26 March 2020
Rolls-Royce Holdings plc
Annual Report 2019 and Annual General Meeting 2020
Rolls-Royce Holdings plc (the Company) announces that it has today published its Annual Report for the year ended 31 December 2019 (Annual Report 2019).
The Company also announces that it has today posted to shareholders the Notice of Annual General Meeting to be held at 11.00am on Thursday 7 May 2020 at Kings Place, 90 York Way, London, N1 9AG.
In accordance with Listing Rule 9.6.1, copies of the following documents have been submitted to the UK Listing Authority and will shortly be available for inspection from the National Storage Mechanism at www.morningstar.co.uk/uk/NSM:
- Annual Report 2019;
- Notice of Annual General Meeting 2020; and
- Proxy Form for the Annual General Meeting 2020.
The above documents are also available at www.rolls-royce.com
This information should be read in conjunction with the Company's preliminary results announcement. A condensed set of the Company's financial statements, information on important events that have occurred during the financial year and their impact on the financial statements and the Company's principal risks were included in the preliminary results announcement released on 28 February 2020. That information, together with the information set out below in the appendix, which is extracted from the Annual Report 2019, is provided in accordance with the Disclosure and Transparency Rule (DTR) 6.3.5R, which requires it to be communicated to the media in full unedited text through a Regulatory Information Service. This announcement is not a substitute for reading the full Annual Report 2019. Page and note references in the text below refer to page numbers and note numbers in the Annual Report 2019.
Executive Director annual bonus for 2019
In line with our remuneration policy, the Executive Directors deferred 40% of their annual bonus into shares on 16 March 2020 at a price of £4.896, which must be held for a minimum of two years. The remaining bonus is ordinarily paid as cash. In light of the current challenging situation caused by the COVID-19 pandemic, the Executive Directors have agreed that half of the remaining cash sum due to them should be retained by the Company for an indefinite period, at the discretion of the Remuneration Committee. No interest will accrue on the retained portion during this period.
Rolls-Royce Long Term Incentive Plan (LTIP)
As communicated on 17 March 2020, after consideration, the Remuneration Committee determined that the 2020 grants would be maintained at the standard levels. As a result, a grant of conditional share awards has been made under the LTIP at a price of £4.896 per share. The conditional shares will vest in three years' time, subject to performance criteria being met and are then subject to a further two-year holding period. In the event the performance conditions are not satisfied the awards will lapse. We acknowledge that, in common with many other companies, we have seen a recent significant fall in our share price due to COVID-19. Under the LTIP rules, the Remuneration Committee has full discretion to ensure that the final outturn of the LTIP reflects all relevant factors, including consideration of any potential for windfall gains.
Enquiries:
Investor Relations:
Isabel Green +44 20 7227 9087
Media:
Richard Wray +44 20 7227 9163
Rolls-Royce Holdings plc LEI: 213800EC7997ZBLZJH69
Appendix
Statement of Directors' responsibilities in respect of the Financial Statements
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group Financial Statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and the parent company Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 Reduced Disclosure Framework, and applicable law).
Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent company and of the profit or loss of the Group and parent company for that period.
In preparing the Financial Statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· state whether applicable IFRSs, as adopted by the European Union, have been followed for the Group Financial Statements and United Kingdom Accounting Standards comprising FRS 101, have been followed for the Company Financial Statements, subject to any material departures disclosed and explained in the Financial Statements;
· make judgements and accounting estimates that are reasonable and prudent; and
· prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Group and parent company will continue in business.
The Directors are also responsible for safeguarding the assets of the Group and parent company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and parent company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and parent company. This enables them to ensure that the Financial Statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group's Consolidated Financial Statements, Article 4 of the IAS Regulation.
The Directors are responsible for the maintenance and integrity of the parent company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Directors' confirmations
The Directors consider that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and parent company's position and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the Directors' Report, confirm that to the best of his or her knowledge:
· the Group Financial Statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and loss of the Group;
· the parent company Financial Statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 Reduced Disclosure Framework, and applicable law), give a true and fair view of the assets, liabilities, financial position and result of the Company; and
· the Strategic Report includes a fair review of the development and performance of the business and the position of the Group and parent company, together with a description of the principal risks and uncertainties that it faces.
By order of the Board
Pamela Coles
Company Secretary
28 February 2020
Related party transactions
|
2019 £m |
2018 £m |
Sales of goods and services to joint ventures and associates |
3,776 |
3,237 |
Purchases of goods and services from joint ventures and associates |
(3,685) |
(2,957) |
Lease payments to joint ventures and associates |
(210) |
(189) |
Guarantees of joint arrangements' and associates' borrowings |
1 |
- |
Gurantees of non-wholly owned subsidiaries' borrowings |
3 |
3 |
Dividends received from joint ventures and associates |
92 |
105 |
Other income received from joint ventures and associates |
1 |
2 |
Included in sales of goods and services to joint ventures and associates are sales of spare engines amounting to £277m (2018: £563m).
Profit recognised in the year on such sales amounted to £93m (2018: £157m), including profit on current year sales and recognition of profit deferred on sales in previous years. On an underlying basis (at actual achieved rates on settled derivative transactions), the amounts were £78m (2018: £132m). Cash Receipts relating to the sale od spare engines amounted to £414m (2018:£563m).
The aggregated balances with joint ventures are shown in notes 14 and 18. Transactions with Group pension schemes are shown in note 21.
In the course of normal operations, related party transactions entered into by the Group have been contracted on an arms-length basis.
Key management personnel are deemed to be the Directors (pages 62 to 64) and the members of the Executive Team (described on page 65). Remuneration for key management personnel is shown below:
|
2019 £m |
2018 £m |
Salaries and short-term benefits |
9 |
19 |
Post-retirement schemes |
- |
- |
Share-based payments |
5 |
5 |
|
14 |
24 |
More detailed information regarding the Directors' remuneration, shareholdings, pension entitlements, share options and other long-term incentive plans is shown in the Directors' Remuneration Report on pages 95 to 104. The charge for share-based payments above is based on when the award is charged to the income statement in accordance with IFRS 2 Share-Based Payments, rather than when the shares vest, which is the basis used in the Directors' Remuneration Report.
