordinary loss before taxation Taxation Extraordinary charges after taxation and before related companies Related companies Johnson Matthey Other 1986 - 000 799 ~ 1985 000 - 25,146 8,444 583 = 199 9,226 8,427 1,504 6,923 2,268 2,268 9,191 22,327 - 8,174 156 30,657 5,511 2,024 3,487 49,241 146 49,387 ; 52,874 NOTE Disposal and rationalization costs for the year 31 March 1986 include 5.8 million net of minority interest as provision for losses associated with the decision to dispose of the assets of the mining machinery division of National Mine Service Company Since the year end an agreemenhats been reached for the sale of substantially all of that division's assets Formal closure of the agreement is satisfactory on dependent dependent satisfactory compliance with the requirements of United States government agencies and certain other conditions The charge includes provision for losses on disposal of the assets closure costs and trading losses from 1 April 1986 up tothe date on which the sale is expected to become effective . Notes on the accounts , continued 13. Intangible and tangi fixb ed al ssee ts 2 angi we aos INTANGIBLE - : TANGIBLE ASSETS . | PLANT MINING FURNITURE AND Seon es EXPLORATION PROPERTIES AND | LEASES FITTINGS TOTAL ( : -MINING LAND MINERAL INCLUDING TANGIBLE ="; LEASES |( |" ' RIGHTS BUILDINGS RESERVES LEASED ASSETS 000 000 000 000 . 000 COST OR VALUATION ' At March 1985 . Capital expenditure grants at 31 March 1985 Restated realignment Currency realignment 5 Additions cost of ' Disposal subsidiaries : cb Disposals and Revaluatioannds reallocations ** March 1986 nl A ae . DEPRECIATION At March 1985 > Currency realignment Charge to acco losu s an ccot unt extrtaooerxtdraiorndianraryy items see note vi below Disposal of subsidiaries Disposals Revaluations Revaluations Revaluations and reallocations At March 1986 ot . 16,312 53,997 5,796 171,911 231,704 LENA is : - 440 - 4,519 4,959 : 16,312 2,732 53,557 4,219 5,796 167,392 226,745 . 10,107 14,928 ay 2 : _ 1,431 1,793 2,080 25,761 29,634 782 5 36 28 9 782 - 267 oe 2,317 2,317 2 oe : ee SP 9,599) 10,381 8 18 110 ey 175 14,975 50,616 7,292 * eae foe 5,617 13,590 = 677 - 2 949 1,824 2 992 25 1,386 =: = 38 577 - 29 2,205 aa 171,020 228,928 : hey PEAR 85,878 100,145 4,575 5,605 17,825 ee ga 19,788 2,249 5 * ane - 36 - - 307 203 . 1,540 1,540 5,976 6,283 . 68 290 6,485 16,085 91,724 109,044 NET BOOK AMOUNTS At 31 March 1986 At March 1985 8,490 10,695 34,531 39,967 79,296 81,514 119,884 126,600 NOTES i Fixed assets are included on the following bases cost valuation - 1964 1974 1975 1976 1978 1979 1984 14,97514,975 14,975 37,120 7,292 151 3,869 4,675 904 1,150 re 468 2,279 : 162,333 304 - - 8,383 171,020 206,745 455 - 3,869 4,675 ~ 904 1,150 468 2 10,662 228,928 ii Fixed assets include the followinign respect of assets held under finance leases Net book amounts at 31 March 1966 Depreciation charge for the year . iii Capital expenditure of subsidiaries Committed AAuutthohroizreid zed but but committcommiteted d 1986 000 3,869 2,26,46848 1985 0003 4,227 6,3462 ,342 6,517 10,569 iv The net book value of the group's land and buildings includes 1.1 million 1985million for long leasehold properties and 0.7 million 1985- million for short leasehold properties properties - 371 - 3 - 11,716 12,087 - 1,681 1,684 v Historical cost figures for land and buildings namely the original cost of all land and buildings and related depreciation are 1986 1985 000 Historical cost Aggregate depreciation 47,428 13,139 Net book value 34,289 The charge to extraordiexntraaorrdiynaryitems relates to the disposal and rationalization of operating subsidiaries a erie ite 14. Fixed asset investments uy At March 1985 Purchases Share of net surplus for the year see note 3 Disposals Reserve movements including currency realignment - . Reallocation At March 1986 Listed in Great Britain Unlisted Related companies comprise Share of net assets aa <, Discount net on acquisition AT MARKET OR DIRECTORS VALUATION see note ) below Listed in Great Britain Unlisted 69,969 108,468 40,126 148,594 111 111 111 111 111 111 111 111 111 111 111 111 111 111 111 111 _ 111 111 111 111 OTHER INVESTMENTS INVESTMENTS 1986 1985 000 ~ 000 19,851 20,095 4,284 3,517 24,135 _ 23,612 TOTAL 1986 000 63,224 :> 30,880 1985 * 000 61,026 27,160 94,104 88,186 NOTES or i In the event of the realizatdiriectorson of fix' evdalauastsioent investments investments at market : there would be a taxation liability of approximately 27 million 1985- 13 million ii Parent company in subsidiaries Balance 31 March 1985 Purchase Disposal Balance 31 31 March 1986 companies investment in related includes iii TChhaerter's 29.9 per cent equity share of Rowe & Pitman see note 7 on page 51 15. Assets under finance leases to third parties Amounts falling due within one year Amounts falling due after one year RANE NOTES to assets under finance leases during the i Additions - 899,000 899,000 ge t year amounted to 190,000 1985 ii aggregate lease rentals received during the The 3,022,000 year amounted to 3,296,000 1985 - Provision for diminution in value .- 28,050 70,155 1986 000 1,615 20,000 21,615 Noteosn the accounts continued : : payments cost - Contract work in progress Deduct Progress received and receivable Raw materials components components andconsumable ~ consumable stores . goods Work in progress -) Finished including mineral concentrates . 7 7 an : a NOTE ; of The estimated value total group stocks on a basis replacement cost was 145.940.000 1985- as 164,285,000 eee 1986 000 . 210,641 180,876 : 29,765 . 1985 000 ae > 235,246 2s: 203,002 -.. 32,244 , 78,541 34,552 12,445 157,782 . 18. Current asset investments oo . ELS wig we AMOUNTS FALLING DUE WITHIN ONE YEAR : Trade debtors Amounts owed by related companies Amount due on sale of subsidiaries and : businesses . Other debtors . Prepayments and accrued income OPERATING SUBSIDIARIES SUBSIDIARIES SERVICE oe TOTAL es mal E> 2 TOTAL / 000 me 90,149 364 ~ 8,802 1,993 sy : we . 000 we 92,208 6,316 | 000 oes 99,213 - 926 - 19,549 * 6,036 124,109 16,603 31,555 6,482 : 154,779 AMOUNTS FALLING DUE AFTER ONE YEAR Amount owed by related companies Amount due in 1990 on sale of subsidiaries and . businesses Other debtors see note ii below : Prepayments and accrued income 473 : 5,250 : - 22,851 473 5,250 217 38 . 5,978 _ 130,087 NOTES An interest free loan of 1.744 was made to ) J.W. Herbert on 9 April 1985. The loan was repaid in 12 equal instalments by 31 March 1986 On ii Loans of 224,954 to two officers were outstanding at 31 March 1986 : - Listed in Great Britain Listed outside Great Britain ; Unlisted a 1,565 22,089 AT VALUATION 000 10,976 12,184 23,160 1.816 24,976 WRITEN AT VALUATION 000 oO 13,102 10,775 23,877 oo 3,347 27,224 oe ne 19. Creditors due 2 ~ one year as within . : - : ys : fe * ing Sab: . Trade creditors Payments received on account Other creditors see note 20 Accruals and deferred income ~ nm Dividend payable ee : a we Bon : : | OPERATING SUBSIDIARIES AND SUBSIDIARIES 1986 000 61,548 5,931 19,131 18,611 - SERVICE SUBSIDIARIES - . 105,221 14,205 TOTAL . / / 1986 000 1985 000 63,955 69,588 5,931 -: 26,141 7,989 20,140 26,141 -. 21,249 . 24,988 8,151 7,624 119,426 136,330 : : Corporation tax : Se : Overseas tax security 19 AL Included in other creditors see note 2p. Social and other taxation - o s : . : . : . ; . 1986 000 2). 18,581 1,739 oo : . : 7,888 ' 28,208 21. Deposit Amounts Amounts deposited by relatedcompanies 422,000 339,000 Short term i. 22. pe borrowings e ene ele aie atk a 23. Contingent liabilities Ne Af ra v} as Fe MN CANEsl Bank loans and overdrafts Obligations under finance leases NOTE Bank loans and overdrafts include 5,526,000 1985 33,608,000 which is secured on assets of subsidiaries Guarantees in respect of borrowings by third parties and other obligations of 9,708,000 less guarantees of 4,021,000 Underwriting commitments Bills receivable discounted Other items In addition the group has contingent liabilities ee - entered into in the normal course of business - from which no liability is expected to arise ~ The parent company has given guarantees totalling 42,135,000 21,968,000 including 36,118,000 16,057,000 relating to subsidiary companies borrowings Continued overleaf CHARTER - Notes on the accounts continued 23. Contingent liabilities NOTES Charter ) In 1980 took credit for tax relief on its investment in respect of losses incurred Cleveland Potash Further losses on that were incurred incurred in 1981 for which no investment relief has yet been claimedclaimed The Inland tax have refused refused Charter's claim for tax Rreevleineuferespect the 1980 losses and in of the claim has been subject an consequently in appeal before the Special Commissioners available yet May 1986 and their decision is not yet the appeal is upheld thaernisteakI inf g bortehfuyseeadrs into account a credit will should not exceed > the additional tax liability liability . 4.0 million through a subsidiary 67.3 per cent ii Charter owns Cape Certain PLC of Cape Industries continue be : companies in twhiethCoatpheegrraosubpestos fibre and named along as defendants a suppliers asbestos prnoduumctbser legal actionsactions in the United significant of States The plaintiffs in such actions are result damages damages as a substantial claiming In addition the Cape group addition use of their products has retained obligations in respect of claims be made made within limited made or which maycompanies disposed of within its > companies received legal period against former mining division division Cape has in the United Kingdom that such actions United advice brought in the would fail in principle defence is mounted or Kingdom and that no actions United actionsin United response made to such States obtained judgements within the Cape group States against companies would not be enforceable in the United In actions instituted in Illinois Kingdom and Texas none of of which ha Pennsylvania responded to in any manner been defended or responded plaintiffs have obtained against Cape group judgements continuing Texas ~ defaultdefault totalling in companies approximately US million aggregate approximately Attempts to enforce the IlliSntoiastejsudhgaevmeebnetesn against Cape in the United unsuccessful but these attempts are of its subsidiaries are currently - Cape and one actions being brought the United contesting . High Court enforce the to totalling approximately US judgements directors of Cape have stated that The million that they believe in the light of legal advice thhaevye received that the mentiomanteeridal ef' fect matters are unlikely to have any the Cape group's financial position Having on of Charter believe regard to this the directors relate to the that such matters in so far as they material Cape group are unlikely to have any Charter's position and accordingly no on eprfofviesciton in respect them has been made has also been named defendant a Charter of asbestos actions in the United number basis that is allegedly liable for States on the the . ct contests existence the acts of Cape Charter be: any such liability This issue hashyaevtetobeen adjudicated at trial The directors able successfully * +- advised that Charter should be but that defend the actions brought against it S == to the eventual uncertainty mustrtialesxtriails sotfaasntyosuch actions It not outcome of the in particular particular the the practicable to estimaete stimate in case practicable practicable damages which might case which might ensue if amount of any damages liability were imposed on Charter Based on advice the directors believe that the aggregate material of any such liability is unlikelpyostiothia onvIen these on effect Charter's financial have concluded that circumstances the directors provison in is not appropriate to make any respect such actions Authorized Issued Fully paid shares Partly paid shares 1p paid see note ) below 7, " Fully paid shares with restricted rights see note ii below Total issued share capital 1986 SHARES OF EACH 135,000,000 2,700,000 135,000,000 105,174,065 107,200 47,213 2,103,481 1,072 944 2,105,497 ee ' 1985 SHARES OF 2p EACH 135,000,000 _ 2,700,000 _ 105,165,943 2,103,319 109,700 48,314 1,097 966 ; 2,105,382 aoe NOTES sliares sliares were issued under the ) The partly paid scheme adopted in company's share incentive incentive under that 1970. No further shares will be issued under scheme partly The fully paid shares with restricted rights were ii of the company's allotted to the holders a scheme arrangement paid shares in termasnofd are subject to the same of 22 October 1979 to which as the partly paid shares restrictions paid relate until those partly shares partly they fully paid During the year 2,500 become were fully paid up and as a result paid shares with restricted rights 1,101 fully paid shares became free of restriction of The total number shares over which there ii outstanding 31 March 1986 were options was 263,561 oo ee 25. Reserves SHARE PREMIUM- ACCOUNT REVALUATION RESERVES 000 000 OTHER RESERVES 000 .... PROFIT AND LOSS ACCOUNT 22, 3 * / / 000 +000 . : GROUP BN Reserves at 31 March 1985 ' abe 7 12,513 129,268 . 113,987 = 1,510 281,370 1,510 sDeffoir tc he i yet ar bee : = : . 5 2 : ved Net effect of translation of currencies see note iii below ~ 5 , 3,830 6,252 10,177 a Cape Industries PLC of Cancellation share premium account as confirmed by the High : Courtin June 1985 . categories :. Transfer between reserves . accordance with the undertakings : .: . . 1,876 10,448 . 4,084 10,448 . 2,208 given to the High Court ; : : : . Movement on current assetvaluation uF investments included at valuation . after deferred taxation of 804,000 Premium on shares issued by the Ue fee ae tepals - 1,550 company ee Transfers between reserves =~ Related companies Other items Reserves at 31 March 1986 12,526 Charter Consolidated PLC and its subsidiaries ~~ , : Related companies : 12,526 - . COMPANY Reserves at 31 March 1985 Surplus for the year Premium on shares issued Reserves at 31 March 1986 NOTES reserves i The group's other 31 March 1986 include distributable reserves of 63,362,000 ii In the event of certain overseas subsidiaries and related companies distributing reserves or an profits additional liability to United Kingdom and overseas taxation would arise iii Included in the net effect of translation of currencies is a credit of 5,629,000 1985 charge 4,631,000 in relation to foreign currency borrowings Notes on the accounts ee as continued . DEBENTURE LOANS . guaranteed Financial subsidiaries bonds of FF47,470,000 repayable 1987 7per cent : see note ii a below a Operating subsidiaries ./- 10 per cent secured loan stock 1986/91 :. increased from % per cent from 10 April 1985 8 per cent unsecured loan stock 1986/91 7 Unsecured loan 1984/90 see note ii b below: 12 per cent promissory notes 1986/95 8per cent promissory notes 1984/95 6 cent industrial revenue bonds 1988 . : per US mortgage notes 1993 at 6.6 per cent to 12.5 cent 6 see note ii c below ee wee - Industrial revenue bonds see note ii d below ~\: Land purchase contracts see note ii e below : ae BANK LOANS AND OVERDRAFTS see notes ) and iii below 7 Unsecured Secured see note ii f below : a sec note ii g below i ; Amounts owoewdetd o related company variable interest repayable : : in sterling between one and two years ; OTHER CREDITORS See ae, Obligations under finance leases see note i below TOTAL LONG TERM BORROWINGS Short term borrowings see note 22 TOTAL BORROWINGS . 29,737 : : 2 et 46,267 : 35,770 : : : 1,700 cae 1,000 ; ee EAs eo 7,254 6,474 oan 80,562 14,190 94,752 _ 72,981 45,067 - 118,048 _ _ _ 7 NOTES ) Repayments are due as follows Between one and two years Between two and five years Over five years otherwise than by instalments Over five years by instalments BANK LOANS AND OVERDRAFTS 000 OTHER BORROWINGS 000 18,583 26,897 - 787 46,267 7,985 8,245 3,459 7,352 27,041 FINANCE LEASES 000 5 1,738 3,922 - 1,594 7,254 TOTAL 000 28,306 - 39,064 3,459 oe 9,733 80,562 principal ii a The bonds are listed on The Stock Exchange in London Charter Consolidated .c has guaranteed the bonds as regards repayment of including premium any and payment interest b => The loan carries interest 65 per cent United States prime rate c The notes are secured by plant carries d The loan interest at 75 per cent the United States prime rate e The loan carries interest at 1 per cent over the United States prime rate f The bank loans are secured on assets of subsidiaries and carry variable interest rates g The unsecured bank loans and overdrafts carry ' interest at per cent to s per over the London interbank Eurocurrency Rate ii Bank loans are repayable in the following currencies 1986 1986 000 : 1985 . United Sterling States dollars Other . 38,832 2,688 46,267 46,267 F 27. Other long term . o ; creditors 2 : ~ deferred Accruals and income : & Other creditors OPERATING SUBSIDIARIES 1986 000 996 1,159 2,155 SERVICE SUBSIDIARIES ec: Te po } poe : - TOTAL 1986 000 TOTAL 1985 ~,, 000 1,076 1,159 517 - 2,235 517 grants He) From 1 April 1986 capital expenditure in respect tangible fixed assets have been deducted from the cost of the relevant fixed assets see note 13 The 1985 comparatives have been - altered to reflect this change ii 61,796,000 due by the parent company to no subsidiary is interest free and has fixed wie repayment term 5 Provisions for liabilities and charges : oo one 2.22000 a we : aes wee Ps 'At March 1985 S me CLOSURE ~ : DEFERRED GUARANTEES : 000 . Ln 18,618-5 OTHER : GUARANTE S es note Utilized in year aE Provided in year net * -- Amounts relating to subsidiaries sold 94 a et gy EO IAAL ante PAM deminer * ent At March 1986 The provision made in the accounts for deferred taxation and the full potential liability are set . out below : Excess of the book value of assets including finance leases qualifying for taxation allowances over their written down value for taxation purposes Difference between book and taxation value of investments ; Excess of valuation over book cost of current asset investments Legal costs provided for future years in respect of asbestos litigation see note 12 : Taxation on trading losses of operating subsidiaries carried forward oe Other timing differences Advance corporation tax see note ii below NOTES on i No account has been taken of potential or deferred taxation relief provisions of 4,526,000 raised in 1980 in respect of Cleveland Charter's and Charter's Potash for certain guarantees maximum liability for closure costs ii Advance corporation tax of 3,329,000 1985-1985- 3,267,000 is included in taxation recoverable in the parent company's balance sheet respect iii Other provisions at March 1986 include legal costs of 4,831,000 in of continuing PROVISION MADE 000 FULI POTENTIAL LIABILITY 000 PROVISION MADE 000 FULI ' = POTENTIAL LIABILITY 000 _ 18,178 , . 23,293 5 E 60 E 13,129 974 1,688 974 : 1,688 : 24,999 bs 11,079 . 11,079 - : 332 - 2,356 -'- 2,356 ; 384 1,322 3,329 3,389 716 3,329 642 85 3,638 12,489 3,448 ; 13,613 . iv asbestos actions in the United States and pension unfunded commitments commitments for certain operating subsidiaries of 1,167,000 Closure costs and guarantees 31 March 1986 include 5.2 million in respect of provision made for closure costs and future losses of the mining machinery division of National Mine Service Company see note 12 Notes CHARTER on the accounts e continued | 29. Source and application _ of funds : ) Analysis of working capital Decrease in stocks and work in progress : Decrease in debtors Decrease in creditors Currency variations ii Net assets on disposal of subsidiaries ' -. Fixed assets riovements Goodwill riovements; Stocks and work }:3 progress : = _.: Debtors ve Creditors 22" - Taxation Capital expenditure grants wee Liquid funds Minority interests Long term borrowings oe Investments Other items Outstanding proceeds receivable iii Investments Fixed purchases . -book value of realizations Current assets realizations at book value -. liquid funds cash iv Decrease in in short term loans deposits and Decrease Decrease in deposit accounts Decrease in short term borrowings 1986 000 1985 000 20,577 13,636 12,392 13,763 8,058 _ 6,911 29,047 19,846 '. 10,940 5,172 _ _ aad. (282) 781 533 5). 38,006 5,494 18,992 14,847 21,439 Foes : 1,494 626 1,032 = 2,855 2,104 1,578 62 eee _ 38,317 21,853 16,464 | _ _ _ 33,865 23,372 10,493 4,209 > 6,284 _ Principal CHARTER interests includingprincipal subsidiary and related companies SUBSIDIARIES | IE ye pee Pe te t tO P ea ROE SCA Company -* Country of incorporation or registration Group interest in capeitqaulity per cent of busin bue sis nes ss Manufacturing industry Anderson Strathclyde PLC National Mine Service Company a subsidiary of Anderson Strathclyde PLC _ Perard Torque Tension Limited Cape Industries PLC- building products note 4 - MKR Holdings Limited Pandrol International Limited Speno Rail Services Company partnership 50 per cent owned by Pandrol International Limited Scotland United States 100 51.2 England . England England 100 England . 100 United States 50 Mining equipment Mining equipment Mining equipment Building products Licensed trade equipment Rail track equipment Rail maintenance services Construction industry Cape Industries PLC - contracts note ) , Shand Limited - civil engineering and construction divisions Alexander Morrison Builders Limited a subsidiary of Shand Limited England England Scotland Industrial contracting Civil engineering and construction Civil engineering and construction Mining industry Anmercosa Sales Limited Beralt Tin & Wolfram Portugal S.A.R.L. a subsidiary of Beralt Tin and Wolfram Limited Shand - Limited mining division Shand Mining Inc. England Portugal Marketing of metals Wolfram mining England 100 United States 100 Contract coal mining and quarrying Coal mining Continued overleaf CHARTER i Principalprincipal including interests subsidiary and related companies continued* SUBSIDIARIES continued INVESTMENTS Company Country of incorporation or registration interest in equity capital per cent Nature of business OT Finance investment and service Abercorn Investments Limited England Barnato U.K. Limited England Central Mining Finance = Limited The Central Mining & England England : Investment Corporation Limited Charter Consolidated ' England Finance Limited Charter Consolidated Investments Limited England Charter Consolidated Services England . Limited Charter Industries Limited England | shares held directly by Charter Consolidated P.L.C. Finance and general investment General investment Mining finance - Mining and construction investment Finance : Manufacturing and construction investment Administration and technical : services Manufacturing investment Related companies and partnership interest note 1 Covenant Industries England 33.9 Limited note ) Johnson Matthey Public Limited Company England 27.9 note 6 Rowe & Pitman note 7 ; Marketing and manufacturing of chemicals in Africa Refining fabrication and marketing of precious metals Stockbroking Other investments Anglo American Corporation Zimbabwe Limited note 5 Botswana RST Limited Cleveland Potash Limited note 3 Malaysia Mining Corporation Berhad Mineralsand Resources Corporation Limited Zimbabwe Botswana England Malaysia Bermuda Mining and industrial finance and investment Nickel and copper mining Potash mining Tin mining marketing and smelting plantation and diamond interests International mining finance and investment ] accounting 1. The date for inclusion of related companies resultsis 31 March with the exception 6. Charter also holds 14,794,174 8 per cent convertible cumulative preference shares of of Covenant Industries for which the accounting each and a to warrant subscribe for 1,000,000 dateis 30 September The issued share capital of ~ Covenant Industries at 30 September 1985 was ordinary shares of 1 each of Johnson Matthey On full conversion of these preference shares and 91,824 exercise of the warrant Charter's equity interest 2. The Pandrol International group holds a 40 per in interest the equity capital of Elastic Rail Spike Company Proprietary Limited incorporatedin South Africa whose businessis rail track equipnient and whose issued share capital at 30 June 1985 was R400,000 wouldincrease to 35.2 per cent assuming full conversion by the other holders of convertible preference shares and full exercise of subscription issued rights by the other holders of warrants The ordinary share capital convertible preference share capital and debt securities of Johnson Matthey 31 March 1956 were 133,590,870 25,048,781 and 7,500,000 respectively account merger Charter does not for any profits or losses 17. On 12 April 1986 pursuant to the of Rowe & & of Cleveland Potash as the entitlement to its Pitman Akroyd & Smithers Mullens and ven r equity share of profits is deferred until certain Mercury Securities to form Mercury International ine preferential loans have been repaid and the Group MIG Charter received as consideration in obligation to finance losses is restricted to specific pen provisions made in previous years representing pay . Charter holds 6,729,105 8.4 per cent fuly sold cumulative convertible redeemable preference its shares of each representing G7.3 per cent such shares issued and 100 per cent the 3per of cent cumulative preference shares of Cape for its interest Rowe & Pitman and an additional investment of 17.7 million ordinary and convertible preference sharesin MIG an equity interest of 8.8 percent on a fully converted basis On 14 May 1986 Charter the majority of shares retaining convertible preference shares equivalent to 0.5 per cent of MIG on fully converted basis Industries subsidiary The of the following companies and partnership interest are not 5. account is taken of the group share ofthe results of Anglo American Corporation Zimbabwe AMZIM as Charter is not in a position to exercise significant influence over the affairs of that audited by Coopers & Lybrand Beralt Tin & Wolfram Portugal Cape Industries group companies National Mine Service Company company The issued share capital and reserves of Rowe & Pitman AMZIM at 30 June 1985 were 56,709,212 and 24,079,000 respectively totalling 80,788,212 9. 9. The principal country of operation is the same as and its profit after taxation for the year to that date was 7,238,000 the country of incorporation or registration except where indicated under the nature of business t ; 51 Analysis of revenue and assets TURNOVER 5184m Excludes businsoeljorssoljsor cleossed OPERATING PROFIT 184m Excludes businesses sold or closed BY PRODUCT CATEGORY Turnover and operating profit MANUFACTURING Mining equipment Building products Rail track equipment Licensed trade equipment CONSTRUCTION AND RELATED ACTIVITIES . Industrial contracting Civil engineering and construction MINING Contract coal mining Wolfram mining Metal marketing FINANCIAL AND ADMINISTRATIVE SERVICES COMPENSATION FOR INDUSTRIAL DISEASE CAPE DISCONTINUED BUSINESSES Manufacturing Construction and related activities Mining RESULTS FOR THE 12 MONTH PERIODS Results for the three months to 31 March 1984 for subsidiaries which changed their year ends Turnover 1986 1985 12 months 31 March 000 Operating profit 1986 1985 12 months to 31 March 000 . . 000 250,684 14,661 247,394 22,437 13,823 ay" 81,845 80,554 300 104,412| | 93,769 5,644 175 | 1,371 186,257 -. 183,323 5,344 1,546 81,448 518,389 2,794 74,127 504,844 3,005 | 521,183 507,849 39,059 6,847 1,274 18,367 267 1,450 17,184 7,407 19,684 474 600 19,558 2,541 45,906 130,636 Se 567,089 638,485 2,784 14,400 8,041 _ 11,517 - 116,043 ee 567,089 754,528 - 1,819 14,400 13,336 14,400 =o | TT SNEie Se nem cat eng ee vegan eno segs GEOGRAPHICAL TANNA TURNOVER 1986 567.1m 400 a. Turnover of operating subsidiaries by markets supplied 1986 United Kingdom Rest of Europe North America Rest of World 000 317,986 31,715 150,521 66,867 Per cent - 56.1 5.6 26.5 11.8 567,089 100.0 Kingdom 31 March 1986 I 503.7m World KingdomEuropeAmericaRest REVENUE 1986 46.0m m 40 30 20 Group capital employed 1986 000 Per cent - - United Kingdorn Rest of Europe North America Rest of World 274,472 44,920 147,141 37,143 54.5 8.9 29.2 7.4 503,676 _ 100.0 _ Group revenue United Kingdom Rest of Europe North America Rest of World 1986 cent 1985 Per cent 57.4 .8.1 22.8 11.7 100.0 s 1985 cent , 51.1 8.6 28.2 12.1 _ 100.0 1985 Per cent 55.8 14.4 19.6 10.2 100.0 NOTE The analyses of group capital employed and group revenue take into consideration interests and where possible major indirect interests in the areas concerned and are therefore only approximate CHARTER year financial record ~ CHARTER CONSOLIDATED CONSOLIDATED R.L.C. AND ITS SUBSIDIARY COMPANIES Seven BALANCE SHEET -. Investments at valuation Subsidiaries not consolidated Current assets from 1983 - includes current assets at valuation from 1985 - includes assets under finance leases Creditors and provisions excluding short and long term borrowings Capital employed _. Borrowings Long term : c | Short Interest of outside shareholders in subsidiaries ; Net assets : Lie ; Net assets share |. . : ns Shareholders funds of investments see note ) from 1983 - fixed asset Appreciation investments Net assets PROFIT AND LOSS ACCOUNT Turnover Operating profit Revenue Profit before taxation Taxation Profit after taxation Outside shareholders interest Earnings attributable Dividends Retained profits Earnings per share Dividends per share Extraordinary items Charter Related companies 1986 900 1985 000 128,374 - ' 142,254 204,642 '.150,209 te a . 359,934 183,274 . 417,915 215,976 503,676 : on 494,402 -.. : . 80,562 14,190 24,386 - 72,981 45,067 2 2. 30,856 7 : 384,538 345,498 : 366p 329p 274,000 Woe 283,475 : coos 62,023 2,268 (49,387) 2,874). .1982 000 218,866 261,59;7- 221,663 356,255 141,456 313,588 401,452 223,881 415,630 205,983 225,890 139,326 767,658 521,701 108,708 115,852 30,338 43,800 28,489 85,163 475,188 538,154 452p 512p 339,969 315,515 135,219 7 475,188 475,188 222,639 538,154 26,251 18,153 30,172 447,125 319,743 127,382 447,125 86,080 392,471 24,926 197,517 138,395 562,599 18,893 23,015 23,680 497,011 473p 290,767 206,244 497,011 | 1980 000 68.449 242,175 174,241 104,517 379,948 23,126 9,605 22,944 324,273 309p 224,809 99,464 324,273 NOTES : 1. The profit and loss account for 1985 includes 15 month period for certain operating subsidiaries see note 2 on the accounts on : page 36 2. The classification of the headings under net , assets was revised in 1984 to comply with the requirements of the Companies Act 1981. The figures from 1980 to 1982 are not directly comparable due to the classification portfolio of investments as in the later years current assets from 1983 onwards are shown after Net assets providing for taxation on the appreciation of current asset investments not previously provided for 3. No account has been taken oftaxation on appreciation of investments other than as stated above see note ) to note 14 on the accounts on page 41 In 1980 major changes in Charter's investments together with a capital reduction of 53.3 million of took place under a arranagre ram ngeemnentt as result of which Charter shareholders received one quarter ofa share in Minerals and Resources Corporation worth 55p at the time for each Charter share held 614,052 16,298 59,378 37,012 12,380 24,632 1,761 26,393 - 11,567 14,826 " 25.10p " 11.00p 414,890 15,160 61,384 45,902 9,219 36,683 1,792 34,891 11,560 23,331 33.20p 11.00p 356,939 . 13,490 69,633 56,291 16,566 39,725 2,098 37,627 11,558 26,069 35.81p 11.00p 291,582 13,615 61,429 50,473 16,403 34,070 1,476 32,594 10,497 22,097 31.05p 10.00p 266,379 19,790 62,044 50,754 19,157 31,597 3,659 27,938 8,760 19,178 26.63p 8.35p 14,045 7,292 . 6,753 4,991 2,648 2,343 5,645 77 5,568 43,785 5,551 49,336 56,835 195 57,030 : CHARTER Share ownership ee ER CSD ASE Analysis of Charter's share capital at 31 March 1986 Number GEOGRAPHICAL CATEGORY registered Percentage .. shareholders Percentage . 56.9 Number of registered shareholders Individuals Insurance companies 10.8 4.2 16,223 46 United Kingdom Rest of Europe Bermuda 5.0 36,0 Pension funds and 2.2 95 Rest of world 0.9 trustees Banks and nominee 39.6 1,233 Total registered 98.8 companies 38.2 194 Other companies 300 Represented by share 1.2 ne Others 3.8 warrants to bearer ae Total registered Represented by share warrants to bearer 18,091 98.8 18,091 a 100.0 ane ne Bee Interests of directors in Charter and a subsidiary company _ AT MARCH 1986 DIRECTOR OR ALTERNATE Fully paid shnres of 2p Options to subscribe for fully paid Partly paid shares 1p paid each shareg 12,306 R. Armitage PC D. Burnell J. Clarke Cleasby O. Hambro 1,5891 100 1,781 nil 1.131 1,7455 12,306 nil 27,162 nil nil nil 7,500 7,500 7,500 nil nil W. Herbert G.A. Higham 100 1,791 1005 20.051 nil nil mil nil M. Hofmeyr Howard E.I.A. Sir Robert Hunt % 1.681 nil 20,051 nil nil nil nil ni Oppenheimer A. W. Owston 1,781 H. Relly isil 20,051 nil nil nil nil CHARTER |. Fully paid shares with restricted rights3 Fully paid shares 2p each 3,304 3.304 3.304 nil nil 1.589 100 1,7814 nil 1,131 1,745 nil AT APRIL ' paid Options to subscribe Partly paid Fully paid shares with for fully paid shares 1p paid restricted rights shares 12.306 nil G. Richardson M.J. Statham J. Ogilvie Thompson 1.378+ 16,019 5.000 nil 9.739 NOTES schemes adopted on 17 July 1973 1 granted under share option AugAuugsustt 1983 9 2 issued under share incentive scheme adopted on 14 July 1970 3 holders of partly paid shares under scheme of to allotted to of 22 October 1979 and subject same restrictions arrangement as partly paid shares to which they relate 4 includes shares appropriated under profit sharing scheme adopted on 11 August 1981 beneficial 6at date of appointment 9 April 1985 Mr J. W. Herbert had a beneficial interest in 1,100 shares of 25p each in Cape Industries at 31 ordinary March 1986 nil at 9 April 1985 the date of his a Charter director Mr G. A. Higham appointment as shares of Cape in 312 had a intere ords inat ry beneficial Industries at 31 March 1986 312 shares at 1 April 1985 and in 104 8.4 per cent cumuolfativ eeaccohnveorftitbhlaet redeemable preference shares 31 March 1986 nil at April 1985 company There intern ests otice10June one was no change in any of the between 31 March 1986 and mentioned 1986 being ofannual general meeting ae et ben a ee ADMINISTRATION R. Armitage MANAGER Services H. O. Ellison Public relations N. G. McNair Scott MANAGER Development planning and new business D. McVean MANAGER Personnel L. C. Smets Chief economist FINANCE D. Bowden MANAGER - Group financial control B. J. Crean Investment H. T. Dawkins Group chief accountant M. Statham Investment MINING M. W. Bown Administration R. G. Burn Chief geologist J. V. Cleasby Consulting engineer head of technical department J. McCormack Chief metallurgist S. de W. Waller Metal marketing I. it eee jemnetsn Ree AEE Sean GSS ETB ae