AGA Aga Rangemaster

 
TIDMAGA 
 
AGA RANGEMASTER GROUP PLC (the "Company") 
ANNUAL FINANCIAL REPORT - DTR 6.3.5 Disclosure 
 
Following the release on 13 March 2009 of the Company's Preliminary Results 
Announcement for the financial year ended 31 December 2008 (the "Preliminary 
Announcement"), the Company announced on 27 March 2009 that the 2008 Annual 
Report and Accounts, the Notice of Annual General Meeting and Form of Proxy for 
the 2009 Annual General Meeting had been published. These documents were 
despatched to shareholders on 27 March 2009 and made publicly available on the 
Aga Rangemaster Group plc website (www.agarangemaster.com). The direct link to 
the pdf file is: www.agarangemaster.com/Siteimages/Site_301/Pdf/ 
2008ReportAndAccounts.pdf 
 
In compliance with 9.6.1  of the Listing Rules, on 27 March 2009 the Company 
submitted to the UK Listing Authority two copies of the 2008 Annual Report and 
Accounts, the Notice of Annual General Meeting and the Form of Proxy for the 
2009 Annual General Meeting. Printed copies of the documents may be obtained by 
writing to the Company Secretary, Aga Rangemaster Group plc, Juno Drive, 
Leamington Spa, Warwickshire CV31 3RG. 
 
In accordance with paragraph 6.3.5 (2) (b) of the Disclosure and Transparency 
Rules (DTR) additional information is set out in the appendices to this 
announcement. 
 
The Preliminary Announcement includes an indication of the important events 
that occurred during the year, a condensed set of the financial statements and 
confirmation that the Company's auditor had reported on the accounts and its 
reports were unqualified and did not contain any statements under section 237 
(2) or (3) of the Companies Act 1985. The Independent Auditor's Report on the 
Group financial statements is set out in full on page 69 of the 2008 Annual 
Report and Accounts and the Independent Auditor's Report on the parent company 
financial statements is set out in full on page 77 of the 2008 Annual Report 
and Accounts. 
 
References to page numbers and notes to the accounts set out in the Appendices 
below refer to page numbers and notes to the accounts in the Company's 2008 
Annual Report and Accounts. 
 
APPENDIX A - DIRECTORS' RESPONSIBILITY STATEMENT 
 
The 2008 Annual Report and Accounts contain a responsibility statement in 
compliance with paragraph 4.1.12 of the DTR signed by order of the Board by 
William McGrath, Chief Executive and Shaun Smith, Finance Director. The 
directors' responsibility statement is set out on page 38 of the 2008 Annual 
Report and Accounts for the Group. This statement is set out below in full and 
unedited text. This states that on 13 March 2009, the date of approval of the 
2008 Annual Report and Accounts: 
 
"Each of the directors (whose names and functions are referred to on page 23 of 
the 2008 Annual Report and Accounts) confirm that to the best of their 
knowledge: 
 
* the Group financial statements, prepared in accordance with IFRS as adopted 
by the EU and the Company financial statements prepared under UK GAAP, have 
been followed and give a true and fair view of the assets, liabilities, 
financial position and profit of the Group and the Company and; 
 
* the chief executive's review, which is incorporated into the directors' 
report, includes a fair review of the development and performance of the 
business and the position of the Group and the Company, together with a 
description of the principal risks and uncertainties they face." 
 
The directors' responsibility statement is set out on page 76 of the 2008 
Annual Report & Accounts for the parent company. This statement is set out 
below in full and unedited text: 
 
"The following statement, which should be read in conjunction with the 
statement of auditors' responsibilities set out on page 77, is made with a view 
to distinguishing the respective responsibilities of the directors and of the 
auditors in relation to the accounts. 
 
The directors are required to prepare financial statements for each financial 
year which comply with the provisions of the Companies Act 1985 and give a true 
and fair view of the state of affairs of the Company as at the end of the 
financial year and of the profit or loss for that year. 
 
The directors consider that in preparing the financial statements on a 
going-concern basis, the Company has used appropriate accounting policies, 
consistently applied and supported by reasonable and prudent judgements and 
estimates, and that all accounting standards which they consider to be 
applicable have been followed. 
 
The directors are responsible for ensuring that the Company maintains 
accounting records which disclose with reasonable accuracy the financial 
position of the Company and which enable them to ensure that the financial 
statements comply with the Companies Act 1985. 
 
The directors are responsible for taking such steps as are reasonably open to 
them to safeguard the assets of the Company and to prevent and detect fraud and 
other irregularities." 
 
APPENDIX B - RISKS AND UNCERTAINTIES 
 
The principal risks and uncertainties are set out pages 16 to 18 of the 2008 
Annual Report and Accounts. The full and unedited text relating to these 
disclosures are set out below: 
 
"In order to achieve our business objectives, the Group must respond 
effectively to the associated risks. The Group has established risk management 
procedures, involving the identification and monitoring of operational, 
regulatory, financial and market driven factors, at various levels throughout 
the business. The Group takes a proactive approach to managing risk and our 
risk management processes are further described on pages 29 and 30. These 
processes also help to identify business, product and performance 
opportunities. The board and the executive management committee regularly 
review material risks identified. However, it is not possible to mitigate fully 
all risks that the Group encounters. 
 
This section highlights a number of potential risks and uncertainties which 
could have a material impact on the Group's long-term performance and 
achievement of its strategy. Risks listed do not compose all risks faced by the 
Group and are not in any order of priority. 
 
In current economic conditions with major financial imbalances and large 
commercial organisations seeing unprecedented difficulties, the impact on the 
Group can be sudden and material. This makes awareness and flexibility key to 
mitigating risks in rapidly changing conditions and important in identifying 
relevant business opportunities. 
 
Economic and market conditions 
 
The Group derives most of its revenues from sales of consumer appliances and 
other household products. Financial and operating performance depends, on 
factors which affect the level of consumer and retail spending. The economic 
environment, unemployment levels, interest rates, consumer debt levels, the 
availability of credit and many other factors including changes in consumer 
preferences and trends can influence consumer spending decisions. 
 
The board recognizes the need to monitor economic changes and market conditions 
in order to react in the best interest of the Group. 
 
Competitive environment 
 
The markets in which the Group competes are fragmented and many of the Group's 
competitors are larger than ourselves with potentially more resources. The 
Group is subject to their competitive actions and, although the Group believes 
that the performance and price characteristics of its products provide 
competitive solutions for its customers' needs, there can be no assurance that 
existing customers will continue to choose its products over products offered 
by competitors. The Group continues to monitor developments in the markets in 
which it operates, its key competitors and their strategies and it develops its 
strategy to mitigate these risks. 
 
Suppliers and supply chain management 
 
The Group is dependent on its supply base for raw materials, utilities and some 
components. Volatility and changes in the pricing and availability of these 
could have a significant impact on the Group's results. In particular, the 
prices of steel and utilities have been extremely volatile in recent years. 
However, there can be no assurance that the Group will continue to secure 
supply of these commodities on the same pricing and other terms as currently 
supplied. In the current market conditions this can be difficult. The Group 
continually reviews its supply chain and where possible has identified multiple 
sources of supply and/or contingency plans. The procurement teams continue to 
monitor suppliers to ensure they have the ability to meet demand; they remain 
price competitive and provide assurance on the quality of goods being supplied. 
 
Dividend payments 
 
The dividend policy is kept under review as performance levels change. The 
ability of the Company to pay dividends on the ordinary shares in the normal 
course is dependent on its profitability, trading performance, actual and 
potential liabilities and the extent to which, as a matter of law, it has 
available to it sufficient distributable reserves out of which any proposed 
dividend may be paid. The Company's ability to pay dividends is also dependent 
upon receipt by it of dividends and other distributions from subsidiaries. 
Further returns of cash other than in the ordinary course are subject to 
agreement with the Trustee of the Group's main United Kingdom pension scheme. 
 
Pension scheme funding 
 
The value of the assets and liabilities of the Aga Rangemaster Group's defined 
benefit pension schemes is significant compared to the market capitalisation of 
the Company. As at 31st December 2008, the schemes were in overall surplus on 
an IAS 19 basis. Further details are set out in note 5 to the accounts. The 
next full actuarial valuation of the Group's main United Kingdom scheme is 
being carried out by the Trustee of the scheme as at 31st December 2008, and 
the results of this valuation are expected to be known, by no later than the 
end of June 2010. Pension scheme valuations can be impacted from time to time 
by a number of factors, including falls in the market value of scheme assets, 
the expectation of lower returns on investments or of higher rates of inflation 
and further improvements in life expectancies. The level of risk associated 
with market movements is significant even though the scheme has matched assets 
and liabilities to a greater extent than many schemes. The Company works 
closely with the scheme trustees and specialist advisers in managing the 
inherent risks of such schemes, and the Company and the Trustee of the Group's 
main United Kingdom scheme have put in place a long-term funding and investment 
strategy agreement which aims to move the scheme systematically to a self 
sufficiency funding position by 2020. There is a risk that the Company may need 
to add to the level of bank guarantees provided in the period up to 2020 or to 
make further substantial contributions to the defined benefit pension schemes 
in the future. 
 
Effect of legislation or other regulatory action 
 
The Group is subject to various laws and regulations around the world and 
operates in sectors which may be affected by changes in the regulatory 
environment. Failure to comply with laws and regulations, including health and 
safety and environmental regulations, taxation, operational and competition 
matters could impose additional costs on, or have an adverse impact on the 
performance of or damage the reputation of the businesses carried on by the 
Group. 
 
Divestments 
 
Following the sale of the pipe systems and the foodservice businesses and 
Domain home furnishing business, along with some smaller divestments, there 
remains some potential for legacy claims. The sale and purchase agreements 
governing the sales of these businesses contain certain warranties and 
indemnities in favour of the purchasers and suitable provisions have been made. 
Indemnities cover the potential costs of litigation relating to the price at 
which certain minority shareholders in Friatec, a business acquired in 1998, 
were purchased. 
 
Intellectual property 
 
The Group relies on confidential know how, patents, trademarks, copyrights and 
design rights to protect proprietary technology and other rights relating to 
our renowned brands and trading styles. We monitor market developments closely 
to identify potential violations of our proprietary rights without 
authorisation and take appropriate legal action where this option is available. 
 
Treasury policy 
 
The Group operates a central treasury which operates in accordance with a 
treasury policy and procedures manual setting out guidelines for managing 
foreign exchange, interest rate, credit risk and financial instruments to be 
used in managing these risks. 
 
The objective of the treasury policy is to manage the Group's financial risk 
and to ensure that adequate financial resources are available for the 
development of the business. The Group's treasury strategy, policy and controls 
are approved by the board. Further details of the main financial risks are set 
out in note 19 to the accounts. 
 
Currency 
 
The Group's main transaction exposures are in respect of products manufactured 
in one currency region and sold in another currency and exposure through the 
movement in exchanges rates on purchases of raw materials and other goods that 
are not denominated in sterling. These are mainly imports from Asia and the US 
which are denominated in US Dollars and imports from Europe which are 
denominated in Euros. These currency outflows are offset by inflows of US 
Dollars relating to UK exports to US markets and inflows of Euros in respect of 
UK exports to the eurozone respectively. The main translation risk is that the 
results of non-UK businesses will translate into differing sterling values 
depending on the exchange rate. Further details relating to financial 
instruments are set out in note 19 to the accounts. 
 
The treasury policy sets out a framework through which the majority of the 
Group's forecast foreign currency transactions are hedged. 
 
Liquidity and funding risk 
 
The Group's funding objective is to have sufficient long-term committed 
facilities, in addition to uncommitted facilities and finance lease agreements, 
to meet its funding needs. An analysis of the Group's facilities is detailed in 
note 19 to the accounts. 
 
The Group maintains relationships with several large financial institutions. 
The Group's committed loan facilities have two principal financial covenants, 
interest cover and net debt : EBITDA. The Group complied with them at the end 
of the year. 
 
The Group has sound and long established arrangements in place with its 
relationship banks who offer committed and uncommitted facilities, which 
together with cash surpluses, provide adequate funding for the Group's 
operations. In the ordinary course, no committed facilities are due for renewal 
until 2010. New facilities, if required are expected to be available from 
existing lenders although this cannot be assured in light of the current market 
conditions. 
 
Trade credit 
 
Trade credit is less readily available following the deterioration in the 
financial sector. The Group monitors closely the availability of trade finance 
to its customers and suppliers - given the constraint on the business this can 
become. 
 
The ability for the Group and its principal operating businesses to maintain 
trade credit insurance on our customers is a significant issue for the Group. 
Where insurers inform us it is their intention to withdraw or reduce trade 
credit insurance cover on our customers we undertake detailed analysis on 
commercial and financial information available to us to establish whether we 
are able to continue to trade. 
 
In addition, the ability of our suppliers to maintain credit insurance on the 
Group and its principal operating businesses is an important issue. We have 
excellent relationships with our suppliers and we continue to work closely with 
them on a normal commercial basis. A reduction in the level of cover available 
to suppliers may impact on our trading relationship with them and may have a 
significant effect on cash flows. 
 
Possible volatility of the price of shares in the Company 
 
The market price of the ordinary shares may be affected by a variety of factors 
including, but not limited to, all of the factors set out above. Shareholders 
should be aware that the value of the ordinary shares can decrease as well as 
increase and may not always reflect the underlying asset value or prospects of 
the Group." 
 
APPENDIX C - RELATED PARTY TRANSACTIONS 
 
The related party transactions are set out in note 29 to the Group accounts on 
page 68 of the 2008 Annual Report and Accounts. The full and unedited text 
relating to these disclosures are set out below: 
 
"The Group recharges the Group pension scheme with the cost of administration 
and independent advisers paid by the Group. The total amount recharged in the 
year to 31st December 2008 was GBP0.2m (2007: GBP0.2m). The amount outstanding at 
the year end was GBPnil (2007: GBPnil). 
 
Directors' compensation 
 
Details of the directors' compensation, share options, Long-Term Incentives and 
pensions are set out in the remuneration report on pages 32 to 37. 
 
Key management's compensation 
 
The compensation for the key management team at the balance sheet date is set 
out below: 
 
                                                                 2008       2007 
                                                                   GBPm         GBPm 
 
Salaries and short-term benefits                                  0.7        0.5 
Post employment benefits                                          0.1          - 
Share based payments                                                -        0.2 
Contributions to defined benefit contribution plans                 -        0.1 
                  _____________________________________________________________ 
 
Total emoluments to key management                                0.8        0.8 
                  _____________________________________________________________ 
 
In respect of the parent company, the related party transactions are set out in 
note 14 to the parent company accounts on page 76 of the 2008 Annual Report and 
Accounts. The full and unedited text relating to these disclosures are set out 
below: 
 
"The Company has taken advantage of the exemption permitted by FRS 8 not to 
disclose any transactions or balances with entities that are 90% or more 
controlled by the Aga Rangemaster Group plc." 
 
 
END 
 

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