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Report on pages 135 to 138.
Basis of consolidation
The Consolidated Financial Statements include the results, cash flows and assets and liabilities of The Weir Group PLC and its subsidiaries, and
the Group\u2019s share of results of its joint venture. For consolidation purposes, subsidiaries and joint ventures prepare financial information for the
same reporting period as the Company using consistent accounting policies.
A subsidiary is an entity controlled, either directly or indirectly, by the Company, where control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
The results of a subsidiary acquired during the period are included in the Group\u2019s results from the effective date on which control is transferred
to the Group. The results of a subsidiary sold during the period are included in the Group\u2019s results up to the effective date on which control is
transferred out of the Group. All intragroup transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries that are not held by the Group and are presented
within equity in the Consolidated Balance Sheet, separately from the Company Shareholders\u2019 equity.
A full list of the Company\u2019s related undertakings can be found on pages 226 to 232.
New accounting standards, amendments and interpretations
The accounting policies that follow are consistent with those of the previous period, with the exception of the following standards,
amendments and interpretations which are effective for the year ended 31\u00a0December 2022:
i)Property, plant and equipment: Proceeds before intended use - Amendments to IAS 16;
ii)Annual improvements to IFRS standards 2018-2020;
iii)Onerous contracts - Cost of fulfilling a contract - Amendments to IAS 37; and
iv)Reference to conceptual framework amendments to IFRS 3.
The amendments listed above are not considered to have a material impact on the Consolidated Financial Statements of the Group.
The following new accounting standards and interpretations have been published but are not mandatory for 31\u00a0December 2022:
i) Amendments to IAS 1 - Classification of liabilities as current or non-current;
ii) Narrow scope amendments to IAS 1, Practice statement 2 and IAS 8;
iii) Amendment to IFRS 16 - Leases on sale and leaseback;
iv) Amendment to IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction; and
v) IFRS 17 'Insurance contracts' as amended in December 2021.
These amendments have not been early adopted by the Group. The impact assessment is ongoing, however, from initial review these
standards are not expected to have a material impact on the Group in the current or future reporting periods or on foreseeable future
transactions.
Climate change
Climate change is considered to be a key element of our overall sustainability roadmap. As well as considering the impact of climate change
across our business model, the Directors have considered the impact on the financial statements in accordance with the Task Force on
Climate-related Financial Disclosures (TCFD) recommendations. Climate change is not considered to have a material impact on the financial
reporting judgements and estimates arising from our considerations. Overall, sustainability is recognised in the market as a growth driver for
Weir and a key part of our investment case. This is consistent with our assessment that climate change is not expected to have a detrimental
impact on the viability of the Group in the medium-term. Specifically we note the following:
\u2022The impact of climate change has been included in the modelling to assess the viability and going concern status of the Group, both in terms
of the preparation of our Strategic Plan, which underpins our viability statement modelling, and the modelling of our severe, but plausible
downside scenarios;
\u2022Our assessment of the carrying value of goodwill and intangible assets included consideration of scenario analysis of potential climate
change on our end markets and this did not introduce a set of circumstances that were considered could reasonably lead to an impairment;
\u2022The impact on the carrying value and useful lives of tangible assets has been considered and while we continue to invest in projects to
reduce our carbon impact, there is not considered to be a material impact on our existing asset base; and
\u2022In May 2021, the Group successfully completed the issuance of five-year US$800m Sustainability-Linked Notes. The cost of meeting our
linked targets in 2024 has been considered within the above modelling and the impact is not material.
Further detail on our science-based targets and performance against them is included in the Emissions Strategy in the Strategic Report.
B. Prior year restatement
Following the acquisition of Motion Metrics during the year ended 31 December 2021, the Group has completed the review of the opening
balance sheet (OBS) position acquired. As part of this process, the Group has identified the adjustments below that are required to the opening
balance sheet, which was reported in the 2021 Annual Report.
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Restated Consolidated Balance Sheet (extract) |
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C. Use of estimates and judgements
The Group\u2019s significant accounting policies are set out below. The preparation of the Consolidated Financial Statements, in conformity with
IFRS, requires management to make judgements that affect the application of accounting policies and estimates that impact the reported
amounts of assets, liabilities, income and expense.
Management bases these judgements on a combination of past experience, professional expert advice and other evidence that is relevant to
each individual circumstance. Actual results may differ from these judgements and the resulting estimates, which are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised.
Areas requiring significant judgement in the current year and on a recurring basis are presented to the Audit Committee, as summarised on
page 105.
Critical judgments and estimates
The areas where management considers critical judgements and estimates to be required, which are areas more likely to be materially adjusted
within the next 12 months due to inherent uncertainty regarding estimates and assumptions, are those in respect of the following:
i)Retirement benefits (estimate)
The assumptions underlying the valuation of retirement benefit assets and liabilities include discount rates, inflation rates and mortality
assumptions, which are based on actuarial advice. Changes in these assumptions could have a material impact on the measurement of the
Group\u2019s retirement benefit obligations. Sensitivities to changes in key assumptions are provided in note 24.
ii)Provisions (judgement/estimate)
Management judgement is used to determine when a provision is recognised, taking into account the commercial drivers that gave rise to it,
the Group\u2019s previous experience of similar obligations and the progress of any associated legal proceedings. The calculation of provisions
typically involves management estimates of associated cash flows and discount rates. The key provision, which currently requires a greater
degree of management judgement and estimate is the US asbestos provision and associated insurance asset, details of which are included in
note 22.
iii)Deferred taxation (estimate)
The level of current and deferred tax recognised in the financial statements is dependent on subjective judgements as to the interpretation of
complex international tax regulations and, in some cases, the outcome of decisions by tax authorities in various jurisdictions around the world,
together with the ability of the Group to utilise tax attributes within the time limits imposed by the relevant tax legislation. The value of the
recognised US deferred tax asset in relation to US tax attributes is based on expected future US taxable profits with reference to the Group's
ten-year forecast period and assumptions over the intended use of these tax attributes during this period. The application of this model and its
underlying assumptions may result in future changes to the deferred tax asset recognised. In particular, the recognition of US deferred tax
assets relating to deferred intra-group interest deductions is based upon the current policy and modelling demonstrating full utilisation of that
attribute over the ten-year forecast period. If the current policy were to change then the utilisation of this tax attribute, as demonstrated by the
model, may reduce resulting in a reduction in US deferred tax asset recognised of a maximum of \u00a341.2m.\u00a0
Other estimates
i) Taxation (estimate)
The Group faces a variety of tax risks, which result from operating in a complex global environment, including the ongoing reform of both
international and domestic tax rules in some of the Group\u2019s larger markets and the challenge to fulfil ongoing tax compliance filing and transfer
pricing obligations given the scale and diversity of the Group\u2019s global operations.
The Group makes provision for open tax issues where it is probable that an exposure will arise including, in a number of jurisdictions, ongoing
tax audits and uncertain tax positions including transfer pricing which are by nature complex and can take a number of years to resolve. In all
cases, provisions are based on management\u2019s interpretation of tax law in each country, as supported where appropriate by discussion and
analysis undertaken by the Group\u2019s external advisers, and reflect the single best estimate of the likely outcome or the expected value for each
liability. Provisions for uncertain tax positions are included in current tax liabilities and total \u00a37.1m at 31\u00a0December 2022 (2021: \u00a37.0m).
The Group believes it has made adequate provision for such matters although it is possible that amounts ultimately paid will be different from
the amounts provided, but not materially within the next 12 months.
D. Accounting policies
Adjusting items
In order to provide the users of the Consolidated Financial Statements with a more relevant presentation of the Group\u2019s performance, statutory
results for each year have been analysed between:
i)adjusted results; and
ii)the effect of adjusting items.
The principal adjusting items are summarised below. These specific items are presented on the face of the Consolidated Income Statement,
along with the related adjusting items' taxation, to provide greater clarity and a better understanding of the impact of these items on the
Group\u2019s financial performance. In doing so, it also facilitates greater comparison of the Group\u2019s underlying results with prior years and
assessment of trends in financial performance. This split is consistent with how business performance is measured internally.
i)Intangibles amortisation
Intangibles amortisation is expensed in line with the other intangible assets policy, with separate disclosure provided to allow visibility of the
impact of both:
a)intangible assets recognised via acquisition, which primarily relate to items that would not normally be capitalised unless identified as part
of\u00a0an acquisition opening balance sheet. The ongoing costs associated with these assets are expensed; and
b)ongoing multi-year investment activities, which currently include our IT transformation strategy and digitalisation strategy.
During the year, amortisation of \u00a35.7m (2021: \u00a35.3m) is included within adjusted operating profit in relation to assets which are no longer part
of ongoing multi-year investment activities.
ii)Exceptional items
Exceptional items are items of income and expense which, because of the nature, size and/or infrequency of the events giving rise to them,
merit separate presentation. Exceptional items may include, but are not restricted to: profits or losses arising on disposal or closure of
businesses; the cost of significant business restructuring; significant impairments of intangible or tangible assets; adjustments to the fair value
of acquisition-related items such as contingent consideration and inventory; acquisitions and other items deemed exceptional due to their
significance, size or nature.
iii)Other adjusting items
Other adjusting items are those that do not relate to the Group\u2019s current ongoing trading and, due to their nature, are treated as adjusting
items. For example these may include, but are not restricted to, movements in the provision for asbestos-related claims or the associated
insurance assets, which relate to the Flow Control Division that was sold in 2019, but the provision remains with the Group and is in run-off,
or\u00a0past service costs related to pension liabilities.
Further analysis of the items included in the column \u2018Adjusting items\u2019 in the Consolidated Income Statement is provided in notes 5 and 6 to\u00a0the
financial statements.
Discontinued operations
In compliance with IFRS 5 \u2018Non-current assets held for sale and discontinued operations\u2019, when it is known that a significant component of the
Group will be held for sale or disposed of the results are disclosed within one line in the Consolidated Income Statement, with the comparative
periods also restated. In the Consolidated Balance Sheet, the assets and liabilities of the component, in the current period only, are reported as
current assets/liabilities held for sale.
As a discontinued operation, the component is measured at the lower of its carrying amount and fair value less costs to sell. At the time
of\u00a0disposal the foreign currency translation reserve will be recycled to the Consolidated Income Statement and included in the gain or loss
on\u00a0disposal.
Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control
of a subsidiary is the sum of the fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which
includes the fair value of any asset or liability arising from a contingent consideration arrangement. Any goodwill arising from the business
combination is accounted for in line with the goodwill policy below.
Acquisition costs are expensed as incurred.
On the acquisition of a business, management assesses: (i) the Purchase Price Allocation (PPA) in order to attribute fair values to separately
identifiable intangible assets providing they meet the recognition criteria and (ii) the fair values of other assets and liabilities. The fair values of
these intangible assets are dependent on estimates of attributable future revenues, margins and cash flows, as well as appropriate discount
rates. In addition, the allocation of useful lives to acquired intangible assets requires the application of judgement based on available information
and management expectations at the time of recognition. The valuation of other tangible assets and liabilities involves aligning accounting
policies with those of the Group, reflecting appropriate external market valuations for property, plant and equipment, assessing recoverability of
receivables and inventory, and exposures to unrecorded liabilities.
Joint venture
The Group has a long-term contractual arrangement with another party, which represents a joint venture. The Group\u2019s interests in the results
and assets and liabilities of its joint venture are accounted for using the equity method.
This investment is carried in the Consolidated Balance Sheet at cost plus post-acquisition changes in the Group\u2019s share of net assets less any
impairment in value. The Consolidated Income Statement reflects the share of results of operations of the investment after tax. Where there
has been a change recognised directly in the investee\u2019s equity, the Group recognises its share of any changes and discloses this when
applicable in the Consolidated Statement of Comprehensive Income.
Any goodwill arising on the acquisition of a joint venture, representing the excess of the cost of the investment over the Group\u2019s share of the
net fair value of the joint venture\u2019s identifiable assets, liabilities and contingent liabilities, is included in the carrying amount of the joint venture
and is not amortised. To the extent that the net fair value of the joint venture\u2019s identifiable assets, liabilities and contingent liabilities is greater
than the cost of the investment, a gain is recognised and added to the Group\u2019s share of the joint venture\u2019s profit or loss in the year in which the
investment is acquired.
Foreign currency translation
The financial statements for each of the Group\u2019s subsidiaries and joint ventures are prepared using their functional currency. The functional
currency is the currency of the primary economic environment in which an entity operates.
At the entity level, transactions denominated in foreign currencies are translated into the entity\u2019s functional currency at the exchange rate ruling
on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate ruling on
the balance sheet date. Currency translation differences are recognised in the Consolidated Income Statement except when hedge accounting
is applied and for differences on monetary assets and liabilities that form part of the Group\u2019s net investment in a foreign operation. These are
recognised in other comprehensive income until the disposal of the net investment, at which time they are recognised in profit or loss.
On consolidation, the results of foreign operations are translated into Sterling at the average exchange rate for the year and their assets and
liabilities are translated into Sterling at the exchange rate ruling on the balance sheet date. Currency translation differences, including those on
monetary items that form part of a net investment in a foreign operation, are recognised in the foreign currency translation reserve and in other
comprehensive income.
In the event that a foreign operation is sold, the gain or loss on disposal recognised in the Consolidated Income Statement is determined after
taking into account the cumulative currency translation differences that are attributable to the operation. As permitted by IFRS 1, the Group
elected to deem cumulative currency translation differences to be \u00a3nil as at 27 December 2003. Accordingly, the gain or loss on disposal of
a\u00a0foreign operation does not include currency translation differences arising before that date.
In the Consolidated Cash Flow Statement, the cash flows of foreign operations are translated into Sterling at the average exchange rate for
the\u00a0year.
Revenue recognition
Revenue is the consideration the Group expects to receive from customers in exchange for goods and services. Revenue is recognised in the
Consolidated Income Statement when control of goods and services is transferred to the customer. Transfer of control is deemed to be over
time where the following criteria are met:
\u2022The customer concurrently receives and consumes the benefits from the Group\u2019s performance;
\u2022The Group\u2019s performance creates or enhances a customer-controlled asset; or
\u2022The Group\u2019s performance does not create an asset with an alternative use and the Group has a right to payment for performance completed
to date.
Where the above criteria are not met, then revenue is recognised at a point in time when control is transferred to the customer.
Revenue is shown net of sales taxes, discounts and after eliminating sales within the Group. No revenue is recognised where recovery of the
consideration is not probable or there are significant uncertainties regarding associated costs, or the possible return of goods. Variable
consideration is recognised only if it is highly probable that there will not be a significant revenue reversal. The consideration is an estimation
based on the terms of the contract and other available information. Liquidated damages can result in variable consideration and will only be
recognised as a deduction from revenue where there is a history of recurring liquidated damages, for example, for the same customer or
product line with the value of the reduction being the most likely amount from a range of possible outcomes. The adjustment to revenue will be
monitored throughout the contract and adjusted as liquidated damages become more or less likely. Volume discounts are deducted from
revenue based on the most reliable estimates of volumes to be purchased.
The timing of payment from customers is generally aligned to revenue recognition, subject to agreed payment terms usually in line with
industry standards. Certain contracts may include milestone payments which do not necessarily align to revenue recognition: a contract asset is
recorded where revenue is recognised in advance of customer invoicing, and a contract liability is recognised where cash is received in advance
of revenue recognition.
i)Sale of goods
This policy is applicable to the sale of both original equipment and spare parts whether sold individually, in bulk or as part of a cross-selling
marketing strategy. Contracts for the provision of both original equipment and spare parts, and where required services, are combined if one or
more of the following is met:
\u2022The contract achieves a single commercial objective and is negotiated as a package.
\u2022The price or performance of one contract influences the amount of consideration to be paid in the other contract.
\u2022The goods or services in the separate contracts represent a single performance obligation.
Each cross-selling contract is reviewed to identify the performance obligations in relation to original equipment and spare parts with them only
being combined if they are not capable of being distinct and are not distinct in the context of the contract.
Revenue from the sale of goods is recognised in line with incoterms which in the majority of transactions is at the point of despatch. This
reflects when the customer obtains control of the product and can determine its future use and location. For larger orders where multiple units
are delivered in instalments as part of one performance obligation, revenue will be recognised over time in line with delivery. These items are a
series of distinct goods that have the same pattern of transfer of control being the fulfilment of the incoterm, provided the customer has control
of the goods as they are delivered.
Where the sale of product requires customer inspection, this is deemed to be part of the main performance obligation so revenue is not
recognised until the inspection has been completed and approved by the customer. In instances where commissioning is provided, the transfer
of control for the sale of goods is at the point of despatch where commissioning is a separate performance obligation or once commissioning is
complete where combined in the sale of goods performance obligation. A separate performance obligation for commissioning is identified
where a customer could obtain the same service from a third-party supplier with revenue in respect of commissioning being recognised once
the commissioning is complete.
ii)Provision of services
The revenue recognition of provision of services is dependent on the nature of the contracts. Shorter-term contracts tend to be for \u2018one-off\u2019
service provision, which means the customer only consumes the benefit from the Group\u2019s performance when the work is complete. Revenue
is\u00a0therefore recognised at a point in time for such contracts. For other contracts, revenue from the rendering of services is generally recognised
over time where the customer concurrently receives and consumes a benefit from the Group\u2019s performance over the period of the contract
duration. Revenue from services is recognised in proportion to the stage of completion of the performance obligations at the balance sheet
date. The stage of completion is assessed by reference to the transfer of control over time, which usually corresponds to the contractual
agreement with each separate customer and the costs incurred on the contract to date in comparison with the total forecast costs of\u00a0the
contract.
iii)Construction contracts
Revenue for construction contracts is recognised over time as the contracts usually contain discrete elements separately transferring control
to\u00a0customers over the life of the contract and the Group\u2019s performance does not create an asset with an alternative use.
The stage of completion of a contract is determined either by reference to the proportion that contract costs incurred for work performed to
date bear to the estimated total contract costs, or by reference to the completion of a physical proportion of the contract work. Both these
methods are faithful depictions of the transfer of control given the Group has a right to payment for performance completed to date. The basis
used is dependent upon the nature of the underlying contract. For instances where the work is subject to formal customer acceptance
procedures, revenue will only be recognised once the customer review has been completed and approved by the customer as this is the point
both parties are in agreement that control has been transferred in line with contract terms. Losses on contracts are recognised in the year
when such losses become probable.
Property, plant & equipment
Property, plant and equipment comprises owned assets and right-of-use assets that do not meet the definition of investment property.
i)Owned assets
Owned property, plant and equipment is stated at cost less accumulated depreciation and any recognised impairment losses. Freehold land and
assets under construction are not depreciated. Depreciation of property, plant and equipment is provided on a straight-line basis so as to charge
the cost less residual value to the Consolidated Income Statement over the expected useful life of the asset concerned, and is in the following
ranges:
Freehold buildings, long leasehold land and buildings10 \u2013 40 years
Plant and equipment3 \u2013 20 years
ii)Right-of-use assets and lease liabilities
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group assesses whether it has both the right to obtain substantially all of the
economic benefits from use of the identified asset and the right to direct the use of the identified asset throughout the period of use.
The Group recognises a lease liability and right-of-use asset at the lease commencement date. The lease liability is initially measured as the
present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease, or
where the interest rate implicit in the lease cannot be readily determined, the Group\u2019s incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate. The Group\u2019s incremental borrowing rate is calculated by taking the government borrowing rate
in any given currency and adding the estimated Group credit spreads for a variety of tenors. An interpolation is performed annually to obtain one
rate for each of the major lease currencies based on the weighted average life of the lease book.
Lease payments consist of the following components:
\u2022fixed payments, including in-substance fixed payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or a rate;
\u2022amounts expected to be payable by the lessee under residual value guarantees;
\u2022the exercise price of a purchase option (if the lessee is reasonably certain to exercise that option); and
\u2022payments of penalties for terminating the lease (if the lease term reflects the lessee exercising the option to terminate the lease).
The right-of-use asset is measured as equal to the lease liability and adjusted for:
\u2022lease payments made to the lessor at or before the commencement date;
\u2022lease incentives received;
\u2022initial direct costs associated with the lease; and
\u2022an initial estimate of restoration costs.
The right-of-use asset is depreciated using the straight-line method over the lease term. In addition, the right-of-use asset is periodically
reduced by any impairment losses.
The Group has adopted the exemption available for short-term leases, with payments being recognised on a straight-line basis over the lease
term. Short-term leases are defined as leases with a lease term of 12 months or less.
The Group has adopted the exemption available for low value assets, with payments being recognised on a straight-line basis over the lease
term. Leases relating to laptops, desktop computers, mobile phones, photocopiers, printers and other office equipment, where the asset value
is less than \u00a33,500 or the local currency equivalent have been treated as low value. Where the lease contract meets both short-term and low
value exemptions, the annual cost of the lease is reported within expenses relating to short-term leases.
For each lease, the lease term has been calculated as the non-cancellable period of the lease contract, except where the Group is reasonably
certain that it will exercise contractual extension options. In assessing whether a lessee is reasonably certain to exercise an option to extend a
lease, or not to exercise an option to terminate a lease, the Group shall consider all relevant facts and circumstances that create an economic
incentive for the lessee to exercise the option to extend the lease, or not to exercise the option to terminate the lease. In certain
circumstances, the Group will refer to the five-year Strategic Plan period as an appropriate period to consider whether the \u2018reasonably certain\u2019
criteria are met.
Goodwill
Goodwill arises on the acquisition of businesses and represents any excess of the cost of the acquired entity over the Group\u2019s interest in the
fair value of the entity\u2019s identifiable assets, liabilities and contingent liabilities determined at the date of acquisition. Acquisition costs are
recognised in the Consolidated Income Statement in the year in which they are incurred. Goodwill in respect of an acquired business is
recognised as an intangible asset. Goodwill is carried at cost less any recognised impairment losses and is tested at least annually or where
there are indicators of impairment.
The carrying amount of goodwill allocated to a cash generating unit is taken into account when determining the gain or loss on disposal of
the\u00a0unit.
An assessment of probable contingent consideration is recognised at the date of acquisition or disposal. For acquisitions, subsequent changes
to the fair value of the contingent consideration are adjusted against the cost of acquisition where they qualify as measurement period
adjustments. The measurement period is the period from the date of acquisition to the date that the Group obtains complete information about
facts and circumstances that existed as of the acquisition date, and is subject to a maximum of one year. If the change does not qualify as a
measurement period adjustment, it is reflected in the Consolidated Income Statement as an adjusting item. For disposals, any subsequent
change in contingent consideration is adjusted against the disposal proceeds and the gain or loss on disposal.
Other intangible assets
Intangible assets acquired separately are measured at cost on initial recognition. An intangible resource acquired in a business combination is
recognised as an intangible asset if it is separable from the acquired business or arises from contractual or legal rights, is expected to generate
future economic benefits and its fair value can be measured reliably.
An intangible asset with a finite life is amortised on a straight-line basis so as to charge its cost, which in respect of an acquired intangible asset
represents its fair value at the acquisition date, to the Consolidated Income Statement over its expected useful life. An intangible asset with an
indefinite life is\u00a0not amortised but is tested at least annually for impairment and carried at cost less any recognised impairment losses.
Brand names
Brands are recognised as a result of a business combination. The brand is recognised if it is separable from the remaining business and is
expected to generate future economic benefits. Internally generated brands are not capitalised in accordance with IAS 38 'Intangible Assets'.
Brands are fair valued at acquisition and subsequently measured at cost less any accumulated impairment. All subsequent expenditure is
expensed to the Consolidated Income Statement as incurred.
Due to the long-term nature of the brands, the Group has assessed that they have indefinite useful lives, with the exception of Motion Metrics,
which is amortised over 15 years. An annual impairment exercise is completed for brands with an indefinite useful life, to confirm that the value
in use, based on discounted cash flows, exceeds the carrying value.
Customer and distributor relationships
Customer and distributor relationships are recognised as part of a business combination if they are separable from the acquired business or
arise from contractual or legal rights. They represent the relationships that the acquiree has built up over a significant period of time and will
provide repeat custom to the business which will generate future economic benefit.
The assets are initially recorded at fair value at acquisition and subsequently recognised at cost less accumulated amortisation and impairment.
All subsequent expenditure is charged to the Consolidated Income Statement as incurred. Amortisation is charged to the Consolidated Income
Statement over the useful life of the asset. The useful life can vary depending on the circumstances of each acquisition. The useful lives range
from five to 30 years.
If there are any indicators of impairment an assessment of the value in use of the relationships is completed. If the carrying value exceeds the
value in use the variance is accounted for as an impairment to the asset with a corresponding charge to the Consolidated Income Statement.
Software
Software assets can be purchased, acquired or internally generated. Software that is not an integral part of related hardware is recognised as an
intangible asset.
Software is recognised at cost less accumulated amortisation and impairment. Amortisation is spread over the estimated useful life of the
software which can range from four to eight years.
Software as a Service (SaaS) arrangements provide the Group with the right to access cloud-based software applications over a contractual
period. The software remains the intellectual property of the developer and as a result the Group does not recognise an intangible asset in
relation to subscription fees and costs incurred to customise or configure the software. The related costs are recognised in the Consolidated
Income Statement when the service is received.
Costs incurred to enhance or develop an existing intangible asset or develop new software code that meet the definition and recognition criteria
of an intangible asset are capitalised as intangible software assets. Amortisation is recognised over the expected useful life of the software.
Trademarks and intellectual property
Trademarks and intellectual property are legally protected rights that are expected to generate future revenues. On acquisition, they are
measured at fair value based on discounted expected cash flows. Assets are subsequently held at cost less accumulated amortisation and
impairment.
The assets are amortised based on the period in which the legal protection is in place or the asset is expected to generate revenues. The
amortisation period for the currently capitalised trademarks ranges from six to 15 years.
Other
Other intangible assets are stated at cost less accumulated amortisation and any recognised impairment losses. The expected useful life of
other intangible assets is up to six years.
Research & development costs
All research expenditure is charged to the Consolidated Income Statement in the year in which it is incurred.
Development expenditure is charged to the Consolidated Income Statement in the year in which it is incurred unless it relates to the
development of a new product or technology and meets the following requirements:
\u2022it is incurred after the technical feasibility and commercial viability of the product has been proven;
\u2022the development costs can be measured reliably;
\u2022future economic benefits are probable; and
\u2022the Group intends, and has sufficient resources, to complete the development and to use or sell the asset.
Any such capitalised development expenditure is amortised on a straight-line basis so it is charged to the Consolidated Income Statement over
the expected life of the resulting product or technology.
Impairment of non-current assets
All non-current assets are tested for impairment whenever events or circumstances indicate that their carrying values might be impaired.
Additionally, goodwill and intangible assets with an indefinite life are subject to an annual impairment test.
An impairment loss is recognised to the extent that an asset\u2019s carrying value exceeds its recoverable amount, which represents the higher of
the asset\u2019s fair value less costs to sell and its value in use. An asset\u2019s value in use represents the present value of the future cash flows
expected to be derived from the asset. Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test
is conducted for the cash generating unit to which it belongs. Similarly, the recoverable amount of goodwill is determined by reference to the
discounted future cash flows of the cash generating units to which it is allocated.
Impairment losses are recognised in the Consolidated Income Statement. Impairment losses recognised in previous periods for an asset other
than goodwill are reversed if there has been a change in the estimates used to determine the asset\u2019s recoverable amount. The carrying amount
of an asset shall not be increased above the carrying amount that would have been determined had no impairment loss been recognised for the
asset in prior periods. Impairment losses recognised in respect of goodwill are not reversed.
Inventories
Inventories are valued at the lower of cost and net realisable value, with due allowance for any obsolete or slow-moving items. Cost represents
the expenditure incurred in bringing inventories to their existing location and condition and comprises the cost of raw materials, direct labour
costs, other direct costs and related production overheads. Raw material cost is generally determined on a first-in, first-out basis. Net realisable
value is the estimated selling price less costs to complete and sell.
Financial assets & liabilities
The Group\u2019s principal financial assets and liabilities, other than derivatives, comprise bank overdrafts, short-term borrowings, loans and fixed-
rate notes, cash and short-term deposits. The Group also has other financial assets and liabilities such as trade receivables, trade payables and
leases which arise directly from its operations.
A financial asset is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing financial liability
is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, such that the difference in
the respective carrying amounts together with any costs or fees incurred are recognised in profit or loss. Under IFRS 9 \u2018Financial instruments\u2019
where the modification is not substantial, any difference in the modified cash flows is recognised in profit or loss.
Reimbursement asset
The Group has several insurance policies in place with regards to legal claims in relation to alleged asbestos exposure as discussed in note 22.
In accordance with IAS 37 \u2018Provisions, contingent liabilities and contingent assets\u2019 a reimbursement asset is only recognised when it is virtually
certain that the asset will be received and there is a corresponding liability recognised. The value recognised is the lower of the amount
confirmed by the insurer under the policy and the provision for the related liability. If the asset is probable the asset is not recognised but
disclosed.
Trade receivables
Trade receivables, which are generally of a short-term nature, are recognised at original invoice amount where the consideration is
unconditional. If they contain significant financing components, trade receivables are instead recognised at fair value. The Group holds trade
receivables to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest
method. Details of the Group\u2019s impairment policies and the calculation of the loss allowance are provided in note 18 and the policy in respect of
invoice discounting is included in note 30.
Cash & cash equivalents
Cash and cash equivalents comprise cash in hand, deposits available on demand and other short-term highly liquid investments with a maturity
on acquisition of three months or less and bank overdrafts and short-term borrowings with a maturity on acquisition of three months or less.
Bank overdrafts are presented as current liabilities to the extent that there is no right of offset with cash balances.
Trade payables
Trade payables are recognised and carried at original invoice amount. The Group\u2019s supply chain financing programme policy and assessment for
the period is provided in note 21.
Interest-bearing loans & borrowings
Obligations for loans and borrowings are recognised when the Group becomes party to the related contracts and are measured initially at fair
value less directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs and any discount or
premium on settlement. Borrowings are classified as current liabilities unless the Group has an unconditional right to settle the liability at least
12 months after the balance sheet date.
Provisions, contingent liabilities & contingent assets
A provision is recognised in the Consolidated Balance Sheet when the Group has a legal or constructive obligation as a result of a past event,
the obligation can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. If the
effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks specific to the liability.
A contingent liability is disclosed if there is a possible obligation as a result of a past event that might, but will probably not, require an outflow
of economic benefits; or there is a present obligation as a result of a past event that probably requires an outflow of economic benefits, but
where the obligation cannot be measured reliably.
A contingent asset is disclosed if an inflow of economic benefits is probable arising from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
Derivative financial instruments & hedge accounting
The Group uses derivative financial instruments, principally forward foreign currency contracts and cross-currency swaps, to reduce its
exposure to exchange rate movements. The Group also uses foreign currency borrowings as a hedge of its exposure to foreign exchange risk
on its investments in foreign subsidiaries. Additionally, the Group periodically uses interest rate swaps to manage its exposure to interest rate
risk. The Group does not hold or issue derivatives for speculative or trading purposes.
Derivative financial instruments are recognised as assets and liabilities measured at their fair values at the balance sheet date. The fair value of
forward foreign currency contracts is calculated as the present value of the estimated future cash flows based on spot and forward foreign
exchange rates and counterparty and the Group\u2019s own credit risk. The fair value of interest rate swaps and cross-currency swaps is calculated
as the present value of the estimated future cash flows based on interest rate curves, spot foreign exchange rates and counterparty and own
credit risk. Changes in their fair values are recognised in the Consolidated Income Statement, except where hedge accounting is used, provided
the conditions specified by IFRS 9 are met. Hedge accounting is applied in respect of hedge relationships where it is both permissible under
IFRS 9 and practical to do so. When hedge accounting is used, the relevant hedging relationships are classified as fair value hedges, cash flow
hedges or net investment hedges, as appropriate.
Where the hedging relationship is classified as a fair value hedge, the carrying amount of the hedged asset or liability will be adjusted by the
increase or decrease in its fair value attributable to the hedged risk and the resulting gain or loss will be recognised in the Consolidated Income
Statement where, to the extent that the hedge is effective, it will be offset by the change in the fair value of the hedging instrument.
Where the hedging relationship is classified as a cash flow or net investment hedge, to the extent that the hedge is effective, changes in the
fair value of the hedging instrument will be recognised directly in other comprehensive income. For the cash flow hedge, when the hedged
asset or liability is recognised in the financial statements, the accumulated gains and losses recognised in other comprehensive income will be
either recycled to the income statement or, if the hedged item results in a non-financial asset, will be recognised as adjustments to its initial
carrying amount. For net investment hedges, gains and losses on hedging instruments designated as hedges of the net investments in foreign
operations are recognised in other comprehensive income to the extent that the hedging relationship is effective. Gains and losses
accumulated in the foreign currency translation reserve are recycled to the income statement when the foreign operation is disposed of.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge
accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised through other comprehensive income is
kept in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss
that was reported in equity is immediately reclassified to the income statement in the period.
Derivatives embedded in non-derivative host contracts, which are not already measured at fair value through profit or loss, are recognised
separately as derivative financial instruments when their risks and characteristics are not closely related to those of the host contract and the
host contract is not stated at its fair value with changes in its fair value recognised in the Consolidated Income Statement.
Where items are recognised in the Consolidated Income Statement, these are presented within operating profit or finance costs dependent on
their nature.
Share-based payments
Equity settled share-based incentives are provided to employees under the Group\u2019s Share Reward Plan (SRP), formerly the Long Term
Incentive Plan (LTIP), the Weir ShareBuilder Plan (WSBP) and as a consequence of occasional one-off conditional awards made to employees.
The fair value of SRP awards and one-off conditional awards at the date of the grant is calculated using appropriate option pricing models and
the cost is recognised on a straight-line basis over the vesting period. Adjustments are made to reflect expected and actual forfeitures during
the vesting period due to failure to satisfy service or performance conditions, where applicable. The conditions of the SRP for the Executive
Directors, which took effect in 2018, are summarised in the Directors\u2019 Remuneration Policy, which can be found on the Company\u2019s website at
www.corporategovernance.weir. The conditions of the SRP for Senior Management are summarised in note 28.
The fair value of WSBP awards at grant date is calculated as the share price at the date of the grant less an adjustment for loss of reinvestment
return on the dividend equivalent. There are no performance conditions attached to these awards, but participants who leave the Company prior
to vesting lose their right to the awards. The terms of the share awards granted under the WSBP are set out on the plan\u2019s website at
www.sharebuilder.weir.
Treasury shares
The Weir Group PLC shares held by the Company, or those held in Trust, are classified in Shareholders\u2019 equity as treasury shares and are
recognised at cost. Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds
from sale and the original cost being taken directly to retained earnings. No gain or loss is recognised in total comprehensive income on the
purchase, sale, issue or cancellation of equity shares.
Post-employment benefits
Post-employment benefits comprise pension benefits provided to certain current and former employees in the UK, US and Canada and post-
retirement healthcare benefits provided to certain employees in the US.
For defined benefit pension and post-retirement healthcare plans, the annual service cost is calculated using the projected unit credit method
and is recognised over the future service lives of participating employees, in accordance with the advice of qualified actuaries. Current service
cost and administration expenses are recognised in operating costs and net interest on the net pension liability is recognised in finance costs.
The finance cost recognised in the Consolidated Income Statement in the year reflects the net interest on the net pension liability. This
represents the change in the net pension liability resulting from the passage of time, and is determined by applying the discount rate to the
opening net liability, taking into account employer contributions paid into the plan, and hence reducing the net liability, during the year.
Past service costs resulting from enhanced benefits are recognised immediately in the Consolidated Income Statement. Actuarial gains and
losses, which represent differences between interest on the plan assets, experience on the benefit obligation and the effect of changes in
actuarial assumptions, are recognised in full in other comprehensive income in the year in which they occur.
The defined benefit liability or asset recognised in the Consolidated Balance Sheet comprises the net total for each plan of the present value of
the benefit obligation, using a discount rate based on yields at the balance sheet date on appropriate high quality corporate bonds that have
maturity dates approximating the terms of the Group\u2019s obligations and are denominated in the currency in which the benefits are expected to
be paid minus the fair value of the plan assets, if any, at the balance sheet date. The balance sheet asset recognised is limited to the present
value of economic benefits which the Group expects to recover by way of refunds or a reduction in future contributions. In order to calculate
the present value of economic benefits, consideration is also given to any minimum funding requirements.
For defined contribution plans, the cost represents the Group\u2019s contributions to the plans and these are charged to the Consolidated Income
Statement in the year in which they fall due, along with any associated administration costs.
Taxation
Current tax is the amount of tax payable or recoverable in respect of the taxable profit or loss for the year.
Deferred tax liabilities represent tax payable in future years in respect of taxable temporary differences. Deferred tax assets represent tax
recoverable in future years in respect of deductible temporary differences, the carry forward of unutilised tax losses and the carry forward of
unused tax credits. Deferred tax is measured on an undiscounted basis using the tax rates and laws that have been enacted or substantively
enacted at the balance sheet date and are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax is recognised on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base
with the following exceptions:
i)Deferred tax arising from the initial recognition of goodwill, or of an asset or liability in a transaction that is not a business combination, that,
at\u00a0the time of the transaction, affects neither accounting nor taxable profit or loss, is not recognised;
ii)Deferred tax is provided on temporary differences arising on investments in subsidiaries and joint ventures, except where the timing of the
reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future; and
iii) A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can
be utilised.
Current and deferred tax is recognised in the Consolidated Income Statement except if it relates to an item recognised directly in equity, in
which case it is recognised directly in equity.
The Group also recognises provisions in the Consolidated Balance Sheet for uncertain tax positions as disclosed above in other accounting
estimates",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-419": {
"value": "
A. Basis of preparation
These financial statements are presented in Sterling. All values are rounded to the nearest 0.1 million pounds (\u00a3m) except where otherwise
indicated.
The financial statements are also prepared on a historic cost basis except where measured at fair value as outlined in the accounting policies.
",
"dimensions": {
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"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-420": {
"value": "
Going concern
The Directors have a reasonable expectation that the Group has adequate resources to continue to operate for a period of at least 12 months
from the date of approval of the financial statements. For this reason, they continue to adopt the going concern basis of preparing the financial
statements. In forming this view the Directors have reviewed the Group's budget and sensitivity analysis as discussed further in the Directors'
Report on pages 135 to 138.
",
"dimensions": {
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"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-421": {
"value": "
Basis of consolidation
The Consolidated Financial Statements include the results, cash flows and assets and liabilities of The Weir Group PLC and its subsidiaries, and
the Group\u2019s share of results of its joint venture. For consolidation purposes, subsidiaries and joint ventures prepare financial information for the
same reporting period as the Company using consistent accounting policies.
A subsidiary is an entity controlled, either directly or indirectly, by the Company, where control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
The results of a subsidiary acquired during the period are included in the Group\u2019s results from the effective date on which control is transferred
to the Group. The results of a subsidiary sold during the period are included in the Group\u2019s results up to the effective date on which control is
transferred out of the Group. All intragroup transactions, balances, income and expenses are eliminated on consolidation.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries that are not held by the Group and are presented
within equity in the Consolidated Balance Sheet, separately from the Company Shareholders\u2019 equity.
A full list of the Company\u2019s related undertakings can be found on pages 226 to 232.
",
"dimensions": {
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"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-422": {
"value": "
New accounting standards, amendments and interpretations
The accounting policies that follow are consistent with those of the previous period, with the exception of the following standards,
amendments and interpretations which are effective for the year ended 31\u00a0December 2022:
i)Property, plant and equipment: Proceeds before intended use - Amendments to IAS 16;
ii)Annual improvements to IFRS standards 2018-2020;
iii)Onerous contracts - Cost of fulfilling a contract - Amendments to IAS 37; and
iv)Reference to conceptual framework amendments to IFRS 3.
The amendments listed above are not considered to have a material impact on the Consolidated Financial Statements of the Group.
The following new accounting standards and interpretations have been published but are not mandatory for 31\u00a0December 2022:
i) Amendments to IAS 1 - Classification of liabilities as current or non-current;
ii) Narrow scope amendments to IAS 1, Practice statement 2 and IAS 8;
iii) Amendment to IFRS 16 - Leases on sale and leaseback;
iv) Amendment to IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction; and
v) IFRS 17 'Insurance contracts' as amended in December 2021.
These amendments have not been early adopted by the Group. The impact assessment is ongoing, however, from initial review these
standards are not expected to have a material impact on the Group in the current or future reporting periods or on foreseeable future
transactions.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfExpectedImpactOfInitialApplicationOfNewStandardsOrInterpretations",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-423": {
"value": "
C. Use of estimates and judgements
The Group\u2019s significant accounting policies are set out below. The preparation of the Consolidated Financial Statements, in conformity with
IFRS, requires management to make judgements that affect the application of accounting policies and estimates that impact the reported
amounts of assets, liabilities, income and expense.
Management bases these judgements on a combination of past experience, professional expert advice and other evidence that is relevant to
each individual circumstance. Actual results may differ from these judgements and the resulting estimates, which are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised.
Areas requiring significant judgement in the current year and on a recurring basis are presented to the Audit Committee, as summarised on
page 105.
Critical judgments and estimates
The areas where management considers critical judgements and estimates to be required, which are areas more likely to be materially adjusted
within the next 12 months due to inherent uncertainty regarding estimates and assumptions, are those in respect of the following:
i)Retirement benefits (estimate)
The assumptions underlying the valuation of retirement benefit assets and liabilities include discount rates, inflation rates and mortality
assumptions, which are based on actuarial advice. Changes in these assumptions could have a material impact on the measurement of the
Group\u2019s retirement benefit obligations. Sensitivities to changes in key assumptions are provided in note 24.
ii)Provisions (judgement/estimate)
Management judgement is used to determine when a provision is recognised, taking into account the commercial drivers that gave rise to it,
the Group\u2019s previous experience of similar obligations and the progress of any associated legal proceedings. The calculation of provisions
typically involves management estimates of associated cash flows and discount rates. The key provision, which currently requires a greater
degree of management judgement and estimate is the US asbestos provision and associated insurance asset, details of which are included in
note 22.
iii)Deferred taxation (estimate)
The level of current and deferred tax recognised in the financial statements is dependent on subjective judgements as to the interpretation of
complex international tax regulations and, in some cases, the outcome of decisions by tax authorities in various jurisdictions around the world,
together with the ability of the Group to utilise tax attributes within the time limits imposed by the relevant tax legislation. The value of the
recognised US deferred tax asset in relation to US tax attributes is based on expected future US taxable profits with reference to the Group's
ten-year forecast period and assumptions over the intended use of these tax attributes during this period. The application of this model and its
underlying assumptions may result in future changes to the deferred tax asset recognised. In particular, the recognition of US deferred tax
assets relating to deferred intra-group interest deductions is based upon the current policy and modelling demonstrating full utilisation of that
attribute over the ten-year forecast period. If the current policy were to change then the utilisation of this tax attribute, as demonstrated by the
model, may reduce resulting in a reduction in US deferred tax asset recognised of a maximum of \u00a341.2m.\u00a0
Other estimates
i) Taxation (estimate)
The Group faces a variety of tax risks, which result from operating in a complex global environment, including the ongoing reform of both
international and domestic tax rules in some of the Group\u2019s larger markets and the challenge to fulfil ongoing tax compliance filing and transfer
pricing obligations given the scale and diversity of the Group\u2019s global operations.
The Group makes provision for open tax issues where it is probable that an exposure will arise including, in a number of jurisdictions, ongoing
tax audits and uncertain tax positions including transfer pricing which are by nature complex and can take a number of years to resolve. In all
cases, provisions are based on management\u2019s interpretation of tax law in each country, as supported where appropriate by discussion and
analysis undertaken by the Group\u2019s external advisers, and reflect the single best estimate of the likely outcome or the expected value for each
liability. Provisions for uncertain tax positions are included in current tax liabilities and total \u00a37.1m at 31\u00a0December 2022 (2021: \u00a37.0m).
The Group believes it has made adequate provision for such matters although it is possible that amounts ultimately paid will be different from
the amounts provided, but not materially within the next 12 months.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-424": {
"value": "
ii)Exceptional items
Exceptional items are items of income and expense which, because of the nature, size and/or infrequency of the events giving rise to them,
merit separate presentation. Exceptional items may include, but are not restricted to: profits or losses arising on disposal or closure of
businesses; the cost of significant business restructuring; significant impairments of intangible or tangible assets; adjustments to the fair value
of acquisition-related items such as contingent consideration and inventory; acquisitions and other items deemed exceptional due to their
significance, size or nature.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForExceptionalItemsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-425": {
"value": "
Discontinued operations
In compliance with IFRS 5 \u2018Non-current assets held for sale and discontinued operations\u2019, when it is known that a significant component of the
Group will be held for sale or disposed of the results are disclosed within one line in the Consolidated Income Statement, with the comparative
periods also restated. In the Consolidated Balance Sheet, the assets and liabilities of the component, in the current period only, are reported as
current assets/liabilities held for sale.
As a discontinued operation, the component is measured at the lower of its carrying amount and fair value less costs to sell. At the time
of\u00a0disposal the foreign currency translation reserve will be recycled to the Consolidated Income Statement and included in the gain or loss
on\u00a0disposal.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-426": {
"value": "
Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control
of a subsidiary is the sum of the fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which
includes the fair value of any asset or liability arising from a contingent consideration arrangement. Any goodwill arising from the business
combination is accounted for in line with the goodwill policy below.
Acquisition costs are expensed as incurred.
On the acquisition of a business, management assesses: (i) the Purchase Price Allocation (PPA) in order to attribute fair values to separately
identifiable intangible assets providing they meet the recognition criteria and (ii) the fair values of other assets and liabilities. The fair values of
these intangible assets are dependent on estimates of attributable future revenues, margins and cash flows, as well as appropriate discount
rates. In addition, the allocation of useful lives to acquired intangible assets requires the application of judgement based on available information
and management expectations at the time of recognition. The valuation of other tangible assets and liabilities involves aligning accounting
policies with those of the Group, reflecting appropriate external market valuations for property, plant and equipment, assessing recoverability of
receivables and inventory, and exposures to unrecorded liabilities.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-427": {
"value": "
Joint venture
The Group has a long-term contractual arrangement with another party, which represents a joint venture. The Group\u2019s interests in the results
and assets and liabilities of its joint venture are accounted for using the equity method.
This investment is carried in the Consolidated Balance Sheet at cost plus post-acquisition changes in the Group\u2019s share of net assets less any
impairment in value. The Consolidated Income Statement reflects the share of results of operations of the investment after tax. Where there
has been a change recognised directly in the investee\u2019s equity, the Group recognises its share of any changes and discloses this when
applicable in the Consolidated Statement of Comprehensive Income.
Any goodwill arising on the acquisition of a joint venture, representing the excess of the cost of the investment over the Group\u2019s share of the
net fair value of the joint venture\u2019s identifiable assets, liabilities and contingent liabilities, is included in the carrying amount of the joint venture
and is not amortised. To the extent that the net fair value of the joint venture\u2019s identifiable assets, liabilities and contingent liabilities is greater
than the cost of the investment, a gain is recognised and added to the Group\u2019s share of the joint venture\u2019s profit or loss in the year in which the
investment is acquired.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-428": {
"value": "
Foreign currency translation
The financial statements for each of the Group\u2019s subsidiaries and joint ventures are prepared using their functional currency. The functional
currency is the currency of the primary economic environment in which an entity operates.
At the entity level, transactions denominated in foreign currencies are translated into the entity\u2019s functional currency at the exchange rate ruling
on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate ruling on
the balance sheet date. Currency translation differences are recognised in the Consolidated Income Statement except when hedge accounting
is applied and for differences on monetary assets and liabilities that form part of the Group\u2019s net investment in a foreign operation. These are
recognised in other comprehensive income until the disposal of the net investment, at which time they are recognised in profit or loss.
On consolidation, the results of foreign operations are translated into Sterling at the average exchange rate for the year and their assets and
liabilities are translated into Sterling at the exchange rate ruling on the balance sheet date. Currency translation differences, including those on
monetary items that form part of a net investment in a foreign operation, are recognised in the foreign currency translation reserve and in other
comprehensive income.
In the event that a foreign operation is sold, the gain or loss on disposal recognised in the Consolidated Income Statement is determined after
taking into account the cumulative currency translation differences that are attributable to the operation. As permitted by IFRS 1, the Group
elected to deem cumulative currency translation differences to be \u00a3nil as at 27 December 2003. Accordingly, the gain or loss on disposal of
a\u00a0foreign operation does not include currency translation differences arising before that date.
In the Consolidated Cash Flow Statement, the cash flows of foreign operations are translated into Sterling at the average exchange rate for
the\u00a0year.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-429": {
"value": "
Revenue recognition
Revenue is the consideration the Group expects to receive from customers in exchange for goods and services. Revenue is recognised in the
Consolidated Income Statement when control of goods and services is transferred to the customer. Transfer of control is deemed to be over
time where the following criteria are met:
\u2022The customer concurrently receives and consumes the benefits from the Group\u2019s performance;
\u2022The Group\u2019s performance creates or enhances a customer-controlled asset; or
\u2022The Group\u2019s performance does not create an asset with an alternative use and the Group has a right to payment for performance completed
to date.
Where the above criteria are not met, then revenue is recognised at a point in time when control is transferred to the customer.
Revenue is shown net of sales taxes, discounts and after eliminating sales within the Group. No revenue is recognised where recovery of the
consideration is not probable or there are significant uncertainties regarding associated costs, or the possible return of goods. Variable
consideration is recognised only if it is highly probable that there will not be a significant revenue reversal. The consideration is an estimation
based on the terms of the contract and other available information. Liquidated damages can result in variable consideration and will only be
recognised as a deduction from revenue where there is a history of recurring liquidated damages, for example, for the same customer or
product line with the value of the reduction being the most likely amount from a range of possible outcomes. The adjustment to revenue will be
monitored throughout the contract and adjusted as liquidated damages become more or less likely. Volume discounts are deducted from
revenue based on the most reliable estimates of volumes to be purchased.
The timing of payment from customers is generally aligned to revenue recognition, subject to agreed payment terms usually in line with
industry standards. Certain contracts may include milestone payments which do not necessarily align to revenue recognition: a contract asset is
recorded where revenue is recognised in advance of customer invoicing, and a contract liability is recognised where cash is received in advance
of revenue recognition.
i)Sale of goods
This policy is applicable to the sale of both original equipment and spare parts whether sold individually, in bulk or as part of a cross-selling
marketing strategy. Contracts for the provision of both original equipment and spare parts, and where required services, are combined if one or
more of the following is met:
\u2022The contract achieves a single commercial objective and is negotiated as a package.
\u2022The price or performance of one contract influences the amount of consideration to be paid in the other contract.
\u2022The goods or services in the separate contracts represent a single performance obligation.
Each cross-selling contract is reviewed to identify the performance obligations in relation to original equipment and spare parts with them only
being combined if they are not capable of being distinct and are not distinct in the context of the contract.
Revenue from the sale of goods is recognised in line with incoterms which in the majority of transactions is at the point of despatch. This
reflects when the customer obtains control of the product and can determine its future use and location. For larger orders where multiple units
are delivered in instalments as part of one performance obligation, revenue will be recognised over time in line with delivery. These items are a
series of distinct goods that have the same pattern of transfer of control being the fulfilment of the incoterm, provided the customer has control
of the goods as they are delivered.
Where the sale of product requires customer inspection, this is deemed to be part of the main performance obligation so revenue is not
recognised until the inspection has been completed and approved by the customer. In instances where commissioning is provided, the transfer
of control for the sale of goods is at the point of despatch where commissioning is a separate performance obligation or once commissioning is
complete where combined in the sale of goods performance obligation. A separate performance obligation for commissioning is identified
where a customer could obtain the same service from a third-party supplier with revenue in respect of commissioning being recognised once
the commissioning is complete.
ii)Provision of services
The revenue recognition of provision of services is dependent on the nature of the contracts. Shorter-term contracts tend to be for \u2018one-off\u2019
service provision, which means the customer only consumes the benefit from the Group\u2019s performance when the work is complete. Revenue
is\u00a0therefore recognised at a point in time for such contracts. For other contracts, revenue from the rendering of services is generally recognised
over time where the customer concurrently receives and consumes a benefit from the Group\u2019s performance over the period of the contract
duration. Revenue from services is recognised in proportion to the stage of completion of the performance obligations at the balance sheet
date. The stage of completion is assessed by reference to the transfer of control over time, which usually corresponds to the contractual
agreement with each separate customer and the costs incurred on the contract to date in comparison with the total forecast costs of\u00a0the
contract.
iii)Construction contracts
Revenue for construction contracts is recognised over time as the contracts usually contain discrete elements separately transferring control
to\u00a0customers over the life of the contract and the Group\u2019s performance does not create an asset with an alternative use.
The stage of completion of a contract is determined either by reference to the proportion that contract costs incurred for work performed to
date bear to the estimated total contract costs, or by reference to the completion of a physical proportion of the contract work. Both these
methods are faithful depictions of the transfer of control given the Group has a right to payment for performance completed to date. The basis
used is dependent upon the nature of the underlying contract. For instances where the work is subject to formal customer acceptance
procedures, revenue will only be recognised once the customer review has been completed and approved by the customer as this is the point
both parties are in agreement that control has been transferred in line with contract terms. Losses on contracts are recognised in the year
when such losses become probable.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-430": {
"value": "
Property, plant & equipment
Property, plant and equipment comprises owned assets and right-of-use assets that do not meet the definition of investment property.
i)Owned assets
Owned property, plant and equipment is stated at cost less accumulated depreciation and any recognised impairment losses. Freehold land and
assets under construction are not depreciated. Depreciation of property, plant and equipment is provided on a straight-line basis so as to charge
the cost less residual value to the Consolidated Income Statement over the expected useful life of the asset concerned, and is in the following
ranges:
Freehold buildings, long leasehold land and buildings10 \u2013 40 years
Plant and equipment3 \u2013 20 years
ii)Right-of-use assets and lease liabilities
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group assesses whether it has both the right to obtain substantially all of the
economic benefits from use of the identified asset and the right to direct the use of the identified asset throughout the period of use.
The Group recognises a lease liability and right-of-use asset at the lease commencement date. The lease liability is initially measured as the
present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease, or
where the interest rate implicit in the lease cannot be readily determined, the Group\u2019s incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate. The Group\u2019s incremental borrowing rate is calculated by taking the government borrowing rate
in any given currency and adding the estimated Group credit spreads for a variety of tenors. An interpolation is performed annually to obtain one
rate for each of the major lease currencies based on the weighted average life of the lease book.
Lease payments consist of the following components:
\u2022fixed payments, including in-substance fixed payments, less any lease incentives receivable;
\u2022variable lease payments that depend on an index or a rate;
\u2022amounts expected to be payable by the lessee under residual value guarantees;
\u2022the exercise price of a purchase option (if the lessee is reasonably certain to exercise that option); and
\u2022payments of penalties for terminating the lease (if the lease term reflects the lessee exercising the option to terminate the lease).
The right-of-use asset is measured as equal to the lease liability and adjusted for:
\u2022lease payments made to the lessor at or before the commencement date;
\u2022lease incentives received;
\u2022initial direct costs associated with the lease; and
\u2022an initial estimate of restoration costs.
The right-of-use asset is depreciated using the straight-line method over the lease term. In addition, the right-of-use asset is periodically
reduced by any impairment losses.
The Group has adopted the exemption available for short-term leases, with payments being recognised on a straight-line basis over the lease
term. Short-term leases are defined as leases with a lease term of 12 months or less.
The Group has adopted the exemption available for low value assets, with payments being recognised on a straight-line basis over the lease
term. Leases relating to laptops, desktop computers, mobile phones, photocopiers, printers and other office equipment, where the asset value
is less than \u00a33,500 or the local currency equivalent have been treated as low value. Where the lease contract meets both short-term and low
value exemptions, the annual cost of the lease is reported within expenses relating to short-term leases.
For each lease, the lease term has been calculated as the non-cancellable period of the lease contract, except where the Group is reasonably
certain that it will exercise contractual extension options. In assessing whether a lessee is reasonably certain to exercise an option to extend a
lease, or not to exercise an option to terminate a lease, the Group shall consider all relevant facts and circumstances that create an economic
incentive for the lessee to exercise the option to extend the lease, or not to exercise the option to terminate the lease. In certain
circumstances, the Group will refer to the five-year Strategic Plan period as an appropriate period to consider whether the \u2018reasonably certain\u2019
criteria are met.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-431": {
"value": "
Goodwill
Goodwill arises on the acquisition of businesses and represents any excess of the cost of the acquired entity over the Group\u2019s interest in the
fair value of the entity\u2019s identifiable assets, liabilities and contingent liabilities determined at the date of acquisition. Acquisition costs are
recognised in the Consolidated Income Statement in the year in which they are incurred. Goodwill in respect of an acquired business is
recognised as an intangible asset. Goodwill is carried at cost less any recognised impairment losses and is tested at least annually or where
there are indicators of impairment.
The carrying amount of goodwill allocated to a cash generating unit is taken into account when determining the gain or loss on disposal of
the\u00a0unit.
An assessment of probable contingent consideration is recognised at the date of acquisition or disposal. For acquisitions, subsequent changes
to the fair value of the contingent consideration are adjusted against the cost of acquisition where they qualify as measurement period
adjustments. The measurement period is the period from the date of acquisition to the date that the Group obtains complete information about
facts and circumstances that existed as of the acquisition date, and is subject to a maximum of one year. If the change does not qualify as a
measurement period adjustment, it is reflected in the Consolidated Income Statement as an adjusting item. For disposals, any subsequent
change in contingent consideration is adjusted against the disposal proceeds and the gain or loss on disposal.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-432": {
"value": "
Other intangible assets
Intangible assets acquired separately are measured at cost on initial recognition. An intangible resource acquired in a business combination is
recognised as an intangible asset if it is separable from the acquired business or arises from contractual or legal rights, is expected to generate
future economic benefits and its fair value can be measured reliably.
An intangible asset with a finite life is amortised on a straight-line basis so as to charge its cost, which in respect of an acquired intangible asset
represents its fair value at the acquisition date, to the Consolidated Income Statement over its expected useful life. An intangible asset with an
indefinite life is\u00a0not amortised but is tested at least annually for impairment and carried at cost less any recognised impairment losses.
Brand names
Brands are recognised as a result of a business combination. The brand is recognised if it is separable from the remaining business and is
expected to generate future economic benefits. Internally generated brands are not capitalised in accordance with IAS 38 'Intangible Assets'.
Brands are fair valued at acquisition and subsequently measured at cost less any accumulated impairment. All subsequent expenditure is
expensed to the Consolidated Income Statement as incurred.
Due to the long-term nature of the brands, the Group has assessed that they have indefinite useful lives, with the exception of Motion Metrics,
which is amortised over 15 years. An annual impairment exercise is completed for brands with an indefinite useful life, to confirm that the value
in use, based on discounted cash flows, exceeds the carrying value.
Customer and distributor relationships
Customer and distributor relationships are recognised as part of a business combination if they are separable from the acquired business or
arise from contractual or legal rights. They represent the relationships that the acquiree has built up over a significant period of time and will
provide repeat custom to the business which will generate future economic benefit.
The assets are initially recorded at fair value at acquisition and subsequently recognised at cost less accumulated amortisation and impairment.
All subsequent expenditure is charged to the Consolidated Income Statement as incurred. Amortisation is charged to the Consolidated Income
Statement over the useful life of the asset. The useful life can vary depending on the circumstances of each acquisition. The useful lives range
from five to 30 years.
If there are any indicators of impairment an assessment of the value in use of the relationships is completed. If the carrying value exceeds the
value in use the variance is accounted for as an impairment to the asset with a corresponding charge to the Consolidated Income Statement.
Software
Software assets can be purchased, acquired or internally generated. Software that is not an integral part of related hardware is recognised as an
intangible asset.
Software is recognised at cost less accumulated amortisation and impairment. Amortisation is spread over the estimated useful life of the
software which can range from four to eight years.
Software as a Service (SaaS) arrangements provide the Group with the right to access cloud-based software applications over a contractual
period. The software remains the intellectual property of the developer and as a result the Group does not recognise an intangible asset in
relation to subscription fees and costs incurred to customise or configure the software. The related costs are recognised in the Consolidated
Income Statement when the service is received.
Costs incurred to enhance or develop an existing intangible asset or develop new software code that meet the definition and recognition criteria
of an intangible asset are capitalised as intangible software assets. Amortisation is recognised over the expected useful life of the software.
Trademarks and intellectual property
Trademarks and intellectual property are legally protected rights that are expected to generate future revenues. On acquisition, they are
measured at fair value based on discounted expected cash flows. Assets are subsequently held at cost less accumulated amortisation and
impairment.
The assets are amortised based on the period in which the legal protection is in place or the asset is expected to generate revenues. The
amortisation period for the currently capitalised trademarks ranges from six to 15 years.
Other
Other intangible assets are stated at cost less accumulated amortisation and any recognised impairment losses. The expected useful life of
other intangible assets is up to six years.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-433": {
"value": "
Research & development costs
All research expenditure is charged to the Consolidated Income Statement in the year in which it is incurred.
Development expenditure is charged to the Consolidated Income Statement in the year in which it is incurred unless it relates to the
development of a new product or technology and meets the following requirements:
\u2022it is incurred after the technical feasibility and commercial viability of the product has been proven;
\u2022the development costs can be measured reliably;
\u2022future economic benefits are probable; and
\u2022the Group intends, and has sufficient resources, to complete the development and to use or sell the asset.
Any such capitalised development expenditure is amortised on a straight-line basis so it is charged to the Consolidated Income Statement over
the expected life of the resulting product or technology.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-434": {
"value": "
Impairment of non-current assets
All non-current assets are tested for impairment whenever events or circumstances indicate that their carrying values might be impaired.
Additionally, goodwill and intangible assets with an indefinite life are subject to an annual impairment test.
An impairment loss is recognised to the extent that an asset\u2019s carrying value exceeds its recoverable amount, which represents the higher of
the asset\u2019s fair value less costs to sell and its value in use. An asset\u2019s value in use represents the present value of the future cash flows
expected to be derived from the asset. Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test
is conducted for the cash generating unit to which it belongs. Similarly, the recoverable amount of goodwill is determined by reference to the
discounted future cash flows of the cash generating units to which it is allocated.
Impairment losses are recognised in the Consolidated Income Statement. Impairment losses recognised in previous periods for an asset other
than goodwill are reversed if there has been a change in the estimates used to determine the asset\u2019s recoverable amount. The carrying amount
of an asset shall not be increased above the carrying amount that would have been determined had no impairment loss been recognised for the
asset in prior periods. Impairment losses recognised in respect of goodwill are not reversed.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-435": {
"value": "
Inventories
Inventories are valued at the lower of cost and net realisable value, with due allowance for any obsolete or slow-moving items. Cost represents
the expenditure incurred in bringing inventories to their existing location and condition and comprises the cost of raw materials, direct labour
costs, other direct costs and related production overheads. Raw material cost is generally determined on a first-in, first-out basis. Net realisable
value is the estimated selling price less costs to complete and sell.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-436": {
"value": "
Financial assets & liabilities
The Group\u2019s principal financial assets and liabilities, other than derivatives, comprise bank overdrafts, short-term borrowings, loans and fixed-
rate notes, cash and short-term deposits. The Group also has other financial assets and liabilities such as trade receivables, trade payables and
leases which arise directly from its operations.
A financial asset is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing financial liability
is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, such that the difference in
the respective carrying amounts together with any costs or fees incurred are recognised in profit or loss. Under IFRS 9 \u2018Financial instruments\u2019
where the modification is not substantial, any difference in the modified cash flows is recognised in profit or loss.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-437": {
"value": "
Financial assets & liabilities
The Group\u2019s principal financial assets and liabilities, other than derivatives, comprise bank overdrafts, short-term borrowings, loans and fixed-
rate notes, cash and short-term deposits. The Group also has other financial assets and liabilities such as trade receivables, trade payables and
leases which arise directly from its operations.
A financial asset is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing financial liability
is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, such that the difference in
the respective carrying amounts together with any costs or fees incurred are recognised in profit or loss. Under IFRS 9 \u2018Financial instruments\u2019
where the modification is not substantial, any difference in the modified cash flows is recognised in profit or loss.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-438": {
"value": "
Reimbursement asset
The Group has several insurance policies in place with regards to legal claims in relation to alleged asbestos exposure as discussed in note 22.
In accordance with IAS 37 \u2018Provisions, contingent liabilities and contingent assets\u2019 a reimbursement asset is only recognised when it is virtually
certain that the asset will be received and there is a corresponding liability recognised. The value recognised is the lower of the amount
confirmed by the insurer under the policy and the provision for the related liability. If the asset is probable the asset is not recognised but
disclosed.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForInsuranceContracts",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-439": {
"value": "
Trade receivables
Trade receivables, which are generally of a short-term nature, are recognised at original invoice amount where the consideration is
unconditional. If they contain significant financing components, trade receivables are instead recognised at fair value. The Group holds trade
receivables to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest
method. Details of the Group\u2019s impairment policies and the calculation of the loss allowance are provided in note 18 and the policy in respect of
invoice discounting is included in note 30.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-440": {
"value": "
Cash & cash equivalents
Cash and cash equivalents comprise cash in hand, deposits available on demand and other short-term highly liquid investments with a maturity
on acquisition of three months or less and bank overdrafts and short-term borrowings with a maturity on acquisition of three months or less.
Bank overdrafts are presented as current liabilities to the extent that there is no right of offset with cash balances.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-441": {
"value": "
Trade payables
Trade payables are recognised and carried at original invoice amount. The Group\u2019s supply chain financing programme policy and assessment for
the period is provided in note 21.",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-442": {
"value": "
Interest-bearing loans & borrowings
Obligations for loans and borrowings are recognised when the Group becomes party to the related contracts and are measured initially at fair
value less directly attributable transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs and any discount or
premium on settlement. Borrowings are classified as current liabilities unless the Group has an unconditional right to settle the liability at least
12 months after the balance sheet date.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-443": {
"value": "
Provisions, contingent liabilities & contingent assets
A provision is recognised in the Consolidated Balance Sheet when the Group has a legal or constructive obligation as a result of a past event,
the obligation can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. If the
effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks specific to the liability.
A contingent liability is disclosed if there is a possible obligation as a result of a past event that might, but will probably not, require an outflow
of economic benefits; or there is a present obligation as a result of a past event that probably requires an outflow of economic benefits, but
where the obligation cannot be measured reliably.
A contingent asset is disclosed if an inflow of economic benefits is probable arising from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-444": {
"value": "
Derivative financial instruments & hedge accounting
The Group uses derivative financial instruments, principally forward foreign currency contracts and cross-currency swaps, to reduce its
exposure to exchange rate movements. The Group also uses foreign currency borrowings as a hedge of its exposure to foreign exchange risk
on its investments in foreign subsidiaries. Additionally, the Group periodically uses interest rate swaps to manage its exposure to interest rate
risk. The Group does not hold or issue derivatives for speculative or trading purposes.
Derivative financial instruments are recognised as assets and liabilities measured at their fair values at the balance sheet date. The fair value of
forward foreign currency contracts is calculated as the present value of the estimated future cash flows based on spot and forward foreign
exchange rates and counterparty and the Group\u2019s own credit risk. The fair value of interest rate swaps and cross-currency swaps is calculated
as the present value of the estimated future cash flows based on interest rate curves, spot foreign exchange rates and counterparty and own
credit risk. Changes in their fair values are recognised in the Consolidated Income Statement, except where hedge accounting is used, provided
the conditions specified by IFRS 9 are met. Hedge accounting is applied in respect of hedge relationships where it is both permissible under
IFRS 9 and practical to do so. When hedge accounting is used, the relevant hedging relationships are classified as fair value hedges, cash flow
hedges or net investment hedges, as appropriate.
Where the hedging relationship is classified as a fair value hedge, the carrying amount of the hedged asset or liability will be adjusted by the
increase or decrease in its fair value attributable to the hedged risk and the resulting gain or loss will be recognised in the Consolidated Income
Statement where, to the extent that the hedge is effective, it will be offset by the change in the fair value of the hedging instrument.
Where the hedging relationship is classified as a cash flow or net investment hedge, to the extent that the hedge is effective, changes in the
fair value of the hedging instrument will be recognised directly in other comprehensive income. For the cash flow hedge, when the hedged
asset or liability is recognised in the financial statements, the accumulated gains and losses recognised in other comprehensive income will be
either recycled to the income statement or, if the hedged item results in a non-financial asset, will be recognised as adjustments to its initial
carrying amount. For net investment hedges, gains and losses on hedging instruments designated as hedges of the net investments in foreign
operations are recognised in other comprehensive income to the extent that the hedging relationship is effective. Gains and losses
accumulated in the foreign currency translation reserve are recycled to the income statement when the foreign operation is disposed of.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge
accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised through other comprehensive income is
kept in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss
that was reported in equity is immediately reclassified to the income statement in the period.
Derivatives embedded in non-derivative host contracts, which are not already measured at fair value through profit or loss, are recognised
separately as derivative financial instruments when their risks and characteristics are not closely related to those of the host contract and the
host contract is not stated at its fair value with changes in its fair value recognised in the Consolidated Income Statement.
Where items are recognised in the Consolidated Income Statement, these are presented within operating profit or finance costs dependent on
their nature.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-445": {
"value": "
Share-based payments
Equity settled share-based incentives are provided to employees under the Group\u2019s Share Reward Plan (SRP), formerly the Long Term
Incentive Plan (LTIP), the Weir ShareBuilder Plan (WSBP) and as a consequence of occasional one-off conditional awards made to employees.
The fair value of SRP awards and one-off conditional awards at the date of the grant is calculated using appropriate option pricing models and
the cost is recognised on a straight-line basis over the vesting period. Adjustments are made to reflect expected and actual forfeitures during
the vesting period due to failure to satisfy service or performance conditions, where applicable. The conditions of the SRP for the Executive
Directors, which took effect in 2018, are summarised in the Directors\u2019 Remuneration Policy, which can be found on the Company\u2019s website at
www.corporategovernance.weir. The conditions of the SRP for Senior Management are summarised in note 28.
The fair value of WSBP awards at grant date is calculated as the share price at the date of the grant less an adjustment for loss of reinvestment
return on the dividend equivalent. There are no performance conditions attached to these awards, but participants who leave the Company prior
to vesting lose their right to the awards. The terms of the share awards granted under the WSBP are set out on the plan\u2019s website at
www.sharebuilder.weir.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-446": {
"value": "
Treasury shares
The Weir Group PLC shares held by the Company, or those held in Trust, are classified in Shareholders\u2019 equity as treasury shares and are
recognised at cost. Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds
from sale and the original cost being taken directly to retained earnings. No gain or loss is recognised in total comprehensive income on the
purchase, sale, issue or cancellation of equity shares.
",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-447": {
"value": "
Taxation
Current tax is the amount of tax payable or recoverable in respect of the taxable profit or loss for the year.
Deferred tax liabilities represent tax payable in future years in respect of taxable temporary differences. Deferred tax assets represent tax
recoverable in future years in respect of deductible temporary differences, the carry forward of unutilised tax losses and the carry forward of
unused tax credits. Deferred tax is measured on an undiscounted basis using the tax rates and laws that have been enacted or substantively
enacted at the balance sheet date and are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax is recognised on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base
with the following exceptions:
i)Deferred tax arising from the initial recognition of goodwill, or of an asset or liability in a transaction that is not a business combination, that,
at\u00a0the time of the transaction, affects neither accounting nor taxable profit or loss, is not recognised;
ii)Deferred tax is provided on temporary differences arising on investments in subsidiaries and joint ventures, except where the timing of the
reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future; and
iii) A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can
be utilised.
Current and deferred tax is recognised in the Consolidated Income Statement except if it relates to an item recognised directly in equity, in
which case it is recognised directly in equity.
The Group also recognises provisions in the Consolidated Balance Sheet for uncertain tax positions as disclosed above in other accounting
estimates",
"dimensions": {
"concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-448": {
"value": "
4. SEGMENT INFORMATION
Continuing operations includes two operating Divisions: Minerals and ESCO. These two Divisions are organised and managed separately based
on the key markets served and each is treated as an operating segment and a reportable segment under IFRS 8 'Operating Segments'. The
operating and reportable segments were determined based on the reports reviewed by the Chief Executive Officer, which are used to make
operational decisions.
The Minerals segment is a global leader in engineering, manufacturing and service processing technology used in abrasive, high-wear mining
applications. Its differentiated technology is also used in infrastructure and general industrial markets. The ESCO segment is a global leader in
the provision of Ground Engaging Tools (G.E.T.) for large mining machines. It operates predominantly in mining and infrastructure markets
where its highly engineered technology improves productivity through extended wear life, increased safety and reduced energy consumption.
Following the acquisition of Motion Metrics on 30 November 2021 and Carriere Industrial Supply Limited (CIS) on 8 April 2022, these entities
have been included in the ESCO segment. Motion Metrics is a mining technology business, which is the market-leading developer of innovative
artificial intelligence (AI) and 3D rugged Machine Vision Technology, used in mines worldwide. CIS is a premier manufacturer and distributor of
highly engineered wear parts and aftermarket service provider to the Canadian mining industry.
During 2021, the Group completed the disposal of its Oil & Gas Division and, in line with IFRS 5 'Non-current Assets Held for Sale and
Discontinued Operations', the Group classified the Division as a discontinued operation as disclosed in note 9.
The Chief Executive Officer assesses the performance of the operating segments based on operating profit from continuing operations before
exceptional and other adjusting items (\u2018segment result\u2019). Finance income and expenditure and associated interest-bearing liabilities and
financing derivative financial instruments are not allocated to segments as all treasury activity is managed centrally by the Group Treasury
function. The amounts provided to the Chief Executive Officer with respect to assets and liabilities are measured in a manner consistent with
that of the financial statements. The assets are allocated based on the operations of the segment and the physical location of the asset. The
liabilities are allocated based on the operations of the segment.
Transfer prices between business segments are set on an arm\u2019s length basis, in a manner similar to transactions with third parties.
The segment information for the reportable segments for 2022 and 2021 is disclosed below. Information for the former Oil & Gas Division is
included in note 9.
| | | | | | |
| | | Total continuing operations |
| | | | | | |
| | | | | | |
| | | | | | |
Sales to external customers | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Sales to external customers \u2013 2021 at 2022 average exchange rates |
Sales to external customers | | | | | | |
| | | | | | |
| | | | | | |
Segment result before share of results of joint ventures | | | | | | |
Share of results of joint ventures | | | | | | |
| | | | | | |
| | | | | | |
Adjusted operating profit | | | | | | |
| | | | | | |
| | | | | | |
Profit before tax from continuing operations | | | | | | |
| | | | | | |
Segment result \u2013 2021 at 2022 average exchange rates | | | | | |
Segment result before share of results of joint ventures | | | | | | |
Share of results of joint ventures | | | | | | |
| | | | | | |
| | | | | | |
Adjusted operating profit | | | | | | |
Revenues from any single external customer do not exceed 10% of Group revenue.
| | | | | | | | |
| | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Property, plant & equipment | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Investments in joint ventures | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Working capital liabilities | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Other segment information - total Group | | | | | | | |
Segment additions to non-current assets | | | | | | | | |
Unallocated additions to non-current assets | | | | | | | | |
Total additions to non-current assets | | | | | | | | |
| | | | | | | | |
Other segment information - total Group | | | | | | | |
Segment depreciation & amortisation | | | | | | | | |
Segment impairment of property, plant & equipment | | | | | | | | |
Segment impairment of intangible assets | | | | | | | | |
Unallocated depreciation & amortisation | | | | | | | | |
Total depreciation, amortisation & impairment | | | | | | | | |
The asset and liability balances include right-of-use assets and lease liabilities. Refer to note 12 for depreciation on right-of-use assets.
Unallocated assets primarily comprise cash and short-term deposits, asbestos-related insurance asset, Trust Owned Life Insurance policy
investments, derivative financial instruments, income tax receivable, deferred tax assets and elimination of intercompany as well as those
assets which are used for general head office purposes. Unallocated liabilities primarily comprise interest-bearing loans and borrowings and
related interest accruals, derivative financial instruments, income tax payable, provisions, deferred tax liabilities, elimination of intercompany
and retirement benefit deficits as well as liabilities relating to general head office activities. Segment additions to non-current assets include
right-of-use assets.
Geographical information
Geographical information in respect of revenue and non-current assets for 2022 and 2021 is disclosed below. Revenues are allocated based on
the location to which the product is shipped. Assets are allocated based on the location of the assets and operations. Non-current assets
consist of property, plant and equipment, intangible assets and investments in joint ventures.
| | | | | | | | | |
Year ended 31 December 2022 | | | | | | | | | |
| | | | | | | | |
Revenue from continuing operations | | | | | | | | | |
Sales to external customers | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Year ended 31 December 2021 | | | | | | | | | |
| | | | | | | | |
Revenue from continuing operations | | | | | | | | | |
Sales to external customers | | | | | | | | | |
Non-current assets (restated note 2) | | | | | | | | | |
The following disclosures are given in relation to continuing operations.
| | |
| | |
| | |
An analysis of the Group's revenue is as follows: | | |
| | |
| | |
| | |
Provision of services \u2013 aftermarket | | |
Construction contracts \u2013 original equipment | | |
| | |
| | |
| | | | | | |
| | | Total continuing operations |
| | | | | | |
| | | | | | |
Timing of revenue recognition | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-449": {
"value": "5. REVENUES & EXPENSES
The following disclosures are given in relation to continuing operations.
| | | | | | |
| Year ended 31 December 2022 | Year ended 31 December 2021 |
| | | | | | |
| | | | | | |
A reconciliation of revenue to operating profit is as follows: | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Selling & distribution costs | | | | | | |
| | | | | | |
Share of results of joint ventures | | | | | | |
| | | | | | |
Research & development costs
Research and development costs for continuing operations amount to \u00a348.1m (2021: \u00a332.6m) of which \u00a346.9m (2021: \u00a330.6m) was charged
directly to cost of sales in the income statement and \u00a31.2m (2021: \u00a32.0m) was capitalised (note 13). There were no discontinued operations
research and development costs incurred in the year (2021: \u00a30.5m).
| | |
| | |
| | |
Employee benefits expense | | |
| | |
| | |
| | |
| | |
Defined contribution plans | | |
Share-based payments - equity settled transactions (note 28) | | |
| | |
Details of Directors\u2019 remuneration is disclosed in note 29.
| | |
| | |
| | |
The average monthly number of people employed by the Company and its subsidiaries is as follows: | | |
| | |
| | |
| | |
| | |
The following disclosures are given in relation to total operations.
At 31\u00a0December 2022, the number of people employed by the Group, including contingent workers, was 12,627 (2021: 11,994).
The total fees payable by the Group to our auditors for work performed in respect of the audit and other services provided to the Company and
its subsidiary companies during the year are disclosed below.
| | |
| | |
| | |
| | |
Fees payable to the Company's auditors for the audit of the Company and Consolidated Financial Statements | | |
Fees payable to the Company's auditors for other services | | |
The audit of the Company's subsidiaries | | |
Audit-related assurance services | | |
| | |
Finance income
| | |
| | |
| | |
Interest receivable on financial assets | | |
1.Includes \u00a341.0m of deferred tax credit relating to foreign tax (2021: \u00a33.4m credit).
The total income tax expense is disclosed in the Consolidated Income Statement, and note 9, as follows.
| | | |
| | | |
| | | |
| | | |
| | | |
Continuing operations income tax expense in the Consolidated Income Statement | | |
Discontinued operations income tax credit (expense) in the Consolidated Income Statement | | |
Total income tax expense in the Consolidated Income Statement | | |
The tax credit of \u00a344.9m (2021: \u00a39.4m) which has been recognised in adjusting items includes \u00a38.6m (2021: \u00a37.9m) in respect of adjusting
intangibles amortisation and impairment. The remaining \u00a336.3m (2021: \u00a31.5m) relates to exceptional and other adjusting items and includes a
credit of \u00a332.0m which arose on the recognition of US tax attributes that were previously held off balance sheet. These attributes relate
primarily to the deferral of current tax relief on intra-group payments of interest by the US group. Recognition is supported by the application of
detailed modelling of US taxable income over a ten-year forecast period and, in particular, the anticipated full utilisation of these attributes over
the same period.
Current tax for 2022 has been reduced by \u00a31.1m (2021: \u00a30.1m) due to the utilisation of deferred tax assets previously not recognised.
The total deferred tax included in the income tax expense is detailed in note 23.\u00a0
Tax relating to items charged or credited to equity from continuing operations
| | |
| | |
| | |
Consolidated Statement of Comprehensive Income | | |
Deferred tax \u2013 origination & reversal of temporary differences | | |
Deferred tax \u2013 effect of change in tax rates | | |
Tax (charge) on actuarial gains/losses on retirement benefits | | |
Tax (charge) on hedge losses | | |
Tax (charge) in the Consolidated Statement of Comprehensive Income | | |
Consolidated Statement of Changes in Equity | | |
Deferred tax on share-based payments | | |
Tax credit (charge) in the Consolidated Statement of Changes in Equity | | |
Exceptional and other adjusting items ineligible for tax includes the impact of non-deduction for write-off of balances and other losses relating
to the winding down of operations in Russia.\u00a0
Unrecognised deferred tax assets decreased from an addition of \u00a36.4m in 2021 to a reduction of \u00a331.3m in 2022. Within this balance a debit of
\u00a30.7m relates to losses arising in continuing operations entities, including China and Turkey where deferred tax asset recognition is not
appropriate. As noted above a credit of \u00a332.0m arises on the recognition of US tax attributes that were previously held off balance sheet.
The Group\u2019s provision for overseas tax on unremitted earnings decreased from an addition of \u00a33.8m in 2021 to a reduction of \u00a30.7m in 2022.\u00a0
This is due to a release of the provision in respect of unremitted earnings in Canada.
Permanent differences increased from a reduction of \u00a312.5m in 2021 to a reduction of \u00a30.7m in 2022. This reflects the non-recurrence of
\u00a310.0m of 2021 permanent differences that related to movement in the Group\u2019s provision for uncertain tax positions following the expiration of
tax statute of limitation in various jurisdictions together with the conclusion of open tax audits in South Africa. 2022 permanent differences
include the impact of irrecoverable withholding tax on dividends and the impact of inflationary adjustments in territories including Chile and
Argentina.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-452": {
"value": "
9. DISCONTINUED OPERATIONS
In the prior year, the Group disposed of the Oil & Gas Division (excluding the Group's joint venture, Arabian Metals Company (AMCO)) on 1
February 2021 to Caterpillar Inc. (CAT) for an enterprise value of US$375.0m and a final consideration of \u00a3282.8m. On 30 June 2021, the Group
completed the sale of the remaining Oil & Gas joint venture AMCO to Olayan Financing Company (Olayan). A consideration of US$37.8m
(\u00a327.4m) was received compared to the original fair market value of US$30.0m agreed with CAT. The agreement with CAT in respect of the
joint venture sale was that any proceeds received from Olayan above the fair market value would be split 90:10 in favour of CAT, subject to
certain capital gains tax and dividend retentions. This resulted in a payment to CAT of US$4.7m (\u00a33.4m) in July 2021 and a payment of capital
gains tax to the Saudi authorities of US$6.3m (\u00a34.6m) in August 2021.
In the current year, a current tax credit of \u00a31.2m has been recognised following the filing of the 2021 US tax return for Oil & Gas Division
related activity.
Financial information relating to the above rebate is set out in the table below with prior year comparatives for reference. For full disclosure of
the disposals refer to note 8 of the Group's 2021 Annual Report.
Financial performance and cash flow information for discontinued operations
| | | | | | |
| Year ended 31 December 2022 | Year ended 31 December 2021 |
| | | | | | |
| | | | | | |
| | | | | | |
Operating (loss) profit before share of results of joint ventures | | | | | | |
Share of results of joint ventures | | | | | | |
| | | | | | |
| | | | | | |
(Loss) profit before tax from discontinued operations | | | | | | |
| | | | | | |
Profit (loss) after tax from discontinued operations | | | | | | |
Gain on sale of Oil & Gas Division (see below) | | | | | | |
Gain on sale of joint venture (see below) | | | | | | |
Profit (loss) for the year from discontinued operations | | | | | | |
Reclassification of foreign currency translation reserve | | | | | | |
Other comprehensive expense from discontinued operations | | | | | | |
Total net comprehensive income (expense) from discontinued operations | | | | | | |
Earnings per share
Earnings per share from discontinued operations were as follows.
The following reflects the share numbers used in the calculation of earnings per share, and the difference between the weighted average share
capital for the purposes of the basic and the diluted earnings per share calculations.
| | |
| | |
| | |
Weighted average number of ordinary shares for basic earnings per share | | |
Effect of dilution: employee share awards | | |
Adjusted weighted average number of ordinary shares for diluted earnings per share | | |
The current year dividend is in line with the capital allocation policy announced in our 2020 Annual Report and Financial Statements, under
which the Group intends to distribute 33% of adjusted earnings by way of dividend. As a result, dividend cover in 2022 is 3.0 times.
The proposed dividend is based on the number of shares in issue, excluding treasury shares held, at the date that the financial statements were
approved and authorised for issue. The final dividend may differ due to increases or decreases in the number of shares in issue between the
date of approval of this Annual Report and Financial Statements and the record date for the final dividend.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfDividendsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-455": {
"value": "
12. PROPERTY, PLANT & EQUIPMENT
Property, plant and equipment comprises owned and right-of-use assets that do not meet the definition of investment property.
| | | | | | | |
| | | Total owned property, plant & equipment | Right-of- use land & buildings | Right-of- use plant & equipment | Total right- of-use property, plant & equipment | Total property, plant & equipment |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Reclassifications to intangible assets (note 13) | | | | | | | |
Reclassifications to inventory | | | | | | | |
| | | | | | | |
Reassessments and modifications | | | | | | | |
| | | | | | | |
| | | | | | | |
Restated at 31 December 2021 | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Reassessments and modifications | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Accumulated depreciation & impairment | | | | | | | |
| | | | | | | |
Depreciation charge for the year | | | | | | | |
Impairment during the year | | | | | | | |
| | | | | | | |
| | | | | | | |
Reassessments and modifications | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Depreciation charge for the year | | | | | | | |
Impairment during the year | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Reassessments and modifications | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Net book value at 31 December 2020 | | | | | | | |
Restated net book value at 31 December 2021 | | | | | | | |
Net book value at 31 December 2022 | | | | | | | |
Tangible assets as at 31\u00a0December 2021 have been restated following the finalisation of the opening balance sheet related to the prior year
acquisition of Motion Metrics. The restatement and its impact on the Consolidated Financial Statements has been outlined in note 2.
Owned property, plant & equipment
In 2022, an impairment of \u00a31.3m (2021: \u00a30.2m) has been recognised, primarily relating to assets located in Russia, in the amount of \u00a31.0m,
following the Group's announcement to wind down operations. The remaining balance relates to assets located in Canada, in the amount of
\u00a30.2m, following the cessation of a capital expenditure project, and Australia, in the amount of \u00a30.1m, written down on the closure of service
centres.
In 2022, acquisitions of \u00a33.6m (2021 restated: \u00a30.5m) related to the acquisition of Carriere Industrial Supply Limited (CIS) on 8 April 2022, as
outlined in note 14. Acquisitions in the prior year relate to Motion Metrics, which was acquired on 30 November 2021.
The disposal of business in the year reduced cost by \u00a30.4m (2021: \u00a3nil) and accumulated depreciation by \u00a30.1m (2021: \u00a3nil). This related wholly
to assets held by the ESCO Russia business, which was disposed on 15 September 2022.
In 2022, the inflation adjustment recorded was to increase cost by \u00a30.4m (2021: \u00a30.3m) and increase accumulated depreciation by \u00a30.3m
(2021: \u00a30.2m). The inflation adjustments related to owned property, plant and equipment assets located in Argentina, within the Minerals
Division. Inflation adjustments were recorded in accordance with IAS 29 'Financial Reporting in Hyperinflationary Economies'.
The carrying amount of assets under construction included in plant and equipment for continuing operations is \u00a341.6m (2021: \u00a331.8m).
Right-of-use assets
The Group leases many assets, including buildings, vehicles, forklifts, photocopiers and printers, machinery and IT equipment. Building lease
terms are negotiated on an individual basis and contain a wide range of terms from one to 20 years. The average lease term is approximately
six years. Plant and equipment lease terms range from one to 16 years, with an average lease term of approximately four years. The current
and non-current lease liabilities are disclosed in notes 20 and 30 respectively. The maturity analysis of contractual undiscounted cash flows is
included in note 30. The following table shows the breakdown of the lease expense between amounts charged to operating profit and amounts
charged to finance costs in the year for continuing operations.
In 2022, no impairment has been recorded (2021: \u00a31.6m reversal).
| | |
| | |
| | |
Depreciation of right-of-use assets | | |
Expenses relating to short-term leases | | |
Expenses relating to leases of low value assets, excluding short-term leases of low value | | |
Income from sub-leasing right-of-use assets | | |
Expenses relating to variable lease payments not included in the measurement of lease liabilities | | |
Charge to operating profit | | |
Finance cost - interest expense related to lease liabilities | | |
Charge to profit before tax from continuing operations | | |
The total cash outflow in the year for continuing operations, which includes right-of-use cash flows and associated finance costs, as well as
cash flows for the above expenses, is \u00a347.4m (2021: \u00a340.7m). Future cash outflows from leases not yet commenced to which the Group is
committed total \u00a316.2m (2021: \u00a38.6m).
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-456": {
"value": "
13. INTANGIBLE ASSETS
| | | | | | | | |
| | | Customer & distributor relationships | | Intellectual property & trademarks | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Reclassifications from property, plant & equipment (note 12) | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Restated at 31 December 2021 | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Accumulated amortisation & impairment | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Impairment during the year | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Impairment during the year | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Net book value at 31 December 2020 | | | | | | | | |
Restated net book value at 31 December 2021 | | | | | | | | |
Net book value at 31 December 2022 | | | | | | | | |
Intangible assets as at 31\u00a0December 2021 have been restated, following the finalisation of the opening balance sheet related to the prior year
acquisition of Motion Metrics. The restatement and its impact on the Consolidated Financial Statements has been outlined in note 2.
In 2022, an impairment of \u00a30.3m (2021: \u00a30.1m) has been recognised relating to assets located in Russia, following the Group's announcement
to suspend and wind down operations.
In 2022, acquisitions of \u00a36.8m (2021 restated: \u00a389.6m) related to the acquisition of Carriere Industrial Supply Limited (CIS) on 8 April 2022, as
outlined in note 14. Acquisitions in the prior year relate to Motion Metrics, which was acquired on 30 November 2021.
The carrying amount of assets under construction included in intangible assets for continuing operations is \u00a36.1m (2021: \u00a33.7m).
Brand names, with the exception of the Motion Metrics\u2122 brand name, have been assigned an indefinite useful life and as such are not
amortised, but are tested annually for impairment, as detailed in note 15. At 31 December 2022 the carrying value of brand names with an
indefinite life was \u00a3285.6m (2021: \u00a3255.9m). The Motion Metrics\u2122 brand name has an expected useful life of 15 years and is being amortised
over this period.
Brand names includes ESCO\u2122, Linatex\u00ae and Warman\u00ae, all of which are considered to be leaders in their respective markets. The allocation of
significant brand names is as follows.
3.2m at 31\u00a0December 2022 (2021: \u00a33.0m), and is being amortised over an expected remaining useful life of 14 years (2021: 15 years).
The allocation of customer and distributor relationships, and the amortisation period of these assets is as follows.
| | | | |
| Remaining amortisation period | Customer and distributor relationships |
| | | | |
| | | | |
| | | | |
Carriere Industrial Supply | | | | |
| | | | |
| | | | |
| | | | |
3. INTANGIBLE ASSETS
| |
| |
| |
| |
At beginning and end of the year | |
| |
| |
| |
| |
Net book value at 31 December 2021 | |
Net book value at 31 December 2022 | |
acquisition will maintain ESCO's leading core G.E.T. presence in Ontario and provide opportunities to expand into fabricated hardware and
underground capabilities.
Initial consideration of \u00a316.2m was paid on completion, with a further deferred consideration of \u00a32.5m recognised reflecting indemnification
and working capital hold backs. In October 2022, the Group paid a further \u00a30.1m in relation to the finalisation of the completion accounts
process and settled \u00a30.5m of the deferred consideration in relation to the working capital completion mechanism. The remaining deferred
consideration of \u00a32.0m for indemnification is payable in two instalments; on the first and second anniversary of the acquisition date. The final
adjusted purchase price of CAD$30.3m (\u00a318.8m) represents the enterprise value adjusted for certain working capital, net debt and transaction
fee adjustments.
The provisional fair values, which are subject to finalisation within 12 months of acquisition, are disclosed in the table below. There are certain
intangible assets included in the \u00a33.7m of goodwill recognised that cannot be individually separated and reliably measured due to their nature.
These items include the future growth of the business, synergies and an assembled workforce.
| |
| |
Carriere Industrial Supply Limited provisional fair values | |
Property, plant & equipment - owned assets | |
Intangible assets - customer and distributor relationships | |
| |
Trade & other receivables | |
| |
| |
Interest-bearing loans & borrowings | |
| |
| |
Provisional fair value of net assets | |
Goodwill arising on acquisition | |
| |
| |
| |
| |
| |
| |
The total net cash outflow on current year acquisitions was as follows: | |
| |
deferred consideration paid | |
cash & cash equivalents acquired | |
Total cash outflow (note 26) | |
The gross amount and fair value of CIS trade receivables amount to \u00a37.5m. It is expected that virtually all the contractual amounts will be
collected.
CIS contributed \u00a326.9m to revenue and an operating profit of \u00a36.0m (before adjusting items) in the period from acquisition to 31\u00a0December
2022. These values are inclusive of revenue and margin which would have been earned pre-acquisition on sales from ESCO to CIS under the
former distributor model. If the acquisition had occurred at the start of 2022, the revenue and statutory profit for the year from acquired
operations would not have had a material impact on the results disclosed in the Consolidated Income Statement and therefore are not
separately disclosed. Group exceptional acquisition and integration costs in relation to CIS are \u00a31.6m in the year (note 6) and are reported within
Administrative expenses (note 5).
Motion Metrics
The Group completed the acquisition of 100% of the voting rights of Motion Metrics on 30 November 2021 for an enterprise value of
CAD$150.0m (\u00a388.7m), which represents initial equity value consideration of \u00a367.9m paid in cash and adoption of \u00a320.8m of vendor liabilities
primarily relating to tax, settlement of an employee growth participation plan and disposal costs.
Motion Metrics is a leading Canada-based global mining technology business and is the market-leading developer of innovative artificial
intelligence (AI) and 3D rugged Machine Vision Technology used in mines worldwide. Its technology helps miners increase safety, efficiency
and sustainability of their operations. As part of the agreement, Motion Metrics' Vancouver headquarters will become Weir's global centre for
excellence in AI and Machine Vision Technology.
Motion Metrics applications are highly complementary to Weir's product portfolio. It has joined the ESCO Division and reporting segment
reflecting the early adoption of its technology in G.E.T. where ESCO is an established global leader. Motion Metrics AI and Machine Vision
Technology capabilities are expected to be leveraged across the whole mining value chain served by the Weir Group.
The provisional fair values, which were subject to finalisation within 12 months of acquisition, have been finalised and are disclosed in the table
below. There are certain intangible assets included in the \u00a352.1m of goodwill recognised that cannot be individually separated and reliably
measured due to their nature. These items include the future growth of the business, synergies and an assembled workforce.
| | | |
| | | |
| | | |
Motion Metrics fair values | | | |
Property, plant & equipment \u2013 owned assets | | | |
Property, plant & equipment \u2013 right-of-use assets | | | |
| | | |
| | | |
Intellectual property & trademarks | | | |
| | | |
| | | |
Trade & other receivables | | | |
| | | |
Interest-bearing loans & borrowings | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Goodwill arising on acquisition | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
The total net cash outflow on prior year acquisitions was as follows: | | | |
| | | |
Total cash outflow (note 26) | | | |
1Discount rate
The pre-tax nominal weighted average cost of capital (WACC) is the basis for the discount rate, with adjustments made for geographic risk. The WACC is the weighted average of the pre-
tax cost of debt financing and the pre-tax cost of equity finance. The discount rate has increased in Minerals and, by a greater magnitude, in ESCO due to a significant increase in country
equity risk premiums and long-term government bond yields, while mining asset betas have remained stable.
2Real growth
For both CGUs the real growth beyond the five-year forecast period typically reflects external International Monetary Fund (IMF) forecast growth rates for the countries in which the CGU
operates. However, in 2022, given the current high short-term inflation rates and variability caused by general macroeconomic uncertainty, for modelling purposes we have conservatively
restricted the real growth to 0.0% in both CGUs to compensate for current volatility in rates. We do not believe this reflects our outlook on real growth given the global nature of these
businesses, the long-term growth prospects in their end markets and the fact that they sell a significant proportion of their products to emerging markets which also have strong long-term
growth prospects.
3Adjusted operating profit margins
Adjusted operating profit margins have been forecast based on historic levels taking cognisance of the likely impact of changing economic environments and competitive landscapes on
volumes and revenues, and the impact of associated management actions.
Impairment testing and sensitivity analysis
The Directors consider that the assumptions made represent their best estimate of the future cash flows generated by the CGU, and that the
discount rate used is appropriate given the risks associated with the specific cash flows. The resulting value in use model for the Minerals and
ESCO CGUs show significant headroom above carrying value.
While cash flow projections are subject to inherent uncertainty, no detailed sensitivity analysis has been performed for these CGUs, as there is
no reasonably possible change in key assumptions that would cause the carrying value amounts to exceed recoverable amounts. A 1%
increase in the pre-tax real discount rate and 1% decrease in growth rate for each CGU, also indicated significant headroom on the carrying
value of the assets.
Additionally, the Directors have considered scenarios consistent with meeting the Paris goals of limiting the global temperature increase to well
below 2\u00b0C, which the Directors consider to be a reasonably possible outcome. In these scenarios, assumptions have been made over the price
and production volumes of certain commodities, that are key to end customers, with several of these commodities being vital globally in
achieving the Paris goals. Under the scenarios considered by the Directors, there are no indicators of impairment in relation to either CGU.
",
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}
},
"f-459": {
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16. INVESTMENTS IN JOINT VENTURES
At the year end, the Group held an investment in one joint venture, ESCO Elecmetal Fundici\u00f3n Limitada.
The Group\u2019s 50% share of the joint venture balance sheet is detailed below.
| | |
| | |
| | |
Share of joint venture's balance sheet | | |
| | |
| | |
| | |
| | |
| | |
| | | | |
| | |
| | |
| | |
| | |
| | |
The Group\u2019s investment in the joint venture is included in the list of subsidiaries on pages 226 to 232.
",
"dimensions": {
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}
},
"f-460": {
"value": "
17. INVENTORIES
In 2022, the cost of inventories recognised as an expense within cost of sales for continuing operations amounted to \u00a31,573.4m
(2021:\u00a0continuing operations \u00a31,237.2m). In 2022, the write down of inventories to net realisable value for continuing operations amounted
to\u00a0\u00a326.7m (2021: \u00a37.9m), of which \u00a317.2m (2021: \u00a3nil) was recognised as exceptional (note 6). The reversal of previous write downs amounted
to \u00a36.0m (2021: \u00a36.4m).
",
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"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-461": {
"value": "
18. TRADE & OTHER RECEIVABLES
Other receivables presented as non-current on the face of the Consolidated Balance Sheet of \u00a376.8m (2021: \u00a376.5m) are primarily in respect of
insurance contracts, including Trust Owned Life Insurance policy investments of \u00a345.9m (2021: \u00a340.2m) that provide a form of security for
certain unfunded employee benefit plans operated by ESCO, and insurance contracts relating to asbestos-related claims in the US of \u00a324.5m
(2021: \u00a335.3m). Further detail on these claims is presented in note 22.
Current trade and other receivables are analysed in the following table.
The average credit period on sales of goods is 62 days (2021: 72 days) on a continuing basis. Other debtors includes \u00a30.3m (2021: \u00a31.3m)
in\u00a0respect of amounts due from joint ventures, and \u00a37.5m (2021: \u00a36.9m) in respect of insurance contracts relating to asbestos-related claims
(note 22).
Impairment of trade & other receivables
The Group has two types of financial assets that are subject to IFRS 9\u2019s expected credit loss model:
i.trade receivables for sales of products and services; and
ii.contract assets relating to construction contracts.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all
trade receivables and contract assets. To measure the expected credit losses, trade receivables and contract assets have been grouped based
on\u00a0shared credit risk characteristics.
The contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade receivables for the
same types of contracts. Due to the way in which these contracts are managed, expected credit loss is included within the loss allowance
for\u00a0trade receivables.
Due to the diverse end markets and customer geographies within the Group, the methodology applied to arrive at the expected loss rate is
dictated by local circumstances. For short-term trade receivables, historical loss rates might be an appropriate basis for the estimate of
expected future losses. They are then adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability
of the customers to settle the receivables. As such, one methodology applied is the use of a provision matrix, where different loss rates are
applied depending on the number of days that a trade receivable is past due. Alternatively, the expected credit loss is calculated on an individual
customer basis based on historical loss data for that customer, their receivables ageing, and any other knowledge of the customer\u2019s current
and forecast financial position.
Trade receivables and contract assets are written off when there is no reasonable expectation of recovery.
Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating profit (note 5).
Subsequent recoveries of amounts previously written off are credited against the same line item.
The gross carrying amount of trade receivables, for which the loss allowance is measured at an amount equal to the lifetime expected credit
losses under the simplified method, is analysed below.
Analysis of gross carrying amount of trade receivables by days past due
| | |
| | |
| | |
| | |
| | |
Between 3 & 6 months past due | | |
More than 6 months past due | | |
| | |
Reconciliation of opening to closing loss allowance for trade receivables
| | |
| | |
| | |
Balance at the beginning of the year | | |
Impairment losses recognised on receivables | | |
| | |
Amounts written off as uncollectable | | |
Amounts recovered during the year | | |
Impairment losses reversed | | |
| | |
Balance at the end of the year | | |
Impairment losses recognised on receivables includes an amount of \u00a38.3m (2021: \u00a3nil) recognised as exceptional (note 6).
The Group has recognised the following assets in relation to contracts with customers.
| | |
| | |
| | |
Construction contract assets | | |
| | |
| | |
Cash at bank and in hand earns interest at floating-rates based on daily bank deposit rates. Short-term deposits are made for varying periods of
between one day and three months, depending on the immediate cash requirements of the Group and earns interest at the respective short-
term deposit rates.
The Group operates a notional cash pooling arrangement in which individual balances are not offset for reporting purposes. Cash and short-term
deposits at 31 December 2022 includes \u00a3206.9m (2021: \u00a360.5m) that is part of this arrangement and both cash and interest-bearing loans and
borrowings are grossed up by this amount.
",
"dimensions": {
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}
},
"f-463": {
"value": "
20. INTEREST-BEARING LOANS & BORROWINGS
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
1. 2021 balance relates to unamortised issue costs. | | |
The Group operates a notional cash pooling arrangement in which individual balances are not offset for reporting purposes. Bank overdrafts at
31 December 2022 includes \u00a3206.9m (2021: \u00a360.5m) that is part of this arrangement and both bank overdrafts and cash and short-term
deposits\u00a0 are grossed up by this amount.
| | | | | | |
| Weighted average interest rate |
| | | | | | |
| | | | | | |
Revolving credit facility | | | | | | |
Sterling variable-rate loans | | | | | | |
United States Dollar variable-rate loans | | | | | | |
| | | | | | |
The weighted average interest rates include an applicable margin over and above the interest basis.
| | | | | | |
| |
| | | | | | |
| | | | | | |
| | | | | | |
United States Dollar fixed-rate notes | | | | | | |
United States Dollar fixed-rate notes | | | | | | |
| | | | | | |
United States Dollar Sustainability-Linked Notes | | | | | | |
| | | | | | |
Less: current instalments due on fixed-rate notes | | | | | | |
United States Dollar fixed-rate notes | | | | | | |
United States Dollar fixed-rate notes | | | | | | |
Non-current fixed-rate notes | | | | | | |
The disclosures above represent the interest profile and currency profile of financial liabilities before the impact of derivative financial
instruments.
In May 2021, the Group completed the issue of five-year US$800m Sustainability-Linked Notes due to mature in May 2026, which includes a
target to reduce scope 1&2 CO2 emissions by 30% by December 2024, consistent with the Group's medium-term KPIs announced in the 2020
Annual Report. The notes will initially bear interest at a rate of 2.20% per annum to be paid semi-annually in May and November.\u00a0 The interest
on the notes will be linked to achievement of Weir's 2024 Sustainability Performance Target (SPT). The interest rate applicable to the Notes will
increase by 0.25% to 2.45% per annum from and including the last interest payment date preceding 31 December 2024 if the Group does not
attain its SPT. Also, in April 2021 the Group took the decision to settle its \u00a3200m term loan facility, which was due to mature in March 2022,
with a charge to the Consolidated Income Statement of the remaining unamortised costs of \u00a30.8m.
In April 2022, the Group completed the refinancing of its US$950m Revolving Credit Facility (RCF), which was due to expire in June 2023. This
was replaced with a US$800m RCF with a syndicate of 11 global banks and will mature in April 2027, with the option to extend for up to\u00a0a
further two years. The RCF includes a link to the Group\u2019s sustainability goals, with an interest adjustment of +/- 0.025% dependant on
achievement, and the covenant terms are unchanged.
At 31\u00a0December 2022, \u00a3336.5m was drawn under the US$800m multi-currency RCF which, is disclosed net of unamortised issue costs of
\u00a32.4m. At 31 December 2021 \u00a3nil was drawn under the US$950m multi-currency RCF net of unamortised issue costs of \u00a33.0m.
At 31\u00a0December 2022, a total of \u00a3165.3m (2021: \u00a3583.6m) was outstanding under private placement, which is disclosed net of unamortised
issue costs of \u00a3nil (2021: \u00a30.1m).
At 31\u00a0December 2022, a total of \u00a3657.8m (2021: \u00a3586.5m) was outstanding under Sustainability-Linked notes, which is disclosed net of
unamortised issue costs of \u00a33.5m (2021: \u00a34.5m).
",
"dimensions": {
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}
},
"f-464": {
"value": "
21. TRADE & OTHER PAYABLES
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Other taxes & social security costs | | |
| | |
Deferred consideration payable | | |
| | |
| | |
| | |
Deferred consideration payable | | |
| | |
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
},
"f-465": {
"value": "
22. PROVISIONS
| | | | | | |
| Warranties & contract claims | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Restated at 31 December 2021 | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
At 31 December 2021 (restated note 2) | | | | | | |
The impact of discounting is only relevant for the asbestos-related category of provision, with higher discount rates at 31 December 2022,
resulting in a \u00a36.1m reduction in the provision, which is reflected as unutilised above.
Warranties & contract claims
Provision has been made in respect of actual warranty claims on goods sold and services provided, and allowance has been made for potential
warranty claims based on past experience for goods and services sold with a warranty guarantee. At 31\u00a0December 2022, the warranties portion
of the provision totalled \u00a36.6m (2021: \u00a37.2m). At 31 December 2022, all of these costs relate to claims that fall due within one year of the
balance sheet date.
Provision has been made in respect of sales contracts entered into for the sale of goods in the normal course of business where the
unavoidable costs of meeting the obligations under the contracts exceed the economic benefits expected to be received from the contracts
and before allowing for future expected aftermarket revenue streams. Provision is made immediately when it becomes apparent that expected
costs will exceed the expected benefits of the contract. At 31\u00a0December 2022, the contract claims element, which includes onerous provision,
was \u00a33.8m (2021: \u00a32.2m), all of which is expected to be incurred within one year of the balance sheet date.
Asbestos-related claims
| | |
| | |
| | |
US asbestos-related provision \u2013 pre-1981 date of first exposure | | |
US asbestos-related provision \u2013 post-1981 date of first exposure | | |
US asbestos-related provision \u2013 total | | |
UK asbestos-related provision | | |
Total asbestos-related provision | | |
US asbestos-related provision
Certain of the Group\u2019s US-based subsidiaries are co-defendants in lawsuits pending in the US in which plaintiffs are claiming damages arising
from alleged exposure to products previously manufactured which contained asbestos. The dates of alleged exposure currently range from the
1950s to the 1980s.
The Group has historically held comprehensive insurance cover for cases of this nature and continues to do so for claims with a date of first
exposure (dofe) pre-1981. The expiration of one of the Group\u2019s insurance policies in 2019 resulted in no further insurance cover for claims with
a post-1981 dofe. All claims are directly administered by National Coordinating Counsel on behalf of the Group\u2019s insurers who also meet
associated defence costs. The insurers, their legal advisers and in-house counsel agree and execute the defence strategy between them.
A summary of the Group\u2019s US asbestos-related claim activity is shown in the table below.
A review of both the Group\u2019s expected liability for US asbestos-related diseases and the adequacy of the Group\u2019s insurance policies to meet
future settlement and defence costs was completed in conjunction with external advisers in 2020 as part of our planned triennial actuarial
update. This review was based on an industry standard epidemiological decay model, and Weir\u2019s claims settlement history. The 2020 review
reflected higher levels of claims, particularly relating to the 1970s and 1980s, and a longer dofe period, but lower settlement values than the
previous review conducted in 2017. The actuarial model incorporates claims, with a dofe pre- and post-1981, primarily relating to Lung Cancer
and Mesothelioma and includes estimates relating to:
\u2022the number of future claims received;
\u2022settlement rates by disease type;
\u2022mean settlement values by disease type;
\u2022ratio of defence costs to indemnity value; and
\u2022the profile of associated cash flows through to 2049.
The actuarial model in 2020 provided a range of potential liability based on levels of probability from 10% to 90%, which, on an undiscounted
basis, equates to \u00a353m-\u00a3133m. The mean actuarial estimate of \u00a391m represents the expected undiscounted value over the range of
reasonably possible outcomes. The provision in the financial statements is based on the mean actuarial estimate, which is then adjusted each
year to reflect expected settlements in the model, discounting and restricting our estimate to ten years of future claims.
| | |
| | |
Period of future claims provided | | |
| | |
The net provision and insurance asset are presented in the financial statements as follows.
| | |
| | |
| | |
Provisions \u2013 current | | |
Provisions \u2013 non-current | | |
Trade & other receivables | | |
Non-current other receivables | | |
There remains inherent uncertainty associated with estimating future costs in respect of asbestos-related diseases. Actuarial estimates of
future indemnity and defence costs associated with asbestos-related diseases are subject to significantly greater uncertainty than actuarial
estimates for other types of exposures. This uncertainty results from factors that are unique to the asbestos claims litigation and settlement
process including but not limited to:
i)the possibility of future state or federal legislation applying to claims for asbestos-related diseases;
ii)the ability of the plaintiff\u2019s bar to develop and sustain new legal theory and/or develop new populations of claimants;
iii)changes in focus of the plaintiff\u2019s bar;
iv)changes in the Group\u2019s defence strategy; and
v)changes in the financial condition of other co-defendants in suits naming the Group and affiliated businesses.
As a result, there can be no guarantee that the assumptions used to estimate the provision will result in an accurate prediction of the actual
costs that may be incurred.
Since the last triennial update completed in 2020, we have experienced a higher number of claims received than modelled across both disease
types. Average settlement values have been higher for Mesothelioma cases, but lower for Lung Cancer cases. Settlements largely occur within
four years of a claim being received and the settlement rates for Mesothelioma cases are broadly in line with the model while Lung Cancer
case settlement rates are trending below.
These variations from the model may be influenced by fluctuations in the profile of case rates across jurisdictions coupled with the potential
impact of the Covid-19 pandemic. However, if current case numbers and average settlement values were to continue, this may lead to the
insurance asset being eroded as early as 2025, two years earlier than initially suggested in the 2020 actuarial model.
As noted above there are a number of uncertain factors involved in the estimation of the provision and variations in case numbers and
settlements are to be expected from period-to-period. Our actual claims experience will be reflected in the next triennial valuation due in the
second half of 2023, and will be incorporated in our 2023 Annual Report and Financial Statements.
Sensitivity analysis reflecting reasonably probable scenarios has been conducted. The results of this analysis are shown below.
| |
| |
Estimated impact on the discounted US asbestos-related provision of | |
Increasing the number of projected future settled claims by 15% | |
Increasing the estimated settlement value by 10% | |
Increasing the basis of provision by ten years | |
Decreasing the discount rate by 50bps | |
Application of these sensitivities, on an individual basis, would not lead to a material change in the provision.
The Group\u2019s US subsidiaries have been effective in managing the asbestos litigation, in part, because the Group has access to historical project
documents and other business records going back more than 50 years, allowing it to defend itself by determining if legacy products were
present at the location of the alleged asbestos exposure and, if so, the timing and extent of their presence. In addition, the Group has
consistently and vigorously defended claims that are without merit.
UK asbestos-related provision
In the UK, there are outstanding asbestos-related claims that are not the subject of insurance cover. The extent of the UK asbestos exposure
involves a series of legacy employer\u2019s liability claims that all relate to former UK operations and employment periods in the 1950s to 1970s. In
1989, the Group\u2019s employer\u2019s liability insurer (Chester Street Employers Association Ltd) was placed into run-off, which effectively generated
an uninsured liability exposure for all future long-tail disease claims with an exposure period pre-dating 1 January 1972. All claims with a disease
exposure post 1 January 1972 are fully compensated via the Government-established Financial Services Compensation Scheme. Any
settlement to a former employee whose service period straddles 1972 is calculated on a pro rata basis. The Group provides for these claims
based on management\u2019s best estimate of the likely costs given past experience of the volume and cost of similar claims brought against the
Group.
The UK provision was reviewed and adjusted accordingly for claims experience in the year, resulting in a provision of \u00a32.5m (2021: \u00a33.1m).
Employee-related
Employee-related provisions arise from legal obligations in a number of territories in which the Group operates, the majority of which relate to
compensation associated with periods of service. A large proportion of the provision is for long service leave. The outflow is generally
dependent upon the timing of employees\u2019 period of leave with the calculation of the majority of the provision being based on criteria
determined by the various jurisdictions.
Exceptional items
The exceptional items provision relates to certain exceptional charges included within note 6 where the cost is based on a reliable estimate of
the obligation.
The restated opening balance of \u00a310.9m includes \u00a38.7m for opening balance sheet liabilities in Motion Metrics relating to restructuring taxes
and acquisition costs, cybersecurity costs of \u00a30.4m and final Oil & Gas Division disposal costs of \u00a30.4m. The remaining balance of \u00a31.4m
relates to prior year balances in Minerals for severance costs and onerous contract provisions.
Additions in the year total \u00a314.2m, including acquisition and integration costs for Motion Metrics and CIS of \u00a31.8m, which were fully cash
settled in the year, and \u00a32.8m in relation to the Performance Excellence programme, of which \u00a32.2m has been paid in the year with \u00a30.2m held
in creditors due for payment. The remaining addition of \u00a39.6m is in relation to the wind down of our Minerals Russia subsidiary and includes
severance, management retentions and customer penalties. Of this balance, \u00a35.3m has been cash settled in the year, with the remaining
\u00a34.3m expected to be settled in 2023.
The closing balance of \u00a35.4m includes \u00a34.3m related to Russia, \u00a30.4m in relation to capacity optimisation costs as part of the Performance
Excellence programme and \u00a30.7m for final Oil & Gas Division disposal costs related to tax and prior year Minerals Division balances for
severance and onerous contract provisions.
Other
Other provisions include environmental obligations, penalties, duties due, legal claims and other exposures across the Group. These balances
typically include estimates based on multiple sources of information and reports from third-party advisers. The timing of outflows is difficult to
predict as many of them will ultimately rely on legal resolutions and the expected conclusion is based on information currently available. Where
certain outcomes are unknown, a range of possible scenarios is calculated, with the most likely being reflected in the provision.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfProvisionsExplanatory",
"language": "en",
"entity": "scheme:549300KDR56WHY9I3D10",
"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
}
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23. DEFERRED TAX
| | |
| | |
| | |
| | |
Deferred income tax assets | | |
| | |
Decelerated depreciation for tax purposes | | |
| | |
| | |
Offset against liabilities | | |
Deferred income tax assets | | |
| | |
Deferred income tax assets attributable to: | | |
| | |
| | |
| | |
Deferred income tax liabilities | | |
Accelerated depreciation for tax purposes | | |
Overseas tax on unremitted earnings | | |
| | |
Other temporary differences | | |
| | |
| | |
Deferred income tax liabilities | | |
| | |
Deferred income tax liabilities attributable to: | | |
| | |
| | |
| | |
Net deferred income tax asset | | |
The movement in deferred income tax assets and liabilities during the year was as follows.
| | | | | | |
| | Accelerated depreciation for tax purposes | Overseas tax on unremitted earnings | | Untaxed reserves, tax losses & other temporary differences | |
| | | | | | |
| | | | | | |
Credited (charged) to the Consolidated Income Statement (note 8) | | | | | | |
(Charged) to equity (note 8) | | | | | | |
Acquisition of business (restated) | | | | | | |
| | | | | | |
| | | | | | |
At 31 December 2021 (restated) | | | | | | |
(Charged) credited to the Consolidated Income Statement (note 8) | | | | | | |
(Charged) credited to equity (note 8) | | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Untaxed reserves primarily relate to accruals/provisions for liabilities where the tax allowance is deferred until the cash expense occurs, and to
temporarily disallowed inventory/receivable provisions. Included in this balance is a deferred tax asset in relation to tax losses of \u00a339.8m (2021:
\u00a356.6m). This includes \u00a321.9m (2021: \u00a346.3m) relating to US Federal and State tax losses and \u00a310.0m (2021: \u00a37.9m) relating to UK tax losses.
Deferred tax assets of \u00a30.4m (2021: \u00a354.0m) have been recognised in respect of entities which have suffered a tax loss in either the current or
preceding period. Deferred tax assets have been recognised in these territories on the basis of forecast future profitability. Of the recognised
deferred tax assets, \u00a324.2m (2021: \u00a323.7m) of US foreign tax credits have a ten-year time expiry with the earliest expiration date being 2027,
\u00a310.3m (2021: \u00a34.5m) of US research and development tax credits have a 20-year time expiry with the earliest expiration date being 2036, and
\u00a33.6m (2021: \u00a35.4m) of US State attributes have a ten-year time expiry.
Deferred tax assets of \u00a341.2m have been recognised in relation to deferred deductions for intra-group interest in the US group.\u00a0 Within this
balance, \u00a332.7m relates to amounts previously retained off balance sheet and recognised in the year as an exceptional tax credit.
Deferred tax asset balances for unused tax losses of \u00a334.0m (2021: \u00a373.5m) have not been recognised on the grounds that there is insufficient
evidence that these assets will be recoverable. The reduction in 2022 compared to 2021 relates primarily to the recognition of the \u00a332.7m of
additional US tax attributes noted above.
Deferred tax asset balances for capital losses amounting to \u00a37.9m (2021: \u00a37.8m) have not been recognised, but would be available in the event
of future taxable capital gains being incurred by the Group.
Unrecognised assets will be recovered when future tax charges are sufficient to absorb these tax benefits.
The net deferred tax asset due after more than one year is \u00a341.1m (2021 restated: \u00a316.2m).
During 2021, the Organisation for Economic Co-operation and Development (OECD) published a framework for the introduction of a global
minimum effective tax rate of 15%, applicable to large multinational groups. On 20 July 2022, HM Treasury released draft legislation to
implement these 'Pillar 2' rules with effect for years beginning on or after 31 December 2023. The Group is reviewing these draft rules to
understand any potential impacts.
Temporary differences associated with Group investments
A deferred tax liability of \u00a36.1m (2021: \u00a37.3m) has been recognised in respect of taxes on the unremitted earnings of the South American
subsidiaries. As at 31\u00a0December 2022, this is the only recognised deferred tax liability in respect of taxes on unremitted earnings, as the Group
does not foresee a distribution of unremitted earnings from other subsidiaries or joint ventures which would result in a reversal of deferred tax.
The temporary differences associated with investments in subsidiaries and joint ventures, for which a deferred tax liability has not been
recognised, aggregate to \u00a32,531.8m (2021: \u00a32,331.9m).
There are no income tax consequences attaching to the payment of dividends by the Company to its Shareholders.
UK corporation tax rate changes
An increase in the UK rate from 19% to 25% from April 2023 was substantively enacted as part of Finance Bill 2021 (on 25 May 2021). As a
result, at 31\u00a0December 2022, deferred tax balances have been calculated at 25%.
",
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"period": "2022-01-01T00:00:00/2023-01-01T00:00:00"
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24. PENSIONS & OTHER POST-EMPLOYMENT BENEFIT PLANS
The Group operates various defined benefit pension plans in the UK and North America. All defined benefit plans are closed to new members.
The most significant defined benefit plan is the Main funded UK plan.
UK plans
At the balance sheet date, the Group has a funded defined benefit plan (the Main Plan) and an unfunded retirement benefit plan for retired
Executive Directors. The Group also operates a defined contribution plan, the contributions to which are in addition to those set out below, and
are charged directly to the Consolidated Income Statement.
For the defined benefit plans, benefits are related to service and final salary. The Main Plan closed to future accrual of benefits effective from
30 June 2015.
The weighted average duration of the expected benefit payments from the Main Plan is around 12 years.
The current funding target for the UK plans is to maintain assets equal to the value of the accrued benefits. The Main Plan holds two insurance
policies that match the liabilities in respect of a significant proportion of deferred and retired pensioners.
The regulatory framework in the UK requires the pension scheme Trustees and Group to agree upon the assumptions underlying the funding
target, and then to agree upon the necessary contributions required to recover any deficit at the valuation date. There is a risk to the Group that
adverse experience against these assumptions could lead to a requirement for the Group to make considerable contributions to recover any
deficit. This risk is significantly reduced through the insurance policies held.
North American plans
The Group also sponsors funded defined benefit pension plans in the US and Canada and certain unfunded arrangements (including post-
employment healthcare benefits for senior employees) in the US.
Following the acquisition of ESCO in 2018, these plans combined make up 22% of the Group\u2019s pension and other post-employment benefit
plan commitments and 17% of the Group\u2019s total associated assets.
The weighted average duration of these plans is around ten years.
The defined benefit plans in the UK and North America expose the Group to a number of risks.
i) Uncertainty in benefit payments
The value of the Group\u2019s liabilities for the defined benefit plans will ultimately depend on the amount of benefits paid out. This in turn will
depend on the level of inflation (for those benefits that are subject to some form of inflation protection) and how long individuals live. This risk is
significantly reduced through the insurance policies held in the UK.
ii) Volatility in asset values
The Group is exposed to future movements in the values of assets held in the funded defined benefit plans to meet future uninsured benefit
payments.
iii) Uncertainty in cash funding
Movements in the values of the obligations or assets may result in the Group being required to provide higher levels of cash funding, although
changes in the level of cash required can often be spread over a number of years. This risk is significantly reduced through the insurance
policies held. In addition, the Group is also exposed to adverse changes in pension regulation.
iv) Exchange rate movements
Movements in exchange rates will affect the value in GBP of the assets and obligations of the Group\u2019s North American defined benefit plans.
Assumptions
The significant actuarial assumptions used for accounting purposes reflect prevailing market conditions in the UK and North America and are as
follows.
| | | | |
| | North American pensions & post-retirement healthcare |
| | | | |
Significant actuarial assumptions: | | | | |
| | | | |
Retail Prices Inflation (RPI) assumption (% pa) | | | | |
| | | | |
Post-retirement mortality (life expectancies in years): | | | | |
Current pensioners at 65 \u2013 male | | | | |
Current pensioners at 65 \u2013 female | | | | |
Future pensioners at 65 \u2013 male | | | | |
Future pensioners at 65 \u2013 female | | | | |
| | | | |
Other related actuarial assumptions: | | | | |
Rate of increases for pensions in payment (% pa) | | | | |
| | | | |
Post 5 April 2006 service | | | | |
Consumer Prices Inflation (CPI) assumption (% pa) | | | | |
Rate of increase in healthcare costs | | | | |
asset' for the purposes of IAS 19 and is instead treated as a separate Group asset outside of this note. The value of these assets was
estimated at \u00a345.9m as at 31\u00a0December 2022 and are recognised in note 18.
The change in the IAS 19 funding position recognised in the Consolidated Balance Sheet is comprised as follows.
| | | | | | |
| | North American pensions & post-retirement healthcare | |
| | | | | | |
| | | | | | |
| | | | | | |
Expense charged to the Consolidated Income Statement | | | | | | |
Amount recognised in the Consolidated Statement of Comprehensive Income | | | | | | |
| | | | | | |
| | | | | | |
Closing net assets (liabilities) | | | | | | |
Current service cost and administration expenses are recognised in operating costs and interest on net pension liability is recognised in other
finance costs.
The Group\u2019s largest North American plan is the US ESCO Corporation pension plan. The Group\u2019s current funding policy for this plan is to pay the
minimum required contributions under US regulation. However, in the event the plan\u2019s funding level is projected to fall below particular
thresholds, the Group will consider funding more than the minimum required contribution.
Pension contributions are determined with the advice of independent qualified actuaries on the basis of regular valuations using the projected
unit method. The Group made special contributions of \u00a39.7m in 2022 (2021: \u00a37.8m) in addition to the Group\u2019s regular contributions.
In 2015, the Group entered into a pension funding partnership structure under which it has contributed interests in a Scottish Limited
Partnership (SLP) for the Main Plan.
The Main Plan\u2019s interests in the SLP reduce the deficit on a funding basis, although the agreement will not affect the position directly on an IAS
19 accounting basis as the investments held do not qualify as assets for IAS 19 purposes. As a partner in the SLP, the Main Plan is entitled to
receive a share of the profits of the SLP once a year for 15 years, subject to conditions being met. The profits to be shared with the Plan will be
reflected in the Group\u2019s financial statements as a pension contribution.
The latest actuarial funding valuation of the Main Plan was completed in 2022. Under the agreed recovery plan, the Group has agreed to
contribute \u00a36.2m in respect of years ending 31 December 2021 to 31 December 2029 inclusive. These contributions are primarily funded by the
income payments from the SLP described above. The contributions are subject to an annual review mechanism, and may temporarily cease if
the Main Plan's funding level on a funding basis exceeds 105%.
The Group has taken legal advice regarding its UK arrangements to confirm the accounting treatment under IFRIC 14 with regard to recognition
of a surplus and also recognition of a minimum funding requirement. This confirmed that there is no requirement to adjust the balance sheet
and that recognition of a current surplus is appropriate on the basis that the Group has an unconditional right to a refund of a current (or
projected future) surplus at some point in the future. For the same reason, there is no requirement for the Group to adjust the balance sheet to
recognise the future agreed deficit recovery contributions. Having considered the position, taking account of the legal input received and noting
that the Trustees of the UK arrangements do not have discretionary powers to unilaterally wind down the schemes without cause, the
Directors of the Group have concluded that the Group has an unconditional right to a refund of any surplus.\u00a0
The total Group contributions for 2023 (including those expected from the SLP in the UK) are expected to be \u00a312.1m.
Changes in the present value of the defined benefit obligations are analysed as follows.
| | | | | | |
| | North American pensions & post-retirement benefits | |
| | | | | | |
| | | | | | |
Opening defined benefit obligations | | | | | | |
| | | | | | |
Interest on benefit obligations | | | | | | |
| | | | | | |
Actuarial gains (losses) due to: | | | | | | |
Changes in financial assumptions | | | | | | |
Changes in demographic assumptions | | | | | | |
Experience on benefit obligations | | | | | | |
| | | | | | |
Closing defined benefit obligations | | | | | | |
Changes in the fair value of plan assets are analysed as follows.
| | | | | | |
| | North American pensions & post-retirement benefits | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Actual return on plan assets less interest on plan assets | | | | | | |
| | | | | | |
| | | | | | |
Sensitivity analysis
Changes in key assumptions can have a significant effect on the reported retirement benefit obligation and the Consolidated Income Statement
expense for 2023. The effects of changes in those assumptions on the reported retirement benefit obligation are set out in the table below.
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Effect on defined benefit obligation of a 1.0% change | | | | |
Effect on net liability of a 1.0% change | | | | |
RPI inflation (and associated assumptions) | | | | |
Effect on defined benefit obligation of a 1.0% change | | | | |
Effect on net liability of a 1.0% change | | | | |
| | | | |
Effect on defined benefit obligation of a 1 year change | | | | |
Effect on net liability of a 1 year change | | | | |
The Company has one class of ordinary share with a par value of 12.5p, which carries no rights to fixed income.
As at 31\u00a0December 2022, Computershare Investor Services PLC held the following shares, which are subject to restriction, on behalf of
individuals:
\u20220 shares (2021: 36,347) for performance shares that have vested under the LTIP.
\u2022111,314 shares (2021: 36,127) for restricted shares that have vested under the Share Reward Plan. These shares have a market value of
\u00a31.9m.
\u202224,655 shares (2021: 38,174) for bonus shares awarded under the Share Reward Plan. These shares have a market value of \u00a30.4m.
As at 31\u00a0December 2022, 888,227 shares (2021: 289,600) were unallocated and held by the Computershare Trustees (Jersey) Limited with
a\u00a0market value of \u00a314.8m.
Reserves
The period movements on the below reserves are summarised in the Consolidated Statement of Changes in Equity.
Merger reserve
The merger reserve relates to the issue of new equity as part of the consideration paid for an acquisition. Shares issued directly to ESCO
Shareholders on 12 July 2018, as part of the total acquisition consideration, qualified for merger relief under Section 612 of the Companies Act
2006 and resulted in an increase to the reserve of \u00a3323.2m. The remaining reserve balance of \u00a39.4m relates to shares issued in part
consideration for the acquisition of Delta Industrial Valves Inc. during 2015.
Capital redemption reserve
The capital redemption reserve was created by a repurchase and cancellation of own shares during the 53 weeks ended 1 January 1999.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of
foreign operations and the Group\u2019s hedge of its net investment in foreign operations. In 2021, \u00a3103.4m gain relating to Oil & Gas Division
entities was recycled to the Consolidated Income Statement on disposal.
Hedge accounting reserve
This reserve records the portion of the gains or losses on hedging instruments used as cash flow hedges that are determined to be effective.
Net gains (losses) transferred from equity during the year are included in the following line items in the Consolidated Income Statement and
Consolidated Balance Sheet.
A total of 15,080 awards (2021: 10,980) were issued to new employees under the Weir ShareBuilder Plan in the year.
In respect of awards issued in the year and revised estimates of previously issued awards, under the SRP and Weir ShareBuilder, an amount of
\u00a38.0m has been charged (2021: \u00a310.9m) to the Consolidated Income Statement in respect of the number of awards that are expected to be
made at the end of the vesting period.
The remaining contractual lives of the outstanding SRP, Weir ShareBuilder and one-off conditional share awards at the end of the period are
as\u00a0follows.
| | | | |
| | | | |
| Number\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 million | Remaining contractual life* | Number\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 million | Remaining contractual life* |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
*Remaining contractual life reflects an average across awards with one to five year vesting periods.
The fair value at date of grant of the conditional awards has been independently estimated for both the Restricted shares and Weir ShareBuilder
awards. The grant date fair value of these awards is calculated as the share price at the date of grant less an adjustment for loss of
reinvestment return on the dividend equivalent. There are no performance conditions attached to these awards.
The fair value of occasional one-off conditional awards at grant date is also estimated on this basis.
Bonus shares
Under the Group\u2019s annual bonus plan, Executive Directors and members of the Group Executive defer 30% of any bonus received into an
award of Weir Group shares, which will normally be released after three years. These awards are entitled to receive the value of the dividends
paid by the Company during the three-year holding period or to have dividend equivalents added in the form of shares at each vesting date.
The SRP bonus shares are administered by Computershare Trust Company, N.A., CPU Share Plans Pty Ltd and Computershare Investor
Services PLC. The shares are acquired on market at the grant date and are held in Computershare Trust Company, N.A., CPU Share Plans Pty
Ltd and Computershare Investor Services PLC until such time as they are vested. Forfeited shares are reallocated in subsequent grants. Under
the terms of the Trust Deed, Weir Group is required to provide the necessary funding for the acquisition of the shares at the time of the grant.
The number of shares to be granted is determined based on the applicable annual bonus divided by the average share price for the three days
immediately prior to the date of the grant or the number of shares purchased in the stock market with the applicable annual bonus. In 2022,
33,677 shares were awarded (2021: 5,049).
The fair value of the rights at grant date was estimated by taking the market price of the Company\u2019s shares on that date.
",
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"f-472": {
"value": "
29. RELATED PARTY DISCLOSURE
The following table provides the total amount of significant transactions that have been entered into by the Group with related parties for the
relevant financial year and outstanding balances at the year end.
| | | | | | |
| | Sales to related parties - goods | Sales to related parties - services | Purchases from related parties - goods | Amounts owed to related parties | Amounts owed by related parties |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Contributions to the Group pension plans are disclosed in note 24.
Terms & conditions of transactions with related parties
Sales to and from related parties are made at normal market prices. Outstanding balances at the period end are unsecured and settlement
occurs in cash. There have been no guarantees provided or received for any related party balances. For 2022, the Group has not raised any
provision for doubtful debts relating to amounts owed by related parties (2021: \u00a3nil) as the payment history has been excellent and there is no
forward-looking information that suggests there will be any issues affecting the ability for future settlement. This assessment is undertaken
each financial year through examining the financial position of the related party and the market in which the related party operates.
| | |
| | |
Compensation of key management personnel | | |
Short-term employee benefits | | |
| | |
| | |
| | |
| | |
| | |
Emoluments paid to the Directors of The Weir Group PLC | | |
| | |
Gains made on the exercise of Long Term Incentive Plan awards | | |
| | |
B. Financial assets and liabilities
Financial assets and liabilities (with the exception of derivative financial instruments) are initially recognised at fair value net of transaction costs.
Subsequently they are recognised at either fair value or amortised cost. Derivative financial instruments are initially recognised at fair value and
subsequently remeasured at fair value.
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or
indirectly; and
Level 3: Techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
During the years ended 31\u00a0December 2022 and 31\u00a0December 2021, there were no transfers between level 1 and level 2 fair value
measurements and no transfers into or out of level 3 fair value measurements.
Offsetting
Financial assets and liabilities are offset and the net amount reported in the balance sheet where the Group currently has a legal right to offset
the recognised amounts, and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
As at 31\u00a0December 2022, cash and short-term deposits of \u00a3691.2m (2021: \u00a3564.4m) and current interest-bearing loans and borrowings of
\u00a3406.3m (2021 restated: \u00a3524.1m) were presented after elimination of debit and credit balances within individual pools of \u00a3nil (2021: \u00a30.2m).
The Group operates a notional cash pooling arrangement in which individual balances are not offset for reporting purposes. Cash and short-term
deposits at 31 December 2022 includes \u00a3206.9m (2021: \u00a360.5m) that is part of this arrangement and both cash and interest-bearing loans and
borrowings are grossed up by this amount.
The Group has also entered into arrangements that do not meet the criteria for offsetting, but still allow for the related amounts to be offset in
specific circumstances. As at 31\u00a0December 2022, the Group had derivative financial instruments of \u00a34.5m (2021: \u00a32.6m) which were subject to
master netting arrangements, but not offset.
Carrying amounts and fair values
The table below shows the carrying amounts and fair values of the Group\u2019s financial instruments that are reported in the financial statements.
| | | | | |
| | | Fair value measurement using |
| | | Level 1 Quoted prices in active markets | Level 2 Significant observable inputs | Level 3 Significant unobservable inputs |
| | | | | |
| | | | | |
Financial assets - total Group | | | | | |
Derivative financial instruments recognised at fair value through profit or loss | | | | | |
Derivative financial instruments in designated hedge accounting relationships | | | | | |
Trade & other receivables excluding statutory assets, prepayments & construction contract assets | | | | | |
Cash & short-term deposits | | | | | |
| | | | | |
| | | | | |
Financial liabilities - total Group | | | | | |
Derivative financial instruments recognised at fair value through profit or loss | | | | | |
Derivative financial instruments in designated hedge accounting relationships | | | | | |
Deferred consideration payable | | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Trade & other payables excluding statutory liabilities & contract liabilities | | | | | |
| | | | | |
The fair value of lease liabilities is disclosed in line with the carrying value, which is estimated by discounting future cash flows using the rate
implicit in the lease or the Group\u2019s incremental borrowing rate. The fair value of cash and short-term deposits, trade and other receivables and
trade and other payables approximates their carrying amount due to the short-term maturities of these instruments. As such, disclosure of the
fair value hierarchy for these items is not required.
C. Hedging activities
The Group designates certain derivative financial instruments in either cash flow hedging or net investment hedging relationships in accordance
with IFRS 9.
| | |
| | |
| Cash flow hedge of highly probable forecast foreign currency purchases and sales | Net investment hedge of foreign operations |
| Transactional foreign exchange risk | Translational foreign exchange risk |
| Forward foreign currency contracts | Foreign currency debt Forward foreign currency contracts |
| | |
| | |
Year ended 31 December 2021 | | |
Forward foreign currency contracts designated as cash flow hedges | | |
Other forward foreign currency contracts at fair value through profit or loss | | |
| | |
| | | | |
| Amounts recognised in profit or loss | Amounts recognised in equity |
| Other gains (losses) in operating profit | Total amounts recognised in profit or loss | | Foreign currency translation reserve |
Year ended 31 December 2021 | | | | |
Instruments measured at FVTPL | | | | |
Designated in hedge accounting relationships | | | | |
Forward foreign currency contracts designated as cash flow hedges | | | | |
Forward foreign currency contracts designated as net investment hedges | | | | |
Cross-currency swaps designated as net investment hedges | | | | |
Not designated in hedge accounting relationships | | | | |
Other forward foreign currency contracts at FVTPL | | | | |
Total gains/(losses) on instruments measured at FVTPL | | | | |
*The foreign currency forwards are denominated in the same currency as the highly probable future transactions, therefore the hedge ratio is 1:1.
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Net investment hedging: foreign currency forwards and borrowings | | |
Carrying amount (\u00a3m) | | |
Liabilities - derivatives | | |
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Change in fair value of outstanding hedging instruments since 1 January (\u00a3m) | | |
Change in value of hedged item used to determine hedge effectiveness (\u00a3m) | | |
*The derivatives and borrowings are denominated in the same currency as the highly probable future transactions, therefore the hedge ratio is 1:1.
D. Financial risk management
Financial risk management of the Group is carried out by Group Treasury in conjunction with individual subsidiaries. The principal financial risks
to which the Group is exposed are market risk, liquidity risk and credit risk.
Market risk
The Group is exposed to foreign exchange risk and interest rate risk in the ordinary course of business.
i)Foreign exchange risk
The Group is exposed to both transactional and translational foreign exchange risk. Transactional risk arises when subsidiaries enter into
transactions denominated in currencies other than their functional currency for operational or financing purposes or when the Group\u2019s Treasury
function enters into transactions for financing or risk management purposes. Translational risk arises on the translation of overseas earnings
and investments into Sterling for consolidated reporting purposes. Foreign currency transactional and translational risk could result in volatility in
reported consolidated earnings and net assets.
In respect of transactional foreign currency risk, the Group maintains a policy that all operating units eliminate exposures on committed foreign
currency transactions, usually by entering into forward foreign currency contracts through the Group\u2019s Treasury function. Certain operating units
apply cash flow hedge accounting in accordance with IFRS 9. The Group does not engage in any speculative foreign exchange transactions.
The Group has material foreign investments in the US, Australia, Canada, Europe, South America and South Africa. In respect of translational
risk, the Group has a policy of partially hedging its net investment exposure to US Dollar (US$). This is achieved through designating an element
of US$ denominated borrowings and forward currency contracts as net investment hedges against the Group\u2019s investments. The Group does
not hedge the translational exposure arising from profit and loss items.
Sensitivity to foreign exchange rates
The Group considers the most significant transactional foreign exchange risk relates to the US Dollar, Australian Dollar, Chinese Yuan and
Canadian Dollar. The following table shows the impact of movements in derivative valuation as a result of a weakening of these currencies.
In\u00a0the Consolidated Income Statement, these amounts are partially offset by the retranslation of foreign currency denominated receivables
and\u00a0payables.
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| Increase in currency rate | Effect on profit gain (loss) | Effect on equity gain (loss) |
Transactional foreign exchange | | | |
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The Group is also exposed to translational foreign exchange risk as a result of its global operations and therefore the earnings of the Group will
fluctuate due to changes in foreign exchange rates in relation to Sterling. The Group\u2019s operating profit before adjusting items from continuing
operations was denominated in the following currencies.
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Adjusted operating profit | | |
Sensitivity to interest rates
Based on borrowings at 31\u00a0December 2022, a 1% increase in interest rates would have a \u00a33.4m (2021: \u00a3nil) impact on the profit before tax and
amortisation of the Group. This assumes that the change in interest rates is effective from the beginning of the period and that all other
variables are constant throughout the period.
Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its financial liabilities as they fall due.
Liquidity risk is managed by monitoring forecast and actual cash flows and ensuring that sufficient committed facilities are in place to meet
possible downside scenarios. The Group\u2019s objective is to maintain a balance between continuity of funding and flexibility through the use of
fixed-rate loan notes, bank loans and bank overdrafts. Further details of the Group\u2019s borrowing facilities are disclosed in note 20.
The tables below show only the financial liabilities of the Total Group by maturity. The amounts disclosed in the table are undiscounted cash
flows and may therefore not agree to the amounts disclosed in the Consolidated Balance Sheet.
The Group manages its liquidity to ensure that it always has sufficient funding to grow the business and is able to meet its obligations as they
fall due.
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Year ended 31 December 2022 | | | | | |
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Forward foreign currency contracts - net outflow | | | | | |
Cash flows relating to derivative financial liabilities | | | | | |
Trade & other payables excluding statutory liabilities & deferred income | | | | | |
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Cash flows relating to non-derivative financial liabilities | | | | | |
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