UNITED STATES SECURITIES AND EXCHANGE COMMISSION
(Mark One) | WASHINGTON, D.C. 20549 |
FORM 20-F
¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2015
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
OR
¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
Commission file number: 001-32846
CRH public limited company
(Exact name of Registrant as specified in its charter)
Republic of Ireland
(Jurisdiction of incorporation or organisation)
Belgard Castle, Clondalkin, Dublin 22, Ireland
(Address of principal executive offices)
Senan Murphy
Tel: +353 1 404 1000
Fax: +353 1 404 1007
Belgard Castle, Clondalkin, Dublin 22, Ireland
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of Each Class | Name of Each Exchange On Which Registered | |
CRH plc | ||
Ordinary Shares/Income Shares of 0.34 each | The New York Stock Exchange* | |
American Depositary Shares, each representing the right to receive one | The New York Stock Exchange | |
Ordinary Share | ||
CRH America Inc. | ||
4.125% Notes due 2016 guaranteed by CRH plc | The New York Stock Exchange | |
6.000% Notes due 2016 guaranteed by CRH plc | The New York Stock Exchange | |
8.125% Notes due 2018 guaranteed by CRH plc | The New York Stock Exchange | |
5.750% Notes due 2021 guaranteed by CRH plc | The New York Stock Exchange |
* | Not for trading but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission. |
Securities registered or to be registered pursuant to Section 12(g) of the Act. None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None
Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report.
Ordinary Shares/Income Shares of 0.34 each ** |
823,911,253 | |||
5% Cumulative Preference Shares of 1.27 each |
50,000 | |||
7% A Cumulative Preference Shares of 1.27 each |
872,000 |
** | Each Income Share is tied to an Ordinary Share and may only be transferred or otherwise dealt with in conjunction with such Ordinary Share. |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes X No ¨
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ¨ No X
Note Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).*** Yes ¨ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer X Accelerated filer ¨ Non-accelerated filer ¨
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ¨ | International Financial Reporting Standards as issued by the | Other ¨ | ||
International Accounting Standards Board X |
If Other has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ¨ Item 18 ¨
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No X
*** This requirement does not yet apply to the registrant.
CRH Annual Report on Form 20-F | 2015
CRH plc Annual Report on Form 20-F
in respect of the year ended 31 December 2015
CRH Annual Report on Form 20-F | 2015
Cross Reference to Form 20-F Requirements
This table has been provided as a cross reference from the information included in this Annual Report to the requirements of this 20-F.
1 |
CRH Annual Report on Form 20-F | 2015
Our business
CRH creates value by maintaining a balanced portfolio. Our product mix spans the breadth of building materials demand and sectoral end-use, thereby minimising exposure to any one single demand driver. In addition, the Group offsets cyclical economic risk by maintaining a geographically diversified portfolio across its key regions of North America and Europe, as well as in the emerging regions of Asia and South America. |
Heavyside Materials
|
||||
Aggregates crushed stone
Cement primary binding agent
Asphalt road and highway surfaces
Readymixed Concrete pourable pre-mixed, aggregates, cement and water based compound
Precast Concrete structural floors, beams, vaults
Architectural Concrete blocks, bricks, pavers |
||||
Lightside Products
|
||||
Glass & Glazing Systems engineered products for external and internal use
Construction Accessories engineered fixing, connecting and anchoring solutions
Shutters & Awnings solar shading, terrace roof and window protection solutions
Fencing & Security outdoor security and protection systems
Cubis composite access chambers |
||||
Building Materials Distribution
|
||||
Builders Merchants channel for distribution of building materials to the professional contractor
SHAP specialist distribution of sanitary, heating and plumbing products
DIY providing decorative and home improvement products to the consumer |
2 |
CRH Annual Report on Form 20-F | 2015
CRH at a glance
CRH plc is a leading global diversified building materials group, employing 89,000 people at over 3,900 operating locations in 31 countries worldwide.
CRH is a top two building materials company globally and the largest in North America. The Group has leadership positions in Europe as well as established strategic positions in the emerging economic regions of Asia and South America.
CRH is committed to improving the built environment through the delivery of superior materials and products for the construction and maintenance of infrastructure, residential and commercial projects.
A Fortune 500 company, CRH is listed in London and Dublin and is a constituent member of the FTSE100 and the ISEQ 20 indices. CRHs American Depositary Shares are listed on the New York Stock Exchange. CRHs market capitalisation at 31 December 2015 was approximately 22 billion.
|
||
Our vision:
To be the leading building materials business in the world
|
||
2015 Performance highlights
|
23.6 billion | 1.0 billion | |||||||
Sales | Profit Before Tax | |||||||
2.2 billion | 89.1 cent | |||||||
EBITDA (as defined)* | Earnings Per Share | |||||||
1.3 billion | 62.5 cent | |||||||
Operating Profit | Dividend Per Share | |||||||
* Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
3 |
4 |
CRH Annual Report on Form 20-F | 2015
5 |
6 |
7 |
CRH Annual Report on Form 20-F | 2015
Introduction and Performance Measures
Reconciliation of EBITDA (as defined)* and Operating Profit (by segment) to Group Profit
|
| |||||||||||||||||||||||||||||||||||
Year ended 31 December | ||||||||||||||||||||||||||||||||||||
Group operating profit before | ||||||||||||||||||||||||||||||||||||
depreciation and amortisation | Depreciation, amortisation | |||||||||||||||||||||||||||||||||||
(EBITDA (as defined)*) | and impairment | Group operating profit(i) | ||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||
m | m | m | m | m | m | m | m | m | ||||||||||||||||||||||||||||
Europe Heavyside | 334 | 380 | 326 | 199 | 229 | 721 | 135 | 151 | (395) | |||||||||||||||||||||||||||
Europe Lightside | 100 | 94 | 71 | 25 | 23 | 43 | 75 | 71 | 28 | |||||||||||||||||||||||||||
Europe Distribution | 171 | 190 | 186 | 77 | 78 | 80 | 94 | 112 | 106 | |||||||||||||||||||||||||||
Europe | 605 | 664 | 583 | 301 | 330 | 844 | 304 | 334 | (261) | |||||||||||||||||||||||||||
Americas Materials | 912 | 609 | 557 | 301 | 254 | 331 | 611 | 355 | 226 | |||||||||||||||||||||||||||
Americas Products | 391 | 263 | 246 | 142 | 118 | 178 | 249 | 145 | 68 | |||||||||||||||||||||||||||
Americas Distribution | 140 | 105 | 89 | 29 | 22 | 22 | 111 | 83 | 67 | |||||||||||||||||||||||||||
Americas | 1,443 | 977 | 892 | 472 | 394 | 531 | 971 | 583 | 361 | |||||||||||||||||||||||||||
LH Assets | 171 | - | - | 169 | - | - | 2 | - | - | |||||||||||||||||||||||||||
Total Group | 2,219 | 1,641 | 1,475 | 942 | 724 | 1,375 | 1,277 | 917 | 100 | |||||||||||||||||||||||||||
Profit on disposals | 101 | 77 | 26 | |||||||||||||||||||||||||||||||||
Finance costs less income | (295) | (246) | (249) | |||||||||||||||||||||||||||||||||
Other financial expense | (94) | (42) | (48) | |||||||||||||||||||||||||||||||||
Share of equity accounted investments profit/(loss) | 44 | 55 | (44) | |||||||||||||||||||||||||||||||||
Profit/(loss) before tax | 1,033 | 761 | (215) | |||||||||||||||||||||||||||||||||
Income tax expense | (304) | (177) | (80) | |||||||||||||||||||||||||||||||||
Group profit/(loss) for the financial year | 729 | 584 | (295) | |||||||||||||||||||||||||||||||||
(i) Throughout this document, Group operating profit as shown in the Consolidated Financial Statements excludes profit on disposals.
|
| |||||||||||||||||||||||||||||||||||
Calculation of EBITDA (as defined)* Net Interest Cover
|
| |||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||
m | m | m | ||||||||||||||||||||||||||||||||||
Interest | ||||||||||||||||||||||||||||||||||||
Finance costs(i) | 303 | 254 | 262 | |||||||||||||||||||||||||||||||||
Finance income(i) | (8) | (8) | (13) | |||||||||||||||||||||||||||||||||
Net interest | 295 | 246 | 249 | |||||||||||||||||||||||||||||||||
EBITDA (as defined)* | 2,219 | 1,641 | 1,475 | |||||||||||||||||||||||||||||||||
Times | ||||||||||||||||||||||||||||||||||||
EBITDA (as defined)* net interest cover (EBITDA (as defined)* divided by net interest) | 7.5 | 6.7 | 5.9 |
(i) | These items appear on the Consolidated Income Statement on page 156. |
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
8 |
CRH Annual Report on Form 20-F | 2015
Sales and EBITDA (as defined)* from continuing operations | ||||||||||||||||||||||||||||||||||||||||
Sales | 2014 | 2015 |
||||||||||||||||||||||||||||||||||||||
As bn |
Exclude bn |
Exclude bn |
Continuing bn |
As bn |
Exclude bn |
Exclude bn |
Continuing bn |
% change continuing operations |
||||||||||||||||||||||||||||||||
Europe | 8.8 | (0.5) | | 8.3 | 8.7 | (0.1) | | 8.6 | 3% | |||||||||||||||||||||||||||||||
Americas | 10.1 | (0.6) | | 9.5 | 12.5 | (0.2) | | 12.3 | 30% | |||||||||||||||||||||||||||||||
Subtotal |
18.9 | (1.1) | | 17.8 | 21.2 | (0.3) | | 20.9 | 17% | |||||||||||||||||||||||||||||||
LH Assets |
| 2.4 | ||||||||||||||||||||||||||||||||||||||
Total Group |
18.9 | 23.6 |
EBITDA (as defined)* |
2014 | 2015 |
||||||||||||||||||||||||||||||||||||||
As m |
Exclude m |
Exclude m |
Continuing m |
As m |
Exclude m |
Exclude m |
Continuing m |
% change continuing operations |
||||||||||||||||||||||||||||||||
Europe |
664 | (70) | 15 | 609 | 605 | (11) | 41 | 635 | 4% | |||||||||||||||||||||||||||||||
Americas |
977 | (38) | 27 | 966 | 1,443 | (1) | 14 | 1,456 | 51% | |||||||||||||||||||||||||||||||
Subtotal |
1,641 | (108) | 42 | 1,575 | 2,048 | (12) | 55 | 2,091 | 33% | |||||||||||||||||||||||||||||||
LH Assets |
| 171 | ||||||||||||||||||||||||||||||||||||||
Total Group |
1,641 | 2,219 |
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
9 |
CRH Annual Report on Form 20-F | 2015
Introduction and Performance Measures | continued
10 |
CRH Annual Report on Form 20-F | 2015
|
||||||||||||||||||||
Year ended 31 December (amounts in millions, except per share data and ratios)
|
|
|||||||||||||||||||
2015 | 2014 | 2013(i) | 2012(ii) | 2011(ii) | ||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Consolidated Income Statement Data | ||||||||||||||||||||
Revenue | 23,635 | 18,912 | 18,031 | 18,084 | 18,081 | |||||||||||||||
Group operating profit | 1,277 | 917 | 100 | 805 | 871 | |||||||||||||||
Profit/(loss) attributable to equity holders of the Company | 724 | 582 | (296) | 538 | 580 | |||||||||||||||
Basic earnings/(loss) per Ordinary Share | 89.1c | 78.9c | (40.6c) | 74.6c | 81.2c | |||||||||||||||
Diluted earnings/(loss) per Ordinary Share | 88.7c | 78.8c | (40.6c) | 74.5c | 81.2c | |||||||||||||||
Dividends paid during calendar year per Ordinary Share | 62.5c | 62.5c | 62.5c | 62.5c | 62.5c | |||||||||||||||
Average number of Ordinary Shares outstanding(iii) | 812.3 | 737.6 | 729.2 | 721.9 | 714.4 | |||||||||||||||
Ratio of earnings to fixed charges (times)(iv) | 2.9 | 2.6 | 0.7(v) | 2.6 | 2.4 | |||||||||||||||
All data relates to continuing operations | ||||||||||||||||||||
Consolidated Balance Sheet Data | ||||||||||||||||||||
Total assets | 32,007 | 22,017 | 20,429 | 20,900 | 21,384 | |||||||||||||||
Net assets(vi) | 13,544 | 10,198 | 9,686 | 10,589 | 10,593 | |||||||||||||||
Ordinary shareholders equity | 13,014 | 10,176 | 9,661 | 10,552 | 10,518 | |||||||||||||||
Equity share capital | 281 | 253 | 251 | 249 | 247 | |||||||||||||||
Number of Ordinary Shares(iii) | 823.9 | 744.5 | 739.2 | 733.8 | 727.9 | |||||||||||||||
Number of Treasury Shares and own shares(iii) | 1.3 | 3.8 | 6.0 | 7.4 | 8.9 | |||||||||||||||
Number of Ordinary Shares net of Treasury Shares and own shares(iii) | 822.6 | 740.7 | 733.2 | 726.4 | 719.0 |
(i) | Group operating profit includes asset impairment charges of 650 million in 2013, with an additional 105 million impairment charge included in loss attributable to equity holders of the Company in respect of equity accounted investments. Details are contained in note 2 to the Consolidated Financial Statements. |
(ii) | On 1 January 2013, the Group adopted IFRS 11 Joint Arrangements and IAS 19 Employee Benefits (revised). As a result, the prior year comparatives were restated as required by IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. |
(iii) | All share numbers are shown in millions of shares. |
(iv) | For the purposes of calculating the ratio of earnings to fixed charges, in accordance with Item 503 of Regulation S-K, earnings have been calculated by adding: profit/(loss) before tax adjusted to exclude the Groups share of equity accounted investments result after tax, fixed charges and dividends received from equity accounted investments; and the fixed charges were calculated by adding interest expensed and capitalised, amortised premiums, discounts and capitalised expenses related to indebtedness, an estimate of the interest within rental expense and preference security dividend requirements of consolidated subsidiaries. |
(v) | The amount of the deficiency in 2013 was US$183 million. |
(vi) | Net assets is calculated as the sum of total assets less total liabilities. |
11 |
CRH Annual Report on Form 20-F | 2015
Introduction and Performance Measures | continued
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
12 |
CRH Annual Report on Form 20-F | 2015
Exchange Rates |
||||||||||||||||
US Dollar/euro exchange rate
|
|
|||||||||||||||
Years ended 31 December | Period End | Average Rate(i) | High | Low | ||||||||||||
2011 | 1.30 | 1.40 | 1.49 | 1.29 | ||||||||||||
2012 | 1.32 | 1.29 | 1.35 | 1.21 | ||||||||||||
2013 | 1.38 | 1.33 | 1.38 | 1.28 | ||||||||||||
2014 | 1.21 | 1.32 | 1.39 | 1.21 | ||||||||||||
2015 | 1.09 | 1.10 | 1.20 | 1.05 | ||||||||||||
2016 (through 11 March 2016) | 1.12 | 1.10 | 1.14 | 1.07 | ||||||||||||
Months ended |
||||||||||||||||
September 2015 | 1.12 | 1.12 | 1.14 | 1.11 | ||||||||||||
October 2015 | 1.10 | 1.12 | 1.14 | 1.10 | ||||||||||||
November 2015 | 1.06 | 1.07 | 1.10 | 1.06 | ||||||||||||
December 2015 | 1.09 | 1.09 | 1.10 | 1.06 | ||||||||||||
January 2016 | 1.08 | 1.09 | 1.10 | 1.07 | ||||||||||||
February 2016 | 1.09 | 1.11 | 1.14 | 1.09 | ||||||||||||
March 2016 (through 11 March 2016) | 1.12 | 1.10 | 1.12 | 1.08 |
(i) | The average of the US Dollar/euro exchange rate on the last day of each month during the period or in the case of monthly averages, the average of all days in the month, in each case using the FRB Noon Buying Rate. |
13 |
CRH Annual Report on Form 20-F | 2015
History, Development and Organisational Structure of the Company
14 |
CRH Annual Report on Form 20-F | 2015
The percentage of Group revenue and operating profit for each of the seven reporting segments for 2015, 2014 and 2013 is as follows:
Business Overview
|
|
|||||||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||||||
Revenue | Operating profit | Revenue | Operating profit | Revenue | Operating profit | |||||||||||||||||||
Share of revenue and operating profit |
||||||||||||||||||||||||
Europe Heavyside(i) | 15% | 11% | 21% | 16% | 21% | (395%) | ||||||||||||||||||
Europe Lightside | 4% | 6% | 5% | 8% | 5% | 28% | ||||||||||||||||||
Europe Distribution | 18% | 7% | 21% | 12% | 22% | 106% | ||||||||||||||||||
Americas Materials | 27% | 48% | 27% | 39% | 26% | 226% | ||||||||||||||||||
Americas Products | 16% | 19% | 17% | 16% | 17% | 68% | ||||||||||||||||||
Americas Distribution | 10% | 9% | 9% | 9% | 9% | 67% | ||||||||||||||||||
LH Assets(ii) | 10% | 0% | - | - | - | - | ||||||||||||||||||
Total | 100% | 100% | 100% | 100% | 100% | 100% |
(i) | See Business Operations in Europe on page 20 for details of non-European countries grouped with Europe for reporting purposes. |
(ii) | The post-acquisition operating profit for LH Assets reported by CRH in 2015 is stated after charging transaction costs of 144 million (see note 30) and other one-off costs of 53 million. |
A cement kiln at CRH Serbias Novi Popovac production plant, which produced 520,000 tonnes of cement and 360,000 tonnes of clinker in 2015. |
15 |
CRH Annual Report on Form 20-F | 2015
Sector exposure and end-use based on 2015 annualised EBITDA (as defined)*
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
** | Net Assets at 31 December 2015 comprise segment assets less segment liabilities as disclosed in note 1 to the Consolidated Financial Statements. |
16 |
CRH Annual Report on Form 20-F | 2015
1 | Throughout this document annualised volumes have been used which reflect the full-year impact of acquisitions made during the year and may vary from actual volumes produced. |
2 | Throughout this document tonnes denote metric tonnes (i.e. 1,000 kilogrammes). |
| Including equity accounted investments; the volumes quoted above for Europe Heavyside also include the Groups share of production volumes in the businesses in China and India in which CRH has equity accounted investments. |
17 |
18 |
CRH Annual Report on Form 20-F | 2015
CRH in Europe*
CRH is a regional leader in the manufacture and supply of building materials to construction markets in Europe and strives to maintain No. 1 and No. 2 market positions in its various product segments across a range of European countries.
|
||||||||||||
The European operations are comprised of three divisions: Heavyside, Lightside and Distribution. The Heavyside operations produce cement, aggregates, asphalt, readymixed concrete, precast concrete and concrete landscaping. Our Lightside operations manufacture construction accessories, shutters and
|
awnings, fencing and composite access chambers. In Distribution, we are a leading player in builders merchanting, DIY and sanitary, heating and plumbing.
Operating across Western and Eastern Europe, more than 32,000 people are employed by our businesses at approximately 1,500 locations. |
|||||||||||
The limestone quarry at Trzuskawicas plant at Sitkówka. The plant is located near the city of Kielce, an area rich in limestone. This is one of the biggest quarries in Poland, with yearly extraction of up to 6m tonnes of high quality limestone in peak years. | Metal Inert Gas (MIG) welding of a stainless steel brick cladding support system at Ancons 6,500m2 manufacturing facility in Sheffield, UK. Ancon, part of Europe Lightside, is a two-time winner of the Queens Award for Enterprise. | Raboni, a general builders merchant, supplies a wide range of building materials to professional contractors in the Normandy and Paris regions of France. | ||||||||||
* | A map showing the countries, including in Europe, where the newly acquired LH Assets are located is shown on page 32. |
19 |
CRH Annual Report on Form 20-F | 2015
Business Operations in Europe
20 |
CRH Annual Report on Form 20-F | 2015
21 |
CRH Annual Report on Form 20-F | 2015
Business Operations in Europe | continued
22 |
CRH Annual Report on Form 20-F | 2015
23 |
24 |
CRH Annual Report on Form 20-F | 2015
CRH in the Americas
CRH is the largest building materials company in North America. We operate in all 50 US states and in six Canadian provinces.
|
||||||||||||
Our Americas operations comprise Materials, Products and Distribution divisions. In Materials, we are the largest producer of asphalt and third largest producer of aggregates and readymixed concrete in the United States. Our Products operations, with their national footprint and broad product range, are the leading supplier of concrete products and
|
architectural glazing systems in North America. In Distribution, we are a leading supplier of product to the specialist Exterior roofing/siding contractor and also the Interior ceilings/walls demand segments.
Close to 40,000 people are employed by CRH in the Americas, with operations at over 1,700 locations. |
|||||||||||
The Shelly Companys Smith Concrete, supplied 35,000 cubic yards of concrete for the US$45 million Bridge of Honor. The bridge is a cast-in-place segmental concrete edge girder system with transverse floor beams. The bridge, which has a span of 675-feet, connects the cities of Pomeroy, Ohio, and Mason, West Virginia, across the Ohio River. | A rigorous quality assurance process at the Anjou Plant in Quebec, Canada, ensures that our customers receive world-class quality products and service. For more than 60 years, Oldcastle Architectural has been Canadas leader in concrete products, offeringing leading-edge design options for residential and commercial applications. | Tri-Built Materials Group, the private-label division of Allied Building Products, has been well received and now includes more than 30 residential and commercial accessory products. | ||||||||||
25 |
CRH Annual Report on Form 20-F | 2015
Business Operations in the Americas
26 |
27 |
CRH Annual Report on Form 20-F | 2015
Business Operations in the Americas | continued
28 |
CRH Annual Report on Form 20-F | 2015
29 |
CRH Annual Report on Form 20-F | 2015
Business Operations in the Americas | continued
30 |
31 |
CRH Annual Report on Form 20-F | 2015
32 |
CRH Annual Report on Form 20-F | 2015
LH Assets
33 |
34 |
CRH Annual Report on Form 20-F | 2015
CRH in China & India
Equity Accounted Investments
CRH has established strategic footholds in China and India over the last eight years. Our strategy is to build select leading regional positions to enable us to benefit from industrialisation, urbanisation and population growth in these developing economies over the coming decades.
Products and Services - Locations
Cement
China, India
Aggregates
China, India
Readymixed Concrete
China, India
Precast Concrete
China
Commissioned in 2009, this 3.7km conveyor belt feeds crushed limestone to two 5,000 tonne per day kilns in Shuangyang Cement Plant which is located in the northeast of China. |
|
35 |
CRH Annual Report on Form 20-F | 2015
Activities with Reserves Backing(i)
Property acreage | % of mineral | |||||||||||||||||||||||||||||||||||||
(hectares)(ii) | reserves by rock type | |||||||||||||||||||||||||||||||||||||
No. of | Proven & | 2015 | ||||||||||||||||||||||||||||||||||||
Physical | quarries/ | probable | Years to | Hard | Sand & | Annualised | ||||||||||||||||||||||||||||||||
Location | pits | Owned | Leased | Reserves(iii) | Depletion(iv) | rock | gravel | Other | Extraction(v) | |||||||||||||||||||||||||||||
Europe Heavyside |
||||||||||||||||||||||||||||||||||||||
Ireland | 2 | 249 | - | 215 | 109 | 100% | - | - | 2.4 | |||||||||||||||||||||||||||||
Poland | 2 | 293 | - | 185 | 46 | 93% | 6% | 1% | 4.2 | |||||||||||||||||||||||||||||
Cement |
Spain | 1 | 33 | - | 85 | 366 | 100% | - | - | 0.4 | ||||||||||||||||||||||||||||
Switzerland | 3 | 93 | 6 | 31 | 21 | 91% | - | 9% | 1.4 | |||||||||||||||||||||||||||||
Ukraine | 3 | 279 | - | 158 | 51 | 81% | - | 19% | 3.0 | |||||||||||||||||||||||||||||
Finland | 151 | 640 | 436 | 192 | 17 | 70% | 30% | - | 11.0 | |||||||||||||||||||||||||||||
Ireland | 125 | 5,110 | 70 | 1,073 | 94 | 88% | 12% | - | 12.9 | |||||||||||||||||||||||||||||
Aggregates |
Poland | 4 | 273 | - | 182 | 40 | 96% | 4% | - | 4.6 | ||||||||||||||||||||||||||||
Spain | 11 | 138 | 167 | 96 | 44 | 99% | 1% | - | 1.8 | |||||||||||||||||||||||||||||
Other | 36 | 214 | 559 | 172 | 23 | 76% | 24% | - | 7.9 | |||||||||||||||||||||||||||||
Lime |
Ireland, Poland | 3 | 105 | - | 161 | 160 | 100% | - | - | 1.4 | ||||||||||||||||||||||||||||
Clay |
Poland | 13 | 1,851 | 28 | 32 | 115 | - | 17% | 83% | 0.3 | ||||||||||||||||||||||||||||
Subtotals |
354 | 9,278 | 1,266 | 2,582 | 88% | 10% | 2% | |||||||||||||||||||||||||||||||
Americas Materials |
||||||||||||||||||||||||||||||||||||||
Aggregates |
East | 287 | 25,823 | 5,633 | 9,286 | 120 | 87% | 13% | - | 84.6 | ||||||||||||||||||||||||||||
West | 452 | 19,517 | 15,256 | 3,888 | 69 | 45% | 55% | - | 57.4 | |||||||||||||||||||||||||||||
Subtotals |
739 | 45,340 | 20,889 | 13,174 | 75% | 25% | - | |||||||||||||||||||||||||||||||
LH Assets |
||||||||||||||||||||||||||||||||||||||
Brazil | 3 | 1,072 | - | 169 | 89 | 100% | - | - | 2.2 | |||||||||||||||||||||||||||||
Canada | 2 | 691 | - | 300 | 106 | 100% | - | - | 3.0 | |||||||||||||||||||||||||||||
France | 3 | 376 | - | 155 | 81 | 100% | - | - | 1.9 | |||||||||||||||||||||||||||||
Germany | 3 | 321 | - | 164 | 54 | 100% | - | - | 3.0 | |||||||||||||||||||||||||||||
Philippines | 11 | 2,061 | 17 | 189 | 31 | 100% | - | - | 6.6 | |||||||||||||||||||||||||||||
Cement |
Romania | 5 | - | 881 | 241 | 79 | 73% | - | 27% | 3.7 | ||||||||||||||||||||||||||||
Serbia | 2 | 81 | 42 | 109 | 185 | 100% | - | - | 0.6 | |||||||||||||||||||||||||||||
Slovakia | 5 | 193 | 318 | 307 | 113 | 92% | - | 8% | 2.1 | |||||||||||||||||||||||||||||
UK | 7 | 1,498 | 150 | 251 | 63 | 100% | - | - | 4.0 | |||||||||||||||||||||||||||||
United States | 4 | 527 | 19 | 31 | 76 | 100% | - | - | 0.4 | |||||||||||||||||||||||||||||
Canada | 23 | 3,035 | 94 | 481 | 29 | 81% | 19% | - | 16.8 | |||||||||||||||||||||||||||||
France | 47 | 552 | 1,017 | 250 | 24 | 67% | 33% | - | 10.3 | |||||||||||||||||||||||||||||
La Reunion | 3 | - | 54 | 4 | 4 | - | 100% | - | 1.0 | |||||||||||||||||||||||||||||
Aggregates |
Romania | 24 | - | 922 | 121 | 50 | 94% | 6% | - | 2.4 | ||||||||||||||||||||||||||||
Slovakia | 4 | 554 | - | 19 | 25 | - | 100% | - | 0.8 | |||||||||||||||||||||||||||||
UK | 177 | 11,223 | 6,407 | 1,438 | 33 | 89% | 11% | - | 43.6 | |||||||||||||||||||||||||||||
Lime |
UK | 1 | 209 | 3 | 39 | 36 | 100% | - | - | 1.1 | ||||||||||||||||||||||||||||
Subtotals |
324 | 22,393 | 9,924 | 4,268 | 90% | 8% | 2% | |||||||||||||||||||||||||||||||
Group totals |
1,417 | 77,011 | 32,079 | 20,024 | 79% | 20% | 1% | |||||||||||||||||||||||||||||||
(i) | The disclosures made in this category refer to those facilities which are engaged in on-site processing of reserves in the various forms. |
(ii) | 1 hectare equals approximately 2.47 acres. |
(iii) | Where reserves are leased, the data presented above is restricted to include only that material which can be produced over the life of the contractual commitment inherent in the lease; the totals shown pertain only to amounts which are proven and probable. All of the proven and probable reserves are permitted and are quoted in millions of tonnes. |
(iv) | Years to depletion is based on the average of the most recent three years annualised production. |
(v) | Annualised extraction is quoted in millions of tonnes. |
36 |
CRH Annual Report on Form 20-F | 2015
Pennsy Supplys Prescott Quarry in Lebanon, Pennsylvania, was recognised by Oldcastle Materials Groups Aggregates National Performance Committee as Most Improved in the National Large Quarry Category in 2015. Local management successfully adjusted its operations plan to achieve higher volumes while reducing cost. |
37 |
CRH Annual Report on Form 20-F | 2015
38 |
CRH Annual Report on Form 20-F | 2015
39 |
CRH Annual Report on Form 20-F | 2015
The Environment and Government Regulations
40 |
CRH Annual Report on Form 20-F | 2015
41 |
42 |
43 |
CRH Annual Report on Form 20-F | 2015
(i) | See cautionary statement regarding forward-looking statements on page 12. |
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
44 |
CRH Annual Report on Form 20-F | 2015
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
45 |
CRH Annual Report on Form 20-F | 2015
Becoming the global leader
in building materials
CRHs vision is to be the leading building materials business in the
world and in doing so to create value and deliver superior returns for
all our stakeholders.
46 |
CRH Annual Report on Form 20-F | 2015
Continuous Business Improvement | Our relentless focus on operational and commercial performance in all of our businesses in 2015 helped deliver improved returns.
In financial terms this resulted in Return on Net Assets (RONA) of 7.6% in 2015. This reflects improved margins, on a continuing operations basis, in each of our six legacy divisions. When adjusted to take account of non-recurring costs (197 million) relating to the acquisition of our newly acquired LH Assets, Group RONA in 2015 was 8.8%, ahead of 2014 (7.4%).
| |
Disciplined and Focused Growth |
Portfolio management, and in particular the recycling of capital from lower growth areas into core businesses for growth, is a cornerstone of our value creation model. In 2015, we continued to manage our portfolio carefully, recording total disposal proceeds of approximately 1 billion.
While net debt levels of 6.6 billion at year-end 2015 reflect the significant 8 billion acquisition spend during the year, we continued to maintain financial discipline through careful working capital management and capital expenditure controls. The Group is committed to restoring its debt metrics to normalised levels in 2016.
| |
Leadership Development |
2015 was an active year for talent injection and promotion throughout the Group. This ensures that CRH is attracting the very best talent in the market and promoting talented individuals from within.
The Group also maintained its focus on leadership development with high performers selected to participate in a range of leadership development programmes.
Mobility opportunities continue to expand as the Group seeks to offer rewarding career and personal development experiences at different operating locations worldwide.
| |
Extracting the Benefits of Scale |
In 2015, the newly acquired LH Assets more than doubled the Groups cement production volumes and made CRH the second largest building materials player globally and the world No. 2 in aggregates. The transaction enabled the Group to establish new leadership positions in certain heavyside materials markets globally. For example, CRH is now the market leader in the UK, has regional leadership positions in Canada, Germany and the Philippines, and has established top three positions in Romania, Slovakia, Hungary and Serbia. |
47 |
CRH Annual Report on Form 20-F | 2015
Creating value and growth
CRH delivers on its strategy through the execution of a dynamic business model which is focused on value creation and growth. This has allowed CRH to deliver an industry-leading Total Shareholder Return of 16.1% since 1970. 100 invested in CRH shares in 1970, with dividends reinvested, would now be worth 83,000.
48 |
CRH Annual Report on Form 20-F | 2015
Balanced Portfolio | CRH creates value by maintaining a balanced portfolio. Our product mix spans the breadth of building materials demand and sectoral end-use, thereby reducing exposure to any one single demand driver. The Group also offsets cyclical economic risk by maintaining a geographically diversified portfolio across its key regions of North America and Europe, as well as the emerging regions of Asia and South America.
In 2015 the Groups sector exposure was split 35% residential, 35% non-residential and 30% infrastructure. End-use was balanced equally between New Build and RMI.
|
| ||
Making Businesses Better |
CRHs emphasis on making better businesses is a key component of its focus on value creation and growth. We have a proven track record in acquiring new businesses and bringing the Groups collective knowledge and experience to bear in working with the local management teams of those businesses to deliver improvements in performance.
The Group supports the delivery of such improvements through targeted investment in measures that improve capacity, quality and efficiency.
Over time these improvements help us build better businesses that deliver stronger returns on capital invested.
|
| ||
Proven Acquisition Model |
CRH creates value and growth by identifying and acquiring strong businesses that complement our existing portfolio of operations. Typically we specialise in acquiring small and mid-sized companies, releasing value through synergies and network optimisation. From time to time the Group also evaluates and concludes larger transactions where the strategic rationale is compelling.
We excel at integrating businesses and ensuring that they are appropriately positioned and resourced to succeed as part of the CRH Group.
|
| ||
Dynamic Capital Management |
CRH constantly strives to ensure that capital is recycled from low growth areas into core parts of our business that offer the potential for stronger growth and returns.
With a portfolio which is diversified across many products, geographies and end-uses, we allocate capital to the areas best positioned to take advantage of developing growth cycles and new areas that offer improved value creation and growth potential. |
| ||
Financial Strength |
The Group maintains a constant focus on financial discipline and strong cash generation which in turn supports our ability to fund new value creating acquisitions and returns for shareholders.
Our strong financial position reduces the cost of capital. In 2015, we raised over 2.5 billion at historically low interest rates for the Group; with an eight-year bond for 600 million at 1.875%, a ten-year bond for $1.25 billion at 3.875%, a 14-year bond of £400 million at 4.125% and a 30-year bond for $500 million at 5.125%. |
|
49 |
CRH Annual Report on Form 20-F | 2015
Building a sustainable business
Corporate Social Responsibility and Sustainability concepts are embedded in the heart of our business and are fundamental to achieving our vision of becoming the leading building materials business in the world. |
| |||
Our Approach
CRH is committed to delivering a built environment that is sustainable and of value to the communities we serve. Our extensive global presence and industry leadership puts the Group in a strong position to influence transformative innovation that improves the sustainability of the built environment. Applying a strategic approach to deriving tangible long-term business value from sustainability, we collaborate with stakeholders to ensure our medium-term objectives and long-term ambitions are achieved. The Group does this while also being sensitive and responsive to our stakeholders as well as to the environment in which we operate.
CRH has formal structures in place to identify, evaluate and manage potential risks and opportunities in sustainability areas. Group performance and effectiveness is reviewed regularly by the Board of Directors.
We are committed to reporting on the breadth of our sustainability performance in a comprehensive and transparent manner and to publishing performance indicators and ambitions in key identified sustainability areas. |
CRH continues to be ranked among sector leaders by leading Sustainable and Responsible Investment (SRI) rating agencies and continues as a constituent member of several sustainability indices including the FTSE4Good Index, the STOXX® Global ESG Leaders Indices and the Vigeo World 120 Index. In addition, many Group locations have won high-ranking accolades for excellence in sustainability achievements. |
|||
|
50 |
CRH Annual Report on Form 20-F | 2015
51 |
CRH Annual Report on Form 20-F | 2015
Creating value through Risk Governance
The aim of Enterprise Risk Management is to deliver increased shareholder value for CRH. Effective governance, which is considered fundamental in CRH, is critical to success, supporting management in executing strategy, managing costs, responding to risks, attracting investment, achieving regulatory compliance and in promoting effective decision making.
52 |
CRH Annual Report on Form 20-F | 2015
53 |
CRH Annual Report on Form 20-F | 2015
Key Strategic, Operational and Compliance Risk Factors
Industry cyclicality: strategic
Risk Factor
|
Discussion
| |
Description:
The level of construction activity in local and national markets is inherently cyclical being influenced by a wide variety of factors including global and national economic circumstances, ongoing austerity programmes in the developed world, governments ability to fund infrastructure projects, consumer sentiment and weather conditions. Financial performance may also be negatively impacted by unfavourable swings in fuel and other commodity/raw material prices. |
The Groups operating and financial performance is influenced by general economic conditions and the state of the residential, industrial and commercial and infrastructure construction markets in the countries in which it operates, particularly in Europe and North America.
In general, economic uncertainty exacerbates negative trends in construction activity leading to postponement in orders. Construction markets are inherently cyclical and are affected by many factors that are beyond the Groups control, including: | |
Impact:
Failure of the Group to respond on a timely basis and/or adequately to unfavourable events beyond its control may adversely affect financial performance. |
the price of fuel and principal energy-related raw materials such as bitumen and steel (which accounted for approximately 8% of annual Group sales revenues in 2015);
the performance of the national economies in the 31 countries in which the Group operates;
monetary policies in the countries in which the Group operates for example, an increase in interest rates typically reduces the volume of mortgage borrowings thus impacting residential construction activity;
the allocation of government funding for public infrastructure programmes, such as the development of highways in the United States under the Fixing Americas Surface Transportation Act (FAST Act); and
the level of demand for construction materials and services, with sustained adverse weather conditions leading to potential disruptions or curtailments in outdoor construction activity.
While economic conditions appear to be improving in the United States, a prolongation of or further deterioration in economic performance in Europe may result in further general reductions in construction activity in that area. Against this backdrop, the adequacy and timeliness of the actions taken by the Groups management team are of critical importance in maintaining financial performance at appropriate levels.
Each of the above factors could have a material adverse effect on the Groups operating results and the market price of CRH plcs Ordinary Shares.
|
54 |
CRH Annual Report on Form 20-F | 2015
Political and economic uncertainty: strategic
Risk Factor
|
Discussion
| |
Description:
As an international business, the Group operates in many countries with differing, and in some cases, potentially fast-changing economic, social and political conditions. These conditions could include political unrest, currency disintegration, strikes, civil disturbance and other forms of instability including natural disasters, epidemics, widespread transmission of diseases and terrorist attacks. These factors are of particular relevance in developing/emerging markets.
Impact:
Changes in these conditions, or in the governmental or regulatory requirements in any of the countries in which the Group operates, may adversely affect the Groups business, results of operations, financial condition or prospects thus leading to possible impairment of financial performance and/or restrictions on future growth opportunities. |
The adverse developments in eurozone economic performance in recent years, together with ongoing austerity programmes in various countries in Europe and the growth of international terrorism, have contributed to heightened global uncertainty. While various actions have been taken by central banks and other institutions to stabilise the economic situation, the success of these actions cannot be guaranteed.
The Group currently operates mainly in Western Europe and North America as well as, to a lesser degree, in developing countries/emerging markets in Eastern Europe, the Philippines, Brazil, China and India. The economies of these countries are at varying stages of socioeconomic and macroeconomic development which could give rise to a number of risks, uncertainties and challenges and could include the following:
changes in political, social or economic conditions;
trade protection measures and import or export licensing requirements;
potentially negative consequences from changes in tax laws;
labour practices and differing labour regulations;
procurement which contravenes ethical considerations;
unexpected changes in regulatory requirements;
state-imposed restrictions on repatriation of funds; and
the outbreak of armed conflict.
With regard to Ukraine, where the Group has significant business interests, the outlook remains uncertain and the implications for construction activity in 2016 and beyond are unclear. |
Commodity products and substitution: strategic
Risk Factor
|
Discussion
| |
Description:
The Group faces strong volume and price competition across its product lines. In addition, existing products may be replaced by substitute products which the Group does not produce or distribute.
Impact:
Against this backdrop, if the Group fails to generate competitive advantage through differentiation and innovation across the value chain (for example, through superior product quality, engendering customer loyalty or excellence in logistics), market share, and thus financial performance, may decline. |
The competitive environment in which the Group operates can be significantly impacted by general economic conditions in combination with local factors including the number of competitors, the degree of utilisation of production capacity and the specifics of product demand. Across the multitude of largely local markets in which the Group conducts business, downward pricing pressure is experienced from time to time, and the Group may not always be in a position to recover increased operating expenses (caused by factors such as increased fuel and raw material prices) through higher sale prices.
A number of the products sold by the Group (both those manufactured internally and those distributed) compete with other building products that do not feature in the existing product range. Any significant shift in demand preference from the Groups existing products to substitute products, which the Group does not produce or distribute, could adversely impact market share and results of operations. |
55 |
CRH Annual Report on Form 20-F | 2015
Key Strategic, Operational and Compliance Risk Factors | continued
Acquisition activity: strategic
Risk Factor
|
Discussion
| |
Description:
Growth through acquisition and active management of the Groups business portfolio are key elements of the Groups strategy with the Groups balanced portfolio growing year on year through bolt-on activity occasionally supplemented by larger and/or step-change transactions. In 2015, the Group completed the largest transaction in its history, namely the acquisition of the LH Assets across 11 countries. In addition, the Group may be liable for the past acts, omissions or liabilities of companies or businesses it has acquired.
Impact:
The Group may not be able to continue to grow as contemplated in its business plans if it is unable to identify attractive targets (including potential new platforms for growth), execute full and proper due diligence, raise funds on acceptable terms, complete such acquisition transactions, integrate the operations of the acquired businesses and realise anticipated levels of profitability and cash flows. If the Group is held liable for the past acts, omissions or liabilities of companies or businesses it has acquired, those liabilities may either be unforeseen or greater than anticipated at the time of the relevant acquisition. |
The Groups acquisition strategy focuses on value-enhancing mid-sized acquisitions supplemented from time to time by larger strategic acquisitions into new markets or new building products.
The realisation of the Groups acquisition strategy is dependent on the ability to identify and acquire suitable assets at appropriate prices thus satisfying the stringent cash flow and return on investment criteria underpinning such activities. The Group may not be able to identify such companies, and, even if identified, may not be able to acquire them because of a variety of factors including the outcome of due diligence processes, the ability to raise funds (as required) on acceptable terms, the need for competition authority approval in certain instances and competition for transactions from peers and other entities exploring acquisition opportunities in the building materials sector. In addition, situations may arise where the Group may be liable for the past acts or omissions or liabilities of companies acquired; for example, the potential environmental liabilities addressed under the Sustainability Risk Factor below. The Groups ability to realise the expected benefits from acquisition activity depends, in large part, on its ability to integrate newly-acquired businesses in a timely and effective manner. Even if the Group is able to acquire suitable companies, it still may not be able to incorporate them successfully into the relevant legacy businesses and, accordingly, may be deprived of the expected benefits thus leading to potential dissipation and diversion of management resources and constraints on financial performance. |
Joint ventures and associates: strategic
Risk Factor
|
Discussion
| |
Description:
The Group does not have a controlling interest in certain of the businesses (i.e. joint ventures and associates) in which it has invested and may invest. The absence of a controlling interest gives rise to increased governance complexity and a need for proactive relationship management, which may restrict the Groups ability to generate adequate returns and to develop and grow these businesses.
Impact:
These limitations could impair the Groups ability to manage joint ventures and associates effectively and/or realise the strategic goals for these businesses. In addition, improper management or ineffective policies, procedures or controls for non-controlled entities could adversely affect the business, results of operations or financial condition of the relevant investment. |
Due to the absence of full control of joint ventures and associates, important decisions such as the approval of business plans and the timing and amount of cash distributions and capital expenditures, for example, may require the consent of partners or may be approved without the Groups consent.
These limitations could impair the Groups ability to manage joint ventures and associates effectively and/or realise the strategic goals for these businesses. In addition, improper management or ineffective policies, procedures or controls for non-controlled entities could adversely affect the business, results of operations or financial condition of the relevant investment and, by corollary, the Group. |
56 |
CRH Annual Report on Form 20-F | 2015
Human resources: strategic
Risk Factor
|
Discussion
| |
Description:
Existing processes to recruit, develop and retain talented individuals and promote their mobility may be inadequate thus giving rise to employee/management attrition, difficulties in succession planning and inadequate bench strength, potentially impeding the continued realisation of the core strategy of performance and growth. In addition, the Group is exposed to various risks associated with collective representation of employees in certain jurisdictions, these risks could include strikes and increased wage demands with possible reputational consequences.
Impact:
In the longer term, failure to manage talent and plan for leadership and succession could impede the realisation of core strategic objectives around performance and growth. |
The identification and subsequent assessment, management, development and deployment of talented individuals is of major importance in continuing to deliver on the Groups core strategy of performance and growth and in ensuring that succession planning objectives for key executive roles throughout its international operations are satisfied. Programmes designed to focus on performance management skills and leadership development may not achieve their desired objectives.
The maintenance of positive employee and trade/labour union relations is key to the successful operation of the Group. Some of the Groups employees are represented by trade/labour unions under various collective agreements. For unionised employees, the Group may not be able to renegotiate satisfactorily the relevant collective agreements upon expiration and may face tougher negotiations and higher wage demands than would be the case for non-unionised employees. In addition, existing labour agreements may not prevent a strike or work stoppage with any such activity creating reputational risk and potentially having a material adverse effect on the results of operations and financial condition of the Group. |
Corporate communications: strategic
Risk Factor
|
Discussion
| |
Description:
As a publicly-listed company, the Group undertakes regular communications with its stakeholders. Given that these communications may contain forward-looking statements, which by their nature involve uncertainty, actual results and developments may differ from those communicated due to a variety of external and internal factors giving rise to reputational risk.
Impact:
Failure to deliver on performance indications and non-financial commitments communicated to the Groups variety of stakeholders could result in a reduction in share price, reduced earnings and reputational damage. |
The Group places great emphasis on timely and relevant corporate communications with overall responsibility for these matters being vested in senior management at the Group Head Office (largely the Chief Executive, the Finance Director, the Group Transformation Director, the Head of Investor Relations and the Group Director, Corporate Affairs) supported by engagement with highly experienced external advisors, where appropriate. The strategic, operational and financial performance of the Group and of its constituent entities, is reported to the Board on a monthly basis with all results announcements and other externally-issued documentation (e.g. the Annual Report on Form 20-F) being discussed by the Board/Audit Committee prior to release. |
57 |
CRH Annual Report on Form 20-F | 2015
Key Strategic, Operational and Compliance Risk Factors | continued
Sustainability: operational
| ||
Risk Factor
|
Discussion
| |
Description:
The Group is subject to stringent and evolving laws, regulations, standards and best practices in the area of sustainability (comprising corporate governance, environmental management and climate change (specifically capping of emissions), health and safety management and social performance).
Impact:
Non-adherence to such laws, regulations, standards and best practices may give rise to increased ongoing remediation and/or other compliance costs and may adversely affect the Groups business, results of operations, financial condition and/or prospects. |
The Group is subject to a broad and increasingly stringent range of existing and evolving laws, regulations, standards and best practices with respect to governance, the environment, health and safety and social performance in each of the jurisdictions in which it operates giving rise to significant compliance costs, potential legal liability exposure and potential limitations on the development of its operations. These laws, regulations, standards and best practices relate to, amongst other things, climate change, noise, emissions to air, water and soil, the use and handling of hazardous materials and waste disposal practices. Given the above, the risk of increased environmental and other compliance costs and unplanned capital expenditure is inherent in conducting business in the building materials sector and the impact of future developments in these respects on the Groups activities, products, operations, profitability and cash flow cannot be estimated; there can therefore be no assurance that material liabilities and costs will not be incurred in the future or that material limitations on the development of its operations will not arise.
Environmental and health and safety and other laws, regulations, standards and best practices may expose the Group to the risk of substantial costs and liabilities, including liabilities associated with assets that have been sold or acquired and activities that have been discontinued. In addition, many of the Groups manufacturing sites have a history of industrial use and, while strict environmental operating standards are applied and extensive environmental due diligence is undertaken in acquisition activity, some soil and groundwater contamination has occurred in the past at a limited number of sites. Although the associated remediation costs incurred to date have not been material, they may become more significant in the future. Despite the Groups policy and efforts to comply with all applicable environmental and health and safety laws, it may face increased remediation liabilities and legal proceedings concerning environmental and health and safety matters in the future.
Based on information currently available, the Group has budgeted capital and revenue expenditures for environmental improvement projects and has established reserves for known environmental remediation liabilities that are probable and reasonably capable of estimation. However, the Group cannot predict environmental and health and safety matters with certainty, and budgeted amounts and established reserves may not be adequate for all purposes. In addition, the development or discovery of new facts, events, circumstances or conditions, including future decisions to close plants, which may trigger remediation liabilities, and other developments such as changes in laws or increasingly strict enforcement by governmental authorities, could result in increased costs and liabilities or prevent or restrict some of the operations of the Group, which in turn could have a material adverse effect on the reputation, business, results of operations and overall financial condition of the Group.
For additional information see also Introduction The Environment and Government Regulations. |
58 |
CRH Annual Report on Form 20-F | 2015
Cyber and information technology: operational
| ||
Risk Factor
|
Discussion
| |
Description:
As a result of the proliferation of information technology in the world today, the Group is dependent on the employment of advanced information systems and is exposed to risks of failure in the operation of these systems. Further, the Group is exposed to security threats to its digital infrastructure through cyber-crime. Such attacks are by their nature technologically sophisticated and may be difficult to detect and defend in a timely fashion.
Impact:
Should a threat materialise, it might lead to interference with production processes, manipulation of financial data, the theft of private data or misrepresentation of information via digital media. In addition to potential irretrievability or corruption of critical data, the Group could suffer reputational losses, regulatory penalties and incur significant financial costs in remediation.
|
Security and cyber threats are becoming increasingly sophisticated and are continually evolving. Such attacks may result in interference with production software, corruption or theft of sensitive data, manipulation of financial data accessible through digital infrastructure, or reputational losses as a result of misrepresentation via social media and other websites. While the Group has made a significant investment in upgrading its digital infrastructure and governance processes with the overall objective of further enhancing system security, there can be no assurance that future attacks will not be successful due to their increasing sophistication and the difficulties in detecting and defending against them in a timely fashion. | |
Laws and regulations: compliance
| ||
Risk Factor
|
Discussion
| |
Description:
The Group is subject to many local and international laws and regulations, including those relating to competition law, corruption and fraud, across many jurisdictions of operation and is therefore exposed to changes in those laws and regulations and to the outcome of any investigations conducted by governmental, international or other regulatory authorities.
Impact:
Potential breaches of local and international laws and regulations in the areas of competition law, corruption and fraud, among others, could result in the imposition of significant fines and/or sanctions for non-compliance, and may inflict reputational damage. |
The Group is subject to various statutes, regulations and laws applicable to businesses generally in the countries and markets in which it operates. These include statutes, regulations and laws affecting land usage, zoning, labour and employment practices, competition, financial reporting, taxation, anti-bribery, anti-corruption, governance and other matters. The Group mandates that its employees comply with its Code of Business Conduct which stipulates best practices in relation to regulatory matters. The Group cannot guarantee that its employees will at all times successfully comply with all demands of regulatory agencies in a manner which will not materially adversely affect its business, results of operations, financial condition or prospects.
While the Group has put in place significant internal controls and compliance policies and procedures (including with respect to the Foreign Corrupt Practices Act in the United States and the Bribery Act in the United Kingdom), there can be no assurance that such established policies and procedures will afford adequate protection against fraudulent and/or corrupt activity and any such activity could have a material adverse effect on the Groups business, results of operations, financial condition or prospects. |
59 |
CRH Annual Report on Form 20-F | 2015
Key Financial and Reporting Risk Factors
Financial instruments |
||
(interest rate and leverage, foreign currency, counterparty, credit ratings and liquidity)
| ||
Risk Factor
|
Discussion
| |
Description:
The Group uses financial instruments throughout its businesses giving rise to interest rate and leverage, foreign currency, counterparty, credit rating and liquidity risks. A significant portion of the cash generated by the Group from operational activity is currently dedicated to the payment of principal and interest on indebtedness. In addition, the Group has entered into certain financing agreements containing restrictive covenants requiring it to maintain a certain minimum interest coverage ratio and a certain minimum net worth.
Impact:
A downgrade of the Groups credit ratings may give rise to increases in funding costs in respect of future debt and may impair the Groups ability to raise funds on acceptable terms. In addition, insolvency of the financial institutions with which the Group conducts business (or a downgrade in their credit ratings) may lead to losses in derivative assets and cash and cash equivalents balances or render it more difficult either to utilise existing debt capacity or otherwise obtain financing for operations. |
Interest rate and leverage risks: The Groups exposures to changes in interest rates result from investing and borrowing activities undertaken to manage liquidity and capital requirements and stem predominantly from long-term debt obligations. Borrowing costs are managed through employing a mix of fixed and floating rate debt and interest rate swaps, where appropriate. As at 31 December 2015, the Group had outstanding net indebtedness of approximately 6.6 billion (2014: 2.5 billion). On foot of acquisition activity in 2015, the Group has significantly greater outstanding indebtedness, which may impair its operating and financial flexibility over the longer term and could adversely affect its business, results of operations and financial position. This high level of indebtedness could give rise to the Group dedicating a substantial portion of its cash flow to debt service thereby reducing the funds available in the longer term for working capital, capital expenditure, acquisitions, distributions to shareholders and other general corporate purposes and limiting its ability to borrow additional funds and to respond to competitive pressures. In addition, the increased level of indebtedness may give rise to a general increase in interest rates borne and there can be no assurance that the Group will not be adversely impacted by increases in borrowing costs in the future.
For the year ended 31 December 2015, PBITDA/net interest (all as defined in the relevant agreements as discussed in note 23 to the Consolidated Financial Statements), which is the Groups principal financial covenant, was 8.5 times (2014: 7.0 times). The prescribed minimum PBITDA/net interest cover ratio under such agreements is 4.5 times and the prescribed minimum net worth is 5.6 billion.
Foreign currency risks: If the euro, which is the Groups reporting currency, weakens relative to the basket of foreign currencies in which net debt is denominated (principally the US Dollar, Canadian Dollar, Swiss Franc, Philippine Peso and Pound Sterling), the net debt balance would increase; the converse would apply if the euro was to strengthen. The Groups established policy to spread its net worth across the currencies of its operations, with the objective of limiting its exposure to individual currencies and thus promoting consistency with geographical balance, may not be successful.
Counterparty risks: Insolvency of the financial institutions with which the Group conducts business, or a downgrade in their credit ratings, may lead to losses in derivative assets and cash and cash equivalents balances or render it more difficult either to utilise existing debt capacity or otherwise obtain financing for operations. The maximum exposure arising in the event of default on the part of the counterparty (including insolvency) is the carrying amount of the relevant financial instrument.
The Group holds significant cash balances on deposit with a variety of highly-rated financial institutions (typically invested on a short-term basis) which, together with cash and cash equivalents at 31 December 2015, totalled 2.5 billion (2014: 3.3 billion). In addition to the above, the Group enters into derivative transactions with a variety of highly-rated financial institutions giving rise to derivative assets and derivative liabilities; the relevant balances as at 31 December 2015 were 109 million and 24 million respectively (2014: 102 million and 23 million respectively). The counterparty risks inherent in these exposures may give rise to losses in the event that the relevant financial institutions suffer a ratings downgrade or become insolvent. In addition, certain of the Groups activities (e.g. highway paving in the United States) give rise to significant amounts receivable from counterparties at the balance sheet date; at year-end 2015, this balance was 0.7 billion (2014: 0.5 billion). In the current business environment, there is increased exposure to counterparty default, particularly as regards bad debts.
|
60 |
CRH Annual Report on Form 20-F | 2015
Financial instruments | continued |
||
(interest rate and leverage, foreign currency, counterparty, credit ratings and liquidity)
| ||
Risk Factor
|
Discussion
| |
Credit rating risks: A downgrade of the Groups credit ratings may give rise to increases in funding costs in respect of future debt and may, among other concerns, impair its ability to access debt markets or otherwise raise funds or enter into letters of credit, for example, on acceptable terms. Such a downgrade may result from factors specific to the Group, including increased indebtedness stemming from acquisition activity, or from other factors such as general economic or sector-specific weakness or sovereign credit rating ceilings.
Liquidity risks: The principal liquidity risks stem from the maturation of debt obligations and derivative transactions. The Group aims to achieve flexibility in funding sources through a variety of means including (i) maintaining cash and cash equivalents with a number of highly-rated counterparties; (ii) limiting the maturity of such balances; (iii) meeting the bulk of debt requirements through committed bank lines or other term financing; and (iv) having surplus committed lines of credit. However, market or economic conditions may make it difficult at times to realise this objective.
For additional information on the above risks see note 21 to the Consolidated Financial Statements.
| ||
Defined benefit pension schemes and related obligations
| ||
Risk Factor
|
Discussion
| |
Description:
The Group operates a number of defined benefit pension schemes and related obligations (for example, termination indemnities and jubilee/long-term service benefits, which are accounted for as defined benefit) in certain of its operating jurisdictions. The assets and liabilities of defined benefit pension schemes may exhibit significant period-on-period volatility attributable primarily to asset values, changes in bond yields/discount rates and anticipated longevity.
Impact:
In addition to the contributions required for the ongoing service of participating employees, significant cash contributions may be required to remediate deficits applicable to past service. Further, fluctuations in the accounting surplus/deficit may adversely impact credit metrics thus harming the Groups ability to raise funds. |
The assumptions used in the recognition of pension assets, liabilities, income and expenses (including discount rates, rate of increase in future compensation levels, mortality rates and healthcare cost trend rates) are updated based on market and economic conditions at the respective balance sheet date and for any relevant changes to the terms and conditions of the pension and post-retirement plans. These assumptions can be affected by (i) for the discount rate, changes in the rates of return on high-quality fixed income investments; (ii) for future compensation levels, future labour market conditions and anticipated inflation; (iii) for mortality rates, changes in the relevant actuarial funding valuations or changes in best practice; and (iv) for healthcare cost trend rates, the rate of medical cost inflation in the relevant regions. The weighted average actuarial assumptions used and sensitivity analysis in relation to the significant assumptions employed in the determination of pension and other post-retirement liabilities are disclosed on pages 214 to 223. A prolonged period of financial market instability or other adverse changes in the assumption mentioned above would have an adverse impact on the valuations of pension scheme assets.
In addition, a number of the defined benefit pension schemes in operation throughout the Group have reported material funding deficits thus necessitating remediation either in accordance with legislative requirements or as agreed with the relevant regulators. These obligations are reflected in the contracted payments disclosure on page 69. The extent of such contributions may be exacerbated over time as a result of a prolonged period of instability in worldwide financial markets or other adverse changes in the assumption mentioned above.
| |
61 |
CRH Annual Report on Form 20-F | 2015
Key Financial and Reporting Risk Factors | continued
Adequacy of insurance arrangements and related counterparty exposures
| ||
Risk Factor
|
Discussion
| |
Description:
The building materials sector is subject to a wide range of operating risks and hazards, not all of which can be covered, adequately or at all, by insurance; these risks and hazards include climatic conditions such as floods and hurricanes/cyclones, seismic activity, technical failures, interruptions to power supplies, industrial accidents and disputes, environmental hazards, fire and crime. In its worldwide insurance programme, the Group provides coverage for its operations at a level believed to be commensurate with the associated risks.
Impact:
In the event of failure of one or more of the Groups counterparties, the Group could be impacted by losses where recovery from such counterparties is not possible. In addition, losses may materialise in respect of uninsured events or may exceed insured amounts. |
Insurance protection is maintained with leading, highly-rated international insurers with appropriate risk retention by wholly-owned insurance companies (captive insurers) and by insured entities in the context of the deductibles/excesses borne. The coverage includes property damage and business interruption, public and products liability/general liability, employers liability/workmens compensation, environmental impairment liability, automobile liability and directors and officers liability. Adequate coverage at reasonable rates is not always commercially available to cover all potential risks and no assurance can be given that the insurance arrangements in place would be sufficient to cover all losses or liabilities to which the Group might be exposed. The occurrence of a significant adverse event not covered, or only partially covered, by insurance could have a material adverse impact on the business, results of operations, financial condition or prospects of the Group.
As at 31 December 2015, the total insurance provision, which is subject to periodic actuarial valuation and is discounted, amounted to 244 million (2014: 208 million); a substantial proportion of this figure pertained to claims which are classified as incurred but not reported.
| |
Foreign currency translation
| ||
Risk Factor
|
Discussion
| |
Description:
The principal foreign exchange risks to which the Consolidated Financial Statements are exposed pertain to adverse movements in reported results when translated into euro (which is the Groups reporting currency) together with declines in the euro value of net investments which are denominated in a wide basket of currencies other than the euro.
Impact:
Adverse changes in the exchange rates used to translate these and other foreign currencies into euro have impacted and will continue to impact retained earnings. The annual impact is reported in the Consolidated Statement of Comprehensive Income.
|
A significant proportion of the Groups revenues, expenses, assets and liabilities are denominated in currencies other than the euro, principally US Dollars, Canadian Dollars, Swiss Francs, Polish Zlotys, Philippine Pesos and Pounds Sterling. From year to year, adverse changes in the exchange rates used to translate these and other foreign currencies into euro have impacted and will continue to impact consolidated results and net worth. For additional information on the impact of foreign exchange movements on the Consolidated Financial Statements for the Group for the year ended 31 December 2015, see the Business Performance Review section commencing on page 65 and note 21 to the Consolidated Financial Statements. |
62 |
CRH Annual Report on Form 20-F | 2015
Goodwill impairment
| ||
Risk Factor
|
Discussion
| |
Description:
Significant under-performance in any of the Groups major cash-generating units or the divestment of businesses in the future may give rise to a material write-down of goodwill.
Impact:
A write-down of goodwill could have a substantial impact on the Groups income and equity. |
An acquisition generates goodwill to the extent that the price paid exceeds the fair value of the net assets acquired. Under IFRS, goodwill and indefinite-lived intangible assets are not amortised but are subject to annual impairment testing. Other intangible assets deemed separable from goodwill arising on acquisitions are amortised. A detailed discussion of the impairment testing process, the key assumptions used, the results of that testing and the related sensitivity analysis is contained in note 14 to the Consolidated Financial Statements on pages 189 to 192.
Whilst a goodwill impairment charge does not impact cash flow, a full write-down at 31 December 2015 would have resulted in a charge to income and a reduction in equity of 7.4 billion (2014: 4.0 billion).
| |
Inspections by the Public Company Accounting Oversight Board (PCAOB)
| ||
Risk Factor
|
Discussion
| |
Description:
Our auditors, like other independent registered public accounting firms operating in Ireland and a number of other European countries, are not currently permitted to be subject to inspection by the PCAOB.
Impact:
Investors who rely on the audit report prepared by the Groups auditors are deprived of the benefits of PCAOB inspections to assess audit work and quality control procedures. |
As a public company, our auditors are required by United States law to undergo regular PCAOB inspections to assess their compliance with United States law and professional standards in connection with their audits of financial statements filed with the SEC. Under Irish law, the PCAOB is currently unable to inspect and evaluate the audit work and quality control procedures of auditors in Ireland. Accordingly investors who rely on our auditors audit reports are deprived of the benefits of PCAOB inspections of auditors.
|
63 |
64 |
|
||||||
66 | ||||||
66 | ||||||
69 | ||||||
70 | ||||||
|
|
80
|
|
|||
65 |
CRH Annual Report on Form 20-F | 2015
Finance Directors Introduction(i)
(i) | See cautionary statement regarding forward-looking statements on page 12. |
| As disclosed in note 20 to the Consolidated Financial Statements, net debt comprises interest-bearing loans and borrowings, cash and cash equivalents, and derivative financial instruments. |
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
66 |
CRH Annual Report on Form 20-F | 2015
Key Components of 2015 Performance
million | Sales revenue |
EBITDA (as defined)* |
Operating profit |
Profit on disposals |
Finance costs (net) |
Assoc. and JV PAT** |
Pre-tax profit |
|||||||||||||||||||||
2014 | 18,912 | 1,641 | 917 | 77 | (288) | 55 | 761 | |||||||||||||||||||||
Exchange effects | 2,198 | 218 | 137 | 6 | (27) | 4 | 120 | |||||||||||||||||||||
2014 at 2015 rates | 21,110 | 1,859 | 1,054 | 83 | (315) | 59 | 881 | |||||||||||||||||||||
Incremental impact in 2015 of: | ||||||||||||||||||||||||||||
2014/2015 acquisitions |
2,738 | 215 | 28 | - | (50) | 1 | (21) | |||||||||||||||||||||
2014/2015 divestments |
(855) | (100) | (69) | 20 | 6 | (10) | (53) | |||||||||||||||||||||
Restructuring/Impairment |
- | 22 | 27 | - | - | - | 27 | |||||||||||||||||||||
Swiss fine/Pension/CO2 |
- | (35) | (35) | - | - | - | (35) | |||||||||||||||||||||
Early bond redemption |
- | - | - | - | (38) | - | (38) | |||||||||||||||||||||
Organic |
642 | 258 | 272 | (2) | 8 | (6) | 272 | |||||||||||||||||||||
2015 | 23,635 | 2,219 | 1,277 | 101 | (389) | 44 | 1,033 | |||||||||||||||||||||
% Total change | 25% | 35% | 39% | 36% | ||||||||||||||||||||||||
% Organic change | 3% | 14% | 26% | 31% |
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
** | CRHs share of after-tax profits of joint ventures and associated undertakings |
67 |
CRH Annual Report on Form 20-F | 2015
Finance Directors Introduction | continued
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
68 |
CRH Annual Report on Form 20-F | 2015
An analysis of the maturity profile of debt, finance and operating leases, purchase obligations, deferred and contingent acquisition consideration and pension scheme contribution commitments at 31 December 2015 is as follows:
Contractual Obligations
|
||||||||||||||||||||
Less than | More than | |||||||||||||||||||
Payments due by period | Total | 1 year | 1-3 years | 3-5 years | 5 years | |||||||||||||||
m | m | m | m | m | ||||||||||||||||
Interest-bearing loans and borrowings(i) | 9,142 | 760 | 2,161 | 1,250 | 4,971 | |||||||||||||||
Finance leases | 15 | 2 | 4 | 4 | 5 | |||||||||||||||
Estimated interest payments on contractually-committed | 2,524 | 317 | 548 | 387 | 1,272 | |||||||||||||||
debt and finance leases(ii) | ||||||||||||||||||||
Deferred and contingent acquisition consideration | 288 | 46 | 172 | 58 | 12 | |||||||||||||||
Operating leases | 2,116 | 370 | 561 | 354 | 831 | |||||||||||||||
Purchase obligations(iii) | 860 | 497 | 142 | 82 | 139 | |||||||||||||||
Retirement benefit obligation commitments(iv) | 73 | 20 | 38 | 4 | 11 | |||||||||||||||
Total | 15,018 | 2,012 | 3,626 | 2,139 | 7,241 | |||||||||||||||
(i) | Of the 9.1 billion total gross debt, 0.4 billion is drawn on revolving facilities which may be repaid and redrawn up to the date of maturity. The interest payments are estimated assuming these loans are repaid on facility maturity dates. |
(ii) | These amounts have been estimated on the basis of the following assumptions: (a) no change in variable interest rates; (b) no change in exchange rates; (c) that all debt is repaid as if it falls due from future cash generation; and (d) none is refinanced by future debt issuance. |
(iii) | Includes contracted for capital expenditure. A summary of the Groups future purchase commitments as at 31 December 2015 for capital expenditure are set out in note 13 to the Consolidated Financial Statements. These expenditures for replacement and new projects are in the ordinary course of business and will be financed from internal resources. |
(iv) | Represents the contracted payments related to our pension schemes in the United Kingdom and Ireland. See further details in note 27 to the Consolidated Financial Statements. |
69 |
CRH Annual Report on Form 20-F | 2015
Results
|
Analysis of change
| |||||||||||||||||||||||||||||||||||||||||
million |
% |
2015 | 2014 |
Total |
Organic | Acquisitions | Divestments |
Restructuring/ |
Pension/ |
Exchange | ||||||||||||||||||||||||||||||||
Sales revenue | -8% | 3,607 | 3,929 | -322 | -30 | +5 | -386 | - | - | +89 | ||||||||||||||||||||||||||||||||
EBITDA (as defined)* | -12% | 334 | 380 | -46 | +1 | - | -62 | +9 | -3 | +9 | ||||||||||||||||||||||||||||||||
Operating profit | -11% | 135 | 151 | -16 | +7 | - | -45 | +18 | -3 | +7 | ||||||||||||||||||||||||||||||||
EBITDA (as defined)* margin | 9.3% | 9.7% | ||||||||||||||||||||||||||||||||||||||||
Operating profit/sales | 3.7% | 3.8% | ||||||||||||||||||||||||||||||||||||||||
|
Restructuring costs amounted to 6 million (2014: 15 million)
Impairment charges of 26 million were incurred (2014: 35 million)
Pension restructuring gains amounted to 4 million (2014: nil)
Gains from CO2 trading amounted to 2 million (2014: 9 million)
|
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
70 |
CRH Annual Report on Form 20-F | 2015
Studentencomplex Johanna is a student accommodation building in Utrecht, the Netherlands. Zoontjens supplied its Drenoliet® rooftop terrace tiles for communal areas, producing a landscape that is aesthetically pleasing and capable of withstanding high loads. |
|
71 |
CRH Annual Report on Form 20-F | 2015
Europe Lightside
Results
|
Analysis of change
| |||||||||||||||||||||||||||||||
million |
% Change |
2015 | 2014 | Total Change |
Organic |
Acquisitions |
Restructuring | Exchange | ||||||||||||||||||||||||
Sales revenue | +5% | 961 | 913 | +48 | +3 | +12 | - | +33 | ||||||||||||||||||||||||
EBITDA (as defined)* | +6% | 100 | 94 | +6 | +2 | - | - | +4 | ||||||||||||||||||||||||
Operating profit | +6% | 75 | 71 | +4 | - | - | - | +4 | ||||||||||||||||||||||||
EBITDA (as defined)* margin | 10.4% | 10.3% | ||||||||||||||||||||||||||||||
Operating profit/sales
|
|
7.8%
|
|
|
7.8%
|
|
||||||||||||||||||||||||||
|
Restructuring costs amounted to 5 million (2014: 5 million)
|
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
72 |
CRH Annual Report on Form 20-F | 2015
Europe Distribution
Results
|
Analysis of change
| |||||||||||||||||||||||||||||||||||
million |
% Change |
2015 | 2014 | Total Change |
Organic | Acquisitions | Restructuring/ Impairment |
Swiss |
Exchange | |||||||||||||||||||||||||||
Sales revenue | +4% | 4,158 | 3,999 | +159 | -21 | +27 | - | - | +153 | |||||||||||||||||||||||||||
EBITDA (as defined)* | -10% | 171 | 190 | -19 | +4 | +1 | - | -32 | +8 | |||||||||||||||||||||||||||
Operating profit | -16% | 94 | 112 | -18 | +10 | - | -1 | -32 | +5 | |||||||||||||||||||||||||||
EBITDA (as defined)* margin | 4.1% | 4.8% | ||||||||||||||||||||||||||||||||||
Operating profit/sales
|
|
2.3%
|
|
|
2.8%
|
|
||||||||||||||||||||||||||||||
|
Restructuring costs amounted to 4 million (2014: 4 million)
Impairment charges of 1 million were incurred (2014: nil)
|
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
73 |
CRH Annual Report on Form 20-F | 2015
Americas Materials
Results
|
Analysis of change
|
|||||||||||||||||||||||||||||||||||||||
million |
% |
2015 | 2014 |
Total |
Organic | Acquisitions | Divestments | Restructuring | Exchange | |||||||||||||||||||||||||||||||
Sales revenue | +26% | 6,400 | 5,070 | +1,330 | +342 | +80 | -95 | - | +1,003 | |||||||||||||||||||||||||||||||
EBITDA (as defined)* | +50% | 912 | 609 | +303 | +170 | +14 | -7 | +1 | +125 | |||||||||||||||||||||||||||||||
Operating profit | +72% | 611 | 355 | +256 | +176 | +11 | -3 | +1 | +71 | |||||||||||||||||||||||||||||||
EBITDA (as defined)* margin | 14.3% | 12.0% | ||||||||||||||||||||||||||||||||||||||
Operating profit/sales | 9.5% | 7.0% | ||||||||||||||||||||||||||||||||||||||
|
Restructuring costs amounted to 8 million (2014: 9 million)
|
|
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
74 |
CRH Annual Report on Form 20-F | 2015
A CAT 988K wheel loader, loads a gravel train at the Stoneco of Michigan - Ottawa Lake Quarry. The quarry shipped approx. two million tonnes in 2015 while continuing their run of 4,812 days worked without a lost time incident. Ottawa Lake has won multiple NSSGA and MAA awards for safety, community relations and environmental controls and is an MDOT-certified supplier of crushed limestone, sand, and gravel. |
75 |
CRH Annual Report on Form 20-F | 2015
Americas Products
Results
|
Analysis of change
|
|||||||||||||||||||||||||||||||||||||||
million |
% Change |
2015 |
2014 |
Total Change |
Organic |
Acquisitions |
Divestments |
Restructuring/ Impairment |
Exchange |
|||||||||||||||||||||||||||||||
Sales revenue | +20% | 3,862 | 3,225 | +637 | +246 | +196 | -374 | - | +569 | |||||||||||||||||||||||||||||||
EBITDA (as defined)* | +49% | 391 | 263 | +128 | +67 | +29 | -31 | +13 | +50 | |||||||||||||||||||||||||||||||
Operating profit | +72% | 249 | 145 | +104 | +68 | +15 | -21 | +10 | +32 | |||||||||||||||||||||||||||||||
EBITDA (as defined)* margin | 10.1% | 8.2% | ||||||||||||||||||||||||||||||||||||||
Operating profit/sales | 6.4% | 4.5% | ||||||||||||||||||||||||||||||||||||||
|
Restructuring costs amounted to 5 million (2014: 18 million) |
| ||||||||||||||||||||||||||||||||||||||
|
Impairment charges of 17 million were incurred (2014: 14 million)
|
|
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
76 |
CRH Annual Report on Form 20-F | 2015
Oldcastle BuildingEnvelope® designed, engineered, tested, manufactured and delivered 2.6 million square feet of custom-engineered curtain wall, 1.6 million square feet of high performance and silk-screened architectural glass, 20,450 sunshades and 4,000 square feet of custom-engineered skylights for ExxonMobils new global campus in Houston, Texas. |
77 |
CRH Annual Report on Form 20-F | 2015
Americas Distribution
Results
|
Analysis of change
| |||||||||||||||||||||||||||
million | % Change |
2015 | 2014 | Total Change |
Organic | Restructuring | Exchange | |||||||||||||||||||||
Sales revenue | +26% | 2,229 | 1,776 | +453 | +102 | - | +351 | |||||||||||||||||||||
EBITDA (as defined)* | +33% | 140 | 105 | +35 | +14 | -1 | +22 | |||||||||||||||||||||
Operating profit | +34% | 111 | 83 | +28 | +11 | -1 | +18 | |||||||||||||||||||||
EBITDA (as defined)* margin | 6.3% | 5.9% | ||||||||||||||||||||||||||
Operating profit/sales
|
|
5.0%
|
|
|
4.7%
|
|
||||||||||||||||||||||
|
Restructuring costs amounted to 1 million (2014: nil)
|
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
78 |
CRH Annual Report on Form 20-F | 2015
LH Assets
Results
|
Analysis by Region
| |||||||||||||||||||||||
million | 2015 | Western Europe |
CEE | Americas | Asia | Transaction/ One-off costs | ||||||||||||||||||
Sales revenue | 2,418 | 1,464 | 186 | 617 | 151 | - | ||||||||||||||||||
EBITDA (as defined)* | 171 | 183 | 51 | 100 | 34 | -197 | ||||||||||||||||||
Operating profit | 2 | 85 | 22 | 67 | 25 | -197 | ||||||||||||||||||
EBITDA (as defined)* margin | 7.1% | 12.5% | 27.4% | 16.2% | 22.5% | - | ||||||||||||||||||
Operating profit/sales
|
0.1%
|
|
5.8%
|
|
|
11.8%
|
|
|
10.9%
|
|
|
16.6%
|
|
-
| ||||||||||
|
Transaction costs of 144 million and other one-off costs of 53 million
|
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
79 |
CRH Annual Report on Form 20-F | 2015
Business Performance Review - Prior Year
Key Components of 2014 Performance
million | Revenue | EBITDA (as defined)* |
Operating profit |
Profit on disposal |
Finance costs (net) |
Assoc. and JV PAT |
Pre-tax profit/ (loss) |
|||||||||||||||||||||
2013 | 18,031 | 1,475 | 100 | 26 | (297) | (44) | (215) | |||||||||||||||||||||
Exchange effects | (62) | (11) | (4) | - | (1) | 5 | - | |||||||||||||||||||||
2013 at 2014 exchange rates | 17,969 | 1,464 | 96 | 26 | (298) | (39) | (215) | |||||||||||||||||||||
Incremental impact in 2014 of: | ||||||||||||||||||||||||||||
2014 and 2013 acquisitions |
237 | 16 | 4 | - | - | (2) | 2 | |||||||||||||||||||||
2014 and 2013 divestments |
(25) | - | 1 | 43 | - | (1) | 43 | |||||||||||||||||||||
Restructuring costs |
- | 20 | 20 | - | - | - | 20 | |||||||||||||||||||||
Pension/CO2 gains |
- | (23) | (23) | - | - | - | (23) | |||||||||||||||||||||
Impairment charges |
- | - | 601 | - | - | 105 | 706 | |||||||||||||||||||||
Ongoing operations | 731 | 164 | 218 | 8 | 10 | (8) | 228 | |||||||||||||||||||||
2014 | 18,912 | 1,641 | 917 | 77 | (288) | 55 | 761 | |||||||||||||||||||||
| CRHs share of after-tax profits of joint ventures and associated undertakings |
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
80 |
CRH Annual Report on Form 20-F | 2015
Other major movements in net debt during 2014 comprised acquisition spend of 181 million on 21 transactions which was more than offset by divestment and disposal proceeds of 345 million. | ||
Materials provided by CRH Romania were used in the construction of the Agigea Bridge which spans the Danube Black Sea canal and is the longest cable-stayed road bridge ever built in Romania. | ||
| As disclosed in note 20 to the Consolidated Financial Statements, net debt comprises interest-bearing loans and borrowings, cash in cash equivalents, and derivative financial instruments. |
81 |
CRH Annual Report on Form 20-F | 2015
Europe Heavyside - 2014
Results
|
Analysis of change
| |||||||||||||||||||||||||||||||||||||||||||
million | % Change |
2014 | 2013 | Total Change |
Organic | Acquisitions | Divestments | Restructuring/ Impairment |
Pensions | Exchange | ||||||||||||||||||||||||||||||||||
Sales revenue | 4% | 3,929 | 3,786 | 143 | 105 | 51 | -4 | - | - | -9 | ||||||||||||||||||||||||||||||||||
EBITDA (as defined)* | 17% | 380 | 326 | 54 | 47 | 2 | 1 | 22 | -11 | -7 | ||||||||||||||||||||||||||||||||||
Operating profit | 138% | 151 | -395 | 546 | 73 | -2 | 1 | 489 | -11 | -4 | ||||||||||||||||||||||||||||||||||
EBITDA (as defined)* margin | 9.7% | 8.6% | ||||||||||||||||||||||||||||||||||||||||||
Operating profit/sales | 3.8% | -10.4% | ||||||||||||||||||||||||||||||||||||||||||
|
Restructuring costs amounted to 15 million (2013: 37 million)
Impairment charges of 35 million were incurred (2013: 502 million)
No pension restructuring gains were recorded (2013: 12 million)
Gains from CO2 trading amounted to 9 million (2013: 8 million) | |||||||||||||||||||||||||||||||||||||||||||
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
82 |
CRH Annual Report on Form 20-F | 2015
The design for this park in Ciechocinek, Poland was completed by students who won Polbruks Direction: Ciechocinek competition. 4,200 m2 of Urbanika and Carmino pavers were used to bring this design to life. |
83 |
CRH Annual Report on Form 20-F | 2015
Europe Lightside - 2014
Results
|
Analysis of change
| |||||||||||||||||||||||||||||||||||
million | % Change |
2014 | 2013 | Total Change |
Organic | Acquisitions | Restructuring/ Impairment |
Pensions | Exchange | |||||||||||||||||||||||||||
Sales revenue | 7% | 913 | 856 | 57 | 53 | - | - | - | 4 | |||||||||||||||||||||||||||
EBITDA (as defined)* | 32% | 94 | 71 | 23 | 22 | - | 1 | -1 | 1 | |||||||||||||||||||||||||||
Operating profit | 154% | 71 | 28 | 43 | 31 | - | 14 | -1 | -1 | |||||||||||||||||||||||||||
EBITDA (as defined)* margin | 10.3% | 8.3% | ||||||||||||||||||||||||||||||||||
Operating profit/sales | 7.8% | 3.3% | ||||||||||||||||||||||||||||||||||
|
Restructuring costs amounted to 5 million (2013: 6 million)
No impairment charges were recorded (2013: 13 million)
No pension restructuring gains were recorded (2013: 1 million) | |||||||||||||||||||||||||||||||||||
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
84 |
85 |
CRH Annual Report on Form 20-F | 2015
Europe Distribution - 2014
Results
|
Analysis of change
| |||||||||||||||||||||||||||||||||||||
million | % Change |
2014 | 2013 | Total Change |
Organic | Acquisitions | Restructuring/ Impairment |
Pensions | Exchange | |||||||||||||||||||||||||||||
Sales revenue | 2% | 3,999 | 3,936 | 63 | 7 | 41 | - | - | 15 | |||||||||||||||||||||||||||||
EBITDA (as defined)* | 2% | 190 | 186 | 4 | 15 | - | - | -11 | - | |||||||||||||||||||||||||||||
Operating profit | 6% | 112 | 106 | 6 | 14 | -1 | 4 | -11 | - | |||||||||||||||||||||||||||||
EBITDA (as defined)* margin | 4.8% | 4.7% | ||||||||||||||||||||||||||||||||||||
Operating profit/sales | 2.8% | 2.7% | ||||||||||||||||||||||||||||||||||||
Restructuring costs amounted to 4 million (2014: 4 million)
Impairment charges of 1 million were incurred (2014: nil) | ||||||||||||||||||||||||||||||||||||||
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
86 |
CRH Annual Report on Form 20-F | 2015
In the Netherlands, 27 different General Builders Merchants companies in Europe Distribution united under one new name. BMN Bouwmaterialen was formally launched in October 2015 and has nearly 80 branches nationwide. |
87 |
CRH Annual Report on Form 20-F | 2015
Americas Materials - 2014
Results
|
Analysis of change
| |||||||||||||||||||||||||||||||||||
million | % Change |
2014 | 2013 | Total Change |
Organic | Acquisitions | Divestments | Restructuring/ Impairment |
Exchange | |||||||||||||||||||||||||||
Sales revenue | 7% | 5,070 | 4,721 | 349 | 317 | 37 | -2 | - | -3 | |||||||||||||||||||||||||||
EBITDA (as defined)* | 9% | 609 | 557 | 52 | 42 | 7 | - | 3 | - | |||||||||||||||||||||||||||
Operating profit | 57% | 355 | 226 | 129 | 61 | 5 | - | 63 | - | |||||||||||||||||||||||||||
EBITDA (as defined)* margin | 12.0% | 11.8% | ||||||||||||||||||||||||||||||||||
Operating profit/sales | 7.0% | 4.8% | ||||||||||||||||||||||||||||||||||
|
Restructuring costs amounted to 9 million (2013: 12 million)
No impairment charges were recorded (2013: 60 million) | |||||||||||||||||||||||||||||||||||
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
88 |
CRH Annual Report on Form 20-F | 2015
89 |
CRH Annual Report on Form 20-F | 2015
Americas Products - 2014
Results
|
Analysis of change
| |||||||||||||||||||||||||||||||||||||||
million | % Change |
2014 | 2013 | Total Change |
Organic | Acquisitions | Restructuring/ Impairment |
Pensions | Exchange | |||||||||||||||||||||||||||||||
Sales revenue | 5% | 3,225 | 3,068 | 157 | 169 | 75 | -19 | - | -68 | |||||||||||||||||||||||||||||||
EBITDA (as defined)* | 7% | 263 | 246 | 17 | 24 | 6 | -1 | -7 | -5 | |||||||||||||||||||||||||||||||
Operating profit | 113% | 145 | 68 | 77 | 24 | 2 | - | 50 | 1 | |||||||||||||||||||||||||||||||
EBITDA (as defined)* margin | 8.2% | 8.0% | ||||||||||||||||||||||||||||||||||||||
Operating profit/sales | 4.5% | 2.2% | ||||||||||||||||||||||||||||||||||||||
|
Restructuring costs amounted to 18 million (2013: 11 million)
Impairment charges of 14 million were incurred (2013: 71 million) | |||||||||||||||||||||||||||||||||||||||
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
90 |
CRH Annual Report on Form 20-F | 2015
91 |
CRH Annual Report on Form 20-F | 2015
Americas Distribution - 2014
Results
|
Analysis of change
| |||||||||||||||||||||||||||||||||||
million | % Change |
2014 | 2013 | Total Change |
Organic | Acquisitions | Restructuring/ Impairment |
Exchange | ||||||||||||||||||||||||||||
Sales revenue | 7% | 1,776 | 1,664 | 112 | 80 | 33 | - | -1 | ||||||||||||||||||||||||||||
EBITDA (as defined)* | 18% | 105 | 89 | 16 | 14 | 1 | 1 | - | ||||||||||||||||||||||||||||
Operating profit | 24% | 83 | 67 | 16 | 15 | - | 1 | - | ||||||||||||||||||||||||||||
EBITDA (as defined)* margin | 5.9% | 5.3% | ||||||||||||||||||||||||||||||||||
Operating profit/sales | 4.7% | 4.0% | ||||||||||||||||||||||||||||||||||
|
No restructuring costs were recorded (2013: 1 million)
| |||||||||||||||||||||||||||||||||||
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
92 |
CRH Annual Report on Form 20-F | 2015
With close to 200 locations, Allied is a leading building products distributor to specialty contractors in residential and commercial construction in the United States. This Contractor Tool Center in Wall Township, New Jersey, provides a one-stop shopping experience, with products ranging from hand tools to hand cleaner. |
|
93 |
94 |
Governance | ||||||||
Board of Directors | 96 | |||||||
Corporate Governance Report | 100 | |||||||
Directors Remuneration Report | 114 |
95 |
CRH Annual Report on Form 20-F | 2015
Chairman
Appointed to the Board: June 2004
Nationality: Irish
Age: 64
Committee membership: Acquisitions Committee; Finance Committee; Nomination & Corporate Governance Committee; Remuneration Committee |
Skills and experience: Nicky was Vice President of Manufacturing and Business Operations for Dell Inc.s Europe, Middle East and Africa (EMEA) operations from 2000 to 2008. Prior to joining Dell, he was Executive Vice President at Eastman Kodak and previously held the position of President and Chief Executive Officer at Verbatim Corporation, based in the United States.
Qualifications: C.Eng, FIEI, MBA.
External appointments: Non-listed: Chief Executive of Prodigium, a consulting company which provides business advisory services; non-executive Director of Musgrave Group plc, a privately-owned international food retailer and Eircom Limited, a telecommunications services provider in Ireland. Listed: Non-executive Director of Finning International, Inc., the worlds largest Caterpillar equipment dealer. | |||
Chief Executive
Appointed to the Board: January 2009
Nationality: Irish
Age: 53
Committee membership: Acquisitions Committee
|
Skills and experience: Albert was appointed a CRH Board Director in January 2009. He joined CRH in 1998. Prior to joining CRH, he was Chief Operating Officer with a private equity group. While at CRH, he has held a variety of senior positions, including Finance Director of the Europe Materials Division (now part of Europe Heavyside), Group Development Director and Managing Director of Europe Materials. He became Chief Operating Officer in January 2009 and was appointed Group Chief Executive with effect from 1 January 2014.
Qualifications: FCPA, MBA, MBS.
External appointments: Non-listed: Not applicable. Listed: Not applicable. | |||
Finance Director
Appointed to the Board: January 2016
Nationality: Irish
Age: 46 |
Skills and experience: Senan has over 25 years experience in international business across financial services, banking and renewable energy. He joined CRH from Bank of Ireland Group plc where he was the Chief Operating Officer and a member of the Groups Executive Committee. He previously held positions as Chief Operating Officer and Finance Director at Ulster Bank, Chief Financial Officer at Airtricity and numerous senior financial roles in GE, both in Ireland and the United States.
Qualifications: BComm, FCA.
External appointments: Non-listed: Not applicable. Listed: Not applicable. |
96 |
CRH Annual Report on Form 20-F | 2015
Transformation Director
Appointed to the Board: May 2010
Nationality: Irish
Age: 57
Committee membership: Acquisitions Committee; Finance Committee |
Skills and experience: Since joining CRH in 1988, Maeve has held a number of roles in the Group Finance area and was appointed Group Controller in 2001, Head of Group Finance in January 2009 and to the position of Finance Director in May 2010. She was appointed as Group Transformation Director with effect from January 2016. Maeve has broad-ranging experience of CRHs reporting, control, budgetary and capital expenditure processes and has been extensively involved in CRHs evaluation of acquisitions. Prior to joining CRH, she worked for a number of years as a chartered accountant in an international accountancy practice.
Qualifications: MA, FCA.
External appointments: Non-listed: Agency Member of the National Treasury Management Agency (NTMA), a state body that provides asset and liability management services to the Irish Government. Listed: Not applicable. | |||
Chairman, CRH Americas
Appointed to the Board: July 2008
Nationality: United States Age: 66 |
Skills and experience: Mark joined CRH in 1997 and was appointed a CRH Board Director with effect from July 2008. In 2000, he was appointed President of Oldcastle Materials, Inc. and became the Chief Executive Officer of this Division in 2006. He was appointed Chief Executive Officer of Oldcastle, Inc. (the holding company for CRHs operations in the Americas) in July 2008 and, with effect from January 2016, assumed the role of Chairman, CRH Americas. With over 40 years of experience in the building materials industry, he has overall responsibility for the Groups aggregates, asphalt and readymixed concrete operations in the United States and its products and distribution businesses in the Americas.
External appointments: Non-listed: Not applicable. Listed: Not applicable. | |||
Non-executive Director*
Appointed to the Board: July 2013
Nationality: United States
Age: 64
Committee membership: Nomination & Corporate Governance Committee; Remuneration Committee |
Skills and experience: Don retired from PricewaterhouseCoopers (PwC) in June 2013, following a 39 year career with the firm. During that time he was Vice Chairman, Global Assurance at PwC, a position he had held since July 2008 and directed the US firms services for a number of large public company clients. He also held various leadership roles in PwC and was, from July 2001 to June 2008, a member of, and past lead Director for, the Board of Partners and Principals of the US firm as well as a member of PwCs Global Board.
Qualifications: CPA, MBA.
External appointments: Non-listed: Director of Neuraltus Pharmaceuticals, Inc. and eAsic Corporation. Listed: Not applicable.
* Don McGovern is Senior Independent Director | |||
Non-executive Director
Appointed to the Board: October 2011
Nationality: Swiss
Age: 63
Committee membership: Audit Committee (Financial Expert); Finance Committee |
Skills and experience: Ernst was Chief Executive of Sika AG, a manufacturer of speciality chemicals for construction and general industry, until 31 December 2011. Prior to joining Sika, he worked for the Schindler Group and was Chief Finance Officer between 1997 and 2001. Over the course of his career he has gained extensive experience in India, China and the Far East generally.
Qualifications: LIC.OEC.HSG
External appointments: Non-listed: Member of the Advisory Board of China Renaissance Capital Investment Inc., a private equity investment company in Hong Kong, China. Listed: Chairman of the Board of Directors of Conzetta AG, a broadly diversified Swiss company and a member of the Board of Bucher Industries AG, a mechanical and vehicle engineering company based in Switzerland. |
97 |
CRH Annual Report on Form 20-F | 2015
Board of Directors | continued
Non-executive Director
Appointed to the Board: January 2007
Nationality: United States
Age: 70
Committee membership: Nomination & Corporate Governance Committee; Remuneration Committee
|
Skills and experience: Bill is founder and General Partner of Alta Communications and Marion Equity Partners LLC, Massachusetts-based venture capital firms. He is past Chairman of Cephalon Inc., and past President and Chairman of the National Venture Capital Association. He was until May 2014, a Director of the Irish venture capital company Delta Partners Limited.
Qualifications: BA, MBA.
External appointments: Non-listed: Member of the Board of Avadeyne Health, Davler Media Group, Integra Partners and Sentinel Peak Capital, LLC. Listed: Not applicable. | |||
Non-executive Director
Appointed to the Board: July 2007
Nationality: German
Age: 68
Committee membership: Acquisitions Committee; Finance Committee |
Skills and experience: Utz-Hellmuth was, until May 2011, Chairman of the Supervisory Board of Süd-Chemie Aktiengesellschaft. He was also Chief Executive of Degussa AG, Germanys third largest chemical company, until May 2006, a partner in the private equity group One Equity Partners Europe GmbH until July 2014 and a Director of Jungbunzlauer Holding AG until March 2015.
External appointments: Non-listed: Chairman of the Supervisory Board of German rail company Deutsche Bahn AG. Non-executive Director of Honosthor N.V. Listed: Not applicable. | |||
Non-executive Director
Appointed to the Board: January 2015
Nationality: Irish
Age: 62
Committee membership: Acquisitions Committee; Audit Committee |
Skills and experience: Pat was Chairman of the Executive Board of Directors of SHV Holdings (SHV), a large family-owned Dutch multinational company with a diverse portfolio of businesses, including the production and distribution of energy, the provision of industrial services, heavy lifting and transport solutions, cash and carry wholesale and the provision of private equity. He retired from SHV mid-2014. During a 32 year career with SHV, he held various leadership roles across SHVs diverse portfolio of businesses, while living in various parts of the world, and was a member of the Executive Board of SHV from 2001, before becoming Executive Chairman in 2006.
Qualifications: MBS, BComm.
External appointments: Non-listed: Member of the Board of Liquigas S.p.A., a LPG distribution company. Listed: Not applicable. | |||
Non-executive Director
Appointed to the Board: September 2015
Nationality: United States
Age: 63
Committee membership: Acquisitions Committee; Finance Committee
|
Skills and experience: Rebecca has held a variety of executive leadership positions in the energy sector, including Chief Executive of Laurus Energy, President Gas and Power in BHP Billiton and Chief Executive of Amoco Energy Development Company, and has international experience in the Americas, Asia and Africa. She was, until recently, a non-executive Director of Granite Construction, Inc., a leading infrastructure contractor and construction materials producer in the United States.
Qualifications: Bachelor of Sciences degree
External appointments: Non-listed: Not applicable. Listed: Non-executive Director of Aggreko plc, Veresen, Inc. and ITT Corporation. |
98 |
CRH Annual Report on Form 20-F | 2015
Non-executive Director
Appointed to the Board: February 2012
Nationality: Irish
Age: 54
Committee membership: Audit Committee; Finance Committee |
Skills and experience: Heather Ann is a former Managing Director Ireland of Reckitt Benckiser and Boots Healthcare and was previously a non-executive Director of Bank of Ireland plc and IDA Ireland.
Qualifications: BComm, MBS.
External appointments: Non-listed: Chairman of the Bank of Ireland Pension Fund Trustees Board; Director of Ergonomics Solutions International and the Institute of Directors. Listed: Non-executive Director of Greencore Group plc and Jazz Pharmaceuticals plc. | |||
Non-executive Director
Appointed to the Board: March 2015
Nationality: British
Age: 54
Committee membership: Nomination & Corporate Governance Committee; Remuneration Committee |
Skills and experience: Lucinda spent the majority of her career in investment banking, including 21 years in UBS Investment Bank and its predecessor firms where she worked until 2007. She held senior management positions in the UK and the US, including Global Head and Chairman of UBSs Equity Capital Markets Group and Vice Chairman of the Investment Banking Division.
Qualifications: Masters in Philosophy, Politics and Economics and a Masters in Political Science.
External appointments: Non-listed: Non-executive Director of UK Financial Investments Limited, which manages the UK governments investments in financial institutions, and the British Standards Institution. Lucinda is also a non-executive member of the Partnership Board of King & Wood Mallesons LLP and a trustee of Sue Ryder. Listed: Non-executive Director of Diverse Income Trust plc and Graphite Enterprise Trust plc. | |||
Non-executive Director
Appointed to the Board: February 2014
Nationality: Dutch
Age: 59
Committee membership: Acquisitions Committee; Audit Committee
|
Skills and experience: Henk has a background in distribution, wholesale and logistics. Until 2010, he was Chief Executive Officer at Pon Holdings B.V., a large, privately held international company which is focused on the supply and distribution of passenger cars and trucks, and equipment for the construction and marine sectors. He was also a member of the Supervisory Board of the Royal Bank of Scotland N.V. and the retail group Detailresult Groep.
Qualifications: Masters degree in Dutch Law; PMD Harvard Business School (1989).
External appointments: Non-listed: Member of the Supervisory Boards of Stork Technical Services Group and Blokker Holding B.V. and holder of several non-profit board memberships. Listed: Not applicable. | |||
Non-executive Director
Appointed to the Board: March 2016
Nationality: United States
Age: 64 |
Skills and experience: Bill is the Vice Chairman at EMC Corporation, a global leader in enabling businesses and service providers to transform their operations and deliver IT as a service. In previous roles he was responsible for EMCs global sales and distribution organisation (2006 - 2012) and served as Chief Financial Officer leading the companys worldwide finance operation (1996 - 2006). Prior to joining EMC he was a partner in the audit and financial advisory services practice of Coopers & Lybrand LLP.
Qualifications: MBA degree from Babson College, a Masters of Science in Taxation from Bentley College and a Bachelors degree from Holy Cross, Boston.
External appointments: Non-listed: Director of Pivotal Software, Inc. and College of the Holy Cross. Listed: Member of the Board of Directors of Popular, Inc., a diversified financial services company, and Inovalon Holdings, Inc., a healthcare technology company. |
99 |
CRH Annual Report on Form 20-F | 2015
* | The Governance Appendix is prepared in compliance with Section 1373 of the Companies Act 2014. For the purposes of Section 1373 (2) of the Companies Act 2014, the Governance Appendix (included in Exhibit 15.2 to this Annual Report on Form 20-F) and the risk management disclosures on page 52 to 63 form part of, and are incorporated by reference into, this Corporate Governance Report. |
100 |
CRH Annual Report on Form 20-F | 2015
* | ICSA is part of an organisation which provides software solutions to third parties, including CRH. The value of the contract is de minimus and otherwise ICSA has no business connection with CRH. |
101 |
CRH Annual Report on Form 20-F | 2015
Corporate Governance Report | continued
CRH plc has a secondary listing on the Irish Stock Exchange. For this reason, CRH plc is not subject to the same ongoing listing requirements as would apply to an Irish company with a primary listing on the Irish Stock Exchange. For further information, shareholders should consult their own financial adviser. Further details on the Groups listing arrangements, including its premium listing on the London Stock Exchange, are set out on page 110.
102 |
CRH Annual Report on Form 20-F | 2015
Audit Committee Report
Key Areas 2015
Issue |
Description |
Table 1 | ||
Financial Reporting and External Audit |
In July 2015, we met with Ernst & Young to agree the 2015 external audit plan. Table 2 on page 104 outlines the key areas identified as being potentially significant and how we addressed these during the year.
| |||
Impairment Testing |
Through discussion with both management and Ernst & Young, we reviewed managements impairment testing methodology and processes. We found the methodology to be robust and the results of the testing process appropriate. Details of the impairments recorded during the year, which amount to a total of 44 million, are set out in note 2 on page 176.
| |||
Acquisitions |
During 2015, the Group acquired a number of significant assets and businesses. We considered various related aspects, including, estimates and judgements regarding valuations, the recognition of intangible assets and the implementation of CRHs internal control structures.
| |||
Enterprise Risk Management |
We monitored progress in respect of the ongoing formalisation of Enterprise Risk Management, including development of a Risk Appetite & Tolerance Framework (further details in relation to CRHs risk governance are outlined on page 52).
We also considered an assessment of the Groups risk management and internal control systems. This had regard to all material controls, including financial, operational and compliance controls that could affect the Groups business.
| |||
Cyber Security |
We monitored progress in refining the Groups information security programme and cyber security capabilities.
| |||
External Auditors |
Ernst & Young have been the Groups auditors since 1988. During 2015, we considered whether to put the external audit contract out to tender. Given the focus on the integration of the major acquisitions completed in 2015, the appointment of a new Finance Director in January 2016 and the Committees continued satisfaction with the performance of Ernst & Young (details of the Committees processes in reviewing the effectiveness of the external audit are set out on page 105), we concluded that it would not be in the best interests of the Group to carry out a tender at this time. We will continue to keep this under review in the context of EU rules mandating the rotation of external auditors which, for CRH, would require a transition by the end of 2020.
As in prior years, the continuance in office of Ernst & Young will be subject to a non-binding advisory vote at the 2016 Annual General Meeting.
| |||
Internal Audit |
We considered the results of an independent external assessment of the Internal Audit function. The assessment included interviews with key stakeholders across the Group (including the members of the Committee) and the examination of the information provided to the Committee. The results, which were generally very positive, identified some areas where the effectiveness of the function and its reporting to the Committee could be enhanced. A detailed action plan to address these was agreed.
|
(i) | Attendance by non-independent Directors and management is by invitation only. |
103 |
CRH Annual Report on Form 20-F | 2015
Corporate Governance Report | continued
Areas identified for focus during the 2015 External Audit Planning Process
Area of Focus |
Audit Committee Action |
Table 2 | ||
Impairment of Goodwill |
For the purposes of its annual impairment testing process, the Group assesses the recoverable amount of each of CRHs cash-generating units (CGUs see details in note 14 to the Consolidated Financial Statements) based on a value-in-use computation. The annual goodwill impairment testing was conducted by management, and papers outlining the methodology and assumptions used in, and the results of, that assessment were presented to the Audit Committee. Following its deliberations, the Audit Committee was satisfied that the methodology used by management (which was consistent with prior years) and the results of the assessment, together with the disclosures in note 14, were appropriate.
Similar to 2014, a separate assessment was carried out in 2015 in respect of any remaining business units identified for divestment as part of the previously announced Group-wide portfolio review. The valuation of each business unit (based on the estimated fair value less costs of disposal) was reassessed in 2015 on a standalone CGU basis and compared with its carrying value. The Audit Committee reviewed and considered the methodology used by management in the reassessment process and was satisfied that it was appropriate.
During 2015, and as noted elsewhere in this report, the Group completed two significant acquisitions. As the initial allocation of the goodwill to CGUs is not complete, CRH is required to assess whether indicators of impairment exist in relation to goodwill attributable to these businesses. Papers outlining the methodology used in, and the results of, that assessment were presented to the Audit Committee. Following its deliberations, the Audit Committee was satisfied that the methodology used by management and the results of the assessment were appropriate (see note 14 for further details).
| |||
Impairment of Property, Plant and Equipment, and Financial Assets |
In addition to the goodwill impairment testing process discussed above, the Group also annually assesses the need for impairment of other non-current assets (property, plant and equipment and financial assets) as and when indicators of impairment exist. The Audit Committee considered the methodology used by management in that process and was satisfied that it was appropriate.
| |||
Contract Revenue Recognition |
IAS 11 Construction Contracts requires revenue and expenses to be recognised on uncompleted contracts, with the underlying principle that, once the outcome of a long-term construction contract can be reliably estimated, revenue and expenses associated with that contract should be recognised by reference to the stage of completion of the contract activity at the balance sheet date. If it is anticipated that the contract will be loss-making, the expected loss must be recognised immediately. Following discussions with management and Ernst & Young, the Audit Committee was satisfied that contract revenue recognition was not a material issue for the Group in 2015 as the majority of contracts were completed within the financial year.
| |||
Accounting for Acquisitions and Disposals |
During 2015, the Group completed 22 acquisitions and investments at a total cost of approximately 8 billion and realised total disposal proceeds of approximately 1 billion across 30 business disposals. Following discussions with management and Ernst & Young, the Audit Committee was satisfied that the accounting treatment applied to acquisitions and disposals during 2015 was appropriate.
| |||
LH Assets Acquisition Fair Value Accounting for Property, Plant and Equipment and Provisions
|
Given the significant scale of the acquisition of the LH Assets, both in terms of monetary value and geographical spread, the Audit Committee considered with management and Ernst & Young the judgements and estimates used by management in the fair value accounting for property, plant and equipment and in the recognition of provisions related to the acquisition and was satisfied that these were appropriate.
| |||
CRL Acquisition Identification and Valuation of Acquired Intangible Assets
|
The Audit Committee considered with management and Ernst & Young the estimates and judgements used by management in the identification and valuation of intangible assets related to the CRL acquisition and determined that these were appropriate. |
104 |
CRH Annual Report on Form 20-F | 2015
(i) | The Board has determined that all of the non-executive Directors on the Audit Committee are independent according to the requirements of Rule 10A 3 of the rules of the Securities and Exchange Commission. |
(ii) | For more information on the role and responsibilities of the Audit Committee, please see the Governance Appendix (Exhibit 15.2; Section 2; Operation of the Boards Committees; Audit Committee; Role and Responsibilities) which is incorporated by reference herein. |
(iii) | A copy of Section 404 of the Sarbanes-Oxley Act 2002 can be obtained from the US Securities and Exchange Commissions website www.sec.gov. |
(iv) | The term of any general pre-approval is twelve months from the date of pre-approval. |
(v) | For more information on the Groups policy regarding non-audit fees, please see the Governance Appendix (Exhibit 15.2; Section 2; Operation of the Boards Committees; Audit Committee; Non-audit Fees) which is incorporated by reference herein. |
105 |
CRH Annual Report on Form 20-F | 2015
Nomination & Corporate Governance Committee
106 |
CRH Annual Report on Form 20-F | 2015
107 |
CRH Annual Report on Form 20-F | 2015
Corporate Governance Report | continued
Membership of the CRH Board | Table 5 |
(i) | Will increase to 31% following 2016 Annual General Meeting |
(ii) | For more information on the period for which non-executive Directors are appointed, please see the Governance Appendix (Exhibit 15.2; Section 1; Frequently Asked Questions; For what period are non-executive Directors appointed) which is incorporated by reference herein. |
(ii) | For more information on the retirement and re-election of Directors, please see the Governance Appendix (Exhibit 15.2; Section 1; Frequently Asked Questions; What are the requirements regarding the retirement and re-election of Directors) which is incorporated by reference herein. |
108 |
CRH Annual Report on Form 20-F | 2015
* | In accordance with Section 167(7) of the Companies Act 2014. |
** | The terms of reference of these Committees comply fully with the 2014 Code requirements; CRH considers that they are generally responsive to the relevant NYSE rules but may not address all aspects of these rules. |
109 |
CRH Annual Report on Form 20-F | 2015
Corporate Governance Report | continued
Attendance at meetings during the year ended 31 December 2015
|
Table 7
| |||||||||||||||||||||||
Board | Acquisitions | Audit | Finance | Nomination | Remuneration | |||||||||||||||||||
Total | Attended | Total | Attended | Total | Attended | Total | Attended | Total | Attended | Total | Attended | |||||||||||||
E.J. Bärtschi | 8 | 7 | - | - | 9 | 9 | 4 | 4 | - | - | - | - | ||||||||||||
M. Carton | 8 | 8 | 5 | 5 | - | - | 4 | 4 | - | - | - | - | ||||||||||||
W.P. Egan | 8 | 8 | - | - | - | - | - | - | 6 | 6 | 10 | 10 | ||||||||||||
U-H. Felcht | 8 | 8 | 5 | 5 | - | - | 4 | 3 | - | - | - | - | ||||||||||||
N. Hartery | 8 | 8 | 5 | 5 | - | - | 4 | 4 | 6 | 6 | 10 | 10 | ||||||||||||
J.W. Kennedy(i) | 2 | 2 | 1 | 1 | - | - | - | - | - | - | - | - | ||||||||||||
P.J. Kennedy(ii) | 8 | 8 | 4 | 4 | 8 | 7 | - | - | - | - | - | - | ||||||||||||
R. McDonald(iv) | 3 | 3 | 2 | 2 | - | - | 3 | 3 | - | - | - | - | ||||||||||||
D.A. McGovern, Jr. | 8 | 8 | - | - | - | - | - | - | 6 | 6 | 10 | 10 | ||||||||||||
H.A. McSharry | 8 | 8 | - | - | 9 | 9 | 4 | 4 | - | - | - | - | ||||||||||||
A. Manifold | 8 | 8 | 5 | 5 | - | - | - | - | - | - | - | - | ||||||||||||
D.N. OConnor(i) | 2 | 2 | - | - | - | - | - | - | 1 | 1 | 2 | 2 | ||||||||||||
L.J. Riches(iii) | 7 | 6 | - | - | - | - | - | - | 5 | 5 | 9 | 8 | ||||||||||||
H.Th. Rottinghuis | 8 | 7 | 4 | 4 | 9 | 8 | - | - | - | - | - | - | ||||||||||||
M.S. Towe | 8 | 8 | - | - | - | - | - | - | - | - | - | - |
(i) Retired May 2015
(ii) Appointed to Board January 2015
(iii) Appointed to Board March 2015
(iv) Appointed to Board September 2015
All Directors attended the 2015 Annual General Meeting.
* | In accordance with Section 167(7) of the Companies Act 2014. |
110 |
CRH Annual Report on Form 20-F | 2015
111 |
CRH Annual Report on Form 20-F | 2015
Corporate Governance Report | continued
(i) | The Code of Business Conduct is applicable to all Group employees including the Chief Executive and senior financial officers. The Code promotes honest and ethical conduct; full, fair, accurate, timely and understandable disclosures and compliance with applicable governmental laws, rules and regulations and complies with the applicable code of ethics regulations of the United States Securities and Exchange Commission arising from the Sarbanes-Oxley Act. |
112 |
CRH Annual Report on Form 20-F | 2015
113 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report
114 |
CRH Annual Report on Form 20-F | 2015
115 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
116 |
CRH Annual Report on Form 20-F | 2015
117 |
CRH Annual Report on Form 20-F | 2015
Principal proposed changes to the 2014 Directors Remuneration Policy
|
Table 6
| |
Framework 2014-2015 | Framework for 2016 Policy | Comments | ||||||||||||||
Annual Bonus | | 80% of award based on financial performance (profit, EPS growth, cash flow, RONA) | | No changes proposed | | The Committee considered that the metrics for the annual bonus plan remain appropriate, robust and challenging | ||||||||||
| 20% based on individual personal and strategic goals | | Table 7 on page 119 summarises the bonuses paid between 2009 and 2015 | |||||||||||||
| 50% of maximum bonus awarded for delivering target performance | | No changes proposed | |||||||||||||
| Maximum annual award of 150% of salary for all executive Directors | | Maximum annual award of up to 225% of salary | | The revised maximum award will apply to the Chief Executive only in 2016; the maximum award for other executives in 2016 will be 150% | |||||||||||
| The Committee will review the annual bonus opportunity for other executive Directors in due course. However, any increase will be within the maximum in the 2016 Policy and will be set at an appropriate level for the role of the individual | |||||||||||||||
| 25% of bonus awards for all executive Directors deferred for three years | | No changes proposed | | Best practice provision | |||||||||||
| Malus provisions apply for deferred share awards to provide the ability to scale back awards prior to vesting in the event of material misstatement, serious reputational damage or the Group suffering serious losses | | No changes proposed | | Best practice provision | |||||||||||
| Clawback provisions apply to the cash portion of the annual bonus | |||||||||||||||
Performance Share Plan |
Vesting based: | Vesting based: | | Inclusion of the FTSE All-World Construction & Materials Index ensures the TSR test reflects CRHs geographic spread
Cash flow targets will be adjusted, if required, to reflect unusual items such as a significant underspend, or a delay, in budgeted capital expenditure, both ordinary and extraordinary | ||||||||||||
| 75% on TSR performance against sector peers
|
| 50% TSR: | |||||||||||||
| 25% on cumulative cash flow target | | 25% against selected sector peers (see table 8) |
| ||||||||||||
| 25% against FTSE | |||||||||||||||
All-World Construction & Materials Index | ||||||||||||||||
| 50% on cumulative cash flow target | |||||||||||||||
The TSR element will be subject to a RONA underpin. | ||||||||||||||||
| 3-year performance period | | No changes proposed | | Best practice provision | |||||||||||
| Vested awards required to be held for a further 2 years post vesting | |||||||||||||||
| Annual award size of: | | Maximum award amount of up | | The revised maximum award will apply to the Chief Executive only in 2016; the maximum award for other executives in 2016 will be 200% | |||||||||||
|
Chief Executive: 250% of salary |
to 365% of salary | ||||||||||||||
|
Other executive Directors: 200% of salary |
|
No provisions for exceptional circumstances |
|||||||||||||
| Awards in exceptional circumstances limited to 350% of base salary |
| Changes to award levels for other executive Directors may be made in due course. However, any adjustments will be within the maximum in the 2016 Policy and will be set at an appropriate level for the role of the individual | |||||||||||||
| Malus provisions for unvested share awards (see above annual bonus section for circumstances in which it may operate) | | No changes proposed | | Best practice provision | |||||||||||
Shareholding Guidelines | | 1.0x salary |
|
Chief Executive: 2.5x salary
Other executive Directors: 1.0x salary |
| The increased shareholding guideline for the Chief Executive must be achieved by 2020 | ||||||||||
118 |
CRH Annual Report on Form 20-F | 2015
Annual Bonus Levels as a Percentage of Salary 2009 - 2015 | Table 7 | |
2014 Performance Share Plan | Table 8 | |
Tailored Peer Group for TSR Performance Metric (2016 Awards) | ||||||||
ACS | Braas Monier | LafargeHolcim | Skanska | Vinci | ||||
Boral | Cemex | Rockwool | Titan Cement | Wienerberger | ||||
Buzzi Unicem | Heidelberg Cement | Saint Gobain | Vicat |
Vesting Schedule (2016 Awards) | Table 9 | |
Historic vesting of 2006 Performance Share Plan Awards | Table 10 | Chief Executive Salary | Table 11 | |||||
|
||||||||
119 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
120 |
CRH Annual Report on Form 20-F | 2015
Individual remuneration for the year ended 31 December 2015 (Audited) | Table 14 | |
Annual Bonus Plan | ||||||||||||||||||||||||||||||||||||
Deferred | Long-term | Retirement | ||||||||||||||||||||||||||||||||||
Basic salary | Benefits | Cash element | shares | incentives | benefit expense | |||||||||||||||||||||||||||||||
(a) | (b) | (c) | (c) | (d) | (e) | Total | Total | Total | ||||||||||||||||||||||||||||
000 | 000 | 000 | 000 | 000 | 000 | 000 | 000 | 000 | ||||||||||||||||||||||||||||
2015 | 2015 | 2015 | 2015 | 2015 | 2015 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||
Executive Directors | ||||||||||||||||||||||||||||||||||||
Albert Manifold | 1,290 | 22 | 1,451 | 484 | 1,671 | 607 | 5,525 | 4,184 | 2,088 | |||||||||||||||||||||||||||
Maeve Carton | 675 | 10 | 734 | 245 | 1,161 | 282 | 3,107 | 1,907 | 1,412 | |||||||||||||||||||||||||||
Mark Towe | 1,280 | 72 | 1,416 | 472 | 2,091 | 256 | 5,587 | 2,986 | 2,965 | |||||||||||||||||||||||||||
3,245 | 104 | 3,601 | 1,201 | 4,923 | 1,145 | 14,219 | 9,077 | 6,465 | ||||||||||||||||||||||||||||
(a) | Basic Salary: Further details and background in relation to the changes in salaries effective for 2015 are set out on pages 109 and 110 of the 2014 Directors Remuneration Report. |
(b) | Benefits: For executive Directors these relate principally to the use of company cars, medical insurance and life assurance and, where relevant, the value of the discount on the grant of options under the Groups 2010 Savings-related Share Option Scheme. |
(c) | Annual Bonus Plan: Under the executive Directors Annual Bonus Plan for 2015, a bonus was payable for meeting clearly defined and stretch targets and strategic goals. The structure of the 2015 Plan, together with details of the performance against targets and payouts in respect of 2014 and 2015, are set out on pages 122 and 123. For 2015 and 2014 bonuses, 25% of executive Directors bonuses are paid in Deferred Shares, vesting after three years, with no additional performance conditions. |
(d) | Long-Term Incentives: In February 2016, the Remuneration Committee determined that 77.84% of the award made in 2013 under the 2006 Performance Share Plan vested on 7 March 2016. The Remuneration Committee also determined that 37.2% of the award made in 2013 under the 2010 Share Option Scheme vested. For the purposes of this table, the value of these awards, both of which were subject to a three-year performance period ending in 2015, has been estimated using a share price of 25.60, being the three month average share price to 31 December 2015, less, in the case of the award under the 2010 Share Option Scheme, the amount payable by the Directors to purchase the shares under option (i.e. the total exercise cost). Long-term incentive amounts for 2014 reflect the value of vested long-term incentive awards with a performance period ending in 2014. These amounts reflect the value of the awards granted in 2006, 2007, 2008 and 2009 under the 2000 Share Option Scheme, which the Remuneration Committee determined in May 2015 had met the applicable EPS performance targets (see table 22 on page 125) and had vested. For the purposes of this table, the value of these awards have been calculated based on the difference between the total exercise cost and the market value on the date of vesting (25.11) (see page 125 for more details). No other long-term incentive awards with a performance period ending in 2014 vested. |
(e) | Retirement Benefits Expense: The Irish Finance Act 2006 effectively established a cap on pension provision by introducing a penalty tax charge on pension assets in excess of the higher of 5 million or the value of individual prospective pension entitlements as at 7 December 2005. This cap was further reduced by the Irish Finance Act 2011 to 2.3 million and, by the Finance (No. 2) Act 2013, to 2.0 million. As a result of these legislative changes, the Remuneration Committee has decided that executive Directors who are members of Irish pension schemes should have the option of continuing to accrue pension benefits as previously, or of choosing an alternative arrangement - by accepting pension benefits limited by the cap - with a similar overall cost to the Group. Maeve Carton and Albert Manifold chose to opt for the alternative arrangement which involved capping their pensions in line with the provisions of the Finance Acts and receiving a supplementary taxable non-pensionable cash allowance, in lieu of prospective pension benefits foregone. These allowances are similar in value to the reduction in the Companys liability represented by the pension benefit foregone. They are calculated based on actuarial advice as the equivalent of the reduction in the Companys liability to each individual and spread over the term to retirement as annual compensation allowances. |
121 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
2015 Annual Bonus - Achievement - Financial Targets (Albert Manifold, Maeve Carton and Mark Towe) |
Table 15 | |||||||||||
Opportunity | Performance achieved | |||||||||||||||
as a % of salary | relative to targets | Performance | % Outcome versus | |||||||||||||
Measure | Target | Maximum | Threshold(i) | Target | Maximum | achieved | Maximum Opportunity | |||||||||
CRH EPS | 18.75% | 37.5% | 89.1c | 37.5% / 37.5% | ||||||||||||
CRH Cash Flow | ||||||||||||||||
- Operating Cash Flow(ii) | 11.25% | 22.5% | 1,722m | 22.5% / 22.5% | ||||||||||||
- Divestments | 11.25% | 22.5% | 1,017m | 22.5% / 22.5% | ||||||||||||
CRH RONA(iii) | 18.75% | 37.5% | 8.8% | 37.5% / 37.5% | ||||||||||||
(i) | 0% of each element is earned at threshold, 50% at target and 100% at maximum, with a straight-line pay out schedule between these points. |
(ii) | For this purpose, operating cash flow has been defined as reported internally and for 2015 excludes the operating cash flows attributable to the post acquisition period for the LH Assets. The figure also differs from the cash generated from operations figure of 2,784m reported in the Consolidated Statement of Cash Flows, primarily because it is calculated after deducting outflows on the purchase of property, plant and equipment (PP&E), net of proceeds from the disposal of PP&E. |
(iii) | 2015 RONA is calculated excluding the transaction/one-off costs of 197m related to the acquisition of the LH Assets. |
2015 Annual Bonus - Achievement - Personal/Strategic Targets | Table 16 | |||
Directors | Achievements | % Outcome versus Maximum Opportunity | ||
Albert Manifold | Effective leadership of the process to integrate the assets acquired from Lafarge S.A. and Holcim Limited; successful recruitment of new Group Finance Director and supporting the incumbent in the transition to a new strategic role; leading the process of organisation change, including the establishment and resourcing of refined organisation structures in the Americas, Europe and Asia; continued strong leadership of the Groups talent management process and the mentoring of the senior executive team. | 30.0% / 30.0% | ||
Maeve Carton | Continued progress in the area of operational performance including the roll-out of financial reporting systems for the measuring and reporting of KPIs; leading succession planning for the Groups tax function, the development of a new supporting organisation structure and co-ordinating refinements to the Groups tax strategy; managing the process of funding the significant acquisition spend in 2015 and effective management of the Groups bond programme; guiding the process for the evolution of CRHs cyber security arrangements. | 25.0% / 30.0% | ||
Mark Towe | Leadership in relation to the transition to a new organisation structure in the Americas; management of the process to integrate the assets acquired from Lafarge and Holcim in Canada and the United States; continued input into the Groups talent management process; working closely with the Chief Executive in relation to the ongoing process to leverage the size and collective scale of the Group in areas such as procurement. | 27.5% / 30.0% | ||
122 |
CRH Annual Report on Form 20-F | 2015
2014 Annual Bonus - Achievement - Group Targets (Albert Manifold, Maeve Carton and Mark Towe) |
Table 17 | |
Performance needed for payout at | Performance | Payout % | ||||||||||||||||||
Measure | Threshold | Target | Maximum | achieved | of Maximum | |||||||||||||||
CRH EPS | 68c | 74c | 78c | 78.9c | 100.0% | |||||||||||||||
CRH Cash Flow | ||||||||||||||||||||
- Operating Cash Flow(i) | 1,163m | 1,264m | 1,365m | 1,477m | 100.0% | |||||||||||||||
- Divestments | 200m | 225m | 250m | 345m | 100.0% | |||||||||||||||
CRH RONA | 6.15% | 6.7% | 7.2% | 7.4% | 100.0% | |||||||||||||||
(i) | For this purpose, operating cash flow has been defined as reported internally, which differs from the cash generated from operations of 1,626m shown in the 2014 Consolidated Statement of Cash Flows, primarily because it is calculated after deducting cash outflows on the purchase of property, plant and equipment (PP&E), net of proceeds from disposal of PP&E. |
2014 Annual Bonus - Achievement - Oldcastle Targets (Mark Towe) | Table 18 | |
Performance achieved relative to targets | ||||||||||
Measure | Threshold(ii) | Target | Maximum | Payout % of Maximum | ||||||
Oldcastle Group PBIT(i) | 100.0% | |||||||||
Oldcastle Cash Flow | ||||||||||
- Operating Cash Flow | 100.0% | |||||||||
- Divestments | 100.0% | |||||||||
(i) PBIT is defined as earnings before interest and taxes.
(ii) 0% of each element is earned at threshold, 50% at target and 100% at maximum, with a straight-line pay out schedule between these points.
123 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
124 |
CRH Annual Report on Form 20-F | 2015
125 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
Summary of Scheme Interests Granted in 2015 |
Table 23
| |||||||||
Directors | Scheme | Basis of award (% of salary) |
Number of shares |
Face value(i) |
Exercise price |
Percentage vesting (% of maximum) |
Performance period end date |
Expected date of release | ||||||||
A. Manifold | PSP (conditional shares) |
250% | 132,064 | 3,225,002 | n/a | 25% | 31-Dec-17 | Feb-2020 | ||||||||
Annual Bonus(ii) (deferred shares) |
37.5% | 24,928 | 450,000 | n/a | n/a | n/a | Feb-2018 | |||||||||
M. Carton | PSP (conditional shares) |
200% | 55,283 | 1,350,010 | n/a | 25% | 31-Dec-17 | Feb-2020 | ||||||||
Annual Bonus(ii) (deferred shares) |
37.5% | 12,983 | 234,375 | n/a | n/a | n/a | Feb-2018 | |||||||||
M. Towe | PSP (conditional shares) |
200% | 107,110 | 2,615,626 | n/a | 25% | 31-Dec-17 | Feb-2020 | ||||||||
Annual Bonus(ii) (deferred shares) |
37.5% | 22,908 | 413,489 | n/a | n/a | n/a | Feb-2018 | |||||||||
(i) | Face value for PSP awards has been calculated using the share price at the date of grant (24.42). |
(ii) | See table 21 on page 113 of the 2014 Annual Report for the structure of the 2014 Annual Bonus Plan. |
* | Salary is defined as basic annual salary and excludes any fluctuating emoluments. |
126 |
CRH Annual Report on Form 20-F | 2015
Pension entitlements - defined benefit (Audited) | Table 24 | |||||||
Increase in accrued personal pension | Transfer value of increase in | Total accrued personal pension | ||||||||||||
during 2015(i) | dependants pension(i) | at year-end(ii) | ||||||||||||
000 | 000 | 000 | ||||||||||||
Executive Directors | ||||||||||||||
A. Manifold | - | 109 | 273 | |||||||||||
M. Carton | - | 33 | 266 | |||||||||||
(i) | As noted above, the pensions of Albert Manifold and Maeve Carton have been capped in line with the provisions of the Irish Finance Acts. However, dependants pensions continue to accrue resulting in Greenbury transfer values which have been calculated on the basis of actuarial advice. These amounts do not represent sums paid out or due, but are the amounts that the pension scheme would transfer to another pension scheme in relation to benefits accrued in 2015 in the event of these Directors leaving service. |
(ii) | The accrued pensions shown are those which would be payable annually from normal retirement date. |
Pension entitlements - defined contribution (Audited) | Table 25 | |||||||
The accumulated liabilities related to the unfunded Supplemental Executive Retirement Plans for Mark Towe are as follows: | ||||||||||||||||||||
As at | 2015 | 2015 notional | Translation | As at | ||||||||||||||||
31 December 2014 | contribution | interest(iii) | adjustment | 31 December 2015 | ||||||||||||||||
000 | 000 | 000 | 000 | 000 | ||||||||||||||||
Executive Director | ||||||||||||||||||||
M. Towe | 2,502 | 237 | 119 | 295 | 3,153 | |||||||||||||||
(iii) | Notional interest, which is calculated based on the average bid yields of United States Treasury fixed-coupon securities with remaining terms to maturity of approximately 20 years, plus 1.5%, is credited to the above plans. |
127 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
Directors Interests in Shares and Share Scheme Awards
Deferred Share Awards under the Annual Bonus Plan (Audited) | Table 26 | |
Dividend Equivalent | ||||||||||||||||||||||
31 December | Awards in | adjustment(iii)/Scrip | Released in | 31 December | ||||||||||||||||||
2014 | 2015(i) | Dividend allotment 2015 | 2015 | 2015 | Release Date | |||||||||||||||||
Maeve Carton | - | 12,983 | 325 | - | 13,308 | March 2018(ii) | ||||||||||||||||
Albert Manifold | - | 24,928 | 624 | - | 25,552 | March 2018(ii) | ||||||||||||||||
Mark Towe | 2,626 | - | 54 | - | 2,680 | March 2017(ii) | ||||||||||||||||
- | 22,908 | 573 | - | 23,481 | March 2018(ii) | |||||||||||||||||
2,626 | 60,819 | 1,576 | - | 65,021 | ||||||||||||||||||
(i) | The shares awarded during 2015 relate to the deferred portion of 2014 bonus and were included in total remuneration reported for 2014. Under the rules of Annual Bonus Plan, the number of shares awarded was calculated using the three month average share price to 31 December 2014, being 18.05. |
(ii) | Under the Annual Bonus Plan in operation in respect of the financial years ended 31 December 2014 and 2015, up to one-third of the earned bonus was receivable in CRH shares, deferred for a period of three years, with forfeiture in the event of departure from the Group in certain circumstances during that period. Deferred Shares are not subject to any additional performance conditions during the deferral period. |
(iii) | In order to calculate the Dividend Equivalents Adjustment it is assumed that an election for scrip shares in lieu of cash is made for each dividend during the vesting period. |
Directors awards under the 2006 Performance Share Plan(i) (Audited) | Table 27 | |
Year | 31 | 31 | Market | |||||||||||||||||||||||||||||||||
of | December | Granted | Released | Lapsed | December | Performance | Release | Price in euro | ||||||||||||||||||||||||||||
award | 2014 | in 2015 | in 2015(ii) | in 2015(ii) | 2015 | Period | Date | on award | ||||||||||||||||||||||||||||
2012 | 50,000 | - | - | 50,000 | - | |||||||||||||||||||||||||||||||
Maeve Carton | 2013 | 50,000 | - | - | - | 50,000 | |
01/01/13 -31/12/15 |
|
|
March 2016 |
|
16.19 | |||||||||||||||||||||||
100,000 | - | - | 50,000 | 50,000 | ||||||||||||||||||||||||||||||||
2012 | 70,000 | - | - | 70,000 | - | |||||||||||||||||||||||||||||||
Albert Manifold | 2013 | 72,000 | - | - | - | 72,000 | |
01/01/13 -31/12/15 |
|
|
March 2016 |
|
16.19 | |||||||||||||||||||||||
142,000 | - | - | 70,000 | 72,000 | ||||||||||||||||||||||||||||||||
2012 | 90,000 | - | - | 90,000 | - | |||||||||||||||||||||||||||||||
Mark Towe | 2013 | 90,000 | - | - | - | 90,000 | |
01/01/13 -31/12/15 |
|
|
March 2016 |
|
16.19 | |||||||||||||||||||||||
180,000 | - | - | 90,000 | 90,000 | ||||||||||||||||||||||||||||||||
(i) | 2006 Performance Share Plan: This is a long-term share incentive plan under which share awards are granted in the form of a provisional allocation of shares for which no exercise price is payable. 77.84% of the shares awarded in 2013 are scheduled for release in March 2016. See pages 124 and 125 for more details. |
(ii) | In 2015, the Remuneration Committee determined that the 2012 award lapsed as, over the three-year period 2012-2014, CRHs TSR performance was below the median of both the peer group and the Eurofirst Index. |
128 |
CRH Annual Report on Form 20-F | 2015
Directors awards under the 2014 Performance Share Plan(i) (Audited) | Table 28 | |
Market | ||||||||||||||||||||||||||||||||||||||||
31 | Dividend | 31 | Price in | |||||||||||||||||||||||||||||||||||||
Year of | December | Granted | Equivalents | Released | Lapsed | December | Performance | Release | euro on | |||||||||||||||||||||||||||||||
award | 2014 | in 2015 | 2015(ii) | in 2015 | in 2015 | 2015 | Period | date | award | |||||||||||||||||||||||||||||||
2014 | 60,118 | - | 1,508 | - | - | 61,626 |
|
01/01/14 -31/12/16 |
|
|
February 2019 |
|
20.49 | |||||||||||||||||||||||||||
Maeve Carton | 2015 | - | 55,283 | 391 | - | - | 55,674 |
|
01/01/15 -31/12/17 |
|
|
February 2020 |
|
24.42 | ||||||||||||||||||||||||||
60,118 | 55,283 | 1,899 | - | - | 117,300 | |||||||||||||||||||||||||||||||||||
2014 | 144,384 | - | 3,621 | - | - | 148,005 |
|
01/01/14 -31/12/16 |
|
|
February 2019 |
|
20.49 | |||||||||||||||||||||||||||
Albert Manifold | 2015 | - | 132,064 | 934 | - | - | 132,998 |
|
01/01/15 -31/12/17 |
|
|
February 2020 |
|
24.42 | ||||||||||||||||||||||||||
144,384 | 132,064 | 4,555 | - | - | 281,003 | |||||||||||||||||||||||||||||||||||
2014 | 98,109 | - | 2,461 | - | - | 100,570 |
|
01/01/14 -31/12/16 |
|
|
February 2019 |
|
20.49 | |||||||||||||||||||||||||||
Mark Towe | 2015 | - | 107,110 | 757 | - | - | 107,867 |
|
01/01/15 -31/12/17 |
|
|
February 2020 |
|
24.42 | ||||||||||||||||||||||||||
98,109 | 107,110 | 3,218 | - | - | 208,437 | |||||||||||||||||||||||||||||||||||
(i) | 2014 Performance Share Plan: This is a long-term share incentive plan under which share awards are granted in the form of a provisional allocation of shares for which no exercise price is payable. The shares scheduled for release in February 2019 and February 2020 will be allocated to the extent that the relevant performance conditions are achieved. The structure of the 2014 Performance Share Plan is set out in table 6. |
(ii) | The Remuneration Committee has determined that dividend equivalents should accrue on awards under the 2014 Performance Share Plan. Subject to the satisfaction of the applicable performance criteria, such dividend equivalents will be released to participants in the form of additional shares at vesting. |
129 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
Directors Share Options (Audited) | Table 29 | |
Details of movements on outstanding options and those exercised during the year are set out in the table below |
|
|
Options exercised during 2015 |
| ||||||||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||||||||||||||||
average option | average | average market | ||||||||||||||||||||||||||||||||||||
31 | 31 | price at 31 | exercise | price at date of | ||||||||||||||||||||||||||||||||||
December | Granted | Lapsed | Exercised | December | 11 March | December 2015 | price | exercise | ||||||||||||||||||||||||||||||
2014 | in 2015 | in 2015 | in 2015 | 2015 | 2016 | | | | ||||||||||||||||||||||||||||||
55,831 | - | - | 19,234 | 36,597 | 36,597 | (a) | 27.97 | 21.52 | 25.11 | |||||||||||||||||||||||||||||
Maeve Carton | 97,000 | - | 50,000 | - | 47,000 | 47,000 | (b) | 16.19 | ||||||||||||||||||||||||||||||
1,726 | - | - | - | 1,726 | 1,726 | (c) | 17.67 | |||||||||||||||||||||||||||||||
166,445 | - | - | 110,995 | 55,450 | 55,450 | (a) | 28.15 | 18.88 | 25.08 | |||||||||||||||||||||||||||||
Albert Manifold | 137,500 | - | 70,000 | - | 67,500 | 67,500 | (b) | 16.19 | ||||||||||||||||||||||||||||||
2,236 | - | - | - | 2,236 | 2,236 | (c) | 13.64 | |||||||||||||||||||||||||||||||
Mark Towe | 133,081 | - | - | 27,725 | 105,356 | 105,356 | (a) | 25.84 | 18.85 | 25.10 | ||||||||||||||||||||||||||||
175,000 | - | 90,000 | - | 85,000 | 85,000 | (b) | 16.19 | |||||||||||||||||||||||||||||||
768,819 | - | 210,000 | 157,954 | 400,865 | 400,865 | |||||||||||||||||||||||||||||||||
Options by price (Audited) | Table 30 | |
31 | 31 | |||||||||||||||||||||||||||||||
December | Granted | Lapsed | Exercised | December | ||||||||||||||||||||||||||||
| 2014 | in 2015 | in 2015 | in 2015 | 2015 | Earliest exercise date | Expiry date | |||||||||||||||||||||||||
18.7463 | 16,635 | - | - | 16,635 | - | (a) | ||||||||||||||||||||||||||
18.8545 | 27,725 | - | - | 27,725 | - | (a) | ||||||||||||||||||||||||||
26.1493 | 72,085 | - | - | - | 72,085 | (a) | March 2016 | April 2016 | ||||||||||||||||||||||||
29.4855 | 53,232 | - | - | - | 53,232 | (a) | March 2016 | April 2017 | ||||||||||||||||||||||||
29.8643 | 36,043 | - | - | - | 36,043 | (a) | March 2016 | April 2017 | ||||||||||||||||||||||||
21.5235 | 99,637 | - | - | 63,594 | 36,043 | (a) | March 2016 | April 2018 | ||||||||||||||||||||||||
16.58 | 50,000 | - | - | 50,000 | - | (a) | ||||||||||||||||||||||||||
15.19 | 210,000 | - | 210,000 | - | - | (b) | ||||||||||||||||||||||||||
16.19 | 199,500 | - | - | - | 199,500 | (b) | March 2016 | April 2023 | ||||||||||||||||||||||||
13.64 | 2,236 | - | - | - | 2,236 | (c) | August 2017 | January 2018 | ||||||||||||||||||||||||
17.67 | 1,726 | - | - | - | 1,726 | (c) | August 2019 | January 2020 | ||||||||||||||||||||||||
768,819 | - | 210,000 | 157,954 | 400,865 | ||||||||||||||||||||||||||||
The market price of the Companys shares at 31 December 2015 was 26.70 and the range during 2015 was 18.73 to 28.09.
(a) | Granted under the 2000 Share Option Scheme, these options are only exercisable when EPS growth exceeds the growth of the Irish Consumer Price Index by 5% compounded over a period of at least three years subsequent to the granting of the options. |
(b) | Granted under the 2010 Share Option Scheme. Vesting will only occur once an initial performance target has been reached and, thereafter, will be dependent on performance. The performance criteria are set out in table 22 on page 125. |
(c) | Granted under the 2010 Savings-related Share Option Scheme. |
130 |
CRH Annual Report on Form 20-F | 2015
131 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
Shareholdings of Directors and Company Secretary
as at 31 December 2015
Directors interests in share capital at 31 December 2015 (Audited) | Table 32 | |
The interests of the Directors and Secretary in the shares of the Company, which are beneficial unless otherwise indicated, are shown below. The Directors and Secretary have no beneficial interests in any of the Groups subsidiary, joint venture or associated undertakings.
Ordinary Shares | 11 March 2016 | 31 December 2015 | 31 December 2014 | |||||||||
Directors | ||||||||||||
E.J. Bärtschi | 25,200 | 25,200 | 25,200 | |||||||||
M. Carton | 124,256 | (i) | 84,818(i) | 82,036 | ||||||||
W.P. Egan | 16,112 | 16,112 | 16,112 | |||||||||
- Non-beneficial | 12,000 | 12,000 | 12,000 | |||||||||
U-H. Felcht | 1,303 | 1,303 | 1,285 | |||||||||
N. Hartery | 16,591 | 16,591 | 12,265 | |||||||||
P.J. Kennedy | 2,000 | 2,000 | -(ii) | |||||||||
A. Manifold | 69,934 | (i) | 43,372(i) | 39,998 | ||||||||
R. McDonald | 1,000 | 1,000 | -(ii) | |||||||||
D.A. McGovern, Jr. | 5,255 | 5,255 | 5,131 | |||||||||
H.A. McSharry | 3,965 | 3,965 | 3,886 | |||||||||
S. Murphy | 1,000 | 1,000(ii) | - | |||||||||
L.J. Riches | 2,000 | 2,000 | -(ii) | |||||||||
H.Th. Rottinghuis | 15,426 | 15,426 | 15,124 | |||||||||
M. Towe | 177,444 | (i) | 107,388(i) | 100,276(i) | ||||||||
Secretary | ||||||||||||
N. Colgan | 13,698 | 9,511 | 15,549 | |||||||||
487,184 | 345,941 | 328,862 | ||||||||||
Of the above holdings, the following are held in the form of American Depository Receipts:
11 March 2016 | 31 December 2015 | 31 December 2014 | ||||||||||
W.P. Egan | 15,000 | 15,000 | 15,000 | |||||||||
- Non-beneficial | 12,000 | 12,000 | 12,000 | |||||||||
R. McDonald | 1,000 | 1,000 | -(ii) | |||||||||
D.A. McGovern, Jr. | 5,255 | 5,255 | 5,131 | |||||||||
William J. Teuber, Jr. became a Director on 3 March 2016. He does not have a holding of CRH shares.
(i) | Excludes awards of Deferred Shares, details of which are disclosed on page 128. |
(ii) | Holding at date of appointment. |
132 |
CRH Annual Report on Form 20-F | 2015
Non-executive Directors
Remuneration paid to non-executive Directors in 2015 is set out in table 33.
Individual remuneration for the year ended 31 December 2015 (Audited)
|
Table 33
|
Basic salary | Other | |||||||||||||||||||||||
and fees | Benefits | remuneration | ||||||||||||||||||||||
(a) | (b) | (c) | Total | Total | Total | |||||||||||||||||||
000 | 000 | 000 | 000 | 000 | 000 | |||||||||||||||||||
Non-executive Directors
|
2015 | 2015 | 2015 | 2015 | 2014 | 2013 | ||||||||||||||||||
E.J. Bärtschi | 68 | - | 71 | 139 | 139 | 116 | ||||||||||||||||||
W.P. Egan | 68 | - | 52 | 120 | 120 | 120 | ||||||||||||||||||
U-H. Felcht | 68 | - | 37 | 105 | 105 | 105 | ||||||||||||||||||
N. Hartery | 68 | 6 | 382 | 456 | 460 | 473 | ||||||||||||||||||
J.M. de Jong (d) | - | - | - | - | 42 | 128 | ||||||||||||||||||
J.W. Kennedy (e) | 24 | - | 13 | 37 | 105 | 105 | ||||||||||||||||||
P.J. Kennedy (f) | 68 | - | 37 | 105 | - | - | ||||||||||||||||||
R. McDonald (g) | 23 | - | 17 | 40 | - | - | ||||||||||||||||||
D.A. McGovern, Jr. (j) | 68 | - | 85 | 153 | 120 | 60 | ||||||||||||||||||
H.A. McSharry | 68 | - | 22 | 90 | 90 | 90 | ||||||||||||||||||
L.J. Riches (h) | 57 | - | 31 | 88 | - | - | ||||||||||||||||||
D.N. OConnor (e) | 24 | - | 10 | 34 | 124 | 124 | ||||||||||||||||||
H.Th. Rottinghuis (i) | 68 | - | 37 | 105 | 86 | - | ||||||||||||||||||
672 | 6 | 794 | 1,472 | 1,391 | 1,321 | |||||||||||||||||||
(a) | Fee levels for non-executive Directors were unchanged in 2015. The fees which will apply for 2016 are set out on page 134. | |
(b) | Benefits: In the case of Nicholas Hartery the amount reflects the reimbursement of travel expenses from his residence to his Chairmans office in Dublin, which have been grossed up for Irish tax purposes. | |
(c) | Other Remuneration: Includes remuneration for Chairman, Board Committee work and allowances for non-executive Directors based outside of Ireland. | |
(d) | Jan Maarten de Jong retired as Director on 7 May 2014. | |
(e) | John Kennedy and Dan OConnor retired as Directors on 7 May 2015. | |
(f) | Pat Kennedy became a Director on 1 January 2015. | |
(g) | Rebecca McDonald became a Director on 1 September 2015. | |
(h) | Lucinda Riches became a Director on 1 March 2015. | |
(i) | Henk Rottinghuis became a Director on 18 February 2014. | |
(j) | Don McGovern became a Director on 1 July 2013. |
133 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
134 |
CRH Annual Report on Form 20-F | 2015
135 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
Relative importance of spend on pay
Table 37 sets out the amount paid by the Group in remuneration to employees compared to dividend distributions made to shareholders in 2014 and 2015. The average number of employees is set out in note 5 to the Consolidated Financial Statements on page 179. We have also shown the change in EBITDA (as defined)* performance year on year to provide an indication of the change in profit performance.
The Remuneration Committee and Advisers
The non-executive Directors who were members of the Remuneration Committee during 2015, together with their record of attendance at Committee meetings, are identified on page 110.**
Risk policies and systems
During 2015, the Chairman of the Remuneration Committee reviewed with the Audit Committee the Groups remuneration structures from a risk perspective.
Remuneration consultants
Deloitte LLP are the Committees independent remuneration consultants. The Committee has satisfied itself that the advice provided by Deloitte LLP is robust and independent and that the Deloitte LLP engagement partner and team that provide remuneration advice to the Committee do not have connections with CRH plc that may impair their independence.
For the purposes of the remuneration review carried out in 2015 and in early 2016, the |
Relative importance of spend on pay
|
Table 37 | ||||
| ||||||
Committee also engaged the services of Kepler, a brand of Mercer, in relation to the performance metrics for the performance share plan. Kepler also assisted along with Deloitte LLP in the shareholder consultation process.
Both Deloitte LLP and Kepler are signatories to the Voluntary Code of Conduct in relation to executive remuneration consulting in the UK. During 2015, Deloitte LLP provided the following remuneration services:
research and advice regarding remuneration trends, best practice and remuneration levels for executive and non-executive Directors in companies of similar size and complexity;
guidance and advice in relation to remuneration developments;
analysis of TSR workings under the 2006 Performance Share Plan;
advice in relation to remuneration matters generally; and
attendance at Committee meetings, when required.
|
Deloitte LLP also provide other consultancy services to the Company including support for Internal Audit and Regulatory & Compliance functions, when required, and in respect of talent management and human resources, technology and taxation advisory services.
In 2015, Keplers parent, Mercer, provided pensions advice and related services to the Company.
In respect of work carried out on behalf of the Remuneration Committee in 2015, fees in the amount of 125,739 (Deloitte LLP) and 60,766 (Kepler) were incurred.
2015 Annual General Meeting votes on remuneration matters
The voting outcome in respect of the remuneration related votes at the 2015 Annual General Meeting is set out in table 38. |
AGM Remuneration Related Votes
|
Table 38
| |||||||||||
Year of |
% in Favour |
% Against |
No. of votes withheld |
Total No. of votes cast (incl. votes withheld) |
% of issued share capital voted | |||||||
Directors Remuneration Report (Say on Pay) | 2015 | 94.39% | 5.61% | 8,946,923 | 569,847,488 | 69.8% | ||||||
Directors Remuneration Policy | 2014 | 95.23% | 4.77% | 3,648,186 | 511,208,343 | 69.6% |
* | Defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
** | For more information on the role and responsibilities of the Remuneration Committee, please see the Governance Appendix (Exhibit 15.2; Section 2; Operation of the Boards Committees; Remuneration Committee; Role and Responsibilities) which is incorporated by reference herein. |
136 |
CRH Annual Report on Form 20-F | 2015
137 |
138 |
CRH Annual Report on Form 20-F | 2015
139 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
Policy Table
Further details regarding the operation of the Policy for the 2016 financial year can be found on pages 114 to 137 of the Directors Remuneration Report.
Policy Table
|
Table 40
| |||
Element | Fixed Base Salary | Fixed Pension | ||
Purpose and link to strategy |
Competitive salaries help to attract and retain staff with the experience and knowledge required to enable the Group to compete in its markets. |
Pension arrangements provide competitive and appropriate retirement plans.
Given the long-term nature of the business, pension is an important part of the remuneration package to support creation of value and succession planning. | ||
Operation |
Base salaries are set by the Committee taking into account:
the size and scope of the executive Directors role and responsibilities;
the individuals skills, experience and performance;
salary levels at FTSE listed companies of a similar size and complexity to CRH and other international construction and building materials companies;
pay and conditions elsewhere in the Group.
Base salary is normally reviewed annually with changes generally effective on 1 January, although the Committee may make an out-of-cycle increase if it considers it to be appropriate. |
Irish-based executive Directors participate in a contributory defined benefit scheme or, if they joined the Group after 1 January 2012, in a defined contribution scheme as the defined benefit scheme which the Directors participate in is closed to new entrants.
The US-based executive Director participates in a defined contribution scheme and in an unfunded Supplemental Executive Retirement Plan.
For new appointments to the Board the Committee may determine that alternative pension provisions will operate (for example a cash contribution). When determining pension arrangements for new appointments the Committee will give regard to existing entitlements, the cost of the arrangements, market practice and the pension arrangements received elsewhere in the Group.
| ||
Maximum opportunity |
Base salaries are set at a level which the Committee considers to be appropriate taking into consideration the factors outlined in the operation column.
While there is no maximum base salary, normally increases will be in line with the typical level of increase awarded to other employees in the Group but may be higher in certain circumstances. These circumstances may include:
Where a new executive Director has been appointed at a lower salary, higher increases may be awarded over an initial period as the executive Director gains in experience and the salary is moved to what the Committee considers is an appropriate positioning.
Where there has been a significant increase in the scope or responsibility of an executive Directors role or where an individual has been internally promoted, higher salary increases may be awarded.
Where a larger increase is considered necessary to reflect significant changes in market practice. |
The defined benefit pension is provided through an Irish Revenue approved retirement benefit scheme up until the pension cap established in the Finance Act 2006 (see details on page 127). Accrued benefits for service to 31 December 2011 are based on pensionable salary and years of service as at that date (annual accrual of 1/60ths), with this tranche being re-valued annually at the Consumer Price Index subject to a 5% ceiling. For service subsequent to that date, a career-average re-valued earnings system was introduced with each year of service being subject to annual revaluation on the same basis as outlined above. Irish-based executive Directors receive a supplementary taxable non-pensionable cash allowance in lieu of pension benefits foregone as a result of the pension cap. These allowances are similar in value to the reduction in the Companys liability represented by the pension benefit foregone. Whilst there is no absolute maximum to the quantum of these payments they are calculated based on actuarial advice as the equivalent of the reduction in the liability the Company would otherwise have had under the Scheme in respect of each individuals benefits and spread over the term to retirement as annual compensation allowances.
The US-based executive Director participates in a defined contribution retirement plan in respect of basic salary; and in addition he participates in an unfunded defined contribution Supplemental Executive Retirement Plan (SERP) also in respect of basic salary, to which contributions are made at an agreed rate (currently 20%), offset by contributions made to the other retirement plan. | ||
Performance measure |
n/a |
n/a |
140 |
CRH Annual Report on Form 20-F | 2015
Policy Table | continued
| ||
Element | Fixed Benefits | |
Purpose and link to strategy
|
To provide a market competitive level of benefits for executive Directors. | |
Operation |
The Committees policy is to set benefit provision at an appropriate market competitive level taking into account market practice, the level of benefits provided for other employees in the Group, the individuals home jurisdiction and the jurisdiction in which the individual is based. | |
Employment-related benefits include the use of company cars (or a car allowance), medical insurance for the Director and his/her family and life assurance. | ||
In the event that the Chief Executive falls ill or is injured in such a way as which would constitute ill-health or disablement so that the Chief Executive could not work for a period of more than six months, in lieu of the early ill-health retirement provisions in the pension scheme which would otherwise operate in such cases, he shall be entitled to receive a disability salary of 1,000,000 per annum. Such payment would cease when the Chief Executive reaches age 60, returns to work or if the service agreement is terminated. | ||
The US-based executive Director also receives benefits in relation to club membership and short-term disability insurance. | ||
Benefits may also be provided in relation to legal fees incurred in respect of agreeing service contracts, or similar agreements (for which the Company may settle any tax incurred by the executive Director) and a gift on retirement. | ||
The Committee may remove benefits that executive Directors receive or introduce other benefits if it is considered appropriate to do so. The Company may also pay the tax due on benefits if it considers that it is appropriate to do so. | ||
All-employee share schemes - executive Directors are eligible to participate in the Companys all-employee share schemes on the same terms as other employees. Executive Directors may also receive other benefits which are available to employees generally. | ||
Re-location policy - where executive Directors are required to re-locate to take up their role, the Committee may determine that they should receive appropriate re-location and ongoing expatriate benefits. The level of such benefits would be determined based on individual circumstances taking into account typical market practice. | ||
Maximum opportunity |
The level of benefit provided will depend on the cost of providing individual items and the individuals circumstances, and therefore the Committee has not set a maximum level of benefits. | |
Performance measure |
n/a |
141 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
Policy Table | continued
| ||
Element | Performance-related pay Annual Bonus | |
Purpose and link to strategy |
The Annual Performance-related Incentive Plan is designed to reward the creation of shareholder value through operational excellence and organic and acquisitive growth. The Plan incentivises executive Directors to deliver Group and individual goals that support long-term value creation. | |
A Deferred Annual Performance-related Incentive Plan element links the value of executive Directors reward with the long-term performance of the CRH share price and aligns the interests of executive Directors with shareholders interests. | ||
The malus and clawback provisions enable the Company to mitigate risk.
| ||
Operation |
The Annual Performance-related Incentive Plan rewards executive Directors for meeting Company performance goals over a financial year of the Company. Targets are set annually by the Committee. | |
The annual bonus is paid in a mix of cash and shares (structured as a deferred share award). | ||
For 2016: | ||
75% of the bonus will be paid in cash; | ||
25% will be paid in shares. | ||
In future years, the Committee may determine that a different balance between cash and shares is appropriate and adjust the relevant payments accordingly. | ||
When assessing performance and determining bonus payouts the Committee also considers the underlying financial performance of the business to ensure it is consistent with the overall award level. | ||
The deferred element of the bonus will be structured as a conditional share award or nil-cost option and will normally vest after three years from grant (or a different period determined by the Committee). Deferred share awards may be settled in cash. | ||
Dividend equivalents may be paid on deferred share awards in respect of dividends paid during the vesting period. These payments may be made in cash or shares and may assume the reinvestment of dividends on a cumulative basis. | ||
For deferred awards, malus provisions apply (see page 126). Cash bonus payments are subject to clawback of the net amount paid for a period of three years from payment.
| ||
Maximum opportunity |
Maximum annual opportunity of 225% of base salary. | |
For 2016, the intended maximum award levels are: | ||
225% of base salary for Chief Executive; | ||
150% of base salary for other executive Directors. The Committee may increase the percentage in future years up to a maximum of 225%.
| ||
Performance measure |
The performance-related incentive plan is based on achieving clearly defined and stretching annual targets and strategic goals set by the Committee each year based on key business priorities. | |
The performance metrics used are a mix of financial targets including return goals and personal/strategic objectives generally. Currently 80% of the bonus is based on financial performance measures. The Committee may vary the weightings of measures but no less than 50% shall be based on financial performance measures. | ||
A portion of the bonus metrics for any Director may be linked to his/her specific area of responsibility. | ||
Up to 50% of the maximum bonus will be paid for achieving target levels of performance.
|
142 |
CRH Annual Report on Form 20-F | 2015
Policy Table | continued
| ||
Element | Performance-related pay 2014 Performance Share Plan (PSP) | |
Purpose and link to strategy |
The purpose of the 2014 Plan is to align the interest of key management across different regions and nationalities with those of shareholders through an interest in CRH shares and by incentivising the achievement of long-term performance goals. | |
The malus provision enables the Company to mitigate risk. | ||
Operation |
Awards (in the form of conditional share awards or nil-cost options) normally vest based on performance over a period of not less than three years. Awards may also be settled in cash. | |
Awards are normally subject to an additional holding period ending on the fifth anniversary of the grant date (or another date determined by the Committee). | ||
Dividend equivalents may be paid on PSP awards that vest in respect of dividends paid during the vesting period until the end of the holding period. These payments may be made in cash or shares and may assume reinvestment on a cumulative basis. | ||
Malus provisions (as set out in the rules of the 2014 Plan) will apply to awards (see page 126). | ||
Maximum opportunity |
Maximum annual opportunity of up to 365% of base salary. | |
For 2016 the intended award levels are: | ||
365% of base salary for Chief Executive | ||
200% of base salary for other executive Directors. The Committee may increase the percentage in future years up to a maximum of 365%. | ||
Performance measure |
Awards to be granted in 2016 will vest based on a relative TSR test compared to a tailored group of key peers (25%) and an index comparator (25%), and cumulative cash flow performance (50%). | |
For threshold levels of performance, 25% of the award vests. | ||
Where applicable, when determining vesting under the PSP the Committee reviews whether the TSR performance has been impacted by unusual events and whether it therefore, reflects the underlying performance of the business. In addition, the Committee considers financial performance (including Return on Net Assets) in the period to ensure that TSR performance is consistent with the objectives of the performance criteria and was not distorted by extraneous factors. | ||
The Committee may in future years change performance measures including introducing additional performance measures for awards made under this policy, for example, returns based measures. | ||
The Committee may amend the performance conditions if an event occurs that causes it to consider that an amended performance condition would be more appropriate and would not be materially less difficult to satisfy. | ||
143 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
144 |
CRH Annual Report on Form 20-F | 2015
Remuneration Policy for non-executive Directors
|
Table 41
| |||
Approach to setting fees
|
Basis of fees
|
Other items
| ||
The remuneration of non-executive Directors is determined by a Board committee of the Chairman and the executive Directors.
The Remuneration Committee determines the remuneration of the Chairman within the framework or broad policy agreed with the Board.
Remuneration is set at a level which will attract individuals with the necessary experience and ability to make a substantial contribution to the Companys affairs and reflect the time and travel demands of Board duties.
Fees are set taking into account typical practice at other companies of a similar size and complexity to CRH.
Fees are reviewed at appropriate intervals. |
Fees are paid in cash.
Non-executive Director fees policy is to pay:
A basic fee for membership of the Board.
An additional fee for chairing a Committee.
An additional fee for the role of Senior Independent Director (SID) (if the SID is not the Chairman of the Remuneration Committee).
An additional fee to reflect committee work (combined fee for all committee roles).
An additional fee based on the location of the Director to reflect time spent travelling to Board meetings.
Other fees may also be paid to reflect other board roles or responsibilities.
In accordance with the Articles of Association, shareholders set the maximum aggregate amount of the fees payable to non-executive Directors. The current limit of 750,000 was set by shareholders at the Annual General Meeting held in 2005. A resolution to increase the limit to 875,000 will be included on the agenda for the 2016 Annual General Meeting. |
The non-executive Directors do not participate in any of the Companys performance-related incentive plans or share schemes.
Non-executive Directors do not receive pensions.
The Group Chairman is reimbursed for expenses incurred in travelling from his residence to his CRH office. The Company settles any tax incurred on this on his behalf.
Non-executive Directors do not currently receive any benefits. However, benefits may be provided in the future if, in the view of the Board (for non-executive Directors or for the Chairman), this was considered appropriate. The Company may settle any tax due on benefits. | ||
145 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
Remuneration outcomes in different performance scenarios
Remuneration at CRH consists of fixed pay (salary, pension and benefits), short-term variable pay and long-term variable pay. A significant portion of executive Directors remuneration is linked to the delivery of key business goals over the short and long-term and the creation of shareholder value.
Table 44 shows hypothetical values of the remuneration package for executive Directors under three assumed performance scenarios (based on 2016 proposals).
No share price growth or the payment of dividend equivalents has been assumed in these scenarios. Potential benefits under all-employee share schemes have not been included. |
Remuneration outcomes in different performance scenarios
|
Table 42 | ||||
Performance scenario
|
Payout level
| |||||
Minimum |
Fixed pay (see table 43 for each executive Director) | |||||
No bonus payout | ||||||
No vesting under the Performance Share Plan | ||||||
On-target performance |
50% annual bonus payout (112.5% of salary for the Chief Executive and 75% for the other executive Directors) | |||||
25% vesting under the Performance Share Plan (91.25% of salary for the Chief Executive and 50% for other executive Directors) | ||||||
Maximum performance |
100% annual bonus payout (225% of salary for the Chief Executive and 150% of salary for other executive Directors) | |||||
100% Performance Share Plan vesting (365% of salary for the Chief Executive and 200% for other executive Directors) | ||||||
Hypothetical remuneration values
|
Table 43
|
|||||||||||||||
Salary | Benefits | |||||||||||||||
With effect from | Level paid | Estimated | Total | |||||||||||||
1 January 2016 | in 2015(i) | Pension(ii) | Fixed Pay | |||||||||||||
Chief Executive (Albert Manifold) | 1,400,000 | 22,000 | 700,000 | 2,122,000 | ||||||||||||
Finance Director (Senan Murphy) | 625,000 | 18,500 | 156,250 | 799,750 | ||||||||||||
Group Transformation Director (Maeve Carton) | 688,500 | 10,000 | 290,000 | 988,500 | ||||||||||||
Chairman, CRH Americas (Mark Towe) | $1,448,400 | $72,000 | $289,680 | $1,810,080 | ||||||||||||
(i) | estimated in the case of S. Murphy; based on 2015 expenses for other executive Directors. |
(ii) | see page 126 for details in relation to retirement benefit arrangements. |
146 |
CRH Annual Report on Form 20-F | 2015
Performance-related remuneration outcomes
|
Table 44
|
147 |
CRH Annual Report on Form 20-F | 2015
Directors Remuneration Report | continued
Executive Director service contracts and policy on payment for loss of office
When determining leaving arrangements for an executive Director the Committee takes into account any contractual agreements (including any incentive arrangements) and the performance and conduct of the individual.
Service contracts
The Chief Executive and Finance Director have entered into service contracts with the Company. The summaries in tables 45 and 46 set out the key remuneration terms of those contracts.
The Committee reserves the right to make any other payments in connection with a directors cessation of office or employment where the payments are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of a compromise or settlement of any claim arising in connection with the cessation of a directors office or employment. Any such payments may include paying any fees for outplacement assistance and/or the Directors legal/or professional advice fees in connection with his cessation of office or employment.
The Group Transformation Director (Maeve Carton) and Chairman, CRH Americas (Mark Towe) do not currently have service contracts. They do not have a notice period in excess of 12 months or an entitlement to any benefits on termination of employment. The Committee will determine the amount, if any, paid on termination taking into account the circumstances around departure and the prevailing employment law.
The Committees policy in this area is that service contracts will be put in place for newly appointed executive Directors and in cases where there is a significant step change in Directors responsibilities. It is currently anticipated that these terms will be similar to those agreed with the Chief Executive. |
Under Irish Company Law, CRH is not required to make service contracts available for inspection as the notice period is not more than 12 months. Service contracts will only be available with the executive Directors consent due to data protection reasons. | Annual cash bonus
Executive Directors may, at the discretion of the Committee, remain eligible to receive an annual bonus award for the financial year in which they leave employment. Such awards will be determined by the Committee taking into account time in employment and performance.
| ||||||||||
Chief Executive service contract
|
Table 45
| |||||||||||
Notice period
|
|
12 months notice by the Company or the executive. | ||||||||||
Expiry date |
|
Indefinite duration. | ||||||||||
|
Terms of contract will automatically terminate on the executives 62nd birthday.
| |||||||||||
Termination payments |
|
On lawful termination of employment, the Committee may, at its absolute discretion, make a termination payment in lieu of 12 months notice based on base salary, benefits and pension contribution due during that period. | ||||||||||
|
Where the Company terminates the contract lawfully without notice then no payment in lieu of notice shall be due. | |||||||||||
|
If, in the event of a change of control, there is a diminution in the role and responsibilities of the Chief Executive he may terminate the contract; on such termination a payment equal to one years remuneration (being salary, pension, other benefits and vested incentive awards) will be made to the executive.
| |||||||||||
Disability |
|
In the event that the Chief Executive falls ill or is injured in such a way as which would constitute ill-health or disablement so that the Chief Executive could not work for a period of more than six months, in lieu of the early ill-health retirement provisions in the pension scheme which would otherwise operate in such cases, he shall be entitled to receive a disability salary of 1,000,000 per annum. Such payment would cease when the Chief Executive reaches age 60, returns to work or if the service agreement is terminated.
| ||||||||||
Other information |
|
The Company retains the ability to suspend the executive from employment on full salary and to require the executive to observe a period of garden leave of up to 12 months on full salary, contractual benefits and pension contribution.
| ||||||||||
Finance Director service contract
|
Table 46 | |||||||||||
Notice period
|
|
Six months notice by the Company or the executive. | ||||||||||
Expiry date |
|
Indefinite duration. | ||||||||||
|
Terms of contract will automatically terminate on the executives 65th birthday.
| |||||||||||
Termination payments |
|
On lawful termination of employment, the Committee may, at its absolute discretion, make a termination payment in lieu of six months notice based on base salary, benefits and pension contribution due during that period.
| ||||||||||
| Where the Company terminates the contract lawfully without notice then no payment in lieu of notice shall be due.
| |||||||||||
Other information |
|
The Company retains the ability to suspend the executive from employment on full salary and to require the executive to observe a period of garden leave of up to 12 months on full salary, contractual benefits and pension contribution.
|
148 |
CRH Annual Report on Form 20-F | 2015
Leaver Provisions
|
Table 47 | |||||
Death | Good Leavers as determined by the Committee in accordance with the plan rules |
Leavers in other circumstances | ||||
Deferred Annual Performance Incentive Plan 2014 | Unvested awards vest, unless the Committee determines otherwise, to the extent determined by the Committee.
Awards in the form of nil-cost options may be exercised for 12 months from death (or another period determined by the Committee). |
Awards shall normally vest in full at the normal vesting date. Alternatively, the Committee may determine that awards should vest in full at cessation of employment.
Where awards vesting in such circumstances are granted in the form of nil-cost options participants shall have six months from vesting to exercise their award.
Where awards have already vested at cessation of employment, participants shall have six months from cessation of employment to exercise their option. |
Awards will lapse on the individuals cessation of office or employment. | |||
Performance Share Plan 2014 | Unvested awards shall vest as soon as practicable following death unless the Committee determines otherwise. The number of shares vesting shall be determined by the Committee taking into account the extent to which the performance condition has been met and, if the Committee determines, the length of time that has elapsed since the award was granted until the date of death (or if death occurs during an applicable holding period, to the beginning of the holding period).
Awards in the form of nil-cost options may be exercised for 12 months from death (or another period determined by the Committee). |
Awards shall normally vest at the normal vesting date. Alternatively the Committee may determine that awards should vest at the time the individual leaves.
The level of vesting shall be determined by the Committee taking into account the extent to which the performance condition has been met and, unless the Committee determines otherwise, the period of time that has elapsed since the date of grant until the date of cessation (or if cessation occurs during an applicable holding period, to the beginning of the holding period).
Awards vesting in such circumstances in the form of nil-cost options may be exercised for six months from vesting (or another period determined by the Committee). Where a nil-cost option was already vested at cessation of employment, participants may exercise such options for six months from cessation (or another period determined by the Committee). |
Awards will lapse on the individuals cessation of office or employment. | |||
Share Option Scheme 2010 | The Committee may determine the extent to which options shall vest. Options shall be exercisable for 12 months from vesting or from death (whichever is later). |
Retirement (for age or health reasons)
The Committee may determine the extent to which options may be exercised on the same terms as if the individual had not ceased to hold employment or office having determined the extent to which the performance conditions applicable to the award have been satisfied. Options shall be exercisable for 12 months from vesting or from the participants cessation (whichever is later).
Redundancy, early retirement, sale of the individuals employing subsidiary out of the Group or for any other reason determined by the Committee.
The Committee may determine the extent to which the option may be exercised having determined the extent to which the performance conditions applicable to the award have been satisfied. Options shall be exercisable for six months from vesting or cessation of employment (whichever is later).
Where a participant has ceased to hold office or employment because of health reasons, redundancy, retirement or sale of his employing subsidiary out of the Group, the Committee may waive any relevant performance conditions, in which case his options may be scaled down by reference to the participants performance and the proportion of the relevant performance period the participant has served. |
Awards will normally lapse. |
149 |
CRH Annual Report on Form 20-F | 2015
150 |
151 |
152 |
Statements
|
|
|||||||
The following Consolidated Financial Statements, together with the reports of the Independent Registered Public Accounting Firm thereon, are filed as part of this Annual Report: | ||||||||
Report of Independent Registered Public Accounting Firm | 154 | |||||||
Consolidated Income Statement | 156 | |||||||
Consolidated Statement of Comprehensive Income | 157 | |||||||
Consolidated Balance Sheet | 158 | |||||||
Consolidated Statement of Changes in Equity | 159 | |||||||
Consolidated Statement of Cash Flows | 160 | |||||||
Accounting Policies | 161 | |||||||
Notes on Consolidated Financial Statements
|
|
172
|
|
153 |
CRH Annual Report on Form 20-F | 2015
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of CRH public limited company (CRH plc):
We have audited the accompanying Consolidated Balance Sheets of CRH plc as of 31 December 2015 and 2014, and the related Consolidated Income Statements and Consolidated Statements of Comprehensive Income, Changes in Equity and Cash Flows for each of the three years in the period ended 31 December 2015. These Consolidated Financial Statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Consolidated Financial Statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Consolidated Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall Consolidated Financial Statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the Consolidated Financial Statements referred to above present fairly, in all material respects, the consolidated financial position of CRH plc at 31 December 2015 and 2014, and the consolidated results of its operations and its consolidated cash flows for each of the three years in the period ended 31 December 2015, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), CRH plcs internal control over financial reporting as of 31 December 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organisations of the Treadway Commission (2013 Framework) and our report dated 15 March 2016 expressed an unqualified opinion thereon.
/s/ ERNST & YOUNG
Dublin, Ireland
15 March 2016
154 |
CRH Annual Report on Form 20-F | 2015
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Board of Directors and Shareholders of CRH public limited company (CRH plc):
We have audited CRH plcs internal control over financial reporting as of 31 December 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organisations of the Treadway Commission (2013 Framework) (the COSO criteria). CRH plcs management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Companys internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Consolidated Financial Statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Consolidated Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the Consolidated Financial Statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As indicated in the accompanying Managements Report on Internal Control over Financial Reporting, managements assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the material acquisitions of LH Assets and CR Laurence completed during the year ended 31 December 2015, which are included in the 2015 Consolidated Financial Statements of CRH plc and constituted 23.3% and 37.4% of total and net assets, respectively, as of 31 December 2015 and 10.9% and (1.7%) of revenues and group profit, respectively, for the year then ended. Our audit of internal control over financial reporting of CRH plc also did not include an evaluation of the internal control over financial reporting of the material acquisitions of LH Assets and CR Laurence completed during the year ended 31 December 2015.
In our opinion, CRH plc maintained, in all material respects, effective internal control over financial reporting as of 31 December 2015, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2015 Consolidated Financial Statements of CRH plc and our report dated 15 March 2016 expressed an unqualified opinion thereon.
/s/ ERNST & YOUNG
Dublin, Ireland
15 March 2016
155 |
CRH Annual Report on Form 20-F | 2015
for the financial year ended 31 December 2015
2015 m |
2014 m |
2013 m |
||||||||||||
Notes | ||||||||||||||
1 | Revenue | 23,635 | 18,912 | 18,031 | ||||||||||
2 | Cost of sales | (16,394) | (13,427) | (13,153) | ||||||||||
Gross profit | 7,241 | 5,485 | 4,878 | |||||||||||
2 | Operating costs | (5,964) | (4,568) | (4,778) | ||||||||||
1,3,5,6 | Group operating profit | 1,277 | 917 | 100 | ||||||||||
1,4 | Profit on disposals | 101 | 77 | 26 | ||||||||||
Profit before finance costs | 1,378 | 994 | 126 | |||||||||||
8 | Finance costs | (303) | (254) | (262) | ||||||||||
8 | Finance income | 8 | 8 | 13 | ||||||||||
8 | Other financial expense | (94) | (42) | (48) | ||||||||||
9 | Share of equity accounted investments profit/(loss) | 44 | 55 | (44) | ||||||||||
1 | Profit/(loss) before tax | 1,033 | 761 | (215) | ||||||||||
10 | Income tax expense | (304) | (177) | (80) | ||||||||||
Group profit/(loss) for the financial year | 729 | 584 | (295) | |||||||||||
Profit/(loss) attributable to: | ||||||||||||||
Equity holders of the Company | 724 | 582 | (296) | |||||||||||
Non-controlling interests | 5 | 2 | 1 | |||||||||||
Group profit/(loss) for the financial year | 729 | 584 | (295) | |||||||||||
12 | Basic earnings/(loss) per Ordinary Share | 89.1c | 78.9c | (40.6c) | ||||||||||
12 | Diluted earnings/(loss) per Ordinary Share | 88.7c | 78.8c | (40.6c) | ||||||||||
All of the results relate to continuing operations. |
156 |
CRH Annual Report on Form 20-F | 2015
Consolidated Statement of Comprehensive Income
for the financial year ended 31 December 2015
2015 m |
2014 m |
2013 m |
||||||||||||
Notes | ||||||||||||||
Group profit/(loss) for the financial year | 729 | 584 | (295) | |||||||||||
Other comprehensive income | ||||||||||||||
Items that may be reclassified to profit or loss in subsequent years: | ||||||||||||||
Currency translation effects | 661 | 599 | (373) | |||||||||||
24 | Losses relating to cash flow hedges | (2) | (6) | (2) | ||||||||||
659 | 593 | (375) | ||||||||||||
Items that will not be reclassified to profit or loss in subsequent years: | ||||||||||||||
27 | Remeasurement of retirement benefit obligations | 203 | (414) | 162 | ||||||||||
10 | Tax on items recognised directly within other comprehensive income | (30) | 69 | (43) | ||||||||||
173 | (345) | 119 | ||||||||||||
Total other comprehensive income for the financial year | 832 | 248 | (256) | |||||||||||
Total comprehensive income for the financial year | 1,561 | 832 | (551) | |||||||||||
Attributable to: | ||||||||||||||
Equity holders of the Company | 1,538 | 830 | (552) | |||||||||||
Non-controlling interests | 23 | 2 | 1 | |||||||||||
Total comprehensive income for the financial year | 1,561 | 832 | (551) |
157 |
CRH Annual Report on Form 20-F | 2015
as at 31 December 2015
2015 m |
2014 m |
|||||||||
Notes | ||||||||||
ASSETS | ||||||||||
Non-current assets | ||||||||||
13 | Property, plant and equipment | 13,062 | 7,422 | |||||||
14 | Intangible assets | 7,820 | 4,173 | |||||||
15 | Investments accounted for using the equity method | 1,317 | 1,329 | |||||||
15 | Other financial assets | 28 | 23 | |||||||
17 | Other receivables | 149 | 85 | |||||||
24 | Derivative financial instruments | 85 | 87 | |||||||
26 | Deferred income tax assets | 149 | 171 | |||||||
Total non-current assets | 22,610 | 13,290 | ||||||||
Current assets | ||||||||||
16 | Inventories | 2,873 | 2,260 | |||||||
17 | Trade and other receivables | 3,977 | 2,644 | |||||||
Current income tax recoverable | 5 | 15 | ||||||||
24 | Derivative financial instruments | 24 | 15 | |||||||
22 | Cash and cash equivalents | 2,518 | 3,262 | |||||||
Assets held for sale | - | 531 | ||||||||
Total current assets | 9,397 | 8,727 | ||||||||
Total assets | 32,007 | 22,017 | ||||||||
EQUITY | ||||||||||
Capital and reserves attributable to the Companys equity holders | ||||||||||
28 | Equity share capital | 281 | 253 | |||||||
28 | Preference share capital | 1 | 1 | |||||||
28 | Share premium account | 6,021 | 4,324 | |||||||
28 | Treasury Shares and own shares | (28 | ) | (76) | ||||||
Other reserves | 240 | 213 | ||||||||
Foreign currency translation reserve | 700 | 57 | ||||||||
Retained income | 5,800 | 5,405 | ||||||||
13,015 | 10,177 | |||||||||
31 | Non-controlling interests | 529 | 21 | |||||||
Total equity | 13,544 | 10,198 | ||||||||
LIABILITIES | ||||||||||
Non-current liabilities | ||||||||||
23 | Interest-bearing loans and borrowings | 8,465 | 5,419 | |||||||
24 | Derivative financial instruments | 5 | 3 | |||||||
26 | Deferred income tax liabilities | 2,023 | 1,305 | |||||||
18 | Other payables | 410 | 257 | |||||||
27 | Retirement benefit obligations | 588 | 711 | |||||||
25 | Provisions for liabilities | 603 | 257 | |||||||
Total non-current liabilities | 12,094 | 7,952 | ||||||||
Current liabilities | ||||||||||
18 | Trade and other payables | 4,761 | 2,894 | |||||||
Current income tax liabilities | 401 | 154 | ||||||||
23 | Interest-bearing loans and borrowings | 756 | 447 | |||||||
24 | Derivative financial instruments | 19 | 20 | |||||||
25 | Provisions for liabilities | 432 | 139 | |||||||
Liabilities associated with assets classified as held for sale | - | 213 | ||||||||
Total current liabilities | 6,369 | 3,867 | ||||||||
Total liabilities | 18,463 | 11,819 | ||||||||
Total equity and liabilities | 32,007 | 22,017 |
158 |
CRH Annual Report on Form 20-F | 2015
Consolidated Statement of Changes in Equity
for the financial year ended 31 December 2015
Attributable to the equity holders of the Company | ||||||||||||||||||||||||||||||||||
Treasury | Foreign | |||||||||||||||||||||||||||||||||
Issued | Share | Shares/ | currency | Non- | ||||||||||||||||||||||||||||||
share | premium | own | Other | translation | Retained | controlling | Total | |||||||||||||||||||||||||||
capital | account | shares | reserves | reserve | income | interests | equity | |||||||||||||||||||||||||||
m | m | m | m | m | m | m | m | |||||||||||||||||||||||||||
Notes | ||||||||||||||||||||||||||||||||||
At 1 January 2015 | 254 | 4,324 | (76) | 213 | 57 | 5,405 | 21 | 10,198 | ||||||||||||||||||||||||||
Group profit for the financial year | - | - | - | - | - | 724 | 5 | 729 | ||||||||||||||||||||||||||
Other comprehensive income | - | - | - | - | 643 | 171 | 18 | 832 | ||||||||||||||||||||||||||
Total comprehensive income | - | - | - | - | 643 | 895 | 23 | 1,561 | ||||||||||||||||||||||||||
28 | Issue of share capital (net of expenses) | 28 | 1,697 | - | - | - | - | - | 1,725 | |||||||||||||||||||||||||
7 | Share-based payment expense | - | - | - | 27 | - | - | - | 27 | |||||||||||||||||||||||||
28 | Treasury/own shares reissued | - | - | 51 | - | - | (51) | - | - | |||||||||||||||||||||||||
28 | Shares acquired by Employee Benefit Trust (own shares) | - | - | (3) | - | - | - | - | (3) | |||||||||||||||||||||||||
10 | Tax relating to share-based payment expense | - | - | - | - | - | 5 | - | 5 | |||||||||||||||||||||||||
Share option exercises | - | - | - | - | - | 57 | - | 57 | ||||||||||||||||||||||||||
11 | Dividends (including shares issued in lieu of dividends) | - | - | - | - | - | (511) | (4) | (515) | |||||||||||||||||||||||||
30 | Non-controlling interests arising on acquisition of subsidiaries | - | - | - | - | - | - | 489 | 489 | |||||||||||||||||||||||||
At 31 December 2015 | 282 | 6,021 | (28) | 240 | 700 | 5,800 | 529 | 13,544 | ||||||||||||||||||||||||||
for the financial year ended 31 December 2014 | ||||||||||||||||||||||||||||||||||
At 1 January 2014 | 252 | 4,219 | (118) | 197 | (542) | 5,654 | 24 | 9,686 | ||||||||||||||||||||||||||
Group profit for the financial year | - | - | - | - | - | 582 | 2 | 584 | ||||||||||||||||||||||||||
Other comprehensive income | - | - | - | - | 599 | (351) | - | 248 | ||||||||||||||||||||||||||
Total comprehensive income | - | - | - | - | 599 | 231 | 2 | 832 | ||||||||||||||||||||||||||
28 | Issue of share capital (net of expenses) | 2 | 105 | - | - | - | - | - | 107 | |||||||||||||||||||||||||
7 | Share-based payment expense | - | - | - | 16 | - | - | - | 16 | |||||||||||||||||||||||||
28 | Treasury/own shares reissued | - | - | 42 | - | - | (42) | - | - | |||||||||||||||||||||||||
Share option exercises | - | - | - | - | - | 22 | - | 22 | ||||||||||||||||||||||||||
11 | Dividends (including shares issued in lieu of dividends) | - | - | - | - | - | (460) | (4) | (464) | |||||||||||||||||||||||||
Acquisition of non-controlling interests | - | - | - | - | - | - | (1) | (1) | ||||||||||||||||||||||||||
At 31 December 2014 | 254 | 4,324 | (76) | 213 | 57 | 5,405 | 21 | 10,198 | ||||||||||||||||||||||||||
for the financial year ended 31 December 2013 | ||||||||||||||||||||||||||||||||||
At 1 January 2013 | 250 | 4,133 | (146) | 182 | (169) | 6,303 | 36 | 10,589 | ||||||||||||||||||||||||||
Group loss for the financial year | - | - | - | - | - | (296) | 1 | (295) | ||||||||||||||||||||||||||
Other comprehensive income | - | - | - | - | (373) | 117 | - | (256) | ||||||||||||||||||||||||||
Total comprehensive income | - | - | - | - | (373) | (179) | 1 | (551) | ||||||||||||||||||||||||||
28 | Issue of share capital (net of expenses) | 2 | 86 | - | - | - | - | - | 88 | |||||||||||||||||||||||||
7 | Share-based payment expense | - | - | - | 15 | - | - | - | 15 | |||||||||||||||||||||||||
Treasury/own shares reissued | - | - | 34 | - | - | (34) | - | - | ||||||||||||||||||||||||||
Shares acquired by Employee Benefit Trust (own shares) | - | - | (6) | - | - | - | - | (6) | ||||||||||||||||||||||||||
Share option exercises | - | - | - | - | - | 19 | - | 19 | ||||||||||||||||||||||||||
11 | Dividends (including shares issued in lieu of dividends) | - | - | - | - | - | (455) | (1) | (456) | |||||||||||||||||||||||||
30 | Non-controlling interests arising on acquisition of subsidiaries | - | - | - | - | - | - | 1 | 1 | |||||||||||||||||||||||||
Acquisition of non-controlling interests | - | - | - | - | - | - | (13) | (13) | ||||||||||||||||||||||||||
At 31 December 2013 | 252 | 4,219 | (118) | 197 | (542) | 5,654 | 24 | 9,686 |
159 |
CRH Annual Report on Form 20-F | 2015
Consolidated Statement of Cash Flows
for the financial year ended 31 December 2015
2015 m |
2014 m |
2013 m |
||||||||||||
Notes | ||||||||||||||
Cash flows from operating activities | ||||||||||||||
Profit/(loss) before tax | 1,033 | 761 | (215) | |||||||||||
8 | Finance costs (net) | 389 | 288 | 297 | ||||||||||
9 | Share of equity accounted investments result | (44) | (55) | 44 | ||||||||||
4 | Profit on disposals | (101) | (77) | (26) | ||||||||||
Group operating profit | 1,277 | 917 | 100 | |||||||||||
2 | Depreciation charge | 843 | 631 | 671 | ||||||||||
2 | Amortisation of intangible assets | 55 | 44 | 54 | ||||||||||
2 | Impairment charge | 44 | 49 | 650 | ||||||||||
7 | Share-based payment expense | 27 | 16 | 15 | ||||||||||
Other (primarily pension payments) | (47) | (66) | (96) | |||||||||||
19 | Net movement on working capital and provisions | 585 | 35 | 77 | ||||||||||
Cash generated from operations | 2,784 | 1,626 | 1,471 | |||||||||||
Interest paid (including finance leases) | (302) | (262) | (269) | |||||||||||
Corporation tax paid | (235) | (127) | (110) | |||||||||||
Net cash inflow from operating activities | 2,247 | 1,237 | 1,092 | |||||||||||
Cash flows from investing activities | ||||||||||||||
4 | Proceeds from disposals (net of cash disposed and deferred proceeds) | 889 | 345 | 122 | ||||||||||
Interest received | 8 | 8 | 13 | |||||||||||
Dividends received from equity accounted investments | 53 | 30 | 33 | |||||||||||
13 | Purchase of property, plant and equipment | (882) | (435) | (497) | ||||||||||
30 | Acquisition of subsidiaries (net of cash acquired) | (7,296) | (151) | (336) | ||||||||||
15 | Other investments and advances | (19) | (3) | (78) | ||||||||||
19 | Deferred and contingent acquisition consideration paid | (59) | (26) | (105) | ||||||||||
Net cash outflow from investing activities | (7,306) | (232) | (848) | |||||||||||
Cash flows from financing activities | ||||||||||||||
28 | Proceeds from issue of shares (net) | 1,593 | - | - | ||||||||||
Proceeds from exercise of share options | 57 | 22 | 19 | |||||||||||
Acquisition of non-controlling interests | - | (1) | (13) | |||||||||||
Increase in interest-bearing loans, borrowings and finance leases | 5,633 | 901 | 1,491 | |||||||||||
Net cash flow arising from derivative financial instruments | 47 | (11) | 64 | |||||||||||
8 | Premium paid on early debt redemption | (38) | - | - | ||||||||||
28 | Treasury/own shares purchased | (3) | - | (6) | ||||||||||
Repayment of interest-bearing loans, borrowings and finance leases | (2,744) | (934) | (586) | |||||||||||
11 | Dividends paid to equity holders of the Company | (379) | (353) | (367) | ||||||||||
11 | Dividends paid to non-controlling interests | (4) | (4) | (1) | ||||||||||
Net cash inflow/(outflow) from financing activities | 4,162 | (380) | 601 | |||||||||||
(Decrease)/increase in cash and cash equivalents | (897) | 625 | 845 | |||||||||||
Reconciliation of opening to closing cash and cash equivalents | ||||||||||||||
Cash and cash equivalents at 1 January | 3,295 | 2,540 | 1,747 | |||||||||||
Translation adjustment | 120 | 130 | (52) | |||||||||||
(Decrease)/increase in cash and cash equivalents | (897) | 625 | 845 | |||||||||||
22 | Cash and cash equivalents at 31 December | 2,518 | 3,295 | 2,540 |
160 |
CRH Annual Report on Form 20-F | 2015
(including key accounting estimates and assumptions)
161 |
CRH Annual Report on Form 20-F | 2015
Accounting Policies | continued
162 |
CRH Annual Report on Form 20-F | 2015
Accounting Policies | continued
163 |
CRH Annual Report on Form 20-F | 2015
Accounting Policies | continued
164 |
CRH Annual Report on Form 20-F | 2015
Accounting Policies | continued
165 |
CRH Annual Report on Form 20-F | 2015
Accounting Policies | continued
166 |
CRH Annual Report on Form 20-F | 2015
Accounting Policies | continued
167 |
CRH Annual Report on Form 20-F | 2015
Accounting Policies | continued
168 |
CRH Annual Report on Form 20-F | 2015
Accounting Policies | continued
169 |
CRH Annual Report on Form 20-F | 2015
Accounting Policies | continued
170 |
CRH Annual Report on Form 20-F | 2015
Accounting Policies | continued
The principal exchange rates used for the translation of results, cash flows and balance sheets into euro were as follows:
Average | Year-end | |||||||||||||||||||||||||||||||||
euro 1 = | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||
US Dollar | 1.1095 | 1.3290 | 1.3281 | 1.0887 | 1.2141 | 1.3791 | ||||||||||||||||||||||||||||
Pound Sterling | 0.7258 | 0.8062 | 0.8493 | 0.7340 | 0.7789 | 0.8337 | ||||||||||||||||||||||||||||
Polish Zloty | 4.1841 | 4.1839 | 4.1975 | 4.2639 | 4.2732 | 4.1543 | ||||||||||||||||||||||||||||
Ukrainian Hryvnia | 24.3693 | 15.8908 | 10.8339 | 26.1434 | 19.1814 | 11.3583 | ||||||||||||||||||||||||||||
Swiss Franc | 1.0679 | 1.2147 | 1.2311 | 1.0835 | 1.2024 | 1.2276 | ||||||||||||||||||||||||||||
Canadian Dollar | 1.4186 | 1.4664 | 1.3684 | 1.5116 | 1.4063 | 1.4671 | ||||||||||||||||||||||||||||
Argentine Peso | 10.2803 | 10.7785 | 7.2892 | 14.0824 | 10.2645 | 8.9910 | ||||||||||||||||||||||||||||
Turkish Lira | 3.0255 | 2.9068 | 2.5335 | 3.1765 | 2.8320 | 2.9605 | ||||||||||||||||||||||||||||
Indian Rupee | 71.1956 | 81.0576 | 77.9300 | 72.0215 | 76.7190 | 85.3660 | ||||||||||||||||||||||||||||
Chinese Renminbi | 6.9733 | 8.1883 | 8.1646 | 7.0608 | 7.5358 | 8.3491 | ||||||||||||||||||||||||||||
Brazilian Real | 3.7004 | - | - | 4.3117 | - | - | ||||||||||||||||||||||||||||
Romanian Leu | 4.4454 | - | - | 4.5240 | - | - | ||||||||||||||||||||||||||||
Hungarian Forint | 309.9956 | - | - | 315.9800 | - | - | ||||||||||||||||||||||||||||
Serbian Dinar | 120.7168 | - | - | 121.5612 | - | - | ||||||||||||||||||||||||||||
Philippine Peso | 50.5217 | - | - | 50.9990 | - | - | ||||||||||||||||||||||||||||
171 |
CRH Annual Report on Form 20-F | 2015
Notes on Consolidated Financial Statements
1. Segment Information
* | EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
172 |
CRH Annual Report on Form 20-F | 2015
1. Segment Information | continued
A. Operating segments disclosures - Consolidated Income Statement data
Year ended 31 December | ||||||||||||||||||||||||||||||||||||||||||||||||
Group operating profit before | Depreciation, | |||||||||||||||||||||||||||||||||||||||||||||||
depreciation and amortisation | amortisation and | Group | ||||||||||||||||||||||||||||||||||||||||||||||
Revenue | (EBITDA (as defined)*) | impairment (i) | operating profit (EBIT) | |||||||||||||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||
m | m | m | m | m | m | m | m | m | m | m | m | |||||||||||||||||||||||||||||||||||||
Europe Heavyside |
3,607 | 3,929 | 3,786 | 334 | 380 | 326 | 199 | 229 | 721 | 135 | 151 | (395) | ||||||||||||||||||||||||||||||||||||
Europe Lightside |
961 | 913 | 856 | 100 | 94 | 71 | 25 | 23 | 43 | 75 | 71 | 28 | ||||||||||||||||||||||||||||||||||||
Europe Distribution |
4,158 | 3,999 | 3,936 | 171 | 190 | 186 | 77 | 78 | 80 | 94 | 112 | 106 | ||||||||||||||||||||||||||||||||||||
Europe |
8,726 | 8,841 | 8,578 | 605 | 664 | 583 | 301 | 330 | 844 | 304 | 334 | (261) | ||||||||||||||||||||||||||||||||||||
Americas Materials |
6,400 | 5,070 | 4,721 | 912 | 609 | 557 | 301 | 254 | 331 | 611 | 355 | 226 | ||||||||||||||||||||||||||||||||||||
Americas Products |
3,862 | 3,225 | 3,068 | 391 | 263 | 246 | 142 | 118 | 178 | 249 | 145 | 68 | ||||||||||||||||||||||||||||||||||||
Americas Distribution |
2,229 | 1,776 | 1,664 | 140 | 105 | 89 | 29 | 22 | 22 | 111 | 83 | 67 | ||||||||||||||||||||||||||||||||||||
Americas |
12,491 | 10,071 | 9,453 | 1,443 | 977 | 892 | 472 | 394 | 531 | 971 | 583 | 361 | ||||||||||||||||||||||||||||||||||||
LH Assets |
2,418 | - | - | 171 | - | - | 169 | - | - | 2 | - | - | ||||||||||||||||||||||||||||||||||||
Total Group |
23,635 | 18,912 | 18,031 | 2,219 | 1,641 | 1,475 | 942 | 724 | 1,375 | 1,277 | 917 | 100 | ||||||||||||||||||||||||||||||||||||
(i) See note 2 for details of the impairment charge. |
|
|||||||||||||||||||||||||||||||||||||||||||||||
Profit on disposals (ii) |
|
101 | 77 | 26 | ||||||||||||||||||||||||||||||||||||||||||||
Finance costs less income |
|
(295) | (246) | (249) | ||||||||||||||||||||||||||||||||||||||||||||
Other financial expense |
|
(94) | (42) | (48) | ||||||||||||||||||||||||||||||||||||||||||||
Share of equity accounted investments profit/(loss) (iii) |
|
44 | 55 | (44) | ||||||||||||||||||||||||||||||||||||||||||||
Profit/(loss) before tax |
|
1,033 | 761 | (215) | ||||||||||||||||||||||||||||||||||||||||||||
(ii) Profit/(loss) on | (iii) Share of equity accounted | |||||||||||||||||||||||||||||||||||||||||||||||
disposals (note 4) | investments profit/(loss) (note 9) | |||||||||||||||||||||||||||||||||||||||||||||||
Europe Heavyside |
|
97 | 38 | 6 | 4 | 35 | (60) | |||||||||||||||||||||||||||||||||||||||||
Europe Lightside |
|
(23) | 1 | 6 | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Europe Distribution |
|
8 | 6 | (2) | 15 | 13 | 9 | |||||||||||||||||||||||||||||||||||||||||
Europe |
|
82 | 45 | 10 | 19 | 48 | (51) | |||||||||||||||||||||||||||||||||||||||||
Americas Materials |
|
24 | 11 | 19 | 23 | 7 | 7 | |||||||||||||||||||||||||||||||||||||||||
Americas Products |
|
(11) | 20 | (3) | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Americas Distribution |
|
2 | 1 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Americas |
|
15 | 32 | 16 | 23 | 7 | 7 | |||||||||||||||||||||||||||||||||||||||||
LH Assets |
|
4 | - | - | 2 | - | - | |||||||||||||||||||||||||||||||||||||||||
Total Group |
|
101 | 77 | 26 | 44 | 55 | (44) |
* | EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
173 |
CRH Annual Report on Form 20-F | 2015
1. Segment Information | continued
B. Operating segments disclosures - Consolidated Balance Sheet data
As at 31 December | ||||||||||||||||
Total assets | Total liabilities | |||||||||||||||
2015 m |
2014 m |
2015 m |
2014 m |
|||||||||||||
Europe Heavyside |
3,802 | 3,864 | 1,260 | 1,468 | ||||||||||||
Europe Lightside |
767 | 761 | 261 | 215 | ||||||||||||
Europe Distribution |
2,238 | 2,221 | 647 | 644 | ||||||||||||
Europe |
6,807 | 6,846 | 2,168 | 2,327 | ||||||||||||
Americas Materials |
6,933 | 6,245 | 1,195 | 969 | ||||||||||||
Americas Products |
4,146 | 2,542 | 952 | 679 | ||||||||||||
Americas Distribution |
1,095 | 951 | 364 | 283 | ||||||||||||
Americas |
12,174 | 9,738 | 2,511 | 1,931 | ||||||||||||
LH Assets |
8,900 | - | 2,115 | - | ||||||||||||
Total Group |
27,881 | 16,584 | 6,794 | 4,258 | ||||||||||||
Reconciliation to total assets as reported in the Consolidated Balance Sheet: |
||||||||||||||||
Investments accounted for using the equity method |
1,317 | 1,329 | ||||||||||||||
Other financial assets |
28 | 23 | ||||||||||||||
Derivative financial instruments (current and non-current) |
109 | 102 | ||||||||||||||
Income tax assets (current and deferred) |
154 | 186 | ||||||||||||||
Cash and cash equivalents |
2,518 | 3,262 | ||||||||||||||
Assets held for sale |
- | 531 | ||||||||||||||
Total assets as reported in the Consolidated Balance Sheet |
32,007 | 22,017 | ||||||||||||||
Reconciliation to total liabilities as reported in the Consolidated Balance Sheet: |
||||||||||||||||
Interest-bearing loans and borrowings (current and non-current) |
9,221 | 5,866 | ||||||||||||||
Derivative financial instruments (current and non-current) |
24 | 23 | ||||||||||||||
Income tax liabilities (current and deferred) |
2,424 | 1,459 | ||||||||||||||
Liabilities associated with assets classified as held for sale |
- | 213 | ||||||||||||||
Total liabilities as reported in the Consolidated Balance Sheet |
18,463 | 11,819 |
174 |
CRH Annual Report on Form 20-F | 2015
1. Segment Information | continued
C. Operating segments disclosures - other items
Additions to non-current assets
Year ended 31 December | ||||||||||||||||||||||||||||||||||||
Property, plant and | Financial assets | |||||||||||||||||||||||||||||||||||
equipment (note 13) | (note 15) | Total Group | ||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||
m | m | m | m | m | m | m | m | m | ||||||||||||||||||||||||||||
Europe Heavyside |
153 | 113 | 132 | 2 | - | 70 | 155 | 113 | 202 | |||||||||||||||||||||||||||
Europe Lightside |
15 | 14 | 13 | - | - | - | 15 | 14 | 13 | |||||||||||||||||||||||||||
Europe Distribution |
46 | 36 | 49 | 1 | - | 1 | 47 | 36 | 50 | |||||||||||||||||||||||||||
Europe |
214 | 163 | 194 | 3 | - | 71 | 217 | 163 | 265 | |||||||||||||||||||||||||||
Americas Materials |
319 | 173 | 199 | 10 | 3 | 7 | 329 | 176 | 206 | |||||||||||||||||||||||||||
Americas Products |
153 | 81 | 83 | - | - | - | 153 | 81 | 83 | |||||||||||||||||||||||||||
Americas Distribution |
41 | 18 | 21 | - | - | - | 41 | 18 | 21 | |||||||||||||||||||||||||||
Americas |
513 | 272 | 303 | 10 | 3 | 7 | 523 | 275 | 310 | |||||||||||||||||||||||||||
LH Assets (i) |
155 | - | - | 6 | - | - | 161 | - | - | |||||||||||||||||||||||||||
Total Group |
882 | 435 | 497 | 19 | 3 | 78 | 901 | 438 | 575 |
(i) | Additions for the LH Assets are reported from the date of acquisition. |
D. Entity-wide disclosures
Section 1: Information about products and services
The Groups revenue from external customers in respect of its principal products and services is analysed in the disclosures above. Segment revenue includes 4,523 million (2014: 3,351 million; 2013: 3,268 million) in respect of revenue applicable to construction contracts. The bulk of our construction activities are performed by our Americas Materials reportable segment, are for the most part short-term in nature and are generally completed within the same financial reporting period.
Neither revenue derived through the supply of services nor intersegment revenue is material to the Group. The transfer pricing policy implemented by the Group between operating segments and across its constituent entities is described in greater detail in note 32. In addition, due to the nature of building materials, which exhibit a low value-to-weight ratio, the Groups revenue streams include a low level of cross-border transactions.
Section 2: Information about geographical areas and customers
CRH has a presence in 31 countries worldwide. The revenues from external customers and non-current assets (as defined in IFRS 8) attributable to the country of domicile and all foreign countries of operation are as follows; individual foreign countries which exceed 10% of total external Group revenue have been highlighted separately on the basis of materiality.
Year ended 31 December | As at 31 December | |||||||||||||||||||
Revenue by destination | Non-current assets | |||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | ||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Country of domicile - Republic of Ireland |
349 | 306 | 278 | 609 | 477 | |||||||||||||||
Benelux (mainly the Netherlands) |
2,478 | 2,350 | 2,324 | 1,209 | 1,231 | |||||||||||||||
United States of America |
12,048 | 9,650 | 8,991 | 8,911 | 6,948 | |||||||||||||||
Other |
8,760 | 6,606 | 6,438 | 11,470 | 4,268 | |||||||||||||||
Total Group |
23,635 | 18,912 | 18,031 | 22,199 | 12,924 |
While the United Kingdom does not exceed 10% of total external Group revenue, at 31 December 2015 it represented 13% of the Groups non-current assets.
There are no material dependencies or concentrations on individual customers which would warrant disclosure under IFRS 8. The individual entities within the Group have a large number of customers spread across various activities, end-uses and geographies.
175 |
CRH Annual Report on Form 20-F | 2015
2. Cost Analysis
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
Cost of sales analysis |
||||||||||||
Raw materials and goods for resale |
8,629 | 7,527 | 7,240 | |||||||||
Employment costs (note 5) |
2,446 | 1,985 | 1,974 | |||||||||
Energy conversion costs |
789 | 655 | 644 | |||||||||
Repairs and maintenance |
630 | 452 | 421 | |||||||||
Depreciation, amortisation and impairment (i) |
697 | 532 | 792 | |||||||||
Change in inventory (note 19) |
29 | 34 | 37 | |||||||||
Other production expenses (primarily sub-contractor costs and equipment rental) |
3,174 | 2,242 | 2,045 | |||||||||
Total |
16,394 | 13,427 | 13,153 | |||||||||
Operating costs analysis |
||||||||||||
Selling and distribution costs |
3,878 | 3,143 | 3,054 | |||||||||
Administrative expenses |
2,086 | 1,425 | 1,724 | |||||||||
Total |
5,964 | 4,568 | 4,778 |
(i) | Depreciation, amortisation and impairment analysis |
Cost of sales | Operating costs | Total | ||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||
m | m | m | m | m | m | m | m | m | ||||||||||||||||||||||||||||
Depreciation and depletion (note 13) |
667 | 485 | 521 | 176 | 146 | 150 | 843 | 631 | 671 | |||||||||||||||||||||||||||
Amortisation of intangible assets (note 14) |
- | - | - | 55 | 44 | 54 | 55 | 44 | 54 | |||||||||||||||||||||||||||
Impairment of property, plant and equipment (note 13) |
30 | 47 | 271 | 11 | 2 | 4 | 41 | 49 | 275 | |||||||||||||||||||||||||||
Impairment of intangible assets (note 14) |
- | - | - | 1 | - | 375 | 1 | - | 375 | |||||||||||||||||||||||||||
Impairment of financial assets (note 15) |
- | - | - | 2 | - | - | 2 | - | - | |||||||||||||||||||||||||||
Total |
697 | 532 | 792 | 245 | 192 | 583 | 942 | 724 | 1,375 |
Segmental analysis of 2013 impairment charges
Portfolio review included in | ||||||||||||||||||||
Annual impairment | Included in operating | share of equity | ||||||||||||||||||
process | Portfolio review | profit | accounted entities | Total | ||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Europe Heavyside |
58 | 444 | 502 | 101 | 603 | |||||||||||||||
Europe Lightside |
- | 13 | 13 | - | 13 | |||||||||||||||
Europe Distribution |
4 | - | 4 | 4 | 8 | |||||||||||||||
Europe |
62 | 457 | 519 | 105 | 624 | |||||||||||||||
Americas Materials |
- | 60 | 60 | - | 60 | |||||||||||||||
Americas Products |
10 | 61 | 71 | - | 71 | |||||||||||||||
Americas Distribution |
- | - | - | - | - | |||||||||||||||
Americas |
10 | 121 | 131 | - | 131 | |||||||||||||||
Total Group |
72 | 578 | 650 | 105 | 755 |
In November 2013, a Group-wide portfolio review was initiated to identify and focus on those businesses within our portfolio which offer the most attractive future returns, and to prioritise capital allocation to ensure profitable growth across our network of businesses. The total impairments (including financial asset impairments) arising from the portfolio review amounted to 683 million, of which 261 million related to property, plant and equipment and 317 million related to intangible assets. The review was completed during 2014 and a multi-year divestment programme is well under way (see note 14 for further details).
The 2013 annual impairment testing process resulted in an impairment of 58 million being recorded in respect of our Benelux CGU in Europe Heavyside due to a difficult trading environment in 2013 and a slower recovery than previously anticipated.
176 |
CRH Annual Report on Form 20-F | 2015
3. Operating Profit Disclosures
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
Operating lease rentals |
||||||||||||
- hire of plant and machinery |
204 | 149 | 108 | |||||||||
- land and buildings |
263 | 216 | 220 | |||||||||
- other operating leases |
50 | 48 | 47 | |||||||||
Total |
517 | 413 | 375 |
Auditors remuneration
Fees for professional services provided by the Groups independent auditor in respect of each of the following categories were:
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
Audit fees (i) |
19 | 14 | 14 | |||||||||
Audit-related fees (ii) |
5 | 1 | 2 | |||||||||
Tax fees |
2 | 1 | 1 | |||||||||
All other fees |
- | - | - | |||||||||
Total |
26 | 16 | 17 |
(i) | Audit of the Group accounts includes Sarbanes-Oxley attestation and parent and subsidiary statutory audit fees, but excludes 2 million (2014: 2 million; 2013: 1 million) paid to auditors other than EY. |
(ii) | Other assurance services includes attestation and due diligence services that are closely related to the performance of the audit. |
177 |
CRH Annual Report on Form 20-F | 2015
4. Business and Non-Current Asset Disposals
Disposal of other | ||||||||||||||||||||||||||||||||||||
Business disposals | non-current assets | Total | ||||||||||||||||||||||||||||||||||
2015 (i) | 2014 (ii) | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||
m | m | m | m | m | m | m | m | m | ||||||||||||||||||||||||||||
Assets/(liabilities) disposed of at net carrying amount: |
||||||||||||||||||||||||||||||||||||
- non-current assets (notes 13,14,15) |
570 | 117 | 43 | 103 | 83 | 66 | 673 | 200 | 109 | |||||||||||||||||||||||||||
- cash and cash equivalents |
90 | - | - | - | - | - | 90 | - | - | |||||||||||||||||||||||||||
- working capital and provisions (note 19) |
246 | 11 | 6 | - | - | - | 246 | 11 | 6 | |||||||||||||||||||||||||||
- asset held for sale (iii) |
- | - | 139 | - | - | - | - | - | 139 | |||||||||||||||||||||||||||
- interest-bearing loans and borrowings |
(20) | - | (17) | - | - | - | (20) | - | (17) | |||||||||||||||||||||||||||
- deferred tax (note 26) |
(22) | - | - | - | - | - | (22) | - | - | |||||||||||||||||||||||||||
- retirement benefit obligations (note 27) |
(84) | - | - | - | - | - | (84) | - | - | |||||||||||||||||||||||||||
Net assets disposed |
780 | 128 | 171 | 103 | 83 | 66 | 883 | 211 | 237 | |||||||||||||||||||||||||||
Reclassification of currency translation effects on disposal |
39 | 57 | 3 | - | - | - | 39 | 57 | 3 | |||||||||||||||||||||||||||
Total |
819 | 185 | 174 | 103 | 83 | 66 | 922 | 268 | 240 | |||||||||||||||||||||||||||
Proceeds from disposals (net of disposal costs) |
875 | 224 | 26 | 142 | 121 | 96 | 1,017 | 345 | 122 | |||||||||||||||||||||||||||
Asset exchange (iii) (note 30) |
- | - | 144 | - | - | - | - | - | 144 | |||||||||||||||||||||||||||
Profit on step acquisition (note 30) |
6 | - | - | - | - | - | 6 | - | - | |||||||||||||||||||||||||||
Profit/(loss) on disposals |
62 | 39 | (4) | 39 | 38 | 30 | 101 | 77 | 26 | |||||||||||||||||||||||||||
Net cash inflow arising on disposal |
||||||||||||||||||||||||||||||||||||
Proceeds from disposals |
875 | 224 | 26 | 142 | 121 | 96 | 1,017 | 345 | 122 | |||||||||||||||||||||||||||
Less: cash and cash equivalents disposed |
(90) | - | - | - | - | - | (90) | - | - | |||||||||||||||||||||||||||
Less: deferred proceeds arising on disposal (note 19) |
(38) | - | - | - | - | - | (38) | - | - | |||||||||||||||||||||||||||
Total |
747 | 224 | 26 | 142 | 121 | 96 | 889 | 345 | 122 |
(i) | This relates principally to the divestment of the Groups clay and concrete businesses in the United Kingdom (Europe Heavyside) and its clay business in the United States (Americas Products) on 26 February 2015. The assets and liabilities associated with this transaction, together with those relating to a number of smaller business units, met the held for sale criteria set out in IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations and were reclassified accordingly as assets or liabilities held for sale as at 31 December 2014. As the vast majority of the assets and liabilities held for sale at 31 December 2014 have been divested prior to 31 December 2015, all opening balances have been reclassified back to the relevant asset and liability categories prior to their divestment for presentation purposes. During the year the Group also sold its businesses in South America (which were part of the Americas Products segment) and our 25% equity stake in our Israeli associates. |
Assets and liabilities that met the IFRS 5 criteria at 31 December 2015 have not been separately disclosed as held for sale as they were not considered material in the context of the Group. The businesses divested in 2015 are not considered to be either separate major lines of business or geographical areas of operation and therefore do not constitute discontinued operations as defined in IFRS 5. |
(ii) | This relates principally to the disposal of our 50% equity stake in our Turkish joint venture, Denizli Çimento (which was part of the Europe Heavyside segment). |
(iii) | On 25 February 2013, the Group transferred its 26% stake in Corporacion Uniland to Cementos Portland Valderrivas in exchange for a 99% stake in Cementos Lemona, an integrated cement, readymixed concrete and aggregates business. |
178 |
CRH Annual Report on Form 20-F | 2015
179 |
CRH Annual Report on Form 20-F | 2015
7. Share-based Payment Expense
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
Total share-based payment expense |
27 | 16 | 15 |
Share-based payment expense relates primarily to awards granted under the 2006 and 2014 Performance Share Plans. The expense, which also includes charges in relation to the 2013 Restricted Share Plan and to options granted under the Groups savings-related share option schemes, is reflected in operating costs in the Consolidated Income Statement.
In May 2014, shareholders approved the adoption of a new Performance Share Plan (the 2014 Performance Share Plan), which replaced the 2006 Performance Share Plan (approved by shareholders in May 2006), the 2010 Share Option Scheme (approved by shareholders in May 2010) and the 2013 Restricted Share Plan (together, the Existing Plans). Following the introduction of the 2014 Performance Share Plan, no further awards will be made under the Existing Plans. Consequently, the last awards under the Existing Plans were made in 2013. The general terms and conditions applicable to the various plans are set out in the Directors Remuneration Report on pages 114 to 150.
2014 Performance Share Plan
The structure of the 2014 Performance Share Plan is set out in the Directors Remuneration Report on page 124. An expense of 20 million was recognised in 2015 (2014: 5 million).
Details of awards granted under the 2014 Performance Share Plan
Number of Shares | ||||||||||||||||
Share price at | Period to earliest | |||||||||||||||
date of award | release date | Initial award | Net outstanding | |||||||||||||
Granted in 2015 |
24.84 | 3 years | 2,989,371 | 2,949,146 | ||||||||||||
Granted in 2014 |
20.49 | 3 years | 2,283,960 | 2,190,120 |
75% of vesting is subject to Total Shareholder Return (TSR) performance against sector peers, while the remaining 25% of vesting is subject to a cumulative cash flow target. A number of awards are subject only to a three year service period (i.e. no performance conditions).
The fair value assigned to the portion of awards which are subject to TSR performance was 13.99 (2014: 10.88). The fair value of these awards was calculated using a TSR pricing model taking account of peer group TSR, volatilities and correlations together with the following assumptions:
2015 | 2014 | |||||||
Risk-free interest rate (%) |
0.25 | 0.13 | ||||||
Expected volatility (%) |
21.4 | 21.9 |
The expected volatility was determined using a historical sample of 37 month-end CRH share prices.
The fair value of (i) the portion of awards subject to cash flow performance and (ii) the awards with no performance conditions (which are subject to a three year service period) was 24.84 (2014: 20.49). The fair value was calculated using the closing CRH share price at the date the award was granted. Awards vest only if all performance and service conditions are met. No expense is recognised for awards that do not ultimately vest. At the balance sheet date the estimate of the level of vesting is reviewed and any necessary adjustment to the share-based payment expense is recognised in the Consolidated Income Statement.
180 |
CRH Annual Report on Form 20-F | 2015
7. Share-based Payment Expense | continued
2006 Performance Share Plan
The expense of 4 million (2014: 8 million; 2013: 13 million) reported in the Consolidated Income Statement has been arrived at through applying a Monte Carlo simulation technique to model the combination of market-based and non-market-based performance conditions in the Plan.
Details of awards granted under the 2006 Performance Share Plan
Number of Shares | ||||||||||||||||||||
Share price at | Period to earliest | |||||||||||||||||||
date of award | release date | Initial award | Net outstanding | Fair value | ||||||||||||||||
Granted in 2012 |
15.63 | 3 years | 2,079,000 | - | 7.77 | |||||||||||||||
Granted in 2013 |
16.69 | 3 years | 1,195,500 | 992,750 | 8.54 |
In April 2015, none of the shares awarded under the Performance Share Plan in 2012 vested and accordingly all remaining awards granted in 2012 lapsed.
The fair value of the shares awarded was determined using a Monte Carlo simulation technique taking account of peer group TSR, volatilities and correlations, together with the following assumptions:
2013 | ||||
Risk-free interest rate (%) |
0.10 | |||
Expected volatility (%) |
31.3 |
2013 Restricted Share Plan
Due to the immateriality of the Restricted Share Plan expense and the level of awards outstanding in this Plan at 31 December 2015, 31 December 2014 and 31 December 2013 detailed financial disclosures have not been provided in relation to this share-based payment arrangement.
The Group also operates savings-related share option schemes. Due to the immateriality of the savings-related schemes expense and the level of savings-related share options outstanding, detailed financial disclosures have not been provided in relation to these schemes.
Share option schemes
Details of movement and options outstanding under share option schemes (excluding savings-related share option schemes)
Weighted average | Number of | Weighted average | Number of | Weighted average | Number of | |||||||||||||||||||
exercise price | options | exercise price | options | exercise price | options | |||||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||||||||||
Outstanding at beginning of year |
19.58 | 15,481,191 | 18.75 | 21,798,887 | 18.84 | 23,295,955 | ||||||||||||||||||
Granted |
- | - | - | - | 16.19 | 3,853,400 | ||||||||||||||||||
Exercised (a) |
19.35 | (2,544,141) | 16.58 | (919,205) | 13.21 | (1,245,029) | ||||||||||||||||||
Lapsed |
16.64 | (4,316,360) | 16.77 | (5,398,491) | 18.53 | (4,105,439) | ||||||||||||||||||
Outstanding at end of year (b) |
21.14 | 8,620,690 | 19.58 | 15,481,191 | 18.75 | 21,798,887 | ||||||||||||||||||
Exercisable at end of year |
24.18 | 5,335,290 | 18.79 | 1,248,698 | 17.94 | 2,114,772 |
(a) | The weighted average share price at the date of exercise of these options was 25.51 (2014: 20.47, 2013: 17.28). |
(b) | The level of vesting of options outstanding at the end of the year will be determined by reference to certain performance targets (outlined on page 125 of this Annual Report). If the performance criteria have been met, these options, or portion thereof as appropriate, may be exercised after the expiration of three years from their date of grant. All options granted have a life of ten years. |
181 |
CRH Annual Report on Form 20-F | 2015
7. Share-based Payment Expense | continued
2015 | 2014 | 2013 | ||||||||||
Weighted average remaining contractual life for the share options outstanding at 31 December (years) |
3.86 | 4.89 | 5.54 | |||||||||
Euro-denominated options outstanding at the end of the year (number) |
8,604,776 | 15,389,922 | 21,683,559 | |||||||||
Range of exercise prices () |
16.19-29.86 | 15.19-29.86 | 15.07-29.86 | |||||||||
Sterling-denominated options outstanding at the end of the year (number) |
15,914 | 91,269 | 115,328 | |||||||||
Range of exercise prices (Stg£) |
13.64-18.02 | 12.80-20.23 | 10.04-20.23 | |||||||||
The CRH share price at 31 December 2015 was 26.70 (2014: 19.90; 2013: 18.30). The following analysis shows the number of outstanding share options with exercise prices lower/higher than the year-end share price: |
| |||||||||||
Number of options with exercise prices lower than year-end price: |
||||||||||||
Exercisable |
3,667,056 | 1,248,698 | 506,581 | |||||||||
Not exercisable |
3,285,400 | 8,789,200 | 13,788,399 | |||||||||
6,952,456 | 10,037,898 | 14,294,980 | ||||||||||
Number of options with exercise prices higher than year-end price: |
||||||||||||
Exercisable |
1,668,234 | - | 1,608,191 | |||||||||
Not exercisable |
- | 5,443,293 | 5,895,716 | |||||||||
1,668,234 | 5,443,293 | 7,503,907 | ||||||||||
Total options outstanding |
8,620,690 | 15,481,191 | 21,798,887 |
182 |
CRH Annual Report on Form 20-F | 2015
8. Finance Costs and Finance Income
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
Finance costs |
||||||||||||
Interest payable on borrowings |
334 | 308 | 323 | |||||||||
Net income on interest rate and currency swaps |
(32) | (42) | (55) | |||||||||
Mark-to-market of derivatives and related fixed rate debt: |
||||||||||||
- interest rate swaps (i) |
12 | (15) | 68 | |||||||||
- currency swaps and forward contracts |
4 | - | 1 | |||||||||
- fixed rate debt (i) |
(22) | 8 | (79) | |||||||||
Net loss/(gain) on interest rate swaps not designated as hedges |
7 | (5) | 4 | |||||||||
Net finance cost on gross debt including related derivatives |
303 | 254 | 262 | |||||||||
Finance income |
||||||||||||
Interest receivable on loans to joint ventures and associates |
(4) | (3) | (3) | |||||||||
Interest receivable on cash and cash equivalents and other |
(4) | (5) | (10) | |||||||||
Finance income |
(8) | (8) | (13) | |||||||||
Finance costs less income |
295 | 246 | 249 | |||||||||
Other financial expense |
||||||||||||
Premium paid on early debt redemption |
38 | - | - | |||||||||
Unwinding of discount element of provisions for liabilities (note 25) |
19 | 16 | 15 | |||||||||
Unwinding of discount applicable to deferred and contingent acquisition consideration |
20 | 12 | 11 | |||||||||
(note 18) |
||||||||||||
Pension-related finance cost (net) (note 27) |
17 | 14 | 22 | |||||||||
Total |
94 | 42 | 48 |
(i) | The Group uses interest rate swaps to convert fixed rate debt to floating rate. Fixed rate debt, which has been converted to floating rate through the use of interest rate swaps, is stated in the Consolidated Balance Sheet at adjusted value to reflect movements in underlying fixed rates. The movement on this adjustment, together with the offsetting movement in the fair value of the related interest rate swaps, is included in finance costs in each reporting period. |
183 |
CRH Annual Report on Form 20-F | 2015
9. Share of Equity Accounted Investments Profit/(Loss)
The Groups share of joint ventures and associates result after tax is equity accounted and is presented as a single line item in the Consolidated Income Statement; it is analysed as follows between the principal Consolidated Income Statement captions:
Joint Ventures | Associates | Total | ||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||
m | m | m | m | m | m | m | m | m | ||||||||||||||||||||||||||||
Group share of: |
||||||||||||||||||||||||||||||||||||
Revenue |
496 | 488 | 469 | 961 | 953 | 961 | 1,457 | 1,441 | 1,430 | |||||||||||||||||||||||||||
EBITDA (as defined)* |
79 | 62 | 60 | 84 | 106 | 109 | 163 | 168 | 169 | |||||||||||||||||||||||||||
Depreciation and amortisation |
(27) | (27) | (27) | (55) | (45) | (39) | (82) | (72) | (66) | |||||||||||||||||||||||||||
Impairment (i) |
- | - | (54) | - | - | (51) | - | - | (105) | |||||||||||||||||||||||||||
Operating profit/(loss) |
52 | 35 | (21) | 29 | 61 | 19 | 81 | 96 | (2) | |||||||||||||||||||||||||||
Finance costs (net) |
(6) | (6) | (2) | (17) | (21) | (22) | (23) | (27) | (24) | |||||||||||||||||||||||||||
Profit/(loss) before tax |
46 | 29 | (23) | 12 | 40 | (3) | 58 | 69 | (26) | |||||||||||||||||||||||||||
Income tax expense |
(5) | (3) | (5) | (9) | (11) | (13) | (14) | (14) | (18) | |||||||||||||||||||||||||||
Profit/(loss) after tax |
41 | 26 | (28) | 3 | 29 | (16) | 44 | 55 | (44) |
An analysis of the result after tax by operating segment is presented in note 1. The aggregated balance sheet data (analysed between current and non-current assets and liabilities) in respect of the Groups investment in joint ventures and associates is presented in note 15.
(i) | See note 2 for details of the 2013 impairment charge. |
* | EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges and profit on disposals. |
10. Income Tax Expense
Recognised within the Consolidated Income Statement | 2015 | 2014 | 2013 | |||||||||
m | m | m | ||||||||||
(a) Current tax |
||||||||||||
Republic of Ireland |
- | - | (1) | |||||||||
Overseas |
339 | 141 | 77 | |||||||||
Total current tax expense |
339 | 141 | 76 | |||||||||
(b) Deferred tax |
||||||||||||
Origination and reversal of temporary differences: |
||||||||||||
Retirement benefit obligations |
7 | 7 | 16 | |||||||||
Share-based payment expense |
(8) | - | (1) | |||||||||
Derivative financial instruments |
1 | 6 | 4 | |||||||||
Other items |
(35) | 23 | (15) | |||||||||
Total deferred tax (income)/expense |
(35) | 36 | 4 | |||||||||
Income tax expense reported in the Consolidated Income Statement |
304 | 177 | 80 |
184 |
CRH Annual Report on Form 20-F | 2015
10. Income Tax Expense | continued
Recognised within equity | 2015 | 2014 | 2013 | |||||||||
m | m | m | ||||||||||
(a) Within the Consolidated Statement of Comprehensive Income: |
||||||||||||
Deferred tax - retirement benefit obligations |
(30) | 69 | (43) | |||||||||
(30) | 69 | (43) | ||||||||||
(b) Within the Consolidated Statement of Changes in Equity: |
||||||||||||
Deferred tax - share-based payment expense |
5 | - | - | |||||||||
5 | - | - | ||||||||||
Income tax expense recognised directly within equity |
(25) | 69 | (43) | |||||||||
Reconciliation of applicable tax rate to effective tax rate |
||||||||||||
Profit/(loss) before tax (m) |
1,033 | 761 | (215) | |||||||||
Tax charge expressed as a percentage of profit/(loss) before tax (effective tax rate): |
||||||||||||
- current tax expense only |
32.8% | 18.5% | (35.3%) | |||||||||
- total income tax expense (current and deferred) |
29.4% | 23.2% | (37.2%) | |||||||||
The following table reconciles the applicable Republic of Ireland statutory tax rate to the effective tax rate (current and deferred) of the Group: |
| |||||||||||
% of profit/(loss) before tax | ||||||||||||
Irish corporation tax rate |
12.5 | 12.5 | 12.5 | |||||||||
Higher tax rates on overseas earnings |
13.8 | 9.6 | 17.8 | |||||||||
Other items (primarily comprising items not chargeable to tax/expenses not deductible for tax) |
||||||||||||
- arising from 2013 impairment |
- | - | (70.2) | |||||||||
- other items |
3.1 | 1.1 | 2.7 | |||||||||
Total effective tax rate |
29.4 | 23.2 | (37.2) |
Other disclosures
Effective tax rate
The 2015 Consolidated Income Statement includes one-off charges related to the LH Assets transaction of 197 million (144 million of acquisition-related costs as detailed in note 30 and a 53 million inventory-related adjustment) which are substantially non-deductible for income tax purposes. The 2015 effective tax rate excluding the impact of these costs is 25.8% .
Changes in tax rates
The total tax charge in future periods will be affected by any changes to the tax rates in force in the countries in which the Group operates.
Excess of capital allowances over depreciation
The current tax charge will also be impacted by changes in the excess of tax depreciation (capital allowances) over accounting depreciation. Based on current capital investment plans, the Group expects to continue to be in a position to claim capital allowances in excess of depreciation in future years.
Investments in subsidiaries
Given managements intention not to unwind temporary differences in respect of its investment in subsidiaries or tax exemptions and credits being available in the majority of jurisdictions in which the Group operates, the aggregate amount of deferred tax liabilities on temporary differences which have not been recognised would be immaterial.
Proposed dividends
There are no income tax consequences for the Company in respect of dividends proposed prior to issuance of the Consolidated Financial Statements and for which a liability has not been recognised.
185 |
CRH Annual Report on Form 20-F | 2015
11. Dividends
The dividends paid and proposed in respect of each class of share capital are as follows:
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
Dividends to shareholders | ||||||||||||
Preference | ||||||||||||
5% Cumulative Preference Shares 3,175 (2014: 3,175; 2013: 3,175) | - | - | - | |||||||||
7% A Cumulative Preference Shares 77,521 (2014: 77,521; 2013: 77,521) | - | - | - | |||||||||
Equity | ||||||||||||
Final - paid 44.00c per Ordinary Share (2014: 44.00c; 2013: 44.00c) | 359 | 323 | 320 | |||||||||
Interim - paid 18.50c per Ordinary Share (2014: 18.50c; 2013: 18.50c) | 152 | 137 | 135 | |||||||||
Total | 511 | 460 | 455 | |||||||||
Dividends proposed (memorandum disclosure) | ||||||||||||
Equity | ||||||||||||
Final 2015 - proposed 44.00c per Ordinary Share (2014: 44.00c; 2013: 44.00c) | 362 | 359 | 323 | |||||||||
Reconciliation to Consolidated Statement of Cash Flows | ||||||||||||
Dividends to shareholders | 511 | 460 | 455 | |||||||||
Less: issue of scrip shares in lieu of cash dividends (note 28) | (132) | (107) | (88) | |||||||||
Dividends paid to equity holders of the Company | 379 | 353 | 367 | |||||||||
Dividends paid by subsidiaries to non-controlling interests | 4 | 4 | 1 | |||||||||
Total dividends paid | 383 | 357 | 368 |
186 |
CRH Annual Report on Form 20-F | 2015
12. Earnings per Ordinary Share
The computation of basic and diluted earnings per Ordinary Share is set out below:
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
Numerator computations | ||||||||||||
Group profit/(loss) for the financial year | 729 | 584 | (295) | |||||||||
Profit attributable to non-controlling interests | (5) | (2) | (1) | |||||||||
Profit/(loss) attributable to equity holders of the Company | 724 | 582 | (296) | |||||||||
Preference dividends | - | - | - | |||||||||
Profit/(loss) attributable to ordinary equity holders of the Company -numerator for basic/diluted earnings per Ordinary Share | 724 | 582 | (296) | |||||||||
Denominator computations | ||||||||||||
Denominator for basic earnings per Ordinary Share | ||||||||||||
Weighted average number of Ordinary Shares (millions) outstanding for the year (i) | 812.3 | 737.6 | 729.2 | |||||||||
Effect of dilutive potential Ordinary Shares (employee share options) (millions) (i) and (ii) | 3.6 | 0.7 | - | |||||||||
Denominator for diluted earnings per Ordinary Share | 815.9 | 738.3 | 729.2 | |||||||||
Basic earnings/(loss) per Ordinary Share | 89.1c | 78.9c | (40.6c) | |||||||||
Diluted earnings/(loss) per Ordinary Share | 88.7c | 78.8c | (40.6c) |
(i) | The weighted average number of Ordinary Shares included in the computation of basic and diluted earnings per Ordinary Share has been adjusted to exclude shares held by the Employee Benefit Trust and Ordinary Shares repurchased and held by the Company (CRH plc) as Treasury Shares given that these shares do not rank for dividend. The number of Ordinary Shares so held at the balance sheet date is detailed in note 28. |
(ii) | Contingently issuable Ordinary Shares (totalling 8,630,786 at 31 December 2015, 19,062,236 at 31 December 2014 and 24,282,615 at 31 December 2013) are excluded from the computation of diluted earnings per Ordinary Share where the conditions governing exercisability have not been satisfied as at the end of the reporting period or they are antidilutive for the periods presented. |
187 |
CRH Annual Report on Form 20-F | 2015
13. Property, Plant and Equipment
Assets in | ||||||||||||||||
Land and | Plant and | course of | ||||||||||||||
buildings (i) | machinery | construction | Total | |||||||||||||
m | m | m | m | |||||||||||||
At 31 December 2015 | ||||||||||||||||
Cost/deemed cost | 8,471 | 12,583 | 582 | 21,636 | ||||||||||||
Accumulated depreciation (and impairment charges) | (2,075) | (6,496) | (3) | (8,574) | ||||||||||||
Net carrying amount | 6,396 | 6,087 | 579 | 13,062 | ||||||||||||
At 1 January 2015, net carrying amount | 4,176 | 3,026 | 220 | 7,422 | ||||||||||||
Translation adjustment | 292 | 115 | 6 | 413 | ||||||||||||
Reclassifications | 145 | 46 | (191) | - | ||||||||||||
Additions at cost | 96 | 514 | 272 | 882 | ||||||||||||
Arising on acquisition (note 30) | 1,999 | 3,138 | 276 | 5,413 | ||||||||||||
Reclassified from held for sale | 173 | 88 | 1 | 262 | ||||||||||||
Disposals at net carrying amount | (283) | (161) | (2) | (446) | ||||||||||||
Depreciation charge for year | (175) | (665) | (3) | (843) | ||||||||||||
Impairment charge for year (ii) | (27) | (14) | - | (41) | ||||||||||||
At 31 December 2015, net carrying amount | 6,396 | 6,087 | 579 | 13,062 | ||||||||||||
The equivalent disclosure for the prior year is as follows: | ||||||||||||||||
At 31 December 2014 | ||||||||||||||||
Cost/deemed cost | 6,068 | 8,940 | 220 | 15,228 | ||||||||||||
Accumulated depreciation (and impairment charges) | (1,892) | (5,914) | - | (7,806) | ||||||||||||
Net carrying amount | 4,176 | 3,026 | 220 | 7,422 | ||||||||||||
At 1 January 2014, net carrying amount | 4,096 | 3,214 | 229 | 7,539 | ||||||||||||
Translation adjustment | 329 | 64 | 1 | 394 | ||||||||||||
Reclassifications | 66 | 34 | (100) | - | ||||||||||||
Additions at cost | 45 | 264 | 126 | 435 | ||||||||||||
Arising on acquisition (note 30) | 20 | 71 | - | 91 | ||||||||||||
Reclassified as held for sale | (173) | (88) | (1) | (262) | ||||||||||||
Disposals at net carrying amount | (68) | (27) | - | (95) | ||||||||||||
Depreciation charge for year | (132) | (499) | - | (631) | ||||||||||||
Impairment charge for year | (7) | (7) | (35) | (49) | ||||||||||||
At 31 December 2014, net carrying amount | 4,176 | 3,026 | 220 | 7,422 | ||||||||||||
At 1 January 2014 | ||||||||||||||||
Cost/deemed cost | 5,912 | 8,847 | 229 | 14,988 | ||||||||||||
Accumulated depreciation (and impairment charges) | (1,816) | (5,633) | - | (7,449) | ||||||||||||
Net carrying amount | 4,096 | 3,214 | 229 | 7,539 |
(i) | The carrying value of mineral-bearing land included in the land and buildings category above amounted to 2,855 million at the balance sheet date (2014: 1,997 million). |
(ii) | The impairment charge of 41 million in 2015 (2014: 49 million), principally relates to the write down of property, plant and equipment in Europe Heavyside and Americas Products of 24 million and 15 million respectively (2014: 35 million and 14 million respectively). |
Future purchase commitments for property, plant and equipment | 2015 | 2014 | ||||||
m | m | |||||||
Contracted for but not provided in the financial statements | 311 | 211 | ||||||
Authorised by the Directors but not contracted for | 118 | 70 |
188 |
CRH Annual Report on Form 20-F | 2015
14. Intangible Assets
Other intangible assets | ||||||||||||||||||||
Marketing- | Customer- | Contract- | ||||||||||||||||||
Goodwill | related | related (i) | based | Total | ||||||||||||||||
m | m | m | m | m | ||||||||||||||||
At 31 December 2015 | ||||||||||||||||||||
Cost/deemed cost | 7,699 | 137 | 639 | 85 | 8,560 | |||||||||||||||
Accumulated amortisation (and impairment charges) | (293) | (46) | (375) | (26) | (740) | |||||||||||||||
Net carrying amount | 7,406 | 91 | 264 | 59 | 7,820 | |||||||||||||||
At 1 January 2015, net carrying amount | 4,018 | 12 | 126 | 17 | 4,173 | |||||||||||||||
Translation adjustment | 247 | 3 | 11 | 2 | 263 | |||||||||||||||
Arising on acquisition (note 30) | 3,187 | 84 | 167 | 47 | 3,485 | |||||||||||||||
Reclassifications | - | (2) | 1 | 1 | - | |||||||||||||||
Reclassified from held for sale | 16 | - | 1 | - | 17 | |||||||||||||||
Disposals | (61) | - | - | (1) | (62) | |||||||||||||||
Amortisation charge for year | - | (6) | (42) | (7) | (55) | |||||||||||||||
Impairment charge for year | (1) | - | - | - | (1) | |||||||||||||||
At 31 December 2015, net carrying amount | 7,406 | 91 | 264 | 59 | 7,820 | |||||||||||||||
The equivalent disclosure for the prior year is as follows: | ||||||||||||||||||||
At 31 December 2014 | ||||||||||||||||||||
Cost/deemed cost | 4,362 | 52 | 448 | 37 | 4,899 | |||||||||||||||
Accumulated amortisation (and impairment charges) | (344) | (40) | (322) | (20) | (726) | |||||||||||||||
Net carrying amount | 4,018 | 12 | 126 | 17 | 4,173 | |||||||||||||||
At 1 January 2014, net carrying amount | 3,734 | 12 | 151 | 14 | 3,911 | |||||||||||||||
Translation adjustment | 279 | 3 | 6 | 1 | 289 | |||||||||||||||
Arising on acquisition (note 30) | 31 | 2 | 10 | 4 | 47 | |||||||||||||||
Reclassified as held for sale | (16) | - | (1) | - | (17) | |||||||||||||||
Disposals | (10) | (1) | (2) | - | (13) | |||||||||||||||
Amortisation charge for year | - | (4) | (38) | (2) | (44) | |||||||||||||||
At 31 December 2014, net carrying amount | 4,018 | 12 | 126 | 17 | 4,173 | |||||||||||||||
At 1 January 2014 | ||||||||||||||||||||
Cost/deemed cost | 4,158 | 48 | 420 | 31 | 4,657 | |||||||||||||||
Accumulated amortisation (and impairment charges) | (424) | (36) | (269) | (17) | (746) | |||||||||||||||
Net carrying amount | 3,734 | 12 | 151 | 14 | 3,911 |
(i) | The customer-related intangible assets relate predominantly to non-contractual customer relationships. |
189 |
CRH Annual Report on Form 20-F | 2015
14. Intangible Assets | continued
(a) Annual goodwill testing
The net book value of goodwill capitalised under previous GAAP (Irish GAAP) as at the transition date to IFRS (1 January 2004) has been treated as deemed cost. Goodwill arising on acquisition since that date is capitalised at cost.
Cash-generating units
Goodwill acquired through business combination activity has been allocated to cash-generating units (CGUs) that are expected to benefit from synergies in that combination. The cash-generating units represent the lowest level within the Group at which the associated goodwill is monitored for internal management purposes, and are not larger than the operating segments determined in accordance with IFRS 8 Operating Segments. A total of 21 (2014: 20) cash-generating units have been identified and these are analysed between the six business segments below, excluding the newly acquired LH Assets and CRL. Given the size and timing of these acquisitions in the second half of 2015, the related goodwill has not yet been allocated to CGUs; the allocation will be completed during 2016. The increase in the number of CGUs in 2015 relates to a reorganisation in the Americas Materials segment. All businesses within the various cash-generating units exhibit similar and/or consistent profit margin and asset intensity characteristics. Assets, liabilities, deferred tax and goodwill have been assigned to the CGUs on a reasonable and consistent basis.
Significant under-performance in any of CRHs major cash-generating units may give rise to a material write-down of goodwill which would have a substantial impact on the Groups income and equity.
Cash-generating units | Goodwill (m) | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Europe Heavyside* | 8 | 8 | 648 | 650 | ||||||||||||
Europe Lightside* | 1 | 1 | 347 | 346 | ||||||||||||
Europe Distribution | 1 | 1 | 662 | 649 | ||||||||||||
Europe | 10 | 10 | 1,657 | 1,645 | ||||||||||||
Americas Materials | 8 | 7 | 1,484 | 1,313 | ||||||||||||
Americas Products | 2 | 2 | 758 | 703 | ||||||||||||
Americas Distribution | 1 | 1 | 398 | 357 | ||||||||||||
Americas | 11 | 10 | 2,640 | 2,373 | ||||||||||||
Unallocated Goodwill | ||||||||||||||||
LH Assets | - | - | 2,252 | - | ||||||||||||
CRL | - | - | 857 | - | ||||||||||||
Total Group | 21 | 20 | 7,406 | 4,018 |
* | Included in the goodwill numbers of Europe Heavyside and Europe Lightside at 31 December 2015 are amounts of 52 million and 8 million respectively (2014: 54 million and 9 million respectively) relating to businesses identified for divestment as part of the portfolio review, which have been tested separately (see section (b) on page 192). |
190 |
CRH Annual Report on Form 20-F | 2015
14. Intangible Assets | continued
Impairment testing methodology and results
Goodwill is subject to impairment testing on an annual basis. The recoverable amount of each of the 21 CGUs is determined based on a value-in-use computation, using Level 3 inputs in accordance with the fair value hierarchy (as described in the fair value hierarchy section of the accounting policies on page 169). The cash flow forecasts are primarily based on a five-year strategic plan document formally approved by senior management and the Board of Directors and specifically exclude the impact of future development activity. These cash flows are projected forward for an additional five years to determine the basis for an annuity-based terminal value, calculated on the same basis as the Groups acquisition modelling methodology. As in prior years, the terminal value is based on a 20-year annuity. The projected cash flows assume zero growth in real cash flows beyond the initial evaluation period. The value-in-use represents the present value of the future cash flows, including the terminal value, discounted at a rate appropriate to each CGU. The real pre-tax discount rates used range from 7.0% to 11.7% (2014: 7.5% to 12.2%); these rates are in line with the Groups estimated weighted average cost of capital, arrived at using the Capital Asset Pricing Model.
The 2015 and 2014 annual goodwill impairment testing processes have resulted in no intangible asset impairments.
Key sources of estimation uncertainty
The cash flows have been arrived at taking account of the Groups strong financial position, its established history of earnings and cash flow generation and the nature of the building materials industry, where product obsolescence is very low. However, expected future cash flows are inherently uncertain and are therefore liable to material change over time. The key assumptions employed in arriving at the estimates of future cash flows factored into impairment testing are subjective and include projected EBITDA (as defined)* margins, net cash flows, discount rates used and the duration of the discounted cash flow model.
Significant goodwill amounts
The goodwill allocated to the Europe Distribution and the Oldcastle Building Products (Americas Products segment) CGUs each account for approximately 10% of the total carrying amount of 7,406 million. The goodwill allocated to each of the remaining CGUs is less than 10% of the total carrying value in all other cases, except for the goodwill arising on the acquisitions of LH Assets and CRL which account for 30% and 12% of the total carrying amount of goodwill respectively. No additional disclosures are presented for the acquired goodwill as the initial allocation of the goodwill to CGUs has not been completed and therefore the goodwill has been assessed for impairment indicators as at 31 December 2015. The additional disclosures required for the two CGUs with significant goodwill are as follows:
Europe Distribution | Oldcastle | |||||||||||||||
Building Products | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Goodwill allocated to the cash-generating unit at balance sheet date | 662m | 649m | 756m | 699m | ||||||||||||
Discount rate applied to the cash flow projections (real pre-tax) | 9.0% | 9.4% | 11.7% | 11.9% | ||||||||||||
Average EBITDA (as defined)* margin over the initial 5-year period | 6.1% | 5.9% | 12.0% | 11.0% | ||||||||||||
Value-in-use (present value of future cash flows) | 2,153m | 2,015m | 2,726m | 2,588m | ||||||||||||
Excess of value-in-use over carrying amount | 472m | 336m | 566m | 509m | ||||||||||||
The key assumptions and methodology used in respect of these two CGUs are consistent with those described above. The values applied to each of the key estimates and assumptions are specific to the individual CGUs and were derived from a combination of internal and external factors based on historical experience and took into account the cash flows specifically associated with these businesses. The cash flows and 20-year annuity-based terminal value were projected in line with the methodology disclosed above.
Europe Distribution and Oldcastle Building Products are not included in the CGUs referred to in the Sensitivity analysis section on page 192. Given the magnitude of the excess of value-in-use over carrying amount, and our belief that the key assumptions are reasonable, management believe that it is not reasonably possible that there would be a change in the key assumptions such that the carrying amount would exceed the value-in-use. Consequently no further disclosures relating to sensitivity of the value-in-use computations for the Europe Distribution or Oldcastle Building Products CGUs are considered to be warranted.
* | EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax. |
191 |
CRH Annual Report on Form 20-F | 2015
14. Intangible Assets | continued
Sensitivity analysis
Sensitivity analysis has been performed and results in additional disclosures in respect of 4 of the 21 CGUs including the Ukraine. The key assumptions, methodology used and values applied to each of the key assumptions for the 4 CGUs are in line with those outlined above. The 4 CGUs had aggregate goodwill of 216 million at the date of testing. The table below identifies the amounts by which each of the following assumptions may either decline or increase to arrive at a zero excess of the present value of future cash flows over the book value of net assets in the 4 CGUs selected for sensitivity analysis disclosures:
4 CGUs | ||||
Reduction in EBITDA (as defined)* margin | 0.6 to 3.6 percentage points | |||
Reduction in profit before tax | 9.1% to 16.2% | |||
Reduction in net cash flow | 8.0% to 17.1% | |||
Increase in pre-tax discount rate | 0.8 to 1.8 percentage points | |||
The average EBITDA (as defined)* margin for the aggregate of these 4 CGUs over the initial five-year period was 11.1% . The value-in-use (being the present value of the future net cash flows) was 1,024 million and the carrying amount was 895 million, resulting in an excess of value-in-use over carrying amount of 129 million.
(b) Portfolio review update
In November 2013, a Group-wide portfolio review was initiated to identify and focus on those businesses within our portfolio which offer the most attractive future returns, and to prioritise capital allocation to ensure profitable growth across our network of businesses. This review was completed during 2014 and a multi-year divestment programme is well under way with proceeds of 1.4 billion realised on business and non-current asset disposals in 2015 and 2014 (see note 4).
The decision to sell these business units resulted in the need to assess them for impairment, either individually or on a combined basis where they form a new group for disposal purposes. Excluding business units divested during 2014 and 2015, the remainder were assessed for impairment or reversal of previous impairments and also assessed from the perspective of the held for sale criteria set out in IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations.
A valuation was prepared based on the estimated fair value less costs of disposal (FVLCD) for each business unit. The valuations were then compared to the carrying value of each business and where that valuation fell below the carrying value an impairment charge was taken.
Impairments of 33 million (1 million relating to goodwill) were recorded during the year in the Europe Heavyside and Americas Products segments. No reversal of previous impairments were recorded during the year.
* | EBITDA is defined as earnings before interest, taxes, depreciation, amortisation, asset impairment charges, profit on disposals and the Groups share of equity accounted investments result after tax |
192 |
CRH Annual Report on Form 20-F | 2015
15. Financial Assets
Investments accounted for | ||||||||||||||||
using the equity method | ||||||||||||||||
(i.e. joint ventures and associates) | ||||||||||||||||
Share of net | ||||||||||||||||
assets | Loans | Total | Other (i) | |||||||||||||
m | m | m | m | |||||||||||||
At 1 January 2015 | 1,193 | 136 | 1,329 | 23 | ||||||||||||
Translation adjustment | 103 | 14 | 117 | 1 | ||||||||||||
Investments and advances | 7 | 11 | 18 | 1 | ||||||||||||
Joint Ventures becoming subsidiaries (note 30) | (25) | - | (25) | - | ||||||||||||
Reclassified from held for sale | 34 | - | 34 | - | ||||||||||||
Disposals and repayments | (159) | (6) | (165) | - | ||||||||||||
Return of Share Capital | (6) | - | (6) | - | ||||||||||||
Arising on acquisition (note 30) | 23 | 1 | 24 | 5 | ||||||||||||
Impairment charge for year | - | - | - | (2) | ||||||||||||
Retained loss | (9) | - | (9) | - | ||||||||||||
At 31 December 2015 | 1,161 | 156 | 1,317 | 28 | ||||||||||||
The equivalent disclosure for the prior year is as follows: | ||||||||||||||||
At 1 January 2014 | 1,211 | 129 | 1,340 | 23 | ||||||||||||
Translation adjustment | 73 | 14 | 87 | - | ||||||||||||
Investments and advances | - | 3 | 3 | - | ||||||||||||
Reclassified as held for sale | (34) | - | (34) | - | ||||||||||||
Disposals and repayments | (82) | (10) | (92) | - | ||||||||||||
Retained profit | 25 | - | 25 | - | ||||||||||||
At 31 December 2014 | 1,193 | 136 | 1,329 | 23 |
(i) | Other financial assets primarily comprise trade investments carried at historical cost. |
Summarised financial information for the Groups investment in joint ventures and associates which are accounted for using the equity method is as follows:
Joint Ventures | Associates | Total | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
m | m | m | m | m | m | |||||||||||||||||||
Non-current assets | 696 | 548 | 880 | 955 | 1,576 | 1,503 | ||||||||||||||||||
Current assets | 173 | 121 | 444 | 538 | 617 | 659 | ||||||||||||||||||
Non-current liabilities | (194) | (161) | (140) | (209) | (334) | (370) | ||||||||||||||||||
Current liabilities | (187) | (73) | (511) | (526) | (698) | (599) | ||||||||||||||||||
Net assets | 488 | 435 | 673 | 758 | 1,161 | 1,193 |
A listing of the principal equity accounted investments is contained in Exhibit 8 of this Annual Report on Form 20F.
The Group holds a 21.13% stake (2014: 21.13%) in Samse S.A., a publicly-listed distributor in France which is accounted for as an associate investment above. The fair value of this investment at the balance sheet date, calculated based on the number of shares held multiplied by the closing share price at 31 December 2015 (Level 1 input in the fair value hierarchy), was 82 million (2014: 75 million).
193 |
CRH Annual Report on Form 20-F | 2015
16. Inventories
2015 | 2014 | |||||||
m | m | |||||||
Raw materials | 836 | 612 | ||||||
Work-in-progress (i) | 106 | 80 | ||||||
Finished goods | 1,931 | 1,568 | ||||||
Total inventories at the lower of cost and net realisable value | 2,873 | 2,260 |
(i) | Work-in-progress includes 9 million (2014: 8 million) in respect of the cumulative costs incurred, net of amounts transferred to cost of sales under percentage-of-completion accounting, for construction contracts in progress at the balance sheet date. |
An analysis of the Groups cost of sales expense is provided in note 2 to the financial statements.
Write-downs of inventories recognised as an expense within cost of sales amounted to 12 million (2014: 29 million; 2013: 19 million).
17. Trade and Other Receivables
2015 | 2014 | |||||
m | m | |||||
Current | ||||||
Trade receivables | 2,752 | 1,810 | ||||
Amounts receivable in respect of construction contracts (i) | 720 | 476 | ||||
Total trade receivables, gross | 3,472 | 2,286 | ||||
Provision for impairment | (161) | (106) | ||||
Total trade receivables, net | 3,311 | 2,180 | ||||
Amounts receivable from equity accounted investments | 11 | 6 | ||||
Prepayments and other receivables | 655 | 458 | ||||
Total | 3,977 | 2,644 | ||||
Non-current | ||||||
Other receivables | 149 | 85 |
The carrying amounts of current and non-current trade and other receivables approximate their fair value largely due to the short-term maturities and nature of these instruments.
(i) | Includes unbilled revenue and retentions held by customers in respect of construction contracts at the balance sheet date amounting to 155 million and 145 million respectively (2014: 119 million and 82 million respectively). |
194 |
CRH Annual Report on Form 20-F | 2015
17. Trade and Other Receivables | continued
Valuation and qualifying accounts (provision for impairment)
The movements in the provision for impairment of receivables during the financial year were as follows:
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
At 1 January | 106 | 118 | 123 | |||||||||
Translation adjustment | 5 | 4 | (2) | |||||||||
Provided during year | 40 | 28 | 36 | |||||||||
Reclassified from/(as) held for sale | 2 | (2) | - | |||||||||
Disposed of during year | (4) | - | - | |||||||||
Written-off during year | (36) | (36) | (33) | |||||||||
Arising on acquisitions during year (note 30) | 55 | - | - | |||||||||
Recovered during year | (7) | (6) | (6) | |||||||||
At 31 December | 161 | 106 | 118 |
Information in relation to the Groups credit risk management is provided in note 21 to the financial statements.
Aged analysis
The aged analysis of trade receivables and amounts receivable in respect of construction contracts at the balance sheet date was as follows:
2015 | 2014 | |||||||
m | m | |||||||
Neither past due nor impaired | 2,385 | 1,638 | ||||||
Past due but not impaired: | ||||||||
- less than 60 days | 608 | 373 | ||||||
- 60 days or greater but less than 120 days | 211 | 117 | ||||||
- 120 days or greater | 107 | 45 | ||||||
Past due and impaired (partial or full provision) | 161 | 113 | ||||||
Total | 3,472 | 2,286 |
Trade receivables and amounts receivable in respect of construction contracts are in general receivable within 90 days of the balance sheet date.
195 |
CRH Annual Report on Form 20-F | 2015
18. Trade and Other Payables
2015 | 2014 | |||||||
m | m | |||||||
Current | ||||||||
Trade payables | 2,521 | 1,506 | ||||||
Construction contract-related payables (i) | 240 | 129 | ||||||
Deferred and contingent acquisition consideration (ii) | 46 | 59 | ||||||
Accruals and other payables | 1,911 | 1,148 | ||||||
Amounts payable to equity accounted investments | 43 | 52 | ||||||
Total | 4,761 | 2,894 | ||||||
Non-current | ||||||||
Other payables | 168 | 109 | ||||||
Deferred and contingent acquisition consideration (ii) | 242 | 148 | ||||||
Total | 410 | 257 |
(i) | Construction contract-related payables include billings in excess of revenue, together with advances received from customers in respect of work to be performed under construction contracts and foreseeable losses thereon. |
Other than deferred and contingent consideration, the carrying amounts of trade and other payables approximate their fair value largely due to the short-term maturities and nature of these instruments. |
(ii) | Deferred and contingent acquisition consideration: |
The fair value of total contingent consideration is 111 million (2014: 122 million), (Level 3 input in the fair value hierarchy) and deferred consideration is 177 million (2014: 85 million). On an undiscounted basis, the corresponding basis for which the Group may be liable for contingent consideration ranges from nil to a maximum of 117 million. The movement in deferred and contingent consideration during the financial year was as follows: |
2015 | 2014 | |||||||
m | m | |||||||
At 1 January | 207 | 208 | ||||||
Translation adjustment | 21 | 16 | ||||||
Arising on acquisitions and investments during the year (note 30) | 97 | 3 | ||||||
Changes in estimate | 2 | (6) | ||||||
Paid during the year | (59) | (26) | ||||||
Discount unwinding | 20 | 12 | ||||||
At 31 December | 288 | 207 |
196 |
CRH Annual Report on Form 20-F | 2015
19. Movement in Working Capital and Provisions for Liabilities
Trade and | Trade and | |||||||||||||||||||
other | other | Provisions | ||||||||||||||||||
Inventories | receivables | payables | for liabilities | Total | ||||||||||||||||
m | m | m | m | m | ||||||||||||||||
At 1 January 2015 | 2,260 | 2,729 | (3,151) | (396) | 1,442 | |||||||||||||||
Translation adjustment | 130 | 147 | (151) | (5) | 121 | |||||||||||||||
Arising on acquisition (note 30) | 621 | 1,533 | (1,549) | (581) | 24 | |||||||||||||||
Reclassified from held for sale | 102 | 79 | (98) | (7) | 76 | |||||||||||||||
Disposals | (211) | (178) | 137 | 6 | (246) | |||||||||||||||
Deferred and contingent acquisition consideration: | ||||||||||||||||||||
- arising on acquisitions during year (note 30) | - | - | (97) | - | (97) | |||||||||||||||
- paid during year | - | - | 59 | - | 59 | |||||||||||||||
Deferred proceeds arising on disposals during year | - | 38 | - | - | 38 | |||||||||||||||
Interest accruals and discount unwinding | - | - | (20) | (19) | (39) | |||||||||||||||
Decrease in working capital and provisions for liabilities | (29) | (222) | (301) | (33) | (585) | |||||||||||||||
At 31 December 2015 | 2,873 | 4,126 | (5,171) | (1,035) | 793 | |||||||||||||||
The equivalent disclosure for the prior years is as follows: | ||||||||||||||||||||
At 1 January 2014 | 2,254 | 2,609 | (3,043) | (380) | 1,440 | |||||||||||||||
Translation adjustment | 128 | 165 | (173) | (27) | 93 | |||||||||||||||
Arising on acquisition (note 30) | 23 | 20 | (17) | (1) | 25 | |||||||||||||||
Reclassified as held for sale | (102) | (79) | 98 | 7 | (76) | |||||||||||||||
Disposals | (9) | (4) | 2 | - | (11) | |||||||||||||||
Deferred and contingent acquisition consideration: | ||||||||||||||||||||
- arising on acquisitions during year (note 30) | - | - | (3) | - | (3) | |||||||||||||||
- paid during year | - | - | 26 | - | 26 | |||||||||||||||
Interest accruals and discount unwinding | - | - | (1) | (16) | (17) | |||||||||||||||
Decrease/(increase) in working capital and provisions for liabilities | (34) | 18 | (40) | 21 | (35) | |||||||||||||||
At 31 December 2014 | 2,260 | 2,729 | (3,151) | (396) | 1,442 | |||||||||||||||
At 1 January 2013 | 2,333 | 2,603 | (3,052) | (366) | 1,518 | |||||||||||||||
Translation adjustment | (74) | (80) | 91 | 9 | (54) | |||||||||||||||
Arising on acquisition (note 30) | 41 | 53 | (80) | (14) | - | |||||||||||||||
Disposals | (9) | (4) | 7 | - | (6) | |||||||||||||||
Deferred and contingent acquisition consideration: | ||||||||||||||||||||
- arising on acquisitions during year (note 30) | - | - | (17) | - | (17) | |||||||||||||||
- paid during year | - | - | 105 | - | 105 | |||||||||||||||
Interest accruals and discount unwinding | - | - | (14) | (15) | (29) | |||||||||||||||
Decrease/(increase) in working capital and provisions for liabilities | (37) | 37 | (83) | 6 | (77) | |||||||||||||||
At 31 December 2013 | 2,254 | 2,609 | (3,043) | (380) | 1,440 |
197 |
CRH Annual Report on Form 20-F | 2015
20. Analysis of Net Debt
Components of net debt
Net debt is a non-GAAP measure which we provide to investors as we believe they find it useful. Net debt comprises cash and cash equivalents, derivative financial instrument assets and liabilities and interest-bearing loans and borrowings and enables investors to see the economic effects of these in total (see note 21 for details of the capital and risk management policies employed by the Group). Net debt is commonly used in computations such as net debt as a % of total equity and net debt as a % of market capitalisation.
As at 31 December 2015 | As at 31 December 2014 | |||||||||||||||||||||||
Fair value (i) m |
Book value m |
Fair value (i) m |
Book value m |
|||||||||||||||||||||
Cash and cash equivalents (note 22) | 2,518 | 2,518 | 3,295 | 3,295 | ||||||||||||||||||||
Interest-bearing loans and borrowings (note 23) | (9,526) | (9,221) | (6,302) | (5,866) | ||||||||||||||||||||
Derivative financial instruments (net) (note 24) | 85 | 85 | 79 | 79 | ||||||||||||||||||||
Group net debt | (6,923) | (6,618) | (2,928) | (2,492) | ||||||||||||||||||||
(i) All interest-bearing loans and borrowings are Level 2 fair value measurements. |
| |||||||||||||||||||||||
The following table shows the effective interest rates on period-end fixed, gross and net debt: |
||||||||||||||||||||||||
As at 31 December 2015 | As at 31 December 2014 | |||||||||||||||||||||||
m | Interest rate |
Weighted average fixed period Years |
m | Interest rate |
Weighted average fixed period Years |
|||||||||||||||||||
Interest-bearing loans and borrowings nominal - fixed rate (i) | (7,431) | (5,657) | ||||||||||||||||||||||
Derivative financial instruments - fixed rate | 2,270 | 1,227 | ||||||||||||||||||||||
Net fixed rate debt including derivatives | (5,161) | 4.0% | 9.4 | (4,430) | 4.5% | 5.2 | ||||||||||||||||||
Interest-bearing loans and borrowings nominal - floating rate (ii) | (1,668) | (63) | ||||||||||||||||||||||
Adjustment of debt from nominal to book value (i) | (122) | (146) | ||||||||||||||||||||||
Derivative financial instruments - currency floating rate | (2,185) | (1,148) | ||||||||||||||||||||||
Gross debt including derivative financial instruments | (9,136) | 3.3% | (5,787) | 4.1% | ||||||||||||||||||||
Cash and cash equivalents - floating rate | 2,518 | 3,295 | ||||||||||||||||||||||
Group net debt | (6,618) | (2,492) | ||||||||||||||||||||||
Cash at bank and in hand reclassified as held for sale (note 22) | - | (33) | ||||||||||||||||||||||
Group net debt excluding cash reclassified as held for sale | (6,618) | (2,525) |
(i) | Of the Groups nominal fixed rate debt at 31 December 2015, 2,270 million (2014: 1,227 million) is hedged to floating rate using interest rate swaps. |
(ii) | Floating rate debt comprises bank borrowings and finance leases bearing interest at rates set in advance for periods ranging from overnight to less than one year largely by reference to inter-bank interest rates. |
Reconciliation of opening to closing net debt
2015 m |
2014 m |
2013 m |
||||||||||
At 1 January | (2,492) | (2,973) | (2,909) | |||||||||
Debt in acquired companies | (175) | (7) | (44) | |||||||||
Debt in disposed companies | 20 | - | 17 | |||||||||
Increase in interest-bearing loans, borrowings and finance leases | (5,633) | (901) | (1,491) | |||||||||
Net cash flow arising from derivative financial instruments | (47) | 11 | (64) | |||||||||
Repayment of interest-bearing loans, borrowings and finance leases | 2,744 | 934 | 586 | |||||||||
(Decrease)/increase in cash and cash equivalents | (897) | 625 | 845 | |||||||||
Mark-to-market adjustment | (1) | (3) | 10 | |||||||||
Translation adjustment | (137) | (178) | 77 | |||||||||
At 31 December | (6,618) | (2,492) | (2,973) |
198 |
CRH Annual Report on Form 20-F | 2015
20. Analysis of Net Debt | continued
Currency profile
The currency profile of the Groups net debt and net worth (capital and reserves attributable to the Companys equity holders) as at 31 December 2015 and 31 December 2014 is as follows:
euro m |
US Dollar m |
Pound Sterling m |
Canadian m |
Philippine Peso m |
Polish Zloty m |
Swiss Franc m |
Other (i) m |
Total m |
||||||||||||||||||||||||||||
Cash and cash equivalents (note 22) | 1,062 | 791 | 99 | 131 | 10 | 120 | 182 | 123 | 2,518 | |||||||||||||||||||||||||||
Interest-bearing loans and borrowings (note 23) | (4,533) | (3,503) | (540) | (29) | (226) | (64) | (304) | (22) | (9,221) | |||||||||||||||||||||||||||
Derivative financial instruments (net) (note 24) | 2,449 | (918) | (413) | (536) | - | (50) | (232) | (215) | 85 | |||||||||||||||||||||||||||
Net debt by major currency including derivative financial instruments | (1,022) | (3,630) | (854) | (434) | (216) | 6 | (354) | (114) | (6,618) | |||||||||||||||||||||||||||
Non-debt assets and liabilities analysed as follows: | ||||||||||||||||||||||||||||||||||||
Non-current assets | 4,487 | 9,111 | 2,845 | 1,403 | 1,459 | 365 | 821 | 2,034 | 22,525 | |||||||||||||||||||||||||||
Current assets | 1,855 | 2,934 | 818 | 393 | 121 | 158 | 331 | 245 | 6,855 | |||||||||||||||||||||||||||
Non-current liabilities | (643) | (1,837) | (254) | (228) | (193) | (8) | (377) | (84) | (3,624) | |||||||||||||||||||||||||||
Current liabilities | (1,547) | (1,956) | (1,091) | (272) | (150) | (121) | (200) | (257) | (5,594) | |||||||||||||||||||||||||||
Non-controlling interests | (39) | (12) | - | - | (467) | 2 | (13) | - | (529) | |||||||||||||||||||||||||||
Capital and reserves attributable to the Companys equity holders | 3,091 | 4,610 | 1,464 | 862 | 554 | 402 | 208 | 1,824 | 13,015 | |||||||||||||||||||||||||||
The equivalent disclosure for the prior year is as follows: |
||||||||||||||||||||||||||||||||||||
Cash and cash equivalents (note 22) | 1,776 | 1,092 | 68 | 7 | - | 43 | 212 | 64 | 3,262 | |||||||||||||||||||||||||||
Interest-bearing loans and borrowings (note 23) | (2,648) | (2,573) | (310) | (1) | - | (24) | (274) | (36) | (5,866) | |||||||||||||||||||||||||||
Derivative financial instruments (net) (note 24) | 1 | 364 | 174 | (109) | - | (112) | (188) | (51) | 79 | |||||||||||||||||||||||||||
Net debt* by major currency including derivative financial instruments | (871) | (1,117) | (68) | (103) | - | (93) | (250) | (23) | (2,525) | |||||||||||||||||||||||||||
Non-debt assets (including cash reclassified as held for sale) and liabilities analysed as follows: | ||||||||||||||||||||||||||||||||||||
Non-current assets | 3,061 | 7,003 | 346 | 221 | - | 395 | 778 | 1,399 | 13,203 | |||||||||||||||||||||||||||
Current assets | 1,611 | 2,558 | 489 | 113 | - | 171 | 326 | 182 | 5,450 | |||||||||||||||||||||||||||
Non-current liabilities | (616) | (1,481) | (92) | (9) | - | (35) | (270) | (27) | (2,530) | |||||||||||||||||||||||||||
Current liabilities | (1,117) | (1,436) | (368) | (65) | - | (88) | (191) | (135) | (3,400) | |||||||||||||||||||||||||||
Non-controlling interests | (5) | (4) | - | - | - | - | (12) | - | (21) | |||||||||||||||||||||||||||
Capital and reserves attributable to the Companys equity holders | 2,063 | 5,523 | 307 | 157 | - | 350 | 381 | 1,396 | 10,177 |
(i) | The principal currencies included in this category are the Chinese Renminbi, the Romanian new leu, the Indian Rupee, the Ukrainian Hryvnia and the Serbian Dinar. |
* Excluding 33 million cash reclassified as held for sale which is analysed by major currency in current assets above.
199 |
CRH Annual Report on Form 20-F | 2015
20. Analysis of Net Debt | continued
Liquidity and capital resources
The following table provides certain information related to our cash generation and changes in our cash and cash equivalents position:
2015 m |
2014 m |
2013 m |
||||||||||
Net cash inflow from operating activities | 2,247 | 1,237 | 1,092 | |||||||||
Net cash outflow from investing activities | (7,306) | (232) | (848) | |||||||||
Net cash inflow/(outflow) from financing activities | 4,162 | (380) | 601 | |||||||||
(Decrease)/increase in cash and cash equivalents | (897) | 625 | 845 | |||||||||
Cash and cash equivalents at the beginning of year, excluding overdrafts (note 22) | 3,295 | 2,540 | 1,747 | |||||||||
Effect of exchange rate changes | 120 | 130 | (52) | |||||||||
Cash and cash equivalents at the end of year, excluding overdrafts (note 22) | 2,518 | 3,295 | 2,540 | |||||||||
Bank overdrafts | (117) | (70) | (40) | |||||||||
Borrowings | (9,104) | (5,796) | (5,500) | |||||||||
Derivative financial instruments | 85 | 79 | 27 | |||||||||
Net debt at end of year | (6,618) | (2,492) | (2,973) |
The Groups financing strategy includes maintenance of adequate financial resources and liquidity. During 2015 the Groups total net cash outflow from investing activities amounted to 7.3 billion which was funded by 2.2 billion of operating cash flow, 4.2 billion of net financing and a 0.9 billion reduction in cash and cash equivalents.
The Group believes that its financial resources (operating cash together with cash and cash equivalents of 2.5 billion and undrawn committed loan facilities of 3.1 billion) will be sufficient to cover the Groups cash requirements.
At 31 December 2015, euro and US Dollar denominated cash and cash equivalents represented 42% (2014: 54%) and 31% (2014: 33%) of total cash and cash equivalents respectively.
Significant borrowings
The main sources of Group debt funding are public bond markets in Europe and North America. The following bonds were outstanding as at 31 December 2015:
Annual coupons |
Outstanding millions |
Final maturity |
||||||||||
US Dollar bonds | 4.125% | $114 | 2016 | |||||||||
US Dollar bonds | 6.00% | $518 | 2016 | |||||||||
US Dollar bonds | 8.125% | $650 | 2018 | |||||||||
euro bonds | 5.00% | 500 | 2019 | |||||||||
euro bonds | 2.75% | 750 | 2020 | |||||||||
US Dollar bonds | 5.75% | $400 | 2021 | |||||||||
euro bonds | 1.75% | 600 | 2021 | |||||||||
Swiss Franc bonds | 1.375% | CHF 330 | 2022 | |||||||||
euro bonds | 3.125% | 750 | 2023 | |||||||||
euro bonds | 1.875% | 600 | 2024 | |||||||||
US Dollar bonds | 3.875% | $1,250 | 2025 | |||||||||
Sterling bonds | 4.125% | £400 | 2029 | |||||||||
US Dollar bonds | 6.40% | $213 | 2033 | |||||||||
US Dollar bonds | 5.125% | $500 | 2045 | |||||||||
200 |
CRH Annual Report on Form 20-F | 2015
21. Capital and Financial Risk Management
Capital management
Overall summary
The primary objectives of CRHs capital management strategy are to ensure that the Group maintains a strong credit rating to support its business and to create shareholder value by managing the debt and equity balance and the cost of capital. No changes were made in the objectives, policies or processes for managing capital during 2015.
The Board periodically reviews the capital structure of the Group, including the cost of capital and the risks associated with each class of capital. The Group manages and, if necessary, adjusts its capital structure taking account of underlying economic conditions; any material adjustments to the Groups capital structure in terms of the relative proportions of debt and equity are approved by the Board. In order to maintain or adjust the capital structure, the Group may issue new shares, dispose of assets, amend investment plans, alter dividend policy or return capital to shareholders.
The Group is committed to optimising the use of its balance sheet within the confines of the overall objective to maintain an investment grade credit rating.
The capital structure of the Group, which comprises net debt and capital and reserves attributable to the Companys equity holders, may be summarised as follows:
2015 m |
|
2014 m |
||||||||
Capital and reserves attributable to the Companys equity holders | 13,015 | 10,177 | ||||||||
Net debt | 6,618 | 2,492 | ||||||||
Capital and net debt | 19,633 | 12,669 |
201 |
CRH Annual Report on Form 20-F | 2015
21. Capital and Financial Risk Management | continued
Financial risk management objectives and policies
The Group uses financial instruments throughout its businesses: interest-bearing loans and borrowings, cash and cash equivalents and finance leases are used to finance the Groups operations; trade receivables and trade payables arise directly from operations; and derivatives, principally interest rate and currency swaps and forward foreign exchange contracts, are used to manage interest rate risks and currency exposures and to achieve the desired profile of borrowings. The Group does not trade in financial instruments nor does it enter into any leveraged derivative transactions.
The Groups corporate treasury function provides services to the business units, co-ordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Group. The Head of Group Financial Operations reports to the General Manager of Finance and the activities of the corporate treasury function are subject to regular internal audit. Systems are in place to monitor and control the Groups liquidity risks. The Groups net debt position forms part of the monthly documentation presented to the Board of Directors.
The main risks attaching to the Groups financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. Commodity price risk arising from financial instruments is of minimal relevance given that exposure is confined to a small number of contracts entered into for the purpose of hedging future movements in energy costs. The Board reviews and agrees policies for the prudent management of each of these risks as documented below.
Interest rate risk
The Groups exposure to market risk for changes in interest rates stems predominantly from its long-term debt obligations. Interest cost is managed using a mix of fixed and floating rate debt. With the objective of managing this mix in a cost-efficient manner, the Group enters into interest rate swaps, under which the Group contracts to exchange, at predetermined intervals, the difference between fixed and variable interest amounts calculated by reference to a pre-agreed notional principal. Such contracts enable the Group to mitigate the risk of changing interest rates on the fair value of issued fixed rate debt and the cash flow exposures of issued floating rate debt.
The majority of these swaps are designated under IAS 39 Financial Instruments; Recognition and Measurement to hedge underlying debt obligations and qualify for hedge accounting; undesignated financial instruments are termed not designated as hedges in the analysis of derivative financial instruments presented in note 24. The following table demonstrates the impact on profit/(loss) before tax and total equity of a range of possible changes in the interest rates applicable to net floating rate borrowings, with all other variables held constant. These impacts are calculated based on the closing balance sheet for the relevant period and assume all floating interest rates and interest curves change by the same amount. For profit/(loss) before tax, the impact shown is the impact on closing balance sheet floating rate net debt for a full year while for total equity the impact shown is the impact on the value of financial instruments.
Percentage change in cost of borrowings | +/- 1% | +/- 0.5% | ||||||||
Impact on profit/(loss) before tax | 2015 |
-/+ 14m | -/+ 7m | |||||||
2014 |
+/- 21m | +/- 10m | ||||||||
2013 |
+/- 10m | +/- 5m | ||||||||
Impact on total equity | 2015 |
-/+ 7m | -/+ 4m | |||||||
2014 |
-/+ 5m | -/+ 2m | ||||||||
2013 |
-/+ 8m | -/+ 4m | ||||||||
202 |
CRH Annual Report on Form 20-F | 2015
21. Capital and Financial Risk Management | continued
Foreign currency risk
Due to the nature of building materials, which in general exhibit a low value-to-weight ratio, CRHs activities are conducted primarily in the local currency of the country of operation resulting in low levels of foreign currency transaction risk; variances arising in this regard are reflected in operating costs or cost of sales in the Consolidated Income Statement in the period in which they arise.
Given the Groups presence in 31 countries worldwide, the principal foreign exchange risk arises from fluctuations in the euro value of the Groups net investment in a wide basket of currencies other than the euro; such changes are reported separately within the Consolidated Statement of Comprehensive Income. A currency profile of the Groups net debt and net worth is presented in note 20. The Groups established policy is to spread its net worth across the currencies of its various operations with the objective of limiting its exposure to individual currencies and thus promoting consistency with the geographical balance of its operations. In order to achieve this objective, the Group manages its borrowings, where practicable and cost effective, to hedge a portion of its foreign currency assets. Hedging is done using currency borrowings in the same currency as the assets being hedged or through the use of other hedging methods such as currency swaps.
The following table demonstrates the sensitivity of profit/(loss) before tax and equity to selected movements in the relevant /US$ exchange rate (with all other variables held constant); the US Dollar has been selected as the appropriate currency for this analysis given the materiality of the Groups activities in the United States. The impact on profit/(loss) before tax is based on changing the /US$ exchange rate used in calculating profit/(loss) before tax for the period. The impact on total equity and financial instruments is calculated by changing the /US$ exchange rate used in measuring the closing balance sheet.
Percentage change in relevant /US$ exchange rate | +/- 5% | +/- 2.5% | ||||||||||
Impact on profit/(loss) before tax | 2015 | -/+ 33m | -/+ 17m | |||||||||
2014 | -/+ 26m | -/+ 13m | ||||||||||
2013 | -/+ 14m | -/+ 7m | ||||||||||
Impact on total equity* | 2015 | -/+ 230m | -/+ 115m | |||||||||
2014 | -/+ 263m | -/+ 135m | ||||||||||
2013 | -/+ 215m | -/+ 110m | ||||||||||
* Includes the impact on financial instruments which is as follows: | 2015 | +/-181m | +/-90m | |||||||||
2014 | +/- 53m | +/- 27m | ||||||||||
2013 | +/-70m | +/-36m |
Financial instruments include deposits, money market funds, bank loans, medium term notes and other fixed term debt, interest rate swaps, commodity swaps and foreign exchange contracts. They exclude trade receivables and trade payables.
203 |
CRH Annual Report on Form 20-F | 2015
21. Capital and Financial Risk Management | continued
Credit/counterparty risk
In addition to cash at bank and in hand, the Group holds significant cash balances which are invested on a short-term basis and are classified as cash equivalents (see note 22). These deposits and other financial instruments (principally certain derivatives and loans and receivables included within financial assets) give rise to credit risk on amounts due from counterparty financial institutions (stemming from their insolvency or a downgrade in their credit ratings). Credit risk is managed by limiting the aggregate amount and duration of exposure to any one counterparty primarily depending on its credit rating and by regular review of these ratings. Acceptable credit ratings are high investment-grade ratings - generally counterparties have ratings of A2/A or higher from Moodys/Standard & Poors ratings agencies. The maximum exposure arising in the event of default on the part of the counterparty (including insolvency) is the carrying value of the relevant financial instrument.
In its worldwide insurance programme, the Group carries appropriate levels of insurance for typical business risks (including product liability) with various leading insurance companies. However, in the event of the failure of one or more of its insurance counterparties, the Group could be impacted by losses where recovery from such counterparties is not possible.
Credit risk arising in the context of the Groups operations is not significant with the total bad debt provision at the balance sheet date amounting to 4.6% of gross trade receivables (2014: 4.6%). Customer credit risk is managed at appropriate Group locations according to established policies, procedures and controls. Customer credit quality is assessed in line with strict credit rating criteria and credit limits are established where appropriate. Outstanding customer balances are regularly monitored and a review for indicators of impairment (evidence of financial difficulty of the customer, payment default, breach of contract etc.) is carried out at each reporting date. Significant balances are reviewed individually while smaller balances are grouped and assessed collectively. Receivables balances are in general unsecured and non-interest-bearing. The trade receivables balances disclosed in note 17 comprise a large number of customers spread across the Groups activities and geographies with balances classified as neither past due nor impaired representing 69% of the total trade receivables balance at the balance sheet date (2014: 72%); amounts receivable from related parties (notes 17 and 32) are immaterial. Factoring and credit guarantee arrangements are employed in certain of the Groups operations where deemed to be of benefit by operational management.
Liquidity risk
The principal liquidity risks faced by the Group stem from the maturation of debt obligations and derivative transactions. A downgrade of CRHs credit ratings may give rise to increases in funding costs in respect of future debt and may impair the Groups ability to raise funds on acceptable terms. The Groups corporate treasury function ensures that sufficient resources are available to meet such liabilities as they fall due through a combination of cash and cash equivalents, cash flows and undrawn committed bank facilities. Flexibility in funding sources is achieved through a variety of means including (i) maintaining cash and cash equivalents only with a diversity of highly-rated counterparties; (ii) limiting the maturity of such balances; (iii) borrowing the bulk of the Groups debt requirements under committed bank lines or other term financing; and (iv) having surplus committed lines of credit.
The undrawn committed facilities available to the Group as at the balance sheet date are quantified in note 23; these facilities span a wide number of highly-rated financial institutions thus minimising any potential exposure arising from concentrations in borrowing sources. The repayment schedule (analysed by maturity date) applicable to the Groups outstanding interest-bearing loans and borrowings as at the balance sheet date is also presented in note 23.
204 |
CRH Annual Report on Form 20-F | 2015
21. Capital and Financial Risk Management | continued
The tables below show the projected contractual undiscounted total cash outflows (principal and interest) arising from the Groups trade and other payables, gross debt and derivative financial instruments. The tables also include the gross cash inflows projected to arise from derivative financial instruments. These projections are based on the interest and foreign exchange rates applying at the end of the relevant financial year.
Within 1 year |
Between m |
Between 2 and 3 years m |
Between 3 and 4 years m |
Between 4 and 5 years m |
After 5 years m |
Total m |
||||||||||||||||||||||
At 31 December 2015 | ||||||||||||||||||||||||||||
Financial liabilities - cash outflows | ||||||||||||||||||||||||||||
Trade and other payables | 4,761 | 231 | 80 | 37 | 48 | 65 | 5,222 | |||||||||||||||||||||
Finance leases | 2 | 2 | 2 | 2 | 2 | 5 | 15 | |||||||||||||||||||||
Other interest-bearing loans and borrowings | 760 | 800 | 1,361 | 500 | 750 | 4,971 | 9,142 | |||||||||||||||||||||
Interest payments on other interest-bearing loans and borrowings (i) | 315 | 277 | 270 | 196 | 190 | 1,271 | 2,519 | |||||||||||||||||||||
Cross-currency swaps - gross cash outflows | 2,716 | 146 | - | - | - | - | 2,862 | |||||||||||||||||||||
Gross projected cash outflows | 8,554 | 1,456 | 1,713 | 735 | 990 | 6,312 | 19,760 | |||||||||||||||||||||
Derivative financial instruments - cash inflows | ||||||||||||||||||||||||||||
Interest rate swaps - net cash inflows (ii) | (53) | (35) | (35) | (21) | (21) | (87) | (252) | |||||||||||||||||||||
Cross-currency swaps - gross cash inflows | (2,707) | (162) | - | - | - | - | (2,869) | |||||||||||||||||||||
Gross projected cash inflows | (2,760) | (197) | (35) | (21) | (21) | (87) | (3,121) | |||||||||||||||||||||
The equivalent disclosure for the prior year is as follows: | ||||||||||||||||||||||||||||
At 31 December 2014 | ||||||||||||||||||||||||||||
Financial liabilities - cash outflows | ||||||||||||||||||||||||||||
Trade and other payables | 2,894 | 178 | 25 | 16 | 11 | 56 | 3,180 | |||||||||||||||||||||
Finance leases | 2 | 2 | 2 | 1 | 2 | 4 | 13 | |||||||||||||||||||||
Other interest-bearing loans and borrowings | 452 | 1,371 | 1 | 536 | 500 | 2,882 | 5,742 | |||||||||||||||||||||
Interest payments on other interest-bearing loans and borrowings (i) | 253 | 207 | 157 | 137 | 90 | 305 | 1,149 | |||||||||||||||||||||
Cross-currency swaps - gross cash outflows | 1,729 | - | - | - | - | - | 1,729 | |||||||||||||||||||||
Gross projected cash outflows | 5,330 | 1,758 | 185 | 690 | 603 | 3,247 | 11,813 | |||||||||||||||||||||
Derivative financial instruments - cash inflows | ||||||||||||||||||||||||||||
Interest rate swaps - net cash inflows (ii) | (34) | (28) | (19) | (14) | (6) | (18) | (119) | |||||||||||||||||||||
Cross-currency swaps - gross cash inflows | (1,738) | - | - | - | - | - | (1,738) | |||||||||||||||||||||
Gross projected cash inflows | (1,772) | (28) | (19) | (14) | (6) | (18) | (1,857) |
Commodity price risk
The fair value of derivatives used to hedge future energy costs was 17 million unfavourable as at the balance sheet date (2014: 19 million unfavourable).
(i) | At 31 December 2015 and 31 December 2014, a portion of the Groups long-term debt carried variable interest rates. The Group uses the interest rates in effect on 31 December to calculate the interest payments on the long-term debt for the periods indicated. |
(ii) | The Group uses interest rate swaps to help manage its interest cost. Under these contracts the Group has agreed to exchange at predetermined intervals, the difference between fixed and variable interest amounts calculated by reference to a pre-agreed notional principal. The Group uses the interest rates in effect on 31 December to calculate the net interest receipts or payments on these contracts. |
205 |
CRH Annual Report on Form 20-F | 2015
206 |
CRH Annual Report on Form 20-F | 2015
23. Interest-bearing Loans and Borrowings
Loans and borrowings outstanding | ||||||||
2015 m |
2014 m |
|||||||
Bank overdrafts | 117 | 70 | ||||||
Bank loans | 1,564 | 16 | ||||||
Finance leases | 15 | 13 | ||||||
Bonds and private placements | 7,508 | 5,750 | ||||||
Other | 17 | 17 | ||||||
Interest-bearing loans and borrowings* | 9,221 | 5,866 |
* Including loans of 1 million (2014: 1 million) secured on specific items of property, plant and equipment; these figures do not include finance leases. |
Maturity profile of loans and borrowings and undrawn committed facilities
As at 31 December 2015 | As at 31 December 2014 | |||||||||||||||
Loans and
m |
Undrawn
m |
Loans and
m |
Undrawn
m |
|||||||||||||
Within one year | 756 | 31 | 447 | 22 | ||||||||||||
Between one and two years | 794 | 220 | 1,395 | - | ||||||||||||
Between two and three years | 1,382 | - | - | - | ||||||||||||
Between three and four years | 501 | - | 562 | - | ||||||||||||
Between four and five years | 747 | 2,837 | 505 | 2,641 | ||||||||||||
After five years | 5,041 | - | 2,957 | - | ||||||||||||
Total | 9,221 | 3,088 | 5,866 | 2,663 |
** | The Group manages its borrowing ability by entering into committed borrowing agreements. Revolving committed bank facilities are generally available to the Group for periods of up to five years from the date of inception. The figures shown above are the undrawn committed facilities available to be drawn by the Group at 31 December 2015. |
207 |
CRH Annual Report on Form 20-F | 2015
23. Interest-bearing Loans and Borrowings | continued
Guarantees
The Company has given letters of guarantee to secure obligations of subsidiary undertakings as follows: 8.9 billion in respect of loans, bank advances, derivative obligations and future lease obligations (2014: 5.8 billion), 308 million in respect of letters of credit (2014: 288 million) and 10 million in respect of other obligations (2014: 5 million).
Pursuant to the provisions of Section 357(1)(b) of the Companies Act 2014, the Company has guaranteed all amounts shown as liabilities in the statutory financial statements of its wholly-owned subsidiary undertakings and the Oldcastle Finance Company general partnership in the Republic of Ireland for the financial year ended 31 December 2015 and as a result, such subsidiary undertakings and the general partnership have been exempted from the filing provisions of Sections 347 and 348 of the Companies Act 2014 and Regulation 20 of the European Communities (Accounts) Regulations, 1993 respectively.
Lender covenants
The Groups major bank facilities and debt issued pursuant to Note Purchase Agreements in private placements require the Group to maintain certain financial covenants. Non-compliance with financial covenants would give the relevant lenders the right to terminate facilities and demand early repayment of any sums drawn thereunder thus altering the maturity profile of the Groups debt and the Groups liquidity. Calculations for financial covenants are completed for twelve-month periods half-yearly on 30 June and 31 December. The Group was in full compliance with its financial covenants throughout each of the periods presented. The Group is not aware of any stated events of default as defined in the Agreements.
The financial covenants are:
(1) | Minimum interest cover defined as PBITDA/net interest (all as defined in the relevant agreement) cover at no lower than 4.5 times (2014: 4.5 times; 2013: 6.3 times). As at 31 December 2015 the ratio was 8.5 times (2014: 7.0 times; 2013: 6.3 times); |
(2) | Minimum net worth defined as total equity plus deferred tax liabilities and capital grants less repayable capital grants being in aggregate no lower than 5.6 billion (2014: 5.0 billion) (such minimum being adjusted for foreign exchange translation impacts). As at 31 December 2015 net worth (as defined in the relevant agreement) was 15.6 billion (2014: 11.5 billion). |
208 |
CRH Annual Report on Form 20-F | 2015
24. Derivative Financial Instruments
The fair values of derivative financial instruments are analysed by year of maturity and by accounting designation as follows:
Fair value hedges m |
Cash flow hedges m |
Net m |
Not designated as hedges m |
Total m |
||||||||||||||||
At 31 December 2015 | ||||||||||||||||||||
Derivative assets | ||||||||||||||||||||
Within one year - current assets | 4 | - | 15 | 5 | 24 | |||||||||||||||
Between one and two years | 21 | - | - | - | 21 | |||||||||||||||
Between two and three years | 22 | - | - | - | 22 | |||||||||||||||
Between three and four years | - | - | - | 8 | 8 | |||||||||||||||
After five years | 34 | - | - | - | 34 | |||||||||||||||
Non-current assets | 77 | - | - | 8 | 85 | |||||||||||||||
Total derivative assets | 81 | - | 15 | 13 | 109 | |||||||||||||||
Derivative liabilities | ||||||||||||||||||||
Within one year - current liabilities | - | (7) | (7) | (5) | (19) | |||||||||||||||
Between one and two years - non-current liabilities | - | (4) | - | (1) | (5) | |||||||||||||||
Total derivative liabilities | - | (11) | (7) | (6) | (24) | |||||||||||||||
Net asset arising on derivative financial instruments | 81 | (11) | 8 | 7 | 85 | |||||||||||||||
The equivalent disclosure for the prior year is as follows: |
||||||||||||||||||||
At 31 December 2014 | ||||||||||||||||||||
Derivative assets | ||||||||||||||||||||
Within one year - current assets | - | 2 | 13 | - | 15 | |||||||||||||||
Between one and two years | 22 | - | - | - | 22 | |||||||||||||||
Between three and four years | 26 | - | - | - | 26 | |||||||||||||||
Between four and five years | - | - | - | 9 | 9 | |||||||||||||||
After five years | 30 | - | - | - | 30 | |||||||||||||||
Non-current assets | 78 | - | - | 9 | 87 | |||||||||||||||
Total derivative assets | 78 | 2 | 13 | 9 | 102 | |||||||||||||||
Derivative liabilities | ||||||||||||||||||||
Within one year - current liabilities | - | (7) | (4) | (9) | (20) | |||||||||||||||
Between one and two years | - | (1) | - | - | (1) | |||||||||||||||
Between two and three years | - | (1) | - | - | (1) | |||||||||||||||
Between three and four years | - | (1) | - | - | (1) | |||||||||||||||
Non-current liabilities | - | (3) | - | - | (3) | |||||||||||||||
Total derivative liabilities | - | (10) | (4) | (9) | (23) | |||||||||||||||
Net asset arising on derivative financial instruments | 78 | (8) | 9 | - | 79 |
209 |
CRH Annual Report on Form 20-F | 2015
24. Derivative Financial Instruments | continued
At 31 December 2015 and 2014, the Group had no master netting or similar arrangements, collateral posting requirements, and enforceable right of set-off agreements with any of its derivative counterparts.
Fair value hedges consist of interest rate swaps and currency swaps. These instruments hedge risks arising from changes in asset/liability fair values due to interest rate and foreign exchange rate movements.
Cash flow hedges consist of forward foreign exchange and commodity contracts and interest rate and currency swaps. These instruments hedge risks arising to future cash flows from movements in foreign exchange rates, commodity prices and interest rates. Cash flow hedges are expected to affect profit and loss over the period to maturity.
Net investment hedges comprise cross-currency swaps and hedge changes in the value of net investments due to currency movements.
The (loss)/profit arising on fair value, cash flow, net investment hedges and related hedged items reflected in the Consolidated Income Statement is shown below:
2015 | 2014 | 2013 | ||||||||||||||
m | m | m | ||||||||||||||
Fair value of hedge instruments | (16) | 15 | (68) | |||||||||||||
Fair value of the hedged items | 13 | (16) | 71 | |||||||||||||
Components of other comprehensive income - cash flow hedges | ||||||||||||||||
Losses arising during the year: | ||||||||||||||||
- commodity forward contracts | (2) | (6) | (2) |
Fair value hierarchy | 2015 | 2014 | ||||||||
Level 2 | Level 2 | |||||||||
m | m | |||||||||
Assets measured at fair value | ||||||||||
Fair value hedges - cross-currency and interest rate swaps | 81 | 78 | ||||||||
Net investment hedges - cross-currency swaps | 15 | 13 | ||||||||
Not designated as hedges (held-for-trading) - interest rate swaps | 13 | 9 | ||||||||
Cash flow hedges - cross-currency, interest rate swaps and commodity forwards | - | 2 | ||||||||
Total | 109 | 102 | ||||||||
Liabilities measured at fair value | ||||||||||
Cash flow hedges - cross-currency, interest rate swaps and commodity forwards | (11) | (10) | ||||||||
Net investment hedges - cross-currency swaps | (7) | (4) | ||||||||
Not designated as hedges (held-for-trading) - interest rate swaps | (6) | (9) | ||||||||
Total | (24) | (23) |
At 31 December 2015 and 2014 there were no derivatives valued using Level 1 or Level 3 fair value techniques. Valuation methods for Levels 1, 2 and 3 are described in the fair value hierarchy section of the accounting policies on page 169.
210 |
CRH Annual Report on Form 20-F | 2015
25. Provisions for Liabilities
At 1 January |
Translation adjustment |
Arising on (note 30) |
Provided year |
Utilised year |
Reclassified for sale |
Disposed year |
Reversed unused |
Discount unwinding |
At 31 December |
|||||||||||||||||||||||||||||||
m | m | m | m | m | m | m | m | m | m | |||||||||||||||||||||||||||||||
31 December 2015 |
||||||||||||||||||||||||||||||||||||||||
Insurance (i) |
208 | 18 | 8 | 61 | (49) | - | - | (12) | 10 | 244 | ||||||||||||||||||||||||||||||
Environment and remediation (ii) |
96 | (5) | 348 | 20 | (10) | 4 | (5) | (4) | 6 | 450 | ||||||||||||||||||||||||||||||
Rationalisation and redundancy (iii) |
24 | 1 | 2 | 23 | (23) | - | - | (2) | 1 | 26 | ||||||||||||||||||||||||||||||
Other (iv) |
68 | (9) | 223 | 62 | (21) | 3 | (1) | (12) | 2 | 315 | ||||||||||||||||||||||||||||||
Total |
396 | 5 | 581 | 166 | (103) | 7 | (6) | (30) | 19 | 1,035 | ||||||||||||||||||||||||||||||
Analysed as: |
||||||||||||||||||||||||||||||||||||||||
Non-current liabilities |
257 | 603 | ||||||||||||||||||||||||||||||||||||||
Current liabilities |
139 | 432 | ||||||||||||||||||||||||||||||||||||||
Total |
396 | 1,035 | ||||||||||||||||||||||||||||||||||||||
The equivalent disclosure for the prior year is as follows: |
|
|||||||||||||||||||||||||||||||||||||||
31 December 2014 |
||||||||||||||||||||||||||||||||||||||||
Insurance (i) |
181 | 20 | - | 52 | (50) | - | - | (3) | 8 | 208 | ||||||||||||||||||||||||||||||
Environment and remediation (ii) |
87 | 5 | - | 12 | (4) | (4) | - | (4) | 4 | 96 | ||||||||||||||||||||||||||||||
Rationalisation and redundancy (iii) |
43 | 1 | - | 30 | (48) | - | - | (3) | 1 | 24 | ||||||||||||||||||||||||||||||
Other (iv) |
69 | 1 | 1 | 14 | (8) | (3) | - | (9) | 3 | 68 | ||||||||||||||||||||||||||||||
Total |
380 | 27 | 1 | 108 | (110) | (7) | - | (19) | 16 | 396 | ||||||||||||||||||||||||||||||
Analysed as: |
||||||||||||||||||||||||||||||||||||||||
Non-current liabilities |
231 | 257 | ||||||||||||||||||||||||||||||||||||||
Current liabilities |
149 | 139 | ||||||||||||||||||||||||||||||||||||||
Total |
380 | 396 |
211 |
CRH Annual Report on Form 20-F | 2015
25. Provisions for Liabilities | continued
(i) | This provision relates to actual and potential obligations arising under the self-insurance components of the Groups insurance arrangements which comprise employers liability (workers compensation in the United States), public and products liability (general liability in the United States), automobile liability, property damage, business interruption and various other insurances; a substantial proportion of the total provision pertains to claims which are classified as incurred but not reported. Due to the extended timeframe associated with many of the insurances, a significant proportion of the total provision is subject to periodic actuarial valuation. The projected cash flows underlying the discounting process are established through the application of actuarial triangulations, which are extrapolated from historical claims experience. The triangulations applied in the discounting process indicate that the Groups insurance provisions have an average life of six years (2014: six years). |
(ii) | This provision comprises obligations governing site remediation, restoration and environmental works to be incurred in compliance with either local or national environmental regulations together with constructive obligations stemming from established best practice. Whilst a significant element of the total provision will reverse in the medium-term (two to ten years), the majority of the legal and constructive obligations applicable to long-lived assets (principally mineral-bearing land) will unwind over a 30-year timeframe. In discounting the related obligations, expected future cash outflows have been determined with due regard to extraction status and anticipated remaining life. |
(iii) | These provisions relate to irrevocable commitments under various rationalisation and redundancy programmes, none of which is individually material to the Group. In 2015, 23 million (2014: 30 million; 2013: 55 million) was provided in respect of rationalisation and redundancy activities as a consequence of undertaking various cost reduction initiatives across all operations. These initiatives included removing excess capacity from manufacturing and distribution networks and scaling operations to match market supply and demand; implementation of these initiatives resulted in a reduction in staffing levels in all business segments over recent years. The Group expects that these provisions will be utilised within one to two years of the balance sheet date (2014: one to two years). |
(iv) | Other provisions primarily relate to legal claims (only one of which is individually material to the Group, see below for further details), onerous contracts, guarantees and warranties and employee related provisions. The Group expects these provisions will be utilised within two to five years of the balance sheet date (2014: two years). |
Swiss Competition Commission Investigation
In July 2015, the Swiss Competition Commission (ComCo) announced its decision to impose fines of approximately CHF 80 million on the Association of Swiss Wholesalers of the Sanitary Industry (the Association) and on major Swiss wholesalers including certain subsidiaries of CRH in Switzerland. The full decision of ComCo, setting out the basis of its findings, is expected to be available in March 2016 at which time CRH has the option to appeal the decision to the Federal Administrative Tribunal, and ultimately to the Federal Supreme Court. While the Group is of the view that the position of ComCo is fundamentally ill-founded and that the fine imposed on CRH is unjustified, a provision of 32 million (CHF 34 million), representing the full amount of the fine attributed to the Groups subsidiaries, has been recorded in the 2015 Consolidated Financial Statements.
Discount rate sensitivity analysis
All non-current provisions are discounted at a rate of 5% (2014: 5%; 2013: 5%), consistent with the average effective interest rate for the Groups borrowings. The impact on profit before tax of a 1% change in the discount rate applicable to provisions, with all other variables held constant, is approximately 2 million (2014: nil million; 2013: nil million).
212 |
CRH Annual Report on Form 20-F | 2015
26. Deferred Income Tax
The deductible and taxable temporary differences in respect of which deferred tax has been recognised are as follows:
2015 | 2014 | |||||||
m | m | |||||||
Reported in balance sheet after offset | ||||||||
Deferred tax liabilities | 2,023 | 1,305 | ||||||
Deferred tax assets | (149) | (171) | ||||||
Net deferred income tax liability | 1,874 | 1,134 | ||||||
Deferred income tax assets (deductible temporary differences) | ||||||||
Deficits on Group retirement benefit obligations (note 27) | 126 | 140 | ||||||
Revaluation of derivative financial instruments to fair value | 13 | 14 | ||||||
Tax loss carryforwards | 158 | 97 | ||||||
Share-based payment expense | 15 | 2 | ||||||
Provisions for liabilities and working capital-related items | 326 | 187 | ||||||
Other deductible temporary differences | 46 | 37 | ||||||
Total | 684 | 477 |
Deferred income tax assets have been recognised in respect of all deductible temporary differences, with the exception of some tax loss carryforwards. The amount of tax losses where recovery is not probable and is therefore not recognised in the Consolidated Balance Sheet is 959 million (2014: 937 million). The vast majority will expire post 2020 (2014: 2019) |
Deferred income tax liabilities (taxable temporary differences) |
||||||||
Taxable temporary differences principally attributable to accelerated tax depreciation and fair value adjustments arising on acquisition (i) | 2,521 | 1,575 | ||||||
Revaluation of derivative financial instruments to fair value | 18 | 18 | ||||||
Rolled-over capital gains | 19 | 18 | ||||||
Total | 2,558 | 1,611 | ||||||
(i) Fair value adjustments arising on acquisition principally relate to property, plant and equipment. | ||||||||
Movement in net deferred income tax liability | ||||||||
At 1 January | 1,134 | 1,059 | ||||||
Translation adjustment | 126 | 125 | ||||||
Net (income)/expense for the year (note 10) | (35) | 36 | ||||||
Arising on acquisition (note 30) | 627 | 2 | ||||||
Reclassified from/(as) held for sale | 19 | (19) | ||||||
Disposal (note 4) | (22) | - | ||||||
Movement in deferred tax asset on Group retirement benefit obligations | 30 | (69) | ||||||
Movement in deferred tax asset on share-based payment expense | (5) | - | ||||||
At 31 December | 1,874 | 1,134 |
213 |
CRH Annual Report on Form 20-F | 2015
27. Retirement Benefit Obligations
The Group operates either defined benefit or defined contribution pension schemes in all of its principal operating areas. The disclosures included below relate to all pension schemes in the Group.
The Group operates defined benefit pension schemes in the Republic of Ireland, Britain and Northern Ireland, the Netherlands, Belgium, France, Germany, Switzerland, the United States, Romania, Serbia, Slovakia, Brazil, the Philippines and Canada; for the purposes of the disclosures which follow, the schemes in the Republic of Ireland, the Netherlands, Belgium, France, Germany and Slovakia have been aggregated into a Eurozone category on the basis of common currency and financial assumptions. The majority of the defined benefit pension schemes operated by the Group are funded as disclosed in the analysis of the defined benefit obligation presented on page 217 with unfunded schemes restricted to a number of schemes in Germany, Canada, the Philippines and one scheme in each of the Netherlands and the United States.
All funded defined benefit schemes are administered by separate funds that are legally separate from the Group under the jurisdiction of Trustees. Each of the Groups schemes operate under broadly similar regulatory frameworks. The Trustees of the various pension funds in existence across the Group are required by law and by their articles of association to act in the best interests of the scheme participants and are responsible for the definition of investment strategy and for scheme administration. The level of benefits available to members depends on length of service and either their average salary over their period of employment or their salary in the final years leading up to retirement. The Groups pension schemes in Switzerland are contribution-based schemes with guarantees to provide further contributions in the event that certain targets are not met largely in relation to investment return and the annuity conversion factor on retirement.
Provision has been made in the financial statements for post-retirement healthcare obligations in respect of certain current and former employees in the United States and Canada and for long-term service commitments in respect of certain employees in the Netherlands and Switzerland. These obligations are unfunded in nature and the required disclosures form part of this note.
Defined benefit pension schemes - principal risks
Through its defined benefit pension schemes and post-retirement healthcare plans, the Group is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility: Under IAS 19 Employee Benefits, the assets of the Groups defined benefit pension schemes are reported at fair value (using bid prices, where relevant). The majority of the schemes assets comprise of equities, bonds and property all of which may fluctuate significantly in value from period to period. Given that liabilities are discounted to present value based on bond yields and that bond prices are inversely related to yields, an increase in the liability discount rate (which would reduce liabilities) would reduce bond values though not necessarily by an equal magnitude.
Given the maturity of certain of the Groups funded defined benefit pension schemes, de-risking frameworks have been introduced to mitigate deficit volatility and enable better matching of investment returns with the cash outflows related to benefit obligations. These frameworks entail the usage of asset-liability matching techniques whereby triggers are set for the conversion of equity holdings into bonds of similar average duration to the relevant liabilities.
Discount rates: The discount rates employed in determining the present value of the schemes liabilities are determined by reference to market yields at the balance sheet date on high-quality corporate bonds of a currency and term consistent with the currency and term of the associated post-employment benefit obligations. Changes in discount rates impact the quantum of liabilities as discussed above.
Inflation risk: A significant amount of the Groups pension obligations have an inflation linkage; higher inflation will lead to higher liabilities (although in most cases, caps on the level of inflationary increases are in place to protect the scheme against extreme inflation).
Longevity risk: In the majority of cases, the Groups defined benefit pension schemes provide benefits for life with spousal and dependent child reversionary provisions; increases in life expectancy will therefore give rise to higher liabilities.
214 |
CRH Annual Report on Form 20-F | 2015
27. Retirement Benefit Obligations | continued
Financial assumptions - scheme liabilities
The major long-term assumptions used by the Groups actuaries in the computation of scheme liabilities as at 31 December 2015, 31 December 2014 and 31 December 2013 are as follows:
Eurozone* | Britain and Northern Ireland |
Switzerland | United States and Canada |
|||||||||||||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||
% | % | % | % | % | % | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||
Rate of increase in: | ||||||||||||||||||||||||||||||||||||||||||||||||
- salaries | 3.64 | 3.75 | 4.00 | 4.00 | 4.00 | 4.30 | 1.75 | 2.25 | 2.25 | 3.29 | 3.50 | 3.50 | ||||||||||||||||||||||||||||||||||||
- pensions in payment | 1.75 | 1.75 | 2.00 | 3.00-3.20 | 3.00-3.20 | 3.30-3.50 | - | - | 0.25 | - | - | - | ||||||||||||||||||||||||||||||||||||
Inflation | 1.75 | 1.75 | 2.00 | 3.00 | 3.00 | 3.30 | 0.75 | 1.25 | 1.25 | 2.00 | 2.00 | 2.00 | ||||||||||||||||||||||||||||||||||||
Discount rate | 2.61 | 2.00 | 3.70 | 3.95 | 3.50 | 4.60 | 0.85 | 1.15 | 2.35 | 4.22 | 3.80 | 4.70 | ||||||||||||||||||||||||||||||||||||
Medical cost trend rate | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | 6.21 | 16.70 | 7.40 | ||||||||||||||||||||||||||||||||||||
The mortality assumptions employed in determining the present value of scheme liabilities under IAS 19 are in accordance with the underlying funding valuations and represent actuarial best practice in the relevant jurisdictions taking account of mortality experience and industry circumstances. For the Groups most material schemes, the future life expectations factored into the relevant valuations, based on retirement at 65 years of age for current and future retirees, are as follows:
|
Republic of Ireland | United States and Canada |
Switzerland | ||||||||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||
Current retirees | ||||||||||||||||||||||||||||||||||||||||||
- male | 22.8 | 22.8 | 22.7 | 21.2 | 22.0 | 19.0 | 21.5 | 21.3 | 21.3 | |||||||||||||||||||||||||||||||||
- female | 24.9 | 24.9 | 24.9 | 23.4 | 24.0 | 21.0 | 24.0 | 23.8 | 23.8 | |||||||||||||||||||||||||||||||||
Future retirees | ||||||||||||||||||||||||||||||||||||||||||
- male | 25.8 | 25.8 | 25.7 | 23.0 | 24.0 | 21.0 | 23.6 | 23.5 | 23.5 | |||||||||||||||||||||||||||||||||
- female | 26.9 | 26.8 | 26.7 | 25.1 | 26.0 | 23.0 | 26.0 | 25.9 | 25.9 |
The above data allows for future improvements in life expectancy.
* | 2015 is calculated based on the weighted average of the assumptions for Republic of Ireland, the Netherlands, Belgium, France, Germany and Slovakia. |
215 |
CRH Annual Report on Form 20-F | 2015
27. Retirement Benefit Obligations | continued
Impact on Consolidated Income Statement
The total retirement benefit expense in the Consolidated Income Statement is as follows:
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
Total defined contribution expense | 211 | 152 | 149 | |||||||||
Total defined benefit expense | 77 | 63 | 52 | |||||||||
Total expense in Consolidated Income Statement | 288 | 215 | 201 |
At 31 December 2015, 79 million (2014: 44 million) was included in other payables in respect of defined contribution pension liabilities. |
Britain and | United States | |||||||||||||||||||||||
Analysis of defined benefit expense | Eurozone | Northern Ireland | Switzerland | and Canada | Other | Total Group | ||||||||||||||||||
2015 | 2015 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||||||
m | m | m | m | m | m | |||||||||||||||||||
Charged in arriving at Group profit before finance costs: | ||||||||||||||||||||||||
Current service cost | 19 | 7 | 34 | 2 | 1 | 63 | ||||||||||||||||||
Administration expenses | 1 | - | 1 | - | - | 2 | ||||||||||||||||||
Past service costs | (1) | - | - | - | - | (1) | ||||||||||||||||||
Gain on settlements | - | (4) | - | - | - | (4) | ||||||||||||||||||
Subtotal | 19 | 3 | 35 | 2 | 1 | 60 | ||||||||||||||||||
Included in finance income and finance costs respectively: | ||||||||||||||||||||||||
Interest income on scheme assets | (19) | (10) | (9) | (12) | - | (50) | ||||||||||||||||||
Interest cost on scheme liabilities | 27 | 12 | 11 | 16 | 1 | 67 | ||||||||||||||||||
Net interest expense | 8 | 2 | 2 | 4 | 1 | 17 | ||||||||||||||||||
Net charge to Consolidated Income Statement | 27 | 5 | 37 | 6 | 2 | 77 | ||||||||||||||||||
Reconciliation of scheme assets (bid value) | ||||||||||||||||||||||||
At 1 January | 935 | 155 | 745 | 211 | - | 2,046 | ||||||||||||||||||
Movement in year | ||||||||||||||||||||||||
Administration expenses | (1) | - | (1) | - | - | (2) | ||||||||||||||||||
Interest income on scheme assets | 19 | 10 | 9 | 12 | - | 50 | ||||||||||||||||||
Arising on acquisition (note 30) | 10 | - | - | 216 | 28 | 254 | ||||||||||||||||||
Reclassified from held for sale | - | 633 | - | - | - | 633 | ||||||||||||||||||
Disposals | - | (705) | (39) | - | - | (744) | ||||||||||||||||||
Remeasurement adjustments | ||||||||||||||||||||||||
- return on scheme assets excluding interest income | 19 | 14 | (6) | (20) | (2) | 5 | ||||||||||||||||||
Employer contributions paid | 74 | 11 | 19 | 6 | 3 | 113 | ||||||||||||||||||
Contributions paid by plan participants | 3 | - | 11 | - | - | 14 | ||||||||||||||||||
Benefit and settlement payments | (43) | (11) | (47) | (21) | - | (122) | ||||||||||||||||||
Translation adjustment | - | 56 | 83 | 12 | 1 | 152 | ||||||||||||||||||
At 31 December | 1,016 | 163 | 774 | 416 | 30 | 2,399 |
216 |
CRH Annual Report on Form 20-F | 2015
27. Retirement Benefit Obligations | continued
Britain and | United States | |||||||||||||||||||||||
Eurozone | Northern Ireland | Switzerland | and Canada | Other | Total Group | |||||||||||||||||||
2015 | 2015 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||||||
m | m | m | m | m | m | |||||||||||||||||||
Reconciliation of actuarial value of liabilities |
||||||||||||||||||||||||
At 1 January |
(1,332) | (216) | (900) | (309) | - | (2,757) | ||||||||||||||||||
Movement in year |
||||||||||||||||||||||||
Current service cost |
(19) | (7) | (34) | (2) | (1) | (63) | ||||||||||||||||||
Past service costs |
1 | - | - | - | - | 1 | ||||||||||||||||||
Gain on settlements |
- | 4 | - | - | - | 4 | ||||||||||||||||||
Interest cost on scheme liabilities |
(27) | (12) | (11) | (16) | (1) | (67) | ||||||||||||||||||
Arising on acquisition (note 30) |
(67) | - | - | (235) | (39) | (341) | ||||||||||||||||||
Reclassified from held for sale |
- | (714) | - | - | - | (714) | ||||||||||||||||||
Disposals |
- | 781 | 47 | - | - | 828 | ||||||||||||||||||
Remeasurement adjustments |
||||||||||||||||||||||||
- experience variations |
28 | 11 | 15 | - | (1) | 53 | ||||||||||||||||||
- actuarial gain/(loss) from changes in financial assumptions |
144 | (9) | (43) | 26 | 3 | 121 | ||||||||||||||||||
- actuarial gain from changes in demographic assumptions |
- | 19 | - | 5 | - | 24 | ||||||||||||||||||
Contributions paid by plan participants |
(3) | - | (11) | - | - | (14) | ||||||||||||||||||
Benefit and settlement payments |
43 | 11 | 47 | 21 | - | 122 | ||||||||||||||||||
Translation adjustment |
- | (65) | (99) | (20) | - | (184) | ||||||||||||||||||
At 31 December |
(1,232) | (197) | (989) | (530) | (39) | (2,987) | ||||||||||||||||||
Recoverable deficit in schemes |
(216) | (34) | (215) | (114) | (9) | (588) | ||||||||||||||||||
Related deferred income tax asset |
34 | 3 | 42 | 43 | 4 | 126 | ||||||||||||||||||
Net pension liability |
(182) | (31) | (173) | (71) | (5) | (462) | ||||||||||||||||||
Split of scheme liabilities - funded and unfunded |
||||||||||||||||||||||||
Funded defined benefit pension schemes |
(1,135) | (197) | (984) | (496) | (36) | (2,848) | ||||||||||||||||||
Unfunded defined benefit pension schemes |
(91) | - | - | (30) | (3) | (124) | ||||||||||||||||||
Total - defined benefit pension schemes |
(1,226) | (197) | (984) | (526) | (39) | (2,972) | ||||||||||||||||||
Post-retirement healthcare obligations (unfunded) |
- | - | - | (4) | - | (4) | ||||||||||||||||||
Long-term service commitments (unfunded) |
(6) | - | (5) | - | - | (11) | ||||||||||||||||||
Actuarial value of liabilities (present value) |
(1,232) | (197) | (989) | (530) | (39) | (2,987) |
217 |
CRH Annual Report on Form 20-F | 2015
27. Retirement Benefit Obligations | continued
The equivalent disclosure for the prior year is as follows:
Analysis of defined benefit expense
Britain and | ||||||||||||||||||||
Eurozone | Northern Ireland | Switzerland | United States | Total Group | ||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2014 | ||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Charged in arriving at Group profit before finance costs: |
||||||||||||||||||||
Current service cost |
11 | 14 | 24 | 2 | 51 | |||||||||||||||
Administration expenses |
1 | 2 | - | - | 3 | |||||||||||||||
Past service costs |
(5) | - | - | - | (5) | |||||||||||||||
Subtotal |
7 | 16 | 24 | 2 | 49 | |||||||||||||||
Included in finance income and finance costs respectively: |
||||||||||||||||||||
Interest income on scheme assets |
(29) | (31) | (16) | (9) | (85) | |||||||||||||||
Interest cost on scheme liabilities |
37 | 34 | 17 | 11 | 99 | |||||||||||||||
Net interest expense |
8 | 3 | 1 | 2 | 14 | |||||||||||||||
Net charge to Consolidated Income Statement |
15 | 19 | 25 | 4 | 63 | |||||||||||||||
Reconciliation of scheme assets (bid value) |
||||||||||||||||||||
At 1 January |
790 | 662 | 683 | 179 | 2,314 | |||||||||||||||
Movement in year |
||||||||||||||||||||
Administration expenses |
(1) | (2) | - | - | (3) | |||||||||||||||
Interest income on scheme assets |
29 | 31 | 16 | 9 | 85 | |||||||||||||||
Remeasurement adjustments |
||||||||||||||||||||
- return on scheme assets excluding interest income |
87 | 54 | 34 | 4 | 179 | |||||||||||||||
Employer contributions paid |
72 | 19 | 17 | 7 | 115 | |||||||||||||||
Contributions paid by plan participants |
3 | - | 10 | - | 13 | |||||||||||||||
Benefit and settlement payments |
(45) | (25) | (30) | (14) | (114) | |||||||||||||||
Reclassified as held for sale |
- | (633) | - | - | (633) | |||||||||||||||
Translation adjustment |
- | 49 | 15 | 26 | 90 | |||||||||||||||
At 31 December |
935 | 155 | 745 | 211 | 2,046 |
218 |
CRH Annual Report on Form 20-F | 2015
27. Retirement Benefit Obligations | continued
Britain and | ||||||||||||||||||||
Eurozone | Northern Ireland | Switzerland | United States | Total Group | ||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2014 | ||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Reconciliation of actuarial value of liabilities |
||||||||||||||||||||
At 1 January |
(1,045) | (723) | (727) | (229) | (2,724) | |||||||||||||||
Movement in year |
||||||||||||||||||||
Current service cost |
(11) | (14) | (24) | (2) | (51) | |||||||||||||||
Past service costs |
5 | - | - | - | 5 | |||||||||||||||
Interest cost on scheme liabilities |
(37) | (34) | (17) | (11) | (99) | |||||||||||||||
Remeasurement adjustments |
||||||||||||||||||||
- experience variations |
20 | 1 | 7 | - | 28 | |||||||||||||||
- actuarial loss from changes in financial assumptions |
(306) | (129) | (142) | (27) | (604) | |||||||||||||||
- actuarial loss from changes in demographic assumptions |
- | - | - | (17) | (17) | |||||||||||||||
Contributions paid by plan participants |
(3) | - | (10) | - | (13) | |||||||||||||||
Benefit and settlement payments |
45 | 25 | 30 | 14 | 114 | |||||||||||||||
Reclassified as held for sale |
- | 714 | - | - | 714 | |||||||||||||||
Translation adjustment |
- | (56) | (17) | (37) | (110) | |||||||||||||||
At 31 December |
(1,332) | (216) | (900) | (309) | (2,757) | |||||||||||||||
Recoverable deficit in schemes |
(397) | (61) | (155) | (98) | (711) | |||||||||||||||
Related deferred income tax asset |
59 | 12 | 30 | 39 | 140 | |||||||||||||||
Net pension liability |
(338) | (49) | (125) | (59) | (571) | |||||||||||||||
Split of scheme liabilities - funded and unfunded |
||||||||||||||||||||
Funded defined benefit pension schemes |
(1,274) | (930) | (894) | (297) | (3,395) | |||||||||||||||
Unfunded defined benefit pension schemes |
(52) | - | - | (8) | (60) | |||||||||||||||
Total - defined benefit pension schemes |
(1,326) | (930) | (894) | (305) | (3,455) | |||||||||||||||
Post-retirement healthcare obligations (unfunded) |
- | - | - | (4) | (4) | |||||||||||||||
Long-term service commitments (unfunded) |
(6) | - | (6) | - | (12) | |||||||||||||||
Actuarial value of liabilities (present value) |
(1,332) | (930) | (900) | (309) | (3,471) | |||||||||||||||
Reclassified as held for sale |
- | 714 | - | - | 714 | |||||||||||||||
Actuarial value of liabilities (present value) excluding schemes reclassified as held for sale |
(1,332) | (216) | (900) | (309) | (2,757) |
219 |
CRH Annual Report on Form 20-F | 2015
27. Retirement Benefit Obligations | continued
The analysis of defined benefit expense for 2013 is as follows:
Britain and | ||||||||||||||||||||
Eurozone | Northern Ireland | Switzerland | United States | Total Group | ||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Charged in arriving at Group profit before finance costs: |
||||||||||||||||||||
Current service cost |
11 | 13 | 27 | - | 51 | |||||||||||||||
Administration expenses |
1 | 1 | 1 | - | 3 | |||||||||||||||
Past service costs |
(6) | (3) | (15) | - | (24) | |||||||||||||||
Subtotal |
6 | 11 | 13 | - | 30 | |||||||||||||||
Included in finance income and finance costs respectively: |
||||||||||||||||||||
Interest income on scheme assets |
(27) | (26) | (12) | (6) | (71) | |||||||||||||||
Interest cost on scheme liabilities |
39 | 30 | 14 | 10 | 93 | |||||||||||||||
Net interest expense |
12 | 4 | 2 | 4 | 22 | |||||||||||||||
Net charge to Consolidated Income Statement |
18 | 15 | 15 | 4 | 52 | |||||||||||||||
Past service costs also include curtailment and settlement gains. The 2013 curtailment gain arose due to the implementation of changes to the terms of a number of the Groups defined benefit pension schemes in Switzerland. |
|
220 |
CRH Annual Report on Form 20-F | 2015
27. Retirement Benefit Obligations | continued
Sensitivity analysis
The impact of a movement (as indicated below) in the principal actuarial assumptions would be as follows:
Britain and | United States | |||||||||||||||||||||||||
Eurozone | Northern Ireland | Switzerland | and Canada | Other | Total Group | |||||||||||||||||||||
2015 | 2015 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||||||||
m | m | m | m | m | m | |||||||||||||||||||||
Scheme liabilities at 31 December 2015 |
(1,232) | (197) | (989) | (530) | (39) | (2,987) | ||||||||||||||||||||
Revised liabilities |
||||||||||||||||||||||||||
Discount rate |
Decrease by 0.25% | (1,284) | (210) | (1,035) | (549) | (39) | (3,117) | |||||||||||||||||||
Inflation rate |
Increase by 0.25% | (1,280) | (204) | (989) | (530) | (39) | (3,042) | |||||||||||||||||||
Life expectancy |
Increase by 1 year | (1,236) | (205) | (1,014) | (545) | (39) | (3,039) | |||||||||||||||||||
The above sensitivity analysis are derived through changing the individual assumption while holding all other assumptions constant. |
| |||||||||||||||||||||||||
Split of scheme assets |
||||||||||||||||||||||||||
Investments quoted in active markets |
||||||||||||||||||||||||||
Equity instruments: |
||||||||||||||||||||||||||
- Developed markets |
290 | 90 | 282 | 108 | - | 770 | ||||||||||||||||||||
- Emerging markets |
9 | 1 | - | - | - | 10 | ||||||||||||||||||||
Debt instruments: |
||||||||||||||||||||||||||
- Non Government debt instruments |
297 | 29 | 262 | 139 | - | 727 | ||||||||||||||||||||
- Government debt instruments |
294 | 8 | 70 | 38 | 23 | 433 | ||||||||||||||||||||
Property |
45 | 12 | 35 | - | - | 92 | ||||||||||||||||||||
Cash and cash equivalents |
31 | - | - | 115 | 7 | 153 | ||||||||||||||||||||
Investment funds |
15 | 18 | - | 15 | - | 48 | ||||||||||||||||||||
Unquoted investments |
||||||||||||||||||||||||||
Equity instruments: |
||||||||||||||||||||||||||
- Developed markets |
10 | - | - | - | - | 10 | ||||||||||||||||||||
- Emerging markets |
- | 5 | - | - | - | 5 | ||||||||||||||||||||
Debt instruments: |
||||||||||||||||||||||||||
- Non Government debt instruments |
1 | - | - | - | - | 1 | ||||||||||||||||||||
Property |
3 | - | 98 | - | - | 101 | ||||||||||||||||||||
Cash and cash equivalents |
18 | - | 11 | 1 | - | 30 | ||||||||||||||||||||
Assets held by insurance company |
3 | - | 16 | - | - | 19 | ||||||||||||||||||||
Total assets |
1,016 | 163 | 774 | 416 | 30 | 2,399 |
221 |
CRH Annual Report on Form 20-F | 2015
27. Retirement Benefit Obligations | continued
The equivalent disclosure for the prior year is as follows:
Split of scheme assets
Britain and | ||||||||||||||||||||
Eurozone | Northern Ireland | Switzerland | United States | Total Group | ||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2014 | ||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Investments quoted in active markets |
||||||||||||||||||||
Equity instruments: |
||||||||||||||||||||
- Developed markets |
281 | 329 | 260 | 69 | 939 | |||||||||||||||
- Emerging markets |
10 | 55 | - | - | 65 | |||||||||||||||
Debt instruments: |
||||||||||||||||||||
- Non Government debt instruments |
279 | 166 | 226 | 59 | 730 | |||||||||||||||
- Government debt instruments |
265 | 165 | 65 | 67 | 562 | |||||||||||||||
Property |
37 | 41 | 31 | - | 109 | |||||||||||||||
Cash and cash equivalents |
16 | 2 | - | 16 | 34 | |||||||||||||||
Investment funds |
24 | 17 | - | - | 41 | |||||||||||||||
Unquoted investments |
||||||||||||||||||||
Equity instruments: |
||||||||||||||||||||
- Developed markets |
- | - | 1 | - | 1 | |||||||||||||||
- Emerging markets |
- | 6 | - | - | 6 | |||||||||||||||
Debt instruments: |
||||||||||||||||||||
- Non Government debt instruments |
- | - | 2 | - | 2 | |||||||||||||||
Property |
3 | - | 97 | - | 100 | |||||||||||||||
Cash and cash equivalents |
17 | 7 | 44 | - | 68 | |||||||||||||||
Assets held by insurance company |
3 | - | 19 | - | 22 | |||||||||||||||
Total assets |
935 | 788 | 745 | 211 | 2,679 | |||||||||||||||
Reclassified as held for sale |
- | (633) | - | - | (633) | |||||||||||||||
Total excluding schemes reclassified as held for sale |
935 | 155 | 745 | 211 | 2,046 |
222 |
CRH Annual Report on Form 20-F | 2015
27. Retirement Benefit Obligations | continued
Actuarial valuations - funding requirements and future cash flows
In accordance with statutory requirements in Ireland and Britain (minimum funding requirements), additional annual contributions and lump-sum payments are required to certain of the schemes in place in those jurisdictions. The funding requirements in relation to the Groups defined benefit schemes are assessed in accordance with the advice of independent and qualified actuaries and valuations are prepared in this regard either annually, where local requirements mandate that this be done, or at triennial intervals at a maximum in all other cases. In Ireland and Britain, either the attained age or projected unit credit methods are used in the valuations. In the Netherlands and Switzerland, the actuarial valuations reflect the current unit method, while the valuations are performed in accordance with the projected unit credit methodology in Germany. In the United States, valuations are performed using a variety of actuarial cost methodologies - current unit, projected unit and aggregate cost. In Canada, the projected unit credit method is used in valuations. The dates of the actuarial valuations range from January 2013 to December 2015.
In general, actuarial valuations are not available for public inspection; however, the results of valuations are advised to the members of the various schemes on request.
The maturity profile of the Groups contracted payments (on a discounted basis) to certain schemes in the Eurozone (Ireland) and Britain and Northern Ireland is as follows:
Eurozone | Britain and Northern Ireland |
Total | ||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||
m | m | m | m | m | m | m | m | m | ||||||||||||||||||||||||||||
Within one year | 18 | 18 | 18 | 2 | 8 | 7 | 20 | 26 | 25 | |||||||||||||||||||||||||||
Between one and two years | 17 | 17 | 17 | 2 | 8 | 7 | 19 | 25 | 24 | |||||||||||||||||||||||||||
Between two and three years | 17 | 17 | 16 | 2 | 7 | 7 | 19 | 24 | 23 | |||||||||||||||||||||||||||
Between three and four years | - | 17 | 16 | 2 | 7 | 6 | 2 | 24 | 22 | |||||||||||||||||||||||||||
Between four and five years | - | - | 15 | 2 | 7 | 6 | 2 | 7 | 21 | |||||||||||||||||||||||||||
After five years | - | - | - | 11 | 48 | 47 | 11 | 48 | 47 | |||||||||||||||||||||||||||
52 | 69 | 82 | 21 | 85 | 80 | 73 | 154 | 162 |
Employer contributions payable in the 2016 financial year including minimum funding payments (expressed using year-end exchange rates for 2015) are estimated at 105 million.
Average | duration and scheme composition |
Eurozone | Britain and Northern Ireland |
Switzerland | United States and Canada |
|||||||||||||||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||
Average duration of defined benefit obligation | 14.7 | 16.0 | 15.9 | 19.9 | 17.5 | 18.1 | 18.0 | 16.0 | 16.0 | 14.0 | 12.0 | 13.3 | ||||||||||||||||||||||||||||||||||||
(years) | ||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of defined benefit obligation by participant: | ||||||||||||||||||||||||||||||||||||||||||||||||
Active plan participants | 64% | 37% | 39% | 30% | 27% | 27% | 85% | 85% | 86% | 45% | 35% | 36% | ||||||||||||||||||||||||||||||||||||
Deferred plan participants | 12% | 21% | 20% | 38% | 34% | 34% | - | - | - | 17% | 30% | 30% | ||||||||||||||||||||||||||||||||||||
Retirees | 24% | 42% | 41% | 32% | 39% | 39% | 15% | 15% | 14% | 38% | 35% | 34% |
223 |
CRH Annual Report on Form 20-F | 2015
28. Share Capital and Reserves
2015 | 2014 | |||||||||||||||
Ordinary | Income | Ordinary | Income | |||||||||||||
Shares of | Shares of | Shares of | Shares of | |||||||||||||
Equity Share Capital | 0.32 each (i) | 0.02 each (ii) | 0.32 each (i) | 0.02 each (ii) | ||||||||||||
Authorised | ||||||||||||||||
At 1 January (m) | 320 | 20 | 320 | 20 | ||||||||||||
Increase in authorised share capital | 80 | 5 | - | - | ||||||||||||
At 31 December (m) | 400 | 25 | 320 | 20 | ||||||||||||
Number of Shares at 1 January (000s) | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
Increase in number of Shares (000s) | 250,000 | 250,000 | - | - | ||||||||||||
Number of Shares at 31 December (000s) | 1,250,000 | 1,250,000 | 1,000,000 | 1,000,000 | ||||||||||||
Allotted, called-up and fully paid | ||||||||||||||||
At 1 January (m) | 239 | 14 | 237 | 14 | ||||||||||||
Issue of share capital - equity placing | 25 | 1 | - | - | ||||||||||||
Issue of scrip shares in lieu of cash dividends (iii) | 2 | - | 2 | - | ||||||||||||
At 31 December (m) | 266 | 15 | 239 | 14 | ||||||||||||
The movement in the number of shares (expressed in 000s) during the financial year was as follows: | ||||||||||||||||
At 1 January | 744,525 | 744,525 | 739,231 | 739,231 | ||||||||||||
Issue of share capital - equity placing | 74,040 | 74,040 | - | - | ||||||||||||
Issue of scrip shares in lieu of cash dividends (iii) | 5,345 | 5,345 | 5,294 | 5,294 | ||||||||||||
At 31 December | 823,910 | 823,910 | 744,525 | 744,525 |
(i) | The Ordinary Shares represent 93.73% of the total issued share capital. |
(ii) | The Income Shares, which represent 5.86% of the total issued share capital, were created on 29 August 1988 for the express purpose of giving shareholders the choice of receiving dividends on either their Ordinary Shares or on their Income Shares (by notice of election to the Company). The Income Shares carried a different tax credit to the Ordinary Shares. The creation of the Income Shares was achieved by the allotment of fully paid Income Shares to each shareholder equal to his/her holding of Ordinary Shares but the shareholder is not entitled to an Income Share certificate, as a certificate for Ordinary Shares is deemed to include an equal number of Income Shares and a shareholder may only sell, transfer or transmit Income Shares with an equivalent number of Ordinary Shares. Income Shares carry no voting rights. Due to changes in Irish tax legislation since the creation of the Income Shares, dividends on the Companys shares no longer carry a tax credit. As elections made by shareholders to receive dividends on their holding of Income Shares were no longer relevant, the Articles of Association were amended on 8 May 2002 to cancel such elections. |
224 |
CRH Annual Report on Form 20-F | 2015
28. Share Capital and Reserves | continued
Share schemes
The aggregate number of shares which may be committed for issue in respect of any share option scheme, savings-related share option scheme, share participation scheme, performance share plan or any subsequent option scheme or share plan, may not exceed 10% of the issued ordinary share capital from time to time.
Share option schemes
Details of share options granted under the Companys share option schemes and the terms attaching thereto are provided in note 7 to the financial statements and on page 130 of the Directors Remuneration Report.
Number of Shares | ||||||||
2015 | 2014 | |||||||
Options exercised during the year (satisfied by the reissue of Treasury Shares) |
2,876,066 | 1,307,406 | ||||||
Share participation schemes
As at 31 December 2015, 7,613,252 (2014: 7,509,125) Ordinary Shares had been appropriated to participation schemes. In the financial year ended 31 December 2015, the appropriation of 104,127 shares was satisfied by the reissue of Treasury Shares (2014: 123,078). The Ordinary Shares appropriated pursuant to these schemes were issued at market value on the dates of appropriation. The shares issued pursuant to these schemes are excluded from the scope of IFRS 2 Share-based Payment and are hence not factored into the expense computation and the associated disclosures in note 7.
(iii) | Issue of scrip shares in lieu of cash dividends: |
Number of Shares | Price per Share | |||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||||||||
May 2015 - Final 2014 dividend (2014: Final 2013 dividend; |
5,056,633 | 4,081,636 | 2,011,165 | | 24.60 | | 20.99 | | 17.01 | |||||||||||||||
October 2015 - Interim 2015 dividend (2014: Interim 2014 dividend; |
288,769 | 1,212,700 | 3,398,992 | | 26.16 | | 17.81 | | 15.79 | |||||||||||||||
Total |
5,345,402 | 5,294,336 | 5,410,157 |
225 |
CRH Annual Report on Form 20-F | 2015
28. Share Capital and Reserves | continued
5% Cumulative Preference Shares of 1.27 each (iv) |
7% A Cumulative Preference Shares of 1.27 each (v) |
|||||||||||||||
Preference Share Capital | Number of Shares 000s |
m | Number of Shares 000s |
m | ||||||||||||
Authorised | ||||||||||||||||
At 1 January 2015 and 31 December 2015 | 150 | - | 872 | 1 | ||||||||||||
Allotted, called-up and fully paid | ||||||||||||||||
At 1 January 2015 and 31 December 2015 | 50 | - | 872 | 1 | ||||||||||||
There was no movement in the number of cumulative preference shares in either the current or the prior year.
(iv) | The holders of the 5% Cumulative Preference Shares are entitled to a fixed cumulative preference dividend at a rate of 5% per annum and priority in a winding-up to repayment of capital, but have no further right to participate in profits or assets and are not entitled to be present or vote at general meetings unless their dividend is in arrears. Dividends on the 5% Cumulative Preference Shares are payable half-yearly on 15 April and 15 October in each year. The 5% Cumulative Preference Shares represent 0.02% of the total issued share capital. |
(v) | The holders of the 7% A Cumulative Preference Shares are entitled to a fixed cumulative preference dividend at a rate of 7% per annum, and subject to the rights of the holders of the 5% Cumulative Preference Shares, priority in a winding-up to repayment of capital, but have no further right to participate in profits or assets and are not entitled to be present or vote at general meetings unless their dividend is in arrears or unless the business of the meeting includes certain matters, which are specified in the Articles of Association. Dividends on the 7% A Cumulative Preference Shares are payable half-yearly on 5 April and 5 October in each year. The 7% A Cumulative Preference Shares represent 0.39% of the total issued share capital. |
Treasury Shares/own shares | 2015 | 2014 | ||||||
m | m | |||||||
At 1 January | (76) | (118) | ||||||
Treasury Shares/own shares reissued | 51 | 42 | ||||||
Shares acquired by Employee Benefit Trust (own shares) | (3) | - | ||||||
At 31 December | (28) | (76) |
As at the balance sheet date, the total number of Treasury Shares held was 795,262 (2014: 3,775,455); the nominal value of these shares was 0.3 million (2014: 1 million). During the year ended 31 December 2015, 2,980,193 (2014: 1,430,484) shares were reissued to satisfy exercises and appropriations under the Groups share option and share participation schemes. These reissued Treasury Shares were previously purchased at an average price of 17.12 (2014: 19.40). No Treasury Shares were purchased during 2015 or 2014.
During 2015, the Employee Benefit Trust purchased 95,843 shares on behalf of CRH plc in respect of awards under the 2014 Deferred Share Bonus Plan. These shares were purchased at a price of £19.79 (26.74) per share. As at 31 December 2015, the Employee Benefit Trust held 489,654 Ordinary Shares on behalf of CRH plc in respect of awards made under the 2013 Restricted Share Plan and the 2014 Deferred Share Bonus Plan. The nominal value of own shares, on which dividends have been waived by the Trustees in respect of the 2013 Restricted Share Plan and the 2014 Deferred Share Bonus Plan amounted to 0.2 million at 31 December 2015 (2014: 0.1 million).
226 |
CRH Annual Report on Form 20-F | 2015
28. Share Capital and Reserves | continued
Reconciliation of shares issued to net proceeds
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
Shares issued at nominal amount: | ||||||||||||
- share capital issued - equity placing | 26 | - | - | |||||||||
- scrip shares issued in lieu of cash dividends | 2 | 2 | 2 | |||||||||
Premium on shares issued | 1,722 | 105 | 86 | |||||||||
Total value of shares issued | 1,750 | 107 | 88 | |||||||||
Issue of scrip shares in lieu of cash dividends (note 11) | (132) | (107) | (88) | |||||||||
Proceeds from issue of shares | 1,618 | - | - | |||||||||
Expenses paid in respect of share issues | (25) | - | - | |||||||||
Net proceeds from issue of shares | 1,593 | - | - |
In connection with the acquisition of LH Assets, CRH completed a placing of 74,039,915 new ordinary shares in February 2015, raising gross proceeds of approximately 1.6 billion, and representing approximately 9.99% of CRHs issued ordinary share capital before the placing.
Share Premium
2015 | 2014 | |||||||
m | m | |||||||
At 1 January | 4,324 | 4,219 | ||||||
Premium arising on shares issued | 1,722 | 105 | ||||||
Expenses paid in respect of shares issued | (25) | - | ||||||
At 31 December | 6,021 | 4,324 |
29. Commitments under Operating and Finance Leases
Operating leases
Future minimum rentals payable under non-cancellable operating leases at 31 December are as follows:
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
Within one year | 370 | 310 | 301 | |||||||||
After one year but not more than five years | 915 | 663 | 596 | |||||||||
More than five years | 831 | 417 | 357 | |||||||||
2,116 | 1,390 | 1,254 |
Finance leases
Future minimum lease payments under finance leases are not material for the Group.
227 |
CRH Annual Report on Form 20-F | 2015
30. Business Combinations
The acquisitions completed during the year ended 31 December 2015 by reportable segment, together with the completion dates, are detailed below; these transactions entailed the acquisition of an effective 100% stake except where indicated to the contrary:
Europe Heavyside:
Poland: selected assets of Stal-Bruk Sp. z o.o. (1 December).
Europe Lightside:
Australia: BVCI Pty Limited (5 June), Netherlands: increased stake in Handelsmaatschappij Caralu B.V. from 50% to 100% (30 November).
Europe Distribution:
Switzerland: Kiener & Wittlin (1 August).
Americas Materials:
Idaho: assets formerly of Gordon Paving (25 March); Iowa: selected assets of McAlister Aggregates (23 February); Michigan and North Carolina: Colas Barrett and Larco assets (27 March); New York: assets of Hudson River Construction Company and Albany Asphalt & Aggregates (3 April); Ohio: increased stake in Scioto Materials LLC from 50% to 51% (1 July); Texas: selected assets of State Development Corporation (11 May), selected assets of Martin Marietta (23 October); Utah: selected assets of Kunkler Trust (15 October); Virginia: increased stake in Boxley Aggregates from 50% to 100% and the selected assets of the Boxley Corporation (31 December); Canada: selected assets of Promix Beton (30 October).
Americas Products:
C.R. Laurence (CRL) (3 September), headquartered in Los Angeles, California with operations in 33 sites in North America in addition to the United Kingdom, Germany, Denmark and Australia; Arizona: Western Block Company (17 December); Minnesota: Anchor Wall Systems, Inc. and Anchor Block Company (8 June); Tennessee: Red River Concrete Products (17 December).
LH Assets:
On 31 July 2015 (and 15 September 2015 for the Philippines) CRH acquired certain assets of Lafarge S.A. and Holcim Limited. The acquired assets consist of over 700 locations in 11 countries: Brazil, Canada, France (including La Reunion), Germany, Hungary, the Philippines (55%), Romania, Serbia, Slovakia, the United Kingdom and the United States.
228 |
CRH Annual Report on Form 20-F | 2015
30. Business Combinations | continued
Other | ||||||||||||||||||||||||
LH Assets | CRL | acquisitions | Total | Total | Total | |||||||||||||||||||
2015 | 2015 | 2015 | 2015 | 2014 | 2013 | |||||||||||||||||||
m | m | m | m | m | m | |||||||||||||||||||
Assets |
||||||||||||||||||||||||
Non-current assets | ||||||||||||||||||||||||
Property, plant and equipment | 5,288 | 26 | 99 | 5,413 | 91 | 342 | ||||||||||||||||||
Intangible assets | 26 | 252 | 20 | 298 | 16 | 39 | ||||||||||||||||||
Equity accounted investments | 24 | - | - | 24 | - | 2 | ||||||||||||||||||
Other financial assets | 5 | - | - | 5 | - | - | ||||||||||||||||||
Total non-current assets | 5,343 | 278 | 119 | 5,740 | 107 | 383 | ||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Inventories | 492 | 105 | 24 | 621 | 23 | 41 | ||||||||||||||||||
Trade and other receivables (i) | 1,445 | 69 | 19 | 1,533 | 20 | 53 | ||||||||||||||||||
Cash and cash equivalents | 463 | 29 | 2 | 494 | 1 | 11 | ||||||||||||||||||
Total current assets | 2,400 | 203 | 45 | 2,648 | 44 | 105 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Trade and other payables | (1,500) | (31) | (18) | (1,549) | (17) | (80) | ||||||||||||||||||
Provisions for liabilities | (580) | - | (1) | (581) | (1) | (14) | ||||||||||||||||||
Retirement benefit obligations | (87) | - | - | (87) | - | - | ||||||||||||||||||
Interest-bearing loans and borrowings and finance leases | (169) | (6) | - | (175) | (7) | (44) | ||||||||||||||||||
Current income tax liabilities | (147) | (2) | - | (149) | - | - | ||||||||||||||||||
Deferred income tax liabilities | (520) | (106) | (1) | (627) | (2) | (8) | ||||||||||||||||||
Total liabilities | (3,003) | (145) | (20) | (3,168) | (27) | (146) | ||||||||||||||||||
Total identifiable net assets at fair value | 4,740 | 336 | 144 | 5,220 | 124 | 342 | ||||||||||||||||||
Goodwill arising on acquisition (ii) | 2,307 | 833 | 47 | 3,187 | 31 | 169 | ||||||||||||||||||
Excess of fair value of identifiable net assets over consideration paid (ii) | - | - | - | - | - | (2) | ||||||||||||||||||
Joint Ventures becoming subsidiaries | - | - | (25) | (25) | - | - | ||||||||||||||||||
Non-controlling interests* | (486) | - | (3) | (489) | - | (1) | ||||||||||||||||||
Total consideration | 6,561 | 1,169 | 163 | 7,893 | 155 | 508 | ||||||||||||||||||
Consideration satisfied by: | ||||||||||||||||||||||||
Cash payments | 6,561 | 1,072 | 157 | 7,790 | 152 | 347 | ||||||||||||||||||
Asset exchange (note 4) | - | - | - | - | - | 144 | ||||||||||||||||||
Deferred consideration (stated at net present cost) | - | 97 | - | 97 | 1 | 4 | ||||||||||||||||||
Contingent consideration | - | - | - | - | 2 | 13 | ||||||||||||||||||
Profit on step acquisition | - | - | 6 | 6 | - | - | ||||||||||||||||||
Total consideration | 6,561 | 1,169 | 163 | 7,893 | 155 | 508 | ||||||||||||||||||
Net cash outflow arising on acquisition | ||||||||||||||||||||||||
Cash consideration | 6,561 | 1,072 | 157 | 7,790 | 152 | 347 | ||||||||||||||||||
Less: cash and cash equivalents acquired | (463) | (29) | (2) | (494) | (1) | (11) | ||||||||||||||||||
Total outflow in the Consolidated Statement of Cash Flows | 6,098 | 1,043 | 155 | 7,296 | 151 | 336 |
* | Measured at fair value. |
229 |
CRH Annual Report on Form 20-F | 2015
30. Business Combinations | continued
The acquisitions of LH Assets and CRL have been deemed to be material acquisitions. None of the remaining acquisitions completed during the financial years 2015, 2014 or 2013 were considered sufficiently material to warrant separate disclosure. The acquisition of LH Assets was completed in the second half of 2015 and spanned 11 countries. The fair value of the identifiable net assets acquired was 4.2 billion (after deducting non-controlling interests of 0.5 billion) and the transaction resulted in the recognition of 2.3 billion of goodwill. Due to both the timing of when the acquisition was completed and the size and scale of the acquisition, the allocation of the purchase price and the determination of the fair values of identifiable assets acquired and liabilities assumed as disclosed above are only provisional (principally PP&E, provisions and the associated goodwill and deferred tax impacts). The fair value assigned to identifiable assets and liabilities acquired is based on estimates and assumptions made by management at the time of acquisition. CRH may revise its preliminary purchase price allocation during the 12 month window as permitted under IFRS 3 Business Combinations. Where the impact of these revisions is sufficiently material, it may result in the restatement of the 2015 Consolidated Balance Sheet to take account of these valuation updates; where the impact is not material, CRH will provide additional disclosures to outline the adjustments made.
The balance sheet as disclosed above for CRL should also be considered provisional (principally intangible assets and the related deferred tax impacts) and will be subject to the same requirements as outlined above for LH Assets.
(i) Trade and other receivables
Gross contractual amounts due |
Allowance for impairment |
Fair value | ||||||||||||||||||||||||||||||||||
2015 m |
2014 m |
2013 m |
2015 m |
2014 m |
2013 m |
2015 m |
2014 m |
2013 m |
||||||||||||||||||||||||||||
LH Assets | 1,499 | - | - | (54) | - | - | 1,445 | - | - | |||||||||||||||||||||||||||
CRL | 70 | - | - | (1) | - | - | 69 | - | - | |||||||||||||||||||||||||||
Other acquisitions | 19 | 22 | 57 | - | (2) | (4) | 19 | 20 | 53 | |||||||||||||||||||||||||||
1,588 | 22 | 57 | (55) | (2) | (4) | 1,533 | 20 | 53 |
(ii) The principal factor contributing to the recognition of goodwill on acquisitions entered into by the Group is the realisation of cost savings and other synergies with existing entities in the Group which do not qualify for separate recognition as intangible assets. Due to the asset-intensive nature of operations in the Europe Heavyside and Americas Materials business segments, no significant intangible assets are recognised on business combinations in these segments. 254 million of the goodwill recognised in respect of acquisitions completed in 2015 is expected to be deductible for tax purposes (2014: 18 million). No excess of fair value of identifiable net assets over consideration arose during the year (2014: nil million; 2013: 2 million).
Acquisition-related costs
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
LH Assets | 144 | - | - | |||||||||
CRL | 6 | - | - | |||||||||
Other acquisitions | 2 | 2 | 2 | |||||||||
152 | 2 | 2 |
Acquisition-related costs amounting to 152 million (2014: 2 million; 2013: 2 million), have been included in operating costs in the Consolidated Income Statement (note 2).
230 |
CRH Annual Report on Form 20-F | 2015
30. Business Combinations | continued
The following table analyses the 19 acquisitions (2014: 21 acquisitions; 2013: 25 acquisitions) by reportable segment and provides details of the goodwill and consideration figures arising in each of those segments:
Reportable segments | Number of acquisitions
|
Goodwill
|
Consideration
|
|||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||
m | m | m | m | m | m | |||||||||||||||||||||||||||||||
Europe Heavyside | 1 | 2 | 6 | - | 2 | 80 | 5 | 7 | 265 | |||||||||||||||||||||||||||
Europe Lightside | 2 | - | - | 6 | - | - | 12 | - | - | |||||||||||||||||||||||||||
Europe Distribution | 1 | 6 | 3 | - | 9 | 10 | 1 | 20 | 15 | |||||||||||||||||||||||||||
Europe | 4 | 8 | 9 | 6 | 11 | 90 | 18 | 27 | 280 | |||||||||||||||||||||||||||
Americas Materials | 10 | 8 | 9 | 32 | 5 | 19 | 80 | 71 | 76 | |||||||||||||||||||||||||||
Americas Products | 3 | 5 | 4 | 9 | 17 | 48 | 65 | 59 | 124 | |||||||||||||||||||||||||||
Americas Distribution | - | - | 3 | - | - | 8 | - | - | 22 | |||||||||||||||||||||||||||
Americas | 13 | 13 | 16 | 41 | 22 | 75 | 145 | 130 | 222 | |||||||||||||||||||||||||||
Unallocated goodwill (note 14) | ||||||||||||||||||||||||||||||||||||
LH Assets | 1 | - | - | 2,307 | - | - | 6,561 | - | - | |||||||||||||||||||||||||||
CRL | 1 | - | - | 833 | - | - | 1,169 | - | - | |||||||||||||||||||||||||||
Total Group | 19 | 21 | 25 | 3,187 | 33 | 165 | 7,893 | 157 | 502 | |||||||||||||||||||||||||||
Adjustments to provisional fair values of prior year acquisitions | - | (2) | 4 | - | (2) | 6 | ||||||||||||||||||||||||||||||
Total | 3,187 | 31 | 169 | 7,893 | 155 | 508 |
231 |
CRH Annual Report on Form 20-F | 2015
30. Business Combinations | continued
The post-acquisition impact of acquisitions completed during the year on the Groups profit/(loss) for the financial year was as follows:
Other | ||||||||||||||||||||||||
LH Assets | CRL | acquisitions | Total | Total | Total | |||||||||||||||||||
2015 | 2015 | 2015 | 2015 | 2014 | 2013 | |||||||||||||||||||
m | m | m | m | m | m | |||||||||||||||||||
Revenue | 2,418 | 162 | 99 | 2,679 | 122 | 306 | ||||||||||||||||||
(Loss)/profit before tax for the financial year | (26) | 13 | 6 | (7) | 7 | 8 |
The revenue and profit of the Group for the financial year determined in accordance with IFRS as though the acquisitions effected during the year had been at the beginning of the year would have been as follows:
Pro-forma 2015 | ||||||||||||||||
2015 acquisitions m |
CRH Group excluding 2015 acquisitions m |
Pro-forma consolidated Group m |
Pro-forma 2014 m |
|||||||||||||
Revenue | 6,261 | 20,956 | 27,217 | 18,972 | ||||||||||||
Profit before tax for the financial year | 201 | 1,040 | 1,241 | 764 | ||||||||||||
Pro-forma 2014 | ||||||||||||||||
2014 acquisitions m |
CRH Group excluding 2014 acquisitions m |
Pro-forma consolidated Group m |
Pro-forma 2013 m |
|||||||||||||
Revenue | 182 | 18,790 | 18,972 | 18,159 | ||||||||||||
Profit/(loss) before tax for the financial year | 10 | 754 | 764 | (220) |
In accordance with the terms of the acquisition agreements, CRH and Lafarge S.A Holcim Limited are currently engaged in a process to finalise the post-completion consideration for the acquisition of the LH Assets as detailed above. That process is not sufficiently advanced to make a financial adjustment in respect of the final purchase price. CRH will continue to monitor the situation and will reflect any financial adjustments when there is sufficient evidence.
There have been no acquisitions completed subsequent to the balance sheet date which would be individually material to the Group, thereby requiring disclosure under either IFRS 3 or IAS 10 Events after the Balance Sheet Date. Development updates, giving details of acquisitions which do not require separate disclosure on the grounds of materiality, are typically published in January and July each year.
232 |
CRH Annual Report on Form 20-F | 2015
31. Non-controlling Interests
The total non-controlling interest at 31 December 2015 is 529 million (2014: 21 million) of which 467 million relates to Republic Cement & Building Materials (RCBM), Inc. and Luzon Continental Land Corporation (LCLC). The non-controlling interests in respect of the Groups other subsidiaries are not considered to be material.
Economic ownership | ||||||
Name | Principal activity | Country of incorporation | interest held by non- | |||
controlling interest | ||||||
Republic Cement & Building Materials, Inc. and Luzon Continental Land Corporation |
Manufacture, development and sale of cement and building materials
|
Philippines | 45% |
The following is summarised financial information for Republic Cement & Building Materials, Inc. and Luzon Continental Land Corporation prepared in accordance with IFRS 12 Disclosure of Interests in Other Entities. This information is before intragroup eliminations with other Group companies.
Summarised financial information
2015 m |
||||
Loss for the period since acquisition | (5) | |||
Current assets | 141 | |||
Non-current assets | 1,459 | |||
Current liabilities | (150) | |||
Non-current liabilities | (675) | |||
Net assets | 775 | |||
Cash flows from operating activities | (2) | |||
Dividends paid to non-controlling interests during the period | (1) |
CRH holds 40% of the equity share capital in RCBM and LCLC and has an economic interest of 55% of the combined Philippines business. Non-controlling interest relates to another party who holds 60% of the equity share capital in RCBM and LCLC and has an economic interest of 45% of the combined Philippines business. CRH has obtained control (as defined under IFRS 10 Consolidated Financial Statements) by virtue of contractual arrangements which give CRH power to direct the relevant non-nationalised activities of the business, in compliance with Philippine law.
233 |
CRH Annual Report on Form 20-F | 2015
32. Related Party Transactions
The principal related party relationships requiring disclosure in the Consolidated Financial Statements of the Group under IAS 24 Related Party Disclosures pertain to: the existence of subsidiaries, joint ventures and associates; transactions with these entities entered into by the Group; the identification and compensation of key management personnel; and lease arrangements.
Subsidiaries, joint ventures and associates
The Consolidated Financial Statements include the financial statements of the Company (CRH plc, the ultimate parent) and its subsidiaries, joint ventures and associates as documented in the accounting policies on pages 161 to 171. The Groups principal subsidiaries, joint ventures and associates are disclosed in Exhibit 8 of this Annual Report on Form 20F.
Sales to and purchases from joint ventures are immaterial in 2015, 2014 and 2013. Loans extended by the Group to joint ventures and associates (see note 15) are included in financial assets. Sales to and purchases from associates during the financial year ended 31 December 2015 amounted to 48 million (2014: 33 million; 2013: 24 million) and 422 million (2014: 411 million; 2013: 411 million) respectively. Amounts receivable from and payable to equity accounted investments (arising from the aforementioned sales and purchases transactions) as at the balance sheet date are included as separate line items in notes 17 and 18 to the Consolidated Financial Statements.
Terms and conditions of transactions with subsidiaries, joint ventures and associates
In general, the transfer pricing policy implemented by the Group across its subsidiaries is market-based. Sales to and purchases from joint ventures and associates are conducted in the ordinary course of business and on terms equivalent to those that prevail in arms-length transactions. The outstanding balances included in receivables and payables as at the balance sheet date in respect of transactions with joint ventures and associates are unsecured and settlement arises in cash. No guarantees have been either requested or provided in relation to related party receivables and payables. Loans to joint ventures and associates (as disclosed in note 15) are extended on normal commercial terms in the ordinary course of business with interest accruing and, in general, paid to the Group at predetermined intervals.
Key management personnel
For the purposes of the disclosure requirements of IAS 24, the term key management personnel (i.e. those persons having authority and responsibility for planning, directing and controlling the activities of the Company) comprises the Board of Directors which manages the business and affairs of the Company.
Key management remuneration amounted to:
2015 | 2014 | 2013 | ||||||||||
m | m | m | ||||||||||
Short-term benefits | 10 | 9 | 7 | |||||||||
Post-employment benefits | 1 | 1 | 2 | |||||||||
Share-based payments - calculated in accordance with the principles disclosed in note 7 | 2 | 2 | 2 | |||||||||
Total | 13 | 12 | 11 |
Other than these compensation entitlements, there were no other transactions involving key management personnel.
Lease arrangements
CRH has a number of lease arrangements in place with related parties across the Group, which have been negotiated on an arms-length basis at market rates. We do not consider these arrangements to be material either individually or collectively in the context of the 2015, 2014 and 2013 Consolidated Financial Statements.
234 |
CRH Annual Report on Form 20-F | 2015
33. Supplemental Guarantor Information
The following consolidating information presents Condensed Consolidated Balance Sheets as at 31 December 2015 and 2014 and Condensed Consolidated Income Statements and Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Cash Flows for the years ended 31 December 2015, 2014 and 2013 of the Company and CRH America, Inc. as required by Article 3-10(c) of Regulation S-X. This information is prepared in accordance with IFRS with the exception that the subsidiaries are accounted for as investments under the equity method rather than being consolidated. CRH America, Inc. is 100% owned by the Company. The Guarantees of the Guarantor are full and unconditional.
CRH America Inc. (the Issuer) has the following notes which are fully and unconditionally guaranteed by CRH plc (the Guarantor):
US$113.746 million 4.125% Notes due 2016 listed on the New York Stock Exchange
US$518.463 million 6.000% Notes due 2016 listed on the New York Stock Exchange
US$650 million 8.125% Notes due 2018 listed on the New York Stock Exchange
US$400 million 5.750% Notes due 2021 listed on the New York Stock Exchange
US$1,250 million 3.875% Notes due 2025 listed on the Irish Stock Exchange
US$300 million 6.40% Notes due 2033 listed on the Irish Stock Exchange
US$500 million 5.125% Notes due 2045 listed on the Irish Stock Exchange
235 |
CRH Annual Report on Form 20-F | 2015
33. Supplemental Guarantor Information | continued
Supplemental Condensed Consolidated Balance Sheet as at 31 December 2015
Guarantor | Issuer | Non-Guarantor subsidiaries |
Eliminate and reclassify |
CRH and subsidiaries |
||||||||||||||||
m | m | m | m | m | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Non-current assets | ||||||||||||||||||||
Property, plant and equipment | - | - | 13,062 | - | 13,062 | |||||||||||||||
Intangible assets | - | - | 7,820 | - | 7,820 | |||||||||||||||
Subsidiaries | 5,925 | 280 | 1,682 | (7,887) | - | |||||||||||||||
Investments accounted for using the equity method | - | - | 1,317 | - | 1,317 | |||||||||||||||
Advances to subsidiaries and parent undertakings | - | 5,019 | - | (5,019) | - | |||||||||||||||
Other financial assets | - | - | 28 | - | 28 | |||||||||||||||
Other receivables | - | - | 149 | - | 149 | |||||||||||||||
Derivative financial instruments | - | 29 | 56 | - | 85 | |||||||||||||||
Deferred income tax assets | - | - | 149 | - | 149 | |||||||||||||||
Total non-current assets | 5,925 | 5,328 | 24,263 | (12,906) | 22,610 | |||||||||||||||
Current assets | ||||||||||||||||||||
Inventories | - | - | 2,873 | - | 2,873 | |||||||||||||||
Trade and other receivables | - | 13 | 3,964 | - | 3,977 | |||||||||||||||
Advances to subsidiaries and parent undertakings | 7,784 | - | 1,091 | (8,875) | - | |||||||||||||||
Current income tax recoverable | - | - | 5 | - | 5 | |||||||||||||||
Derivative financial instruments | - | 9 | 15 | - | 24 | |||||||||||||||
Cash and cash equivalents | 408 | - | 2,110 | - | 2,518 | |||||||||||||||
Total current assets | 8,192 | 22 | 10,058 | (8,875) | 9,397 | |||||||||||||||
Total assets | 14,117 | 5,350 | 34,321 | (21,781) | 32,007 | |||||||||||||||
EQUITY | ||||||||||||||||||||
Capital and reserves attributable to the Companys equity holders | 13,015 | 1,810 | 6,077 | (7,887) | 13,015 | |||||||||||||||
Non-controlling interests | - | - | 529 | - | 529 | |||||||||||||||
Total equity | 13,015 | 1,810 | 6,606 | (7,887) | 13,544 | |||||||||||||||
LIABILITIES | ||||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||
Interest-bearing loans and borrowings | - | 2,867 | 5,598 | - | 8,465 | |||||||||||||||
Derivative financial instruments | - | - | 5 | - | 5 | |||||||||||||||
Deferred income tax liabilities | - | - | 2,023 | - | 2,023 | |||||||||||||||
Other payables | - | - | 410 | - | 410 | |||||||||||||||
Advances from subsidiary and parent undertakings | - | - | 5,019 | (5,019) | - | |||||||||||||||
Retirement benefit obligations | - | - | 588 | - | 588 | |||||||||||||||
Provisions for liabilities | - | - | 603 | - | 603 | |||||||||||||||
Total non-current liabilities | - | 2,867 | 14,246 | (5,019) | 12,094 | |||||||||||||||
Current liabilities | ||||||||||||||||||||
Trade and other payables | - | 53 | 4,708 | - | 4,761 | |||||||||||||||
Advances from subsidiary and parent undertakings | 1,091 | - | 7,784 | (8,875) | - | |||||||||||||||
Current income tax liabilities | - | - | 401 | - | 401 | |||||||||||||||
Interest-bearing loans and borrowings | 11 | 620 | 125 | - | 756 | |||||||||||||||
Derivative financial instruments | - | - | 19 | - | 19 | |||||||||||||||
Provisions for liabilities | - | - | 432 | - | 432 | |||||||||||||||
Total current liabilities | 1,102 | 673 | 13,469 | (8,875) | 6,369 | |||||||||||||||
Total liabilities | 1,102 | 3,540 | 27,715 | (13,894) | 18,463 | |||||||||||||||
Total equity and liabilities | 14,117 | 5,350 | 34,321 | (21,781) | 32,007 |
236 |
CRH Annual Report on Form 20-F | 2015
33. Supplemental Guarantor Information | continued
Supplemental Condensed Consolidated Balance Sheet as at 31 December 2014
Guarantor | Issuer | Non-Guarantor subsidiaries |
Eliminate and reclassify |
CRH and subsidiaries |
||||||||||||||||
m | m | m | m | m | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Non-current assets | ||||||||||||||||||||
Property, plant and equipment | - | - | 7,422 | - | 7,422 | |||||||||||||||
Intangible assets | - | - | 4,173 | - | 4,173 | |||||||||||||||
Subsidiaries | 4,239 | 218 | 1,682 | (6,139) | - | |||||||||||||||
Investments accounted for using the equity method | - | - | 1,329 | - | 1,329 | |||||||||||||||
Advances to subsidiaries and parent undertakings | - | 3,923 | - | (3,923) | - | |||||||||||||||
Other financial assets | - | - | 23 | - | 23 | |||||||||||||||
Other receivables | - | - | 85 | - | 85 | |||||||||||||||
Derivative financial instruments | - | 48 | 39 | - | 87 | |||||||||||||||
Deferred income tax assets | - | - | 171 | - | 171 | |||||||||||||||
Total non-current assets | 4,239 | 4,189 | 14,924 | (10,062) | 13,290 | |||||||||||||||
Current assets | ||||||||||||||||||||
Inventories | - | - | 2,260 | - | 2,260 | |||||||||||||||
Trade and other receivables | - | 10 | 2,634 | - | 2,644 | |||||||||||||||
Advances to subsidiaries and parent undertakings | 5,532 | - | 1,003 | (6,535) | - | |||||||||||||||
Current income tax recoverable | - | - | 15 | - | 15 | |||||||||||||||
Derivative financial instruments | - | - | 15 | - | 15 | |||||||||||||||
Cash and cash equivalents | 1,411 | 25 | 1,826 | - | 3,262 | |||||||||||||||
Assets held for sale | - | - | 531 | - | 531 | |||||||||||||||
Total current assets | 6,943 | 35 | 8,284 | (6,535) | 8,727 | |||||||||||||||
Total assets | 11,182 | 4,224 | 23,208 | (16,597) | 22,017 | |||||||||||||||
EQUITY | ||||||||||||||||||||
Capital and reserves attributable to the Companys equity holders | 10,177 | 1,606 | 4,533 | (6,139) | 10,177 | |||||||||||||||
Non-controlling interests | - | - | 21 | - | 21 | |||||||||||||||
Total equity | 10,177 | 1,606 | 4,554 | (6,139) | 10,198 | |||||||||||||||
LIABILITIES | ||||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||
Interest-bearing loans and borrowings | - | 2,518 | 2,901 | - | 5,419 | |||||||||||||||
Derivative financial instruments | - | - | 3 | - | 3 | |||||||||||||||
Deferred income tax liabilities | - | - | 1,305 | - | 1,305 | |||||||||||||||
Other payables | - | - | 257 | - | 257 | |||||||||||||||
Advances from subsidiary and parent undertakings | - | - | 3,923 | (3,923) | - | |||||||||||||||
Retirement benefit obligations | - | - | 711 | - | 711 | |||||||||||||||
Provisions for liabilities | - | - | 257 | - | 257 | |||||||||||||||
Total non-current liabilities | - | 2,518 | 9,357 | (3,923) | 7,952 | |||||||||||||||
Current liabilities | ||||||||||||||||||||
Trade and other payables | - | 54 | 2,840 | - | 2,894 | |||||||||||||||
Advances from subsidiary and parent undertakings | 1,003 | - | 5,532 | (6,535) | - | |||||||||||||||
Current income tax liabilities | - | - | 154 | - | 154 | |||||||||||||||
Interest-bearing loans and borrowings | 2 | 46 | 399 | - | 447 | |||||||||||||||
Derivative financial instruments | - | - | 20 | - | 20 | |||||||||||||||
Provisions for liabilities | - | - | 139 | - | 139 | |||||||||||||||
Liabilities associated with assets classified as held for sale | - | - | 213 | - | 213 | |||||||||||||||
Total current liabilities | 1,005 | 100 | 9,297 | (6,535) | 3,867 | |||||||||||||||
Total liabilities | 1,005 | 2,618 | 18,654 | (10,458) | 11,819 | |||||||||||||||
Total equity and liabilities | 11,182 | 4,224 | 23,208 | (16,597) | 22,017 |
237 |
CRH Annual Report on Form 20-F | 2015
33. Supplemental Guarantor Information | continued
Supplemental Condensed Consolidated Income Statement
Year ended 31 December 2015 | ||||||||||||||||||||
Guarantor | Issuer | Non-Guarantor subsidiaries |
Eliminate and reclassify |
CRH and subsidiaries |
||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Revenue | - | - | 23,635 | - | 23,635 | |||||||||||||||
Cost of sales | - | - | (16,394) | - | (16,394) | |||||||||||||||
Gross profit | - | - | 7,241 | - | 7,241 | |||||||||||||||
Operating income/(costs) | 1,473 | - | (7,437) | - | (5,964) | |||||||||||||||
Group operating profit/(loss) | 1,473 | - | (196) | - | 1,277 | |||||||||||||||
(Loss)/profit on disposals | (7) | - | 108 | - | 101 | |||||||||||||||
Profit/(loss) before finance costs | 1,466 | - | (88) | - | 1,378 | |||||||||||||||
Finance costs | - | (321) | (315) | 333 | (303) | |||||||||||||||
Finance income | 1 | 333 | 7 | (333) | 8 | |||||||||||||||
Other financial expense | - | - | (94) | - | (94) | |||||||||||||||
Share of subsidiaries (loss)/profit before tax | (483) | 62 | - | 421 | - | |||||||||||||||
Share of equity accounted investments profit | 44 | - | 44 | (44) | 44 | |||||||||||||||
Profit/(loss) before tax | 1,028 | 74 | (446) | 377 | 1,033 | |||||||||||||||
Income tax expense | (304) | (29) | (275) | 304 | (304) | |||||||||||||||
Group profit/(loss) for the financial year | 724 | 45 | (721) | 681 | 729 | |||||||||||||||
Profit/(loss) attributable to: | ||||||||||||||||||||
Equity holders of the Company | 724 | 45 | (726) | 681 | 724 | |||||||||||||||
Non-controlling interests | - | - | 5 | - | 5 | |||||||||||||||
Group profit/(loss) for the financial year | 724 | 45 | (721) | 681 | 729 | |||||||||||||||
Supplemental Condensed Consolidated Statement of Comprehensive Income | ||||||||||||||||||||
Group profit/(loss) for the financial year | 724 | 45 | (721) | 681 | 729 | |||||||||||||||
Other comprehensive income | ||||||||||||||||||||
Items that may be reclassified to profit or loss in subsequent years: | ||||||||||||||||||||
Currency translation effects | 643 | 159 | 502 | (643) | 661 | |||||||||||||||
Losses relating to cash flow hedges | (2) | - | (2) | 2 | (2) | |||||||||||||||
641 | 159 | 500 | (641) | 659 | ||||||||||||||||
Items that will not be reclassified to profit or loss in subsequent years: | ||||||||||||||||||||
Remeasurement of retirement benefit obligations | 203 | - | 203 | (203) | 203 | |||||||||||||||
Tax on items recognised directly within other comprehensive income | (30) | - | (30) | 30 | (30) | |||||||||||||||
173 | - | 173 | (173) | 173 | ||||||||||||||||
Total other comprehensive income for the financial year | 814 | 159 | 673 | (814) | 832 | |||||||||||||||
Total comprehensive income for the financial year | 1,538 | 204 | (48) | (133) | 1,561 | |||||||||||||||
Attributable to: | ||||||||||||||||||||
Equity holders of the Company | 1,538 | 204 | (71) | (133) | 1,538 | |||||||||||||||
Non-controlling interests | - | - | 23 | - | 23 | |||||||||||||||
Total comprehensive income for the financial year | 1,538 | 204 | (48) | (133) | 1,561 |
238 |
CRH Annual Report on Form 20-F | 2015
33. Supplemental Guarantor Information | continued
Supplemental Condensed Consolidated Income Statement
Year ended 31 December 2014 | ||||||||||||||||||||
Guarantor | Issuer | Non-Guarantor subsidiaries |
Eliminate and reclassify |
CRH and subsidiaries |
||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Revenue |
- | - | 18,912 | - | 18,912 | |||||||||||||||
Cost of sales |
- | - | (13,427) | - | (13,427) | |||||||||||||||
Gross profit |
- | - | 5,485 | - | 5,485 | |||||||||||||||
Operating income/(costs) |
1,208 | - | (5,776) | - | (4,568) | |||||||||||||||
Group operating profit/(loss) |
1,208 | - | (291) | - | 917 | |||||||||||||||
Profit on disposals |
- | - | 77 | - | 77 | |||||||||||||||
Profit/(loss) before finance costs |
1,208 | - | (214) | - | 994 | |||||||||||||||
Finance costs |
- | (211) | (262) | 219 | (254) | |||||||||||||||
Finance income |
- | 219 | 8 | (219) | 8 | |||||||||||||||
Other financial expense |
- | - | (42) | - | (42) | |||||||||||||||
Share of subsidiaries (loss)/profit before tax |
(504) | 35 | - | 469 | - | |||||||||||||||
Share of equity accounted investments profit |
55 | - | 55 | (55) | 55 | |||||||||||||||
Profit/(loss) before tax |
759 | 43 | (455) | 414 | 761 | |||||||||||||||
Income tax expense |
(177) | (17) | (160) | 177 | (177) | |||||||||||||||
Group profit/(loss) for the financial year |
582 | 26 | (615) | 591 | 584 | |||||||||||||||
Profit/(loss) attributable to: |
||||||||||||||||||||
Equity holders of the Company |
582 | 26 | (617) | 591 | 582 | |||||||||||||||
Non-controlling interests |
- | - | 2 | - | 2 | |||||||||||||||
Group profit/(loss) for the financial year |
582 | 26 | (615) | 591 | 584 | |||||||||||||||
Supplemental Condensed Consolidated Statement of Comprehensive Income |
| |||||||||||||||||||
Group profit/(loss) for the financial year |
582 | 26 | (615) | 591 | 584 | |||||||||||||||
Other comprehensive income |
||||||||||||||||||||
Items that may be reclassified to profit or loss in subsequent years: |
||||||||||||||||||||
Currency translation effects |
599 | 167 | 432 | (599) | 599 | |||||||||||||||
Losses relating to cash flow hedges |
(6) | - | (6) | 6 | (6) | |||||||||||||||
593 | 167 | 426 | (593) | 593 | ||||||||||||||||
Items that will not be reclassified to profit or loss in subsequent years: |
||||||||||||||||||||
Remeasurement of retirement benefit obligations |
(414) | - | (414) | 414 | (414) | |||||||||||||||
Tax on items recognised directly within other comprehensive income |
69 | - | 69 | (69) | 69 | |||||||||||||||
(345) | - | (345) | 345 | (345) | ||||||||||||||||
Total other comprehensive income for the financial year |
248 | 167 | 81 | (248) | 248 | |||||||||||||||
Total comprehensive income for the financial year |
830 | 193 | (534) | 343 | 832 | |||||||||||||||
Attributable to: |
||||||||||||||||||||
Equity holders of the Company |
830 | 193 | (536) | 343 | 830 | |||||||||||||||
Non-controlling interests |
- | - | 2 | - | 2 | |||||||||||||||
Total comprehensive income for the financial year |
830 | 193 | (534) | 343 | 832 |
239 |
CRH Annual Report on Form 20-F | 2015
33. Supplemental Guarantor Information | continued
Supplemental Condensed Consolidated Income Statement
Year ended 31 December 2013 | ||||||||||||||||||||
Guarantor | Issuer | Non-Guarantor subsidiaries |
Eliminate and reclassify |
CRH and subsidiaries |
||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Revenue |
- | - | 18,031 | - | 18,031 | |||||||||||||||
Cost of sales |
- | - | (13,153) | - | (13,153) | |||||||||||||||
Gross profit |
- | - | 4,878 | - | 4,878 | |||||||||||||||
Operating income/(costs) |
3 | - | (4,781) | - | (4,778) | |||||||||||||||
Group operating profit |
3 | - | 97 | - | 100 | |||||||||||||||
Profit on disposals |
- | - | 26 | - | 26 | |||||||||||||||
Profit before finance costs |
3 | - | 123 | - | 126 | |||||||||||||||
Finance costs |
- | (242) | (270) | 250 | (262) | |||||||||||||||
Finance income |
- | 250 | 13 | (250) | 13 | |||||||||||||||
Other financial expense |
- | - | (48) | - | (48) | |||||||||||||||
Share of subsidiaries (loss)/profit before tax |
(175) | 33 | - | 142 | - | |||||||||||||||
Share of equity accounted investments loss |
(44) | - | (44) | 44 | (44) | |||||||||||||||
(Loss)/profit before tax |
(216) | 41 | (226) | 186 | (215) | |||||||||||||||
Income tax expense |
(80) | (16) | (64) | 80 | (80) | |||||||||||||||
Group (loss)/profit for the financial year |
(296) | 25 | (290) | 266 | (295) | |||||||||||||||
(Loss)/profit attributable to: |
||||||||||||||||||||
Equity holders of the Company |
(296) | 25 | (291) | 266 | (296) | |||||||||||||||
Non-controlling interests |
- | - | 1 | - | 1 | |||||||||||||||
Group (loss)/profit for the financial year |
(296) | 25 | (290) | 266 | (295) | |||||||||||||||
Supplemental Condensed Consolidated Statement of Comprehensive Income |
| |||||||||||||||||||
Group (loss)/profit for the financial year |
(296) | 25 | (290) | 266 | (295) | |||||||||||||||
Other comprehensive income |
||||||||||||||||||||
Items that may be reclassified to profit or loss in subsequent years: |
||||||||||||||||||||
Currency translation effects |
(373) | (57) | (316) | 373 | (373) | |||||||||||||||
Losses relating to cash flow hedges |
(2) | - | (2) | 2 | (2) | |||||||||||||||
(375) | (57) | (318) | 375 | (375) | ||||||||||||||||
Items that will not be reclassified to profit or loss in subsequent years: |
||||||||||||||||||||
Remeasurement of retirement benefit obligations |
162 | - | 162 | (162) | 162 | |||||||||||||||
Tax on items recognised directly within other comprehensive income |
(43) | - | (43) | 43 | (43) | |||||||||||||||
119 | - | 119 | (119) | 119 | ||||||||||||||||
Total other comprehensive income for the financial year |
(256) | (57) | (199) | 256 | (256) | |||||||||||||||
Total comprehensive income for the financial year |
(552) | (32) | (489) | 522 | (551) | |||||||||||||||
Attributable to: |
||||||||||||||||||||
Equity holders of the Company |
(552) | (32) | (490) | 522 | (552) | |||||||||||||||
Non-controlling interests |
- | - | 1 | - | 1 | |||||||||||||||
Total comprehensive income for the financial year |
(552) | (32) | (489) | 522 | (551) |
240 |
CRH Annual Report on Form 20-F | 2015
33. Supplemental Guarantor Information | continued
Supplemental Condensed Consolidated Statement of Cash Flow
Year ended 31 December 2015 | ||||||||||||||||||||
Guarantor | Issuer | Non-Guarantor subsidiaries |
Eliminate and reclassify |
CRH and subsidiaries |
||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Cash flows from operating activities |
||||||||||||||||||||
Profit/(loss) before tax |
1,028 | 74 | (446) | 377 | 1,033 | |||||||||||||||
Finance costs (net) |
(1) | (12) | 402 | - | 389 | |||||||||||||||
Group share of subsidiaries profit/(loss) before tax |
483 | (62) | - | (421) | - | |||||||||||||||
Share of equity accounted investments result |
(44) | - | (44) | 44 | (44) | |||||||||||||||
Loss/(profit) on disposals |
7 | - | (108) | - | (101) | |||||||||||||||
Group operating profit/(loss) |
1,473 | - | (196) | - | 1,277 | |||||||||||||||
Depreciation charge |
- | - | 843 | - | 843 | |||||||||||||||
Amortisation of intangible assets |
- | - | 55 | - | 55 | |||||||||||||||
Impairment charge |
- | - | 44 | - | 44 | |||||||||||||||
Share-based payment (income)/expense |
(2) | - | 29 | - | 27 | |||||||||||||||
Other (primarily pension payments) |
- | - | (47) | - | (47) | |||||||||||||||
Amounts due from subsidiary undertakings |
(1,460) | - | 1,460 | - | - | |||||||||||||||
Net movement on working capital and provisions |
- | (9) | 594 | - | 585 | |||||||||||||||
Cash generated from operations |
11 | (9) | 2,782 | - | 2,784 | |||||||||||||||
Interest paid (including finance leases) |
- | (283) | (352) | 333 | (302) | |||||||||||||||
Corporation tax paid |
- | (29) | (206) | - | (235) | |||||||||||||||
Net cash inflow/(outflow) from operating activities |
11 | (321) | 2,224 | 333 | 2,247 | |||||||||||||||
Cash flows from investing activities |
||||||||||||||||||||
Proceeds from disposals (net of cash disposed and deferred proceeds) |
- | - | 889 | - | 889 | |||||||||||||||
Interest received |
1 | 333 | 7 | (333) | 8 | |||||||||||||||
Dividends received from equity accounted investments |
- | - | 53 | - | 53 | |||||||||||||||
Purchase of property, plant and equipment |
- | - | (882) | - | (882) | |||||||||||||||
Advances from subsidiary and parent undertakings |
(699) | (632) | - | 1,331 | - | |||||||||||||||
Acquisition of subsidiaries (net of cash acquired) |
- | - | (7,296) | - | (7,296) | |||||||||||||||
Other investments and advances |
- | - | (19) | - | (19) | |||||||||||||||
Deferred and contingent acquisition consideration paid |
- | - | (59) | - | (59) | |||||||||||||||
Net cash outflow from investing activities |
(698) | (299) | (7,307) | 998 | (7,306) | |||||||||||||||
Cash flows from financing activities |
||||||||||||||||||||
Proceeds from issue of shares (net) |
- | - | 1,593 | - | 1,593 | |||||||||||||||
Proceeds from exercise of share options |
57 | - | - | - | 57 | |||||||||||||||
Advances to subsidiary and parent undertakings |
- | - | 1,331 | (1,331) | - | |||||||||||||||
Increase in interest-bearing loans, borrowings and finance leases |
9 | 1,584 | 4,040 | - | 5,633 | |||||||||||||||
Net cash flow arising from derivative financial instruments |
- | 15 | 32 | - | 47 | |||||||||||||||
Premium paid on early debt redemption |
- | (38) | - | - | (38) | |||||||||||||||
Treasury/own shares purchased |
(3) | - | - | - | (3) | |||||||||||||||
Repayment of interest-bearing loans, borrowings and finance leases |
- | (968) | (1,776) | - | (2,744) | |||||||||||||||
Dividends paid to equity holders of the Company |
(379) | - | - | - | (379) | |||||||||||||||
Dividends paid to non-controlling interests |
- | - | (4) | - | (4) | |||||||||||||||
Net cash (outflow)/inflow from financing activities |
(316) | 593 | 5,216 | (1,331) | 4,162 | |||||||||||||||
(Decrease)/increase in cash and cash equivalents |
(1,003) | (27) | 133 | - | (897) | |||||||||||||||
Reconciliation of opening to closing cash and cash equivalents |
||||||||||||||||||||
Cash and cash equivalents at 1 January |
1,411 | 25 | 1,859 | - | 3,295 | |||||||||||||||
Translation adjustment |
- | 2 | 118 | - | 120 | |||||||||||||||
(Decrease)/increase in cash and cash equivalents |
(1,003) | (27) | 133 | - | (897) | |||||||||||||||
Cash and cash equivalents at 31 December |
408 | - | 2,110 | - | 2,518 |
241 |
CRH Annual Report on Form 20-F | 2015
33. Supplemental Guarantor Information | continued
Supplemental Condensed Consolidated Statement of Cash Flow
Year ended 31 December 2014 | ||||||||||||||||||||
Guarantor | Issuer | Non-Guarantor subsidiaries |
Eliminate and reclassify |
CRH and subsidiaries |
||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Cash flows from operating activities |
||||||||||||||||||||
Profit/(loss) before tax |
759 | 43 | (455) | 414 | 761 | |||||||||||||||
Finance costs (net) |
- | (8) | 296 | - | 288 | |||||||||||||||
Group share of subsidiaries loss/(profit) before tax |
504 | (35) | - | (469) | - | |||||||||||||||
Share of equity accounted investments result |
(55) | - | (55) | 55 | (55) | |||||||||||||||
Profit on disposals |
- | - | (77) | - | (77) | |||||||||||||||
Group operating profit/(loss) |
1,208 | - | (291) | - | 917 | |||||||||||||||
Depreciation charge |
- | - | 631 | - | 631 | |||||||||||||||
Amortisation of intangible assets |
- | - | 44 | - | 44 | |||||||||||||||
Impairment charge |
- | - | 49 | - | 49 | |||||||||||||||
Share-based payment expense |
- | - | 16 | - | 16 | |||||||||||||||
Other (primarily pension payments) |
- | - | (66) | - | (66) | |||||||||||||||
Net movement on working capital and provisions |
- | (7) | 42 | - | 35 | |||||||||||||||
Cash generated from operations |
1,208 | (7) | 425 | - | 1,626 | |||||||||||||||
Interest paid (including finance leases) |
- | (211) | (270) | 219 | (262) | |||||||||||||||
Corporation tax paid |
- | (17) | (110) | - | (127) | |||||||||||||||
Net cash inflow/(outflow) from operating activities |
1,208 | (235) | 45 | 219 | 1,237 | |||||||||||||||
Cash flows from investing activities |
||||||||||||||||||||
Proceeds from disposals |
- | - | 345 | - | 345 | |||||||||||||||
Interest received |
- | 219 | 8 | (219) | 8 | |||||||||||||||
Dividends received from equity accounted investments |
- | - | 30 | - | 30 | |||||||||||||||
Purchase of property, plant and equipment |
- | - | (435) | - | (435) | |||||||||||||||
Advances from subsidiary and parent undertakings |
414 | 17 | - | (431) | - | |||||||||||||||
Acquisition of subsidiaries (net of cash acquired) |
- | - | (151) | - | (151) | |||||||||||||||
Other investments and advances |
- | - | (3) | - | (3) | |||||||||||||||
Deferred and contingent acquisition consideration paid |
- | - | (26) | - | (26) | |||||||||||||||
Net cash inflow/(outflow) from investing activities |
414 | 236 | (232) | (650) | (232) | |||||||||||||||
Cash flows from financing activities |
||||||||||||||||||||
Proceeds from exercise of share options |
22 | - | - | - | 22 | |||||||||||||||
Acquisition of non-controlling interests |
- | - | (1) | - | (1) | |||||||||||||||
Advances to subsidiary and parent undertakings |
- | - | (431) | 431 | - | |||||||||||||||
Increase in interest-bearing loans, borrowings and finance leases |
- | - | 901 | - | 901 | |||||||||||||||
Net cash flow arising from derivative financial instruments |
- | 16 | (27) | - | (11) | |||||||||||||||
Repayment of interest-bearing loans, borrowings and finance leases |
(55) | (175) | (704) | - | (934) | |||||||||||||||
Dividends paid to equity holders of the Company |
(353) | - | - | - | (353) | |||||||||||||||
Dividends paid to non-controlling interests |
- | - | (4) | - | (4) | |||||||||||||||
Net cash outflow from financing activities |
(386) | (159) | (266) | 431 | (380) | |||||||||||||||
Increase/(decrease) in cash and cash equivalents |
1,236 | (158) | (453) | - | 625 | |||||||||||||||
Reconciliation of opening to closing cash and cash equivalents |
||||||||||||||||||||
Cash and cash equivalents at 1 January |
175 | 174 | 2,191 | - | 2,540 | |||||||||||||||
Translation adjustment |
- | 9 | 121 | - | 130 | |||||||||||||||
Increase/(decrease) in cash and cash equivalents |
1,236 | (158) | (453) | - | 625 | |||||||||||||||
Cash and cash equivalents at 31 December |
1,411 | 25 | 1,859 | - | 3,295 |
242 |
CRH Annual Report on Form 20-F | 2015
33. Supplemental Guarantor Information | continued
Supplemental Condensed Consolidated Statement of Cash Flow
Year ended 31 December 2013 | ||||||||||||||||||||
Guarantor |
Issuer |
Non-Guarantor | Eliminate and | CRH and | ||||||||||||||||
subsidiaries | reclassify | subsidiaries | ||||||||||||||||||
m | m | m | m | m | ||||||||||||||||
Cash flows from operating activities |
||||||||||||||||||||
(Loss)/profit before tax |
(216) | 41 | (226) | 186 | (215) | |||||||||||||||
Finance costs (net) |
- | (8) | 305 | - | 297 | |||||||||||||||
Group share of subsidiaries loss/(profit) before tax |
175 | (33) | - | (142) | - | |||||||||||||||
Share of equity accounted investments result |
44 | - | 44 | (44) | 44 | |||||||||||||||
Profit on disposals |
- | - | (26) | - | (26) | |||||||||||||||
Group operating profit |
3 | - | 97 | - | 100 | |||||||||||||||
Depreciation charge |
- | - | 671 | - | 671 | |||||||||||||||
Amortisation of intangible assets |
- | - | 54 | - | 54 | |||||||||||||||
Impairment charge |
- | - | 650 | - | 650 | |||||||||||||||
Share-based payment expense |
- | - | 15 | - | 15 | |||||||||||||||
Other (primarily pension payments) |
- | - | (96) | - | (96) | |||||||||||||||
Net movement on working capital and provisions |
- | 1 | 76 | - | 77 | |||||||||||||||
Cash generated from operations |
3 | 1 | 1,467 | - | 1,471 | |||||||||||||||
Interest paid (including finance leases) |
- | (242) | (277) | 250 | (269) | |||||||||||||||
Corporation tax paid |
- | (16) | (94) | - | (110) | |||||||||||||||
Net cash inflow/(outflow) from operating activities |
3 | (257) | 1,096 | 250 | 1,092 | |||||||||||||||
Cash flows from investing activities |
||||||||||||||||||||
Proceeds from disposals |
- | - | 122 | - | 122 | |||||||||||||||
Interest received |
- | 250 | 13 | (250) | 13 | |||||||||||||||
Dividends received from equity accounted investments |
- | - | 33 | - | 33 | |||||||||||||||
Purchase of property, plant and equipment |
- | - | (497) | - | (497) | |||||||||||||||
Advances from subsidiary and parent undertakings |
299 | 179 | - | (478) | - | |||||||||||||||
Acquisition of subsidiaries (net of cash acquired) |
- | - | (336) | - | (336) | |||||||||||||||
Other investments and advances |
- | - | (78) | - | (78) | |||||||||||||||
Deferred and contingent acquisition consideration paid |
- | - | (105) | - | (105) | |||||||||||||||
Net cash inflow/(outflow) from investing activities |
299 | 429 | (848) | (728) | (848) | |||||||||||||||
Cash flows from financing activities |
||||||||||||||||||||
Proceeds from exercise of share options |
19 | - | - | - | 19 | |||||||||||||||
Acquisition of non-controlling interests |
- | - | (13) | - | (13) | |||||||||||||||
Advances to subsidiary and parent undertakings |
- | - | (478) | 478 | - | |||||||||||||||
Increase in interest-bearing loans, borrowings and finance leases |
55 | - | 1,436 | - | 1,491 | |||||||||||||||
Net cash flow arising from derivative financial instruments |
- | 43 | 21 | - | 64 | |||||||||||||||
Treasury/own shares purchased |
(6) | - | - | - | (6) | |||||||||||||||
Repayment of interest-bearing loans, borrowings and finance leases |
- | (601) | 15 | - | (586) | |||||||||||||||
Dividends paid to equity holders of the Company |
(367) | - | - | - | (367) | |||||||||||||||
Dividends paid to non-controlling interests |
- | - | (1) | - | (1) | |||||||||||||||
Net cash (outflow)/inflow from financing activities |
(299) | (558) | 980 | 478 | 601 | |||||||||||||||
Increase/(decrease) in cash and cash equivalents |
3 | (386) | 1,228 | - | 845 | |||||||||||||||
Reconciliation of opening to closing cash and cash equivalents |
|
|||||||||||||||||||
Cash and cash equivalents at 1 January |
172 | 570 | 1,005 | - | 1,747 | |||||||||||||||
Translation adjustment |
- | (10) | (42) | - | (52) | |||||||||||||||
Increase/(decrease) in cash and cash equivalents |
3 | (386) | 1,228 | - | 845 | |||||||||||||||
Cash and cash equivalents at 31 December |
175 | 174 | 2,191 | - | 2,540 |
243 |
244 |
Shareholder Information | ||||||
Stock Exchange Listings | 246 | |||||
Ownership of Ordinary Shares | 247 | |||||
Major Shareholders | 247 | |||||
Dividends | 248 | |||||
Share Plans | 249 | |||||
American Depositary Shares | 250 | |||||
Taxation | 251 | |||||
Memorandum and Articles of Association | 254 | |||||
Electronic Communications | 255 | |||||
Financial Calendar | 255 | |||||
Principal Accountant Fees and Services | 256 | |||||
Documents on Display | 256 |
245 |
CRH Annual Report on Form 20-F | 2015
Sterling per Ordinary Share | Euro per Ordinary Share | US Dollars per ADS | ||||||||||||||||||||||
High | Low | High | Low | High | Low | |||||||||||||||||||
Calendar Year |
||||||||||||||||||||||||
2011 |
£12.80(i) | £11.09(i) | 17.00(ii) | 10.50(ii) | $24.95 | $14.38 | ||||||||||||||||||
2012 |
£14.09 | £10.52 | 16.79 | 12.99 | $22.20 | $16.35 | ||||||||||||||||||
2013 |
£16.17 | £12.15 | 19.30 | 14.68 | $26.26 | $19.56 | ||||||||||||||||||
2014 |
£17.88 | £12.66 | 21.82 | 15.86 | $29.72 | $20.47 | ||||||||||||||||||
2015 |
£19.80 | £14.71 | 28.09 | 18.73 | $30.95 | $22.51 | ||||||||||||||||||
2014 |
||||||||||||||||||||||||
First Quarter |
£17.88 | £15.39 | 21.82 | 18.47 | $29.72 | $25.32 | ||||||||||||||||||
Second Quarter |
£17.75 | £15.01 | 21.40 | 18.74 | $29.71 | $25.85 | ||||||||||||||||||
Third Quarter |
£15.55 | £13.43 | 19.58 | 16.81 | $26.77 | $22.71 | ||||||||||||||||||
Fourth Quarter |
£15.79 | £12.66 | 20.04 | 15.86 | $24.52 | $20.47 | ||||||||||||||||||
2015 |
||||||||||||||||||||||||
First Quarter |
£18.52 | £14.71 | 25.62 | 18.73 | $28.47 | $22.51 | ||||||||||||||||||
Second Quarter |
£19.27 | £17.45 | 27.10 | 24.01 | $30.17 | $26.18 | ||||||||||||||||||
Third Quarter |
£19.69 | £17.00 | 28.09 | 22.97 | $30.95 | $25.76 | ||||||||||||||||||
Fourth Quarter |
£19.80 | £17.11 | 27.94 | 23.09 | $29.75 | $26.34 | ||||||||||||||||||
Recent Months |
||||||||||||||||||||||||
September 2015 |
£19.43 | £17.00 | 26.82 | 22.97 | $29.77 | $25.76 | ||||||||||||||||||
October 2015 |
£18.23 | £17.11 | 25.45 | 23.09 | $28.06 | $26.34 | ||||||||||||||||||
November 2015 |
£19.66 | £17.53 | 27.92 | 24.78 | $29.55 | $26.51 | ||||||||||||||||||
December 2015 |
£19.80 | £18.75 | 27.94 | 25.69 | $29.75 | $28.20 | ||||||||||||||||||
January 2016 |
£19.71 | £17.53 | 26.70 | 22.83 | $28.82 | $25.29 | ||||||||||||||||||
February 2016 |
£18.49 | £16.37 | 24.35 | 21.00 | $26.78 | $23.72 | ||||||||||||||||||
March 2016 (through 11 March 2016) |
£19.40 | £18.50 | 24.97 | 23.82 | $27.86 | $26.22 |
(i) | The Sterling high and low closing prices displayed for 2011, based on the London Stock Exchange, are only for the period from 6 December 2011, from which date it became the sole premium listing. |
(ii) | The euro high and low closing prices displayed for 2011 are for the entire period shown and based on the Irish Stock Exchange prices. |
For further information on CRH shares see note 28 to the Consolidated Financial Statements.
246 |
CRH Annual Report on Form 20-F | 2015
Shareholdings as at 31 December 2015
|
||||||||||
Geographic location(i) | Number of shares held 000s | % of total | ||||||||
North America | 274,395 | 33.30 | ||||||||
United Kingdom | 265,209 | 32.19 | ||||||||
Europe/Other | 136,083 | 16.52 | ||||||||
Retail | 119,051 | 14.45 | ||||||||
Ireland | 28,377 | 3.44 | ||||||||
Treasury | 795 | 0.10 | ||||||||
823,910 | 100 | |||||||||
(i) | This represents a best estimate of the number of shares controlled by fund managers resident in the geographic regions indicated. Private shareholders are classified as retail above. |
Holdings | Number of shareholders |
% of total | Number of shares held 000s |
% of total | ||||||||||||
1 - 1,000 | 14,698 | 60.50 | 4,821 | 0.58 | ||||||||||||
1,001 - 10,000 | 7,968 | 32.80 | 23,294 | 2.83 | ||||||||||||
10,001 - 100,000 | 1,175 | 4.84 | 33,513 | 4.07 | ||||||||||||
100,001 - 1,000,000 | 337 | 1.39 | 116,264 | 14.11 | ||||||||||||
Over 1,000,000 | 116 | 0.47 | 646,018 | 78.41 | ||||||||||||
24,294 | 100 | 823,910 | 100 | |||||||||||||
11 March 2016 | 31 December 2015 | 31 December 2014 | 31 December 2013 | |||||||||||||||||||||||||||||
Name | Holding/ Voting Rights |
% at period end |
Holding/ Voting Rights |
% at year end |
Holding/ Voting Rights |
% at year end |
Holding/ Voting Rights |
% at year end |
||||||||||||||||||||||||
Baillie Gifford Overseas Limited and Baillie Gifford & Co. |
25,216,520 | 3.06 | 41,193,797 | 5.00 | - | - | - | - | ||||||||||||||||||||||||
BlackRock, Inc.(i) |
73,838,812 | 8.96 | 74,030,167 | 8.99 | 40,681,647 | 5.49 | 43,857,751 | 5.98 | ||||||||||||||||||||||||
Harbor International Fund |
21,853,816 | 2.65 | 21,853,816 | 2.65 | 21,999,275 | 2.96 | 21,999,275 | 3.00 | ||||||||||||||||||||||||
Templeton Global Advisors Limited |
- | - | - | - | 21,503,171 | 2.90 | 21,503,171 | 2.93 | ||||||||||||||||||||||||
UBS AG |
26,380,604 | 3.20 | 26,380,604 | 3.20 | 26,380,604 | 3.56 | 26,380,604 | 3.59 |
(i) | BlackRock, Inc. has advised that its interests in CRH shares arise by reason of discretionary investment management arrangements entered into by it or its subsidiaries. |
247 |
CRH Annual Report on Form 20-F | 2015
Euro Cent per Ordinary Share | Translated into US cents per ADS | |||||||||||||||||||||||
Years ended 31 December | Interim | Final | Total | Interim | Final | Total | ||||||||||||||||||
2011 | 18.50 | 44.00 | 62.50 | 25.43 | 58.36 | 83.79 | ||||||||||||||||||
2012 | 18.50 | 44.00 | 62.50 | 24.09 | 57.18 | 81.27 | ||||||||||||||||||
2013 | 18.50 | 44.00 | 62.50 | 25.52 | 60.54 | 86.06 | ||||||||||||||||||
2014 | 18.50 | 44.00 | 62.50 | 23.45 | 49.46 | 72.91 | ||||||||||||||||||
2015 | 18.50 | 44.00(i) | 62.50 | 19.88 | 49.19(i) | 69.07 | ||||||||||||||||||
(i) | Proposed |
248 |
CRH Annual Report on Form 20-F | 2015
1 | Whether by way of the allotment of new shares or the reissue of Treasury Shares. |
249 |
CRH Annual Report on Form 20-F | 2015
1 | Whether by way of the allotment of new shares or the reissue of Treasury Shares. |
250 |
CRH Annual Report on Form 20-F | 2015
Category of expense reimbursed to the Company | Amount reimbursed for the year ended 31 December 2015 |
|||
NYSE listing fees | $128,895 | |||
Investor relations expenses | $84,852 | |||
Total | $213,747 |
The table below sets forth the types of expenses that the Depositary has paid to third parties and the amounts reimbursed for the year ended 31 December 2015:
Category of expense waived or paid directly to third parties | Amount reimbursed for the year ended 31 December 2015 |
|||
Printing, distribution and administration costs paid directly to third parties in connection with US shareholder communications and AGM related expenses in connection with the ADS program1 |
$85,237 | |||
Total | $85,237 |
1 | During 2015, $85,237 was paid by the Depositary to third parties, relating to services provided in 2015. |
251 |
CRH Annual Report on Form 20-F | 2015
252 |
CRH Annual Report on Form 20-F | 2015
253 |
CRH Annual Report on Form 20-F | 2015
254 |
CRH Annual Report on Form 20-F | 2015
255 |
CRH Annual Report on Form 20-F | 2015
256 |
CRH Annual Report on Form 20-F | 2015
The following documents are filed as part of this Annual Report:
1 | Memorandum and Articles of Association. |
2.1 | Amended and Restated Deposit Agreement dated 28 November 2006, between CRH plc and The Bank of New York Mellon.* |
4.1 | Share and asset purchase agreement among Holcim Limited, Lafarge S.A., CRH International, CRH Fünfte Vermögensverwaltungs GmbH and CRH plc.** |
4.2 | Put and call options agreement among Lafarge Holdings (Philippines), Inc., Calumboyan Holdings, Inc., Round Royal, Inc., Southwestern Cement Ventures, Inc., CRH International and CRH plc.** |
7 | Computation of Ratios of Earnings to Fixed Charges. |
8 | Listing of principal subsidiary undertakings and equity accounted investments. |
12 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Public Company Accounting Reform and Investor Protection Act of 2002. |
13 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Public Company Accounting Reform and Investor Protection Act of 2002.*** |
15.1 | Consent of Independent Registered Public Accounting Firm. |
15.2 | Governance Appendix. |
99.1 | Disclosure of Mine Safety and Health Administration (MSHA) Safety Data. |
* | Incorporated by reference to Annual Report on Form 20-F for the year ended 31 December 2006 that was filed by the Company on 3 May 2007. |
** | Certain terms are omitted pursuant to a request for confidential treatment |
*** | Furnished but not filed |
The total amount of long-term debt of the Registrant and its subsidiaries authorised under any one instrument does not exceed 10% of the total assets of CRH plc and its subsidiaries on a consolidated basis.
The company agrees to furnish copies of any such instrument to the SEC upon request.
257 |
CRH Annual Report on Form 20-F | 2015
Section Breaks
Introduction
Hoghiz Cement Plant is one of two plants owned and operated by CRH Romania in addition to a grinding station, a network of terminals, quarries, gravel pits and concrete plants. |
Strategy Review
Podilsky Cement in Ukraine operates a modern, fully certified concrete laboratory. It conducts tests of cements from all CRH plants in Ukraine and provides a customer advice service. | |||||
Business Performance Review
Readymixed concrete from OPTERRA being delivered to site. OPTERRAs headquarters are in Leipzig from where it operates two cement plants, a grinding station and a network of readymixed concrete plants, located across Germany. |
Governance
A newly branded cement tanker at CRH Canada, one of the countrys largest vertically integrated building materials and construction companies. | |||||
Financial Statements
Oldcastle BuildingEnvelope® designed, engineered, tested, manufactured and delivered 2.6 million square feet of custom-engineered curtain wall, 1.6 million square feet of high performance and silk-screened architectural glass, 20,450 sunshades and 4,000 square feet of custom-engineered skylights for ExxonMobils new global campus in Houston, Texas. |
Shareholder Information
Oldcastle Precast placed 50, 24-foot by 6.5-foot precast concrete box culverts for a US$252 million infrastructure rehabilitation project along the Interstate 15 corridor in Utah, United States. This single box culvert weighs approximately 80,000 pounds and replaced 40-year-old infrastructure on the East Jordan Canal. | |||||
| ||||||
Full Page Images
|
||||||
Our Global Presence
Oldcastle Architectural supplied Trenwyth Astra-Glaze SW+® concrete masonry blocks to William Allen High School in Allentown, Pennsylvania. This product contributes to Leadership in Energy and Environmental Design (LEED) credits in recycled content, energy efficiency and regional production. |
Tampa Asphalt Plant
The Tampa, Florida, Asphalt Plant of Preferred Materials Inc., is a 2015 recipient of the National Asphalt Pavement Associations Diamond Achievement and Diamond Quality Commendation. The plant produced over 450,000 tonnes of asphalt in 2015, while incorporating nearly 40 percent recycled asphalt into its mixes. | |||||
Anchor Masonry
Oldcastle Architectuals Anchor business manufactured 20,000 square feet of Dufferin® Stone for the new Herbert Hoover Middle School in Potomac, Maryland. Dufferin® Stone products are known for their durable antiqued finishes and custom-look results. |
Halfen Construction Accessories
The German pavilion EXPO 2015 in Milan made extensive use of the HALFEN DETAN tension and compression rod system. The DETAN product was installed into the steel stress, shell and stage of the pavilion, and meets the highest aesthetic and quality standards. HALFEN is part of the Construction Accessories platform within Europe Lightside.
|
258 |
CRH Annual Report on Form 20-F | 2015
Full Page Images | ||||||
Raboni Distribution
Rabonis showroom in the Bastille area of Paris demonstrates the companys range of floor coverings. Raboni, a general builders merchant, has operating locations in the Normandy and Paris regions of France. |
Allied Distribution
Dream Finders Homes built a 2,400 square foot, four-bedroom home in the Fan Entertainment Zone at EverBank Field in Jacksonville, Florida. This home will be donated to a military veteran and moved for that purpose, after it sits on display at the NFL stadium for two years. The Gypsum Wallboard for the project was supplied by Allied Building Products. | |||||
| ||||||
Our Business | ||||||
Heavyside Materials
1,300 tonnes of cement from OPTERRA was used to construct the elephant enclosure at Erfurt Zoo in Germany. The rough finish on the 11m high walls is designed to resemble an elephants skin. |
Lightside Products
An installation of sun protection screens and drop-arm awnings, supplied by SMITS Rolluiken & Zonwering, at a nursery in the Netherlands. | |||||
Building Materials Distribution
Bauking, CRHs leading distribution brand in Germany, operates general builders merchants and DIY stores through the hagebaumarkt brand. This branch, in Königs-Wusterhausen, near Berlin, is a 35,000m2 site serving both customer groups. |
||||||
| ||||||
Sustainability | ||||||
People and Community
School children from Lisburn, Northern Ireland, visited a local residential development, completed by Farrans Construction. The children learnt about building materials, the construction process and the importance of safety on site. |
Environment and Conservation
Tarmac owns Panshanger Park, in Hertfordshire, England. Since the 1980s, it has been extracting minerals from the area but it is now being restored to agriculture, wetland and nature conservation. It includes a Forest School, which encourages hands-on learning experiences in a natural environment. | |||||
|
259 |
CRH Annual Report on Form 20-F | 2015
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorised the undersigned to sign this Annual Report on its behalf. |
||||||
CRH public limited company | ||||||
(Registrant) | ||||||
By: | /s/ M. Carton | |||||
|
||||||
Maeve Carton | ||||||
Director | ||||||
By: | /s/ S. Murphy | |||||
|
||||||
Senan Murphy | ||||||
Finance Director |
Dated: 16 March 2016
260 |
Exhibit 1.0
COMPANY LIMITED BY SHARES
MEMORANDUM
AND
ARTICLES OF ASSOCIATION
OF
public limited company
Registered in Dublin No. 12965
Arthur Cox
Earlsfort Centre,
Earlsfort Terrace,
Dublin 2.
- 1 -
No. 12965
Certificate of Incorporation
I HEREBY CERTIFY THAT ROADSTONE, LIMITED is this day incorporated under the Companies Acts, 1908 to 1924, and that the Company is Limited.
Given under my hand at Dublin, this Twentieth day of June, One Thousand Nine Hundred and Forty-nine.
Fees and Deed Stamps |
£52 | 10s. | 0d. | |||||||
Stamp Duty on Capital |
£1,250 | 0s. | 0d. |
A.K. AUSTIN,
Registrar of Joint Stock Companies
- 2 -
No. 12965
Certificate of Change of Name
I Hereby Certify that
ROADSTONE, LIMITED
having, with the sanction of a Special Resolution of the said Company, and with the approval of the MINISTER FOR INDUSTRY AND COMMERCE, changed its name, is now called
CEMENT-ROADSTONE HOLDINGS LIMITED
and I have entered such new name on the Register accordingly.
Given under my hand at Dublin, this Twentieth day of October, One Thousand Nine Hundred and Seventy.
M. SINSEOIN,
for Registrar of Companies
- 3 -
No. 12965
Certificate of Incorporation
on Re-registration as a
Public Limited Company
I Hereby Certify that
CEMENT-ROADSTONE HOLDINGS PLC
is this day re-registered under the Companies Acts 1963 to 1983 and that the Company is a Public Limited Company.
Given under my hand at Dublin, this Twentieth day of January, One Thousand Nine Hundred and Eighty four.
R. BURKE
for Registrar of Companies
- 4 -
No. 12965
Certificate of Incorporation on
Change of Name
I Hereby Certify that
CEMENT-ROADSTONE HOLDINGS PLC
having, by a Special Resolution of the Company, and with the approval of the MINISTER FOR INDUSTRY AND COMMERCE, changed its name, is now incorporated as a limited company under the name
CRH public limited company
and I have entered such name on the Register accordingly.
Given under my hand this Eighteenth day of May, One Thousand Nine Hundred and Eighty Seven.
R. BURKE
for Registrar of Companies
- 5 -
COMPANIES ACT 2014
COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
OF
C R H
public limited company
(as amended 1st May 1975, 5th May 1992,7th May 2008 and 7th May 2015)
1. | The name of the Company is CRH public limited company. |
2. | The Company is a public limited company for the purposes of Part 17 of the Companies Act 2014. |
3. | The Registered Office of the Company will be situate in Ireland. |
4. | The objects for which the Company is established are: |
(1) | To carry on the business of an investment holding company and for that purpose to acquire and hold either in the name of the Company or in that of any nominee shares, stocks, debentures, debenture stock, bonds, notes, obligations and securities issued or guaranteed by any company wherever incorporated or carrying on business and debentures, debenture stock, bonds, notes, obligations and securities issued or guaranteed by any Government, Sovereign Ruler, Commissioners, Public Body or Authority supreme, dependent, municipal, local or otherwise in any part of the world and to raise money on such terms and conditions as may be thought desirable for any of the above purposes. |
(2) | To acquire any such shares, stock, debentures, debenture stock, bonds, notes, obligations or securities by original subscription, tender, syndicate participation, purchase, exchange or otherwise, and whether or not fully paid up, and to make payments thereon as called up or in advance of calls or otherwise, and to hold, sell or otherwise dispose of any excess thereof, to subscribe for the same either conditionally or otherwise, and generally to sell, exchange or otherwise to dispose of or turn to account any of the assets of the Company or any securities or investments of the Company acquired or agreed so to be and to invest in or to acquire by repurchase or otherwise any securities or investments of the kind before enumerated and to vary the securities and investments of the Company from time to time. |
- 6 -
(3) | To exercise and enforce all rights and powers conferred by or incidental to the ownership of any such shares, stock, obligations or other securities including without prejudice to the generality of the foregoing all such powers of veto or control as may be conferred by virtue of the holding by the Company of some special proportion of the issued or nominal amount thereof and to provide managerial and other executive supervisory and consultant services for or in relation to any company in which the Company is interested upon such terms as may be thought fit. |
(4) | To carry on the business of quarry masters and proprietors, lessees and workers of quarries, sand and gravel pits, mines and the like generally and for the purposes thereof or otherwise in relation to the business of the Company to purchase, take on lease or fee farm grant or in exchange hire or otherwise acquire any real and personal property and any mines, minerals and mining rights, easements and other rights and privileges which the Company may deem necessary or convenient for the purposes of its business. |
(5) | To carry on the business of miners and quarriers and manufacturers and merchants of and dealers in rocks, stones, sand, gravel, breeze, shale, slag, rubble, shingle, ballast, slate, gypsum, marble, coal, coke, turf and other fuels, oils and other mineral substances. |
(6) | To carry on the business of road-makers and contractors, building contractors, builders merchants and providers and dealers in road making and building materials, timber merchants, sawyers, carpenters, joiners, turners, cabinet makers, shop and office fitters, polishers, mining, sanitary, electrical, gas and general engineers, plumbers, glaziers, painters, decorators, general warehousemen and storekeepers, insurance agents, auctioneers, valuers, surveyors, and house, land and estate agents. |
(7) | To manufacture, buy, sell and otherwise deal in minerals, chemicals, chemical products, plant, machinery, implements, conveniences, provisions and things capable of being used in connection with the operations or business of the Company. |
(8) | To buy, sell, deal in, search for, quarry, mine, get, win, work, dress, shape, mould and separate oolitic particles and reform with any cementitious material, hew, polish, crush, refine, smelt, prepare for market or use stone and minerals of all kinds, slate, oolitic substances, chalk, sand, gravel, brick, china and other clays, coal, iron, ironstone, metallic ores, oil and other minerals, metals, materials and substances of all kinds whether obtainable by underground or surface workings. |
(9) | To acquire and undertake the whole or any part of the business, property and liabilities of any person or company carrying on any business which the Company is authorised to carry on, or possessed of property suitable for the purposes of this Company. |
- 7 -
(10) | To amalgamate with any other company having objects similar to the objects of this Company. |
(11) | To apply for, purchase or otherwise acquire any patents, brevets dinvention, licences, concessions and the like, conferring any exclusive or non-exclusive or limited right to use, or any secret or other information as to any invention which may seem capable of being used for any of the purposes of the Company, or the acquisition of which may seem calculated directly or indirectly to benefit the Company and to use, exercise, develop, or grant licences in respect of, or otherwise turn to account the property, rights or information so acquired. |
(12) | To enter into partnership or into any arrangement for sharing profits, union of interests, co-operation, joint adventure, reciprocal concession, mutual assistance, or otherwise, with any person or company carrying on or engaged in, or about to carry on or engage in, any business or transaction which this Company is authorised to carry on or engage in or any business or transaction capable of being conducted so as directly or indirectly to benefit this Company and to lend money to guarantee the contracts of or otherwise assist any such person or company. |
(13) | To enter into any arrangements with any Governments or authorities supreme, municipal, local or otherwise, that may seem conducive to the Companys objects or any of them and to obtain from any such government or authority any rights, privileges and concessions, and any authorities, permits, licences and registrations required by law, or which the Company may think it desirable to obtain, and to carry out, exercise and comply with any such arrangements, rights, privileges, concessions, permits and licences. |
(14) | To establish and support, or aid in the establishment and support of associations, institutions, funds, trusts, and conveniences calculated to benefit employees, or ex-employees of the Company, or the dependants or connections of such persons, and to grant pensions and allowances, and to do any acts or things or make any arrangements or provisions enabling employees of the Company or other persons aforesaid to become shareholders or depositors in the Company, or otherwise to participate in the profits of the Company, upon such terms and in such manner as the Company may think fit, and to make payments towards insurance and to subscribe or guarantee money for charitable or benevolent objects or for any exhibition or for any public, general or useful objects, or any other object whatsoever which the Company may think advisable. |
- 8 -
(15) | To promote any company or companies for the purpose of acquiring or undertaking all or any of the property and liabilities of this Company, or for any other purpose which may seem directly or indirectly calculated to benefit this Company. |
(16) | To acquire by purchase, lease, exchange or otherwise lands, buildings and hereditaments of any tenure or description in any estate or interest and any rights over or connected therewith and to turn the same to account as may seem expedient and in particular by planting, building, improving, farming, grazing and felling timber and by leasing, letting and disposing of the same. |
(17) | To buy, sell, build, charter, hire, acquire, hold, let and use any aircraft, steamers, tugs, barges, motor boats, ferry or other boats or other water conveyances, railways, tramways, railway trucks and rolling stock, motors, lorries, motor cars, waggons or carts of any kind for or in connection with any of the purposes hereby authorised. |
(18) | To manufacture or produce electric light, gas and other means of illumination, and steam or electric power and erect machinery or apparatus for applying and turning to account any wind, water or other power for or in connection with any of the purposes hereby authorised. (19) To develop and turn to account any land acquired by the Company, or in which it is interested, and in particular by laying out and preparing the same for mining purposes or for building purposes, constructing, altering, pulling down, decorating, maintaining, fitting-up and improving buildings and conveniences, and by planting, paving, draining, farming, cultivating, letting on building lease or building agreement, and by advancing money to and entering into contracts and arrangements of all kinds with builders, tenants, and others. |
(20) | To construct, improve, maintain, develop, work, manage, carry out, or control any roads, ways, tramways, railways, branches or sidings, bridges, reservoirs-watercourses, wharves, manufactories, warehouses, electric works, shops, stores and other works and conveniences which may seem calculated directly or indirectly to advance the Companys interests, and to contribute to, subsidise, or otherwise assist or take part in the construction, improvement, maintenance, working, management, carrying out or control thereof. |
(21) | To lend and advance money or other property or give credit or financial accommodation to any company or person in any manner either with or without security and whether with or without the payment of interest and upon |
- 9 -
such terms and conditions as the Companys board of directors shall think fit or expedient and to guarantee, indemnify, grant indemnities in respect of, enter into any suretyship or joint obligation, or otherwise support or secure, whether by personal covenant, indemnity or undertaking or by mortgaging, charging, pledging or granting a lien or other security over all or any part of the Companys property (both present and future) or by any one or more of such methods or any other method and whether in support of such guarantee or indemnity or suretyship or joint obligation or otherwise, on such terms and conditions as the Companys board of directors shall think fit, the payment of any debts or the performance or discharge of any contract, obligation or actual or contingent liability of any person or company (including, without prejudice to the generality of the foregoing, the payment of any capital, principal, dividends or interest on any stocks, shares, debentures, debenture stock, notes, bonds or other securities of any person, authority or company) including, without prejudice to the generality of the foregoing, any company which is for the time being the Companys holding company as defined in the Companies Act 2014 and in any statutory modification or re-enactment thereof, or subsidiary (as defined in the Companies Act 2014) of the Company or otherwise associated with the Company, in each case notwithstanding the fact that the Company may not receive any consideration, advantage or benefit, direct or indirect, from entering into any such guarantee or indemnity or suretyship or joint obligation or other arrangement or transaction contemplated herein. |
(22) | To borrow or raise or secure the payment of money in such manner as the Company shall think fit, and in particular by the issue of debentures or debenture stock, perpetual or otherwise, charged upon all or any of the Companys property, both present and future, including its uncalled capital, and to purchase, redeem or pay off any such securities. |
(23) | To engage in currency exchange and interest rate transactions (whether in connection with or incidental to any other contract undertaking or business entered into or carried on by the Company or whether as an independent object or activity) including, but not limited to, dealings in foreign currency, spot and forward rate exchange contracts, futures, options, forward rate agreements, swaps, caps, floors, collars and any other foreign exchange or interest rate hedging arrangements and such other instruments as are similar to or derive from any of the foregoing whether for the purpose of making a profit or avoiding a loss or managing a currency or interest rate exposure or for any other purpose and to enter into any contract for and to exercise and enforce all the rights and powers conferred by or incidental, directly or indirectly, to |
- 10 -
such transactions or termination of any such transactions and to enter into any contracts, agreements or obligations relating to warrants, bonds, notes, mortgage backed securities or instruments, bills of exchange, promissory notes, instruments involving the management or control of currency exchange and/or risks and to enter into any other agreements relating to synthetic or intangible assets, choses in action and any other financial instruments whatsoever including instruments with conversion rights or options of any nature and instruments evidencing or including debt or equity and all derivatives of those products, invoices, receivables, including movement of goods, assets represented by any contract for bullion or other metals or commodity based products and in whatsoever currencies, including contracts involving packaging and re-packaging of assets of any nature, securitisation, unitisation, sub-participation of assets, participation, discounting, factoring, credit sale, instalment sale, conditional sale, leasing or contracts of any other similar or analogous nature. |
(24) | To remunerate any person or company for services rendered, or to be rendered, in placing or assisting to place or guaranteeing the placing of any of the shares in the Companys share capital or any debentures, debenture stock or other securities of the Company, or in or about the formation or promotion of the Company or the conduct of its business. |
(25) | To draw, make, accept, indorse, discount, execute and issue promissory notes, bills of exchange, bills of lading, warrants, debentures, and other negotiable or transferable instruments. |
(26) | To undertake and execute any trusts, the undertaking whereof may seem desirable and either gratuitously or otherwise. |
(27) | To sell or dispose of the undertaking of the Company or any part thereof for such consideration as the Company may think fit, and in particular for shares, debentures, or securities of any other company having objects altogether or in part similar to those of this Company. |
(28) | To adopt such means of making known the products and investments of the Company as may seem expedient and in particular by advertising through all media, by purchase and exhibition of works of art or interest, by publication of books and periodicals, and by granting prizes, rewards, scholarships and donations and by sponsoring (whether by guarantee or otherwise) sports events, theatrical and cinematic performances and exhibitions of all descriptions. |
- 11 -
(29) | To obtain any Provisional Order or Act of the Oireachtas or Ministerial or Departmental Licence or Order for enabling the Company to carry any of its objects into effect, or for effecting any modification of the Companys constitution, or for any other purpose which may seem expedient, and to oppose any proceedings or applications which may seem calculated directly or indirectly to prejudice the Companys interests. |
(30) | To procure the Company to be registered or recognised in any country or place. |
(31) | To sell, improve, manage, develop, exchange, lease, mortgage, enfranchise, dispose of, turn to account or otherwise deal with all or any part of the property and rights and investments of the Company. |
(32) | To promote freedom of contract, and to resist, insure against, counteract and discourage interference therewith, to join any lawful Federation, Union or Association, or do any other lawful act or thing with a view to preventing or resisting directly or indirectly any interruption of, or interference with the Companys or any other trade or business, or providing or safeguarding against the same, or resisting or opposing any strike movement or organisation which may be thought detrimental to the interests of the Company or its employees, and to subscribe to any association or fund for any such purposes. |
(33) | To do all or any of the above things in any part of the world, and as principals, agents, contractors, trustees, or otherwise, and by or through trustees, agents or otherwise, and either alone or in conjunction with others. |
(34) | To distribute any of the property of the Company in specie among the members. |
(35) | To carry on any other business (whether manufacturing or otherwise), which may seem to the Company capable of being conveniently carried on in connection with the above, or calculated directly or indirectly to enhance the value of or render profitable any of the Companys property or rights. |
(36) | To do all such other things as the Company may think incidental or conducive to the attainment of the above objects or any of them. |
Note: It is hereby declared that the word company in this Clause, except where used in connection with this Company, shall be deemed to include any partnership or other body of persons, whether incorporated or not incorporated, and whether domiciled in Ireland, Northern Ireland, Great Britain, or elsewhere, and the intention is that the objects specified in each paragraph of this Clause shall, except where otherwise expressed in such paragraph, be independent main objects and shall be in no wise limited or restricted by reference to, or inference from, the terms of any other paragraph or the name of the Company.
- 12 -
Provided always that the provisions of this Clause shall be subject to the Company obtaining where necessary for the purpose of carrying any of its objects into effect such licence, permit or authority as may be required by law. |
5. | The liability of the members is limited. |
6. | The capital of the Company is 426,297,940 divided into 150,000 5% Cumulative Preference Shares of 1.27 each, 872,000 7% A Cumulative Preference Shares of 1.27 each, 1,250,000,000 Ordinary Shares of 0.32 each and 1,250,000,000 Income Shares of 0.02 each. |
The rights and privileges attached to any class of shares in the Companys Share Capital shall not be modified, commuted, affected, abrogated, or dealt with except by an Agreement between the Company and any person or persons purporting to contract on behalf of such class, provided that such agreement is ratified in writing by the holders of three-fourths in nominal value of the issued shares of such class, or is confirmed by an Extraordinary Resolution passed at separate General Meetings of the holders of the shares of such class, such meetings to be summoned and held pursuant to the provisions contained in the Companys Articles in force for the time being.
- 13 -
WE, the several persons whose names and addresses are subscribed, are desirous of being formed into a Company, in pursuance of this Memorandum of Association, and we respectively agree to take the number of shares in the capital of the Company set opposite our respective names.
NAMES, ADDRESSES AND DESCRIPTIONS OF SUBSCRIBERS |
Number of Ordinary Shares taken by each Subscriber |
|||
ROBERT J. KIDNEY, ESQ., |
One | |||
12/14 College Green, Dublin. |
||||
Incorporated Accountant. |
||||
C.M. OKELLY, ESQ., |
One | |||
Millbrook, Straffan, Co. Kildare. |
||||
Company Director. |
||||
PATRICK CONWAY, ESQ., |
One | |||
70 Parnell Street, Dublin. |
||||
Company Director. |
||||
CHARLES SEARSON, ESQ., |
One | |||
33 South Richmond Street, Dublin. |
||||
Company Director. |
||||
DONAL M. ROCHE, ESQ., |
One | |||
Mone Roodan, Newlands, Clondalkin, |
||||
Co. Dublin. |
||||
Company Director. |
||||
J. PLUNKETT DILLON, ESQ., |
One | |||
Ludford Park, Dundrum, Co. Dublin. |
||||
Solicitor. |
||||
ROBERT A. KIDNEY, ESQ., |
One | |||
12/14 College Green, Dublin. |
||||
Incorporated Accountant. |
||||
Dated this 3rd day of June, 1949.
WITNESS to the above Signatures:-
JOHN EDMUND DOYLE, Solicitor, 25 Suffolk Street, Dublin, C.3. |
- 14 -
COMPANIES ACT 2014
COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION
OF
C R H
public limited company
The following Articles were adopted by the Company by Special Resolution passed on 7th May 2015 in lieu of and in substitution for all existing Articles of Association of the Company.
PRELIMINARY
1. | Sections 77 to 81, 95(1)(a), 95(2)(a), 96(2) to (11), 124, 125(3), 144(3), 144(4), 148(2), 158(3), 159 to 165, 182(2), 182(5), 183(3), 187, 188, 218(5), 229, 230, 338(5), 338(6), 618(1)(b), 1090, 1092 and 1113 of the Act shall not apply to the Company. |
INTERPRETATION
2. | In these articles unless the context otherwise requires- |
Act means the Companies Act 2014 and every statutory modification and re-enactment thereof for the time being in force;
Acts means the Companies Act 2014 and all statutory instruments which are to be read as one with, or construed or read together as one with, the Act;
Articles means these Articles of Association as from time to time altered by Resolution of the Company;
Auditors means the statutory auditors for the time being of the Company;
Board means the Board of Directors of the Company or the Directors present at a duly convened meeting of Directors at which a quorum is present;
Cash Memorandum Account means an account so designated by the Operator of the Relevant System concerned;
- 15 -
Clear Days means in relation to the period of notice, that period excluding the day when notice is given or deemed to be given and the day for which it is given or on which it is to take effect, or is deemed to take effect;
Directors means the Directors for the time being of the Company or the Directors present at a meeting as the Board of Directors of the Company;
Electronic Communication means information communicated or intended to be communicated to a person, other than its originator, that is generated, communicated, processed, sent, received, recorded, stored or displayed by electronic means or in electronic form but does not include information communicated in the form of speech unless the speech is processed at its destination by an automatic voice recognition system. Any references in this definition, Article 2 or Article 129 to addressee, electronic, information, originator or person shall have the same meaning as in Section 2 of the Electronic Commerce Act, 2000, or as that section may be amended by subsequent legislation;
Month means calendar month;
Office means the registered office for the time being of the Company within the meaning of Section 50 of the Act;
Person means where the context permits an unincorporated body of persons, a partnership, a club or other association as well as an individual and a company which shall be deemed to include a body corporate, whether a company (wherever formed, registered or incorporated), a corporation aggregate, a corporation sole and a national or local government or authority or department or other legal entity or division or constituent thereof;
Record Date for a General Meeting means a date and time specified by the Company for eligibility for voting at a general meeting, which may not be more than forty-eight hours before the general meeting to which it relates;
Register means the Register of Members required to be kept by Section 169 of the Act;
Regulations means the Companies Act, 1990 (Uncertificated Securities) Regulations, 1996 (S.I. No.68/1996) and the Companies Act, 1990 (Uncertificated Securities) (Amendment) Regulations 2005 including any modification thereof or any regulations in substitution thereof under Section 1086 of the Act and for the time being in force;
Relevant System means a computer based system and procedures which enables title to shares to be evidenced and transferred without a written instrument and which facilitates supplementary and incidental matters and which is an operator system within the meaning of the Regulations;
- 16 -
Seal means the Common Seal of the Company or where relevant the official seal kept by the Company pursuant to Section 1017 of the Act;
Secretary means any person appointed to perform the duties of the Secretary of the Company including an Assistant or Deputy Secretary;
State means Ireland;
Subsidiary shall mean a subsidiary as defined in the Act;
Uncertificated form in respect of any share means a share the title to which is recorded on the Register as being held in uncertificated form and title to which by virtue of the Regulations may be transferred by means of a Relevant System.
The masculine includes the feminine, and the singular includes the plural, and vice versa.
Expressions referring to writing shall be construed as including references to printing, lithography, photography, electronic and other modes of representing or of reproducing words in visible form and cognate words shall be similarly construed.
Unless the contrary intention appears, words or expressions contained in these Articles shall bear the same meaning as in the Act or in any statutory modification thereof in force at the date on which these Articles become binding on the Company and all words and expressions used in the Regulations shall have the same meaning when used in these Articles.
References to Articles of these Articles and any reference in an Article to a paragraph or sub-paragraph shall be a reference to a paragraph or sub-paragraph of the Articles in which the reference is contained unless it appears from the contents that a reference to some other provision is intended. The headings and captions included in these Articles are included for convenience of reference only and shall not be considered as part of or affect the construction or interpretation of these Articles.
CONTROL
3. | The Company shall be managed and controlled in Ireland. |
CAPITAL AND SHARES
4. | The capital of the Company is 426,297,400 divided into 150,000 5% Cumulative Preference Shares of 1.27 each, 872,000 7% A Cumulative Preference Shares of 1.27 each, 1,250,000,000 Ordinary Shares of 0.32 each and 1,250,000,000 Income Shares of 0.02 each. |
- 17 -
5. | The said 5 per cent. Cumulative Preference Shares shall confer on the holders thereof the rights and privileges following, that is to say- |
(a) | the right out of the profits which the Company shall determine to distribute by way of dividend to a fixed cumulative preferential dividend at the rate of 5 per cent. per annum on the capital for the time being paid up or credited as paid up on the said shares during the period in respect of which the said dividend is declared; |
(b) | the right in a winding-up to repayment of the capital paid up or credited as paid up on the said shares and to payment of all arrears of the said fixed cumulative preferential dividend (whether earned or declared or not) down to the commencement of the winding-up in priority to the repayment of the amount of capital paid up or credited as paid up on any other shares in the capital of the Company. |
Subject to the foregoing the said Preference Shares shall not confer any further right to participate in profits or assets and the holders of the said Preference Shares shall have no right to receive notice of or to be present or to vote either in person or by proxy at any general meeting by virtue or in respect of their holdings of such Preference Shares unless their fixed preferential dividend shall be six months in arrears or unless a Resolution is proposed for the winding up of the Company or otherwise affecting the rights or privileges of the holders of such Preference Shares.
6. | The following provisions shall have effect in regard to the said 7 per cent. A Cumulative Preference Shares of 1.27 each (hereinafter called A Preference Shares): |
(i) | The A Preference Shares shall carry the right to a fixed cumulative preferential dividend at the rate of 7 per cent. per annum on the capital for the time being paid up or credited as paid up thereon during the period in which the said dividend is declared. |
(ii) | The A Preference Shares shall rank for such dividend next after the said 150,000 5 per cent. Cumulative Preference Shares and in priority to the Ordinary Shares for the time being of the Company. |
(iii) | The A Preference Shares shall carry the right in a winding-up to repayment of capital paid up or credited as paid up thereon and to payment of all arrears of the said fixed cumulative preferential dividend (whether earned or declared or not) down to the commencement of the winding-up net after the said 150,000 5 per cent. Cumulative Preference Shares and in priority to the Ordinary Shares for the time being of the Company. |
- 18 -
(iv) | Save as aforesaid the A Preference Shares shall not confer any further right to participate in profits or assets. |
(v) | The A Preference Shares shall not confer on the holders thereof the right to receive notice of or to attend or vote either in person or by proxy at any general meeting of the Company by virtue or in respect of their holdings thereof unless- |
(a) | At the date of the notice convening the meeting the dividend thereon is six months in arrears and so that for this purpose the dividend on such Shares shall be deemed to be payable half-yearly on the 5th day of April and the 5th day of October in each year, or |
(b) | The business of the meeting includes the consideration of a resolution for reducing the capital of the Company or for the sale of the undertaking of the Company, or for the winding-up of the Company, or for increasing the borrowing powers of the Company, or for altering its objects, or for varying or abrogating any of the special rights or privileges attached to any Preference Shares, in which case they shall only be entitled to vote on any such resolutions. |
(vi) | That the Company shall be entitled to create further new A Preference Shares ranking in all respects pari passu with the said 872,000 7 per cent. A Cumulative Preference Shares but not in priority thereto. |
7. | Subject to the provisions of Section 108 of the Act, the Company shall have the power to redeem any Preference Shares issued by it prior to the 5th May, 1959. |
8. | Subject to the provisions of Chapter 6 of Part 3 and Chapter 5 of Part 17 of the Act and the other provisions of this Article, the Company may: |
(a) | pursuant to Section 66(4) of the Act, issue any shares of the Company which are to be redeemed or are liable to be redeemed at the option of the Company or the Shareholder on such terms and in such manner as may be determined by the Company in general meeting (by Special Resolution of the Company) on the recommendation of the Directors; |
(b) | pursuant to Section 105 and Chapter 5 of Part 17 of the Act, purchase any of its own shares (including any Redeemable Shares and without any obligation to purchase on any pro rata basis as between shareholders |
- 19 -
or shareholders of the same class) and may cancel any shares so purchased or hold them as treasury shares (as defined in Section 106 of the Act) and may reissue any such shares as shares of any class or classes; |
(c) | pursuant to Section 83(3) of the Act, convert any of its shares into Redeemable Shares. |
8A | The Company shall not make a purchase of shares in the Company in accordance with Section 1074 of the Act unless the purchase has first been authorised by a special resolution passed in general meeting. Where the Company has been so authorised to make market purchases (as defined in Section 1072 of the Act) of any of its own shares in accordance with this Article 8A, the Company and/or any of its subsidiaries may make such purchases on such terms and conditions and in such manner as the Directors of the Company or the particular subsidiary of the Company may from time to time determine but subject to the provisions of the Act and to the following restrictions and provisions:- |
(a) | for the purposes of this Article and any special resolution which refers to it, and where the context so requires, an Ordinary Share of the Company shall include an Income Share; |
(b) | the maximum number of Ordinary Shares authorised to be acquired pursuant to the terms of any special resolution which refers to this Article shall be such number of Ordinary Shares whose aggregate nominal value shall equal 10 per cent of the aggregate nominal value of the issued Ordinary Shares of the Company as at the close of business on the date of the passing of such special resolution; |
(c) | the minimum price which may be paid for any Ordinary Share shall be the nominal value of such Ordinary Share; |
(d) | the maximum price which may be paid for any Ordinary Share (a Relevant Share) shall be an amount equal to 105 per cent of the average of the five amounts resulting from determining whichever of the following ((i), (ii) or (iii) specified below) in relation to the Relevant Shares of the same class as the Relevant Share shall be appropriate for each of the five business days immediately preceding the day on which the Relevant Share is purchased, as determined from the information published by or under the authority of The Irish Stock Exchange plc reporting the business done on each of these five business days: |
(i) | if there shall be more than one dealing reported for the day, the average of the prices at which such dealings took place; or |
(ii) | if there shall be only one dealing reported for the day, the price at which such dealing took place; or |
- 20 -
(iii) | if there shall not be any dealing reported for the day, the average of the closing bid and offer prices for the day; |
and if there shall be only a bid (but not an offer) or an offer (but not a bid) price reported, or if there shall not be any bid or offer price reported for any particular day then that day shall not count as one of the said five business days for the purposes of determining the maximum price. If the means of providing the foregoing information as to dealings and prices by reference to which the maximum price is to be determined is altered or is replaced by some other means, then a maximum price shall be determined on the basis of the equivalent information published by the relevant authority in relation to dealings on The Irish Stock Exchange plc or its equivalent;
(e) | the authority conferred by any special resolution referring to this Article shall include authority to make market purchases of Relevant Shares on the London Stock Exchange provided that the maximum price which may be paid for any Relevant Shares so purchased shall be the higher of: |
(i) | an amount equal to the higher of the last independent trade in the Companys shares and the highest current independent bid for a Relevant Share on the London Stock Exchange; and |
(ii) | an amount determined in accordance with sub-paragraph (d) above but deleting from that paragraph the reference to The Irish Stock Exchange plc and inserting instead reference to the London Stock Exchange and deleting from that paragraph sub-paragraph (iii) thereof and the words appearing after sub-paragraph (iii) and forming the rest of the first sentence of sub-paragraph (d) and inserting instead the following:- |
(iii) | if there shall not be any dealing reported for the day, the average of the prices under the heading Quotation in respect of that share for the day and if there shall not be any Quotation reported for any particular day then that day shall not count as one of the said five business days for the purposes of determining the maximum price; |
and deleting from the last line thereof the reference to The Irish Stock Exchange plc and inserting instead reference to the London Stock Exchange.
- 21 -
8B | Where the Company has been authorised by a special resolution passed in general meeting to re-issue treasury shares (as provided for in Section 1078 of the Act) in accordance with this Article 8B, the maximum and minimum prices at which any treasury shares may be re-issued off-market shall be as follows:- |
(a) | the maximum price shall be an amount equal to 120% of the Appropriate Price (as defined in paragraph (c)); and |
(b) | the minimum price shall be: |
(i) | in the case of an Employee Share Scheme (as defined in paragraph (d) below), an amount equal to the price as provided for in such Employee Share Scheme, or |
(ii) | in all other cases and circumstances where treasury shares are re-issued off-market, an amount equal to 95% of the Appropriate Price (as defined in paragraph (c)); and |
(c) | Appropriate Price means, in the case of paragraph (a) above, the higher of the average share prices determined from (i) or (ii) below and, in the case of paragraph (b) above, the lower of the average share prices determined from (i) or (ii) below; |
(i) | the average of the five amounts resulting from determining whichever of the following ((A), (B) or (C) specified below) in relation to shares of the class of which such treasury share is to be re-issued shall be appropriate in respect of each of the five business days immediately preceding the day on which the treasury share is re-issued, as determined from information published by or under the authority of The Irish Stock Exchange plc reporting the business done on each of those five business days: - |
(A) | if there shall be more than one dealing reported for the day, the average of the prices at which such dealings took place; or |
(B) | if there shall be only one dealing reported for the day, the price at which such dealing took place; or |
(C) | if there shall not be any dealing reported for the day, the average of the closing bid and offer prices for the day; |
- 22 -
and if there shall be only a bid (but not an offer) or an offer (but not a bid) price reported, or if there shall not be any bid or offer price reported for any particular day, then that day shall not count as one of the said five business days for the purposes of determining the Appropriate Price; if the means of providing the foregoing information as to dealings and prices by reference to which the Appropriate Price is to be determined is altered or is replaced by some other means, then the Appropriate Price shall be determined on the basis of the equivalent information published by the relevant authority in relation to dealings on The Irish Stock Exchange plc or its equivalent;
(ii) | the average share price determined as provided in sub-paragraph (i) above but deleting from that paragraph the reference to The Irish Stock Exchange plc and inserting instead reference to the London Stock Exchange and deleting from that paragraph sub-paragraph (C) thereof and all of the words appearing thereafter and inserting instead the following:- |
(C) | if there shall not be any dealing reported for the day, the average of the prices under the heading Quotation in respect of that share for the day; |
and if there shall not be any Quotation reported for any particular day then that day shall not count as one of the said five business days for the purposes of determining the Appropriate Price; if the means of providing the foregoing information as to dealings and prices by reference to which the Appropriate Price is to be determined is altered or is replaced by some other means, then the Appropriate Price shall be determined on the basis of the equivalent information published by the relevant authority in relation to dealings on the London Stock Exchange or its equivalent;
(d) | Employee Share Scheme means any scheme or plan which involves the appropriation or issue of Ordinary Shares or the issue of options to acquire Ordinary Shares in the Company and which has been approved by the Companys shareholders in General Meeting; and |
(e) | the Directors may resolve to permit the re-issue of treasury shares to be paid for in a currency or currencies other than euro and, in such cases, the payment shall be subject to the conversion rate or rates as may be determined by the Directors in relation thereto. |
- 23 -
9. | Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, any share in the Company may be issued with such preferred or deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Company may from time to time by Ordinary Resolution determine. |
10. | The rights and privileges attached to any class or classes of shares in the Companys share capital may be modified, commuted, affected, abrogated or dealt with in manner provided by Clause 6 of the Companys Memorandum of Association and all the provisions hereinafter contained as to general meetings (save Article 61) shall mutatis mutandis apply to every meeting of the holders of the shares of any class but so that the quorum thereof shall be members holding or representing by proxy one-third of the nominal amount of the issued shares of such class. |
11. | (a) | Subject to the provisions of these Articles relating to new shares, the shares shall be at the disposal of the Directors, and they may (subject to the provisions of the Act) allot, grant options over or otherwise dispose of them to such persons, on such terms and conditions and at such times as they may consider to be in the best interest of the Company and its shareholders, but so that no share shall be issued at a discount, so that in the case of shares offered to the public for subscriptions, the amount payable on application on each share shall not be less than twenty-five per cent of the nominal amount of the share and the whole of any premium on it. |
(b) | Without prejudice to the generality of the powers conferred on the Directors by the other paragraphs of this Article, the Directors may grant from time to time options to subscribe for the unallotted Shares in the capital of the Company to Directors and other persons in the service or employment of the Company or any subsidiary or associate company of the Company on such terms and subject to such conditions as may be approved from time to time by the Directors or by any Committee thereof appointed by the Directors for the purposes of such approval and on the terms and conditions required to obtain the approval of any statutory authority in any jurisdiction. |
(c) | The Company may issue warrants to subscribe to any person to whom the Company has granted the right to subscribe for shares in the Company (other than under a share option scheme under paragraph (b)) certifying the right of the Registered Holder to subscribe for shares in the Company upon such terms and conditions as the right may have been granted. |
(d) | The Company may at any time and from time to time pass an Ordinary Resolution referring to this Article 11 (d) and authorising the Directors to allot relevant securities (within the meaning of Section 1021 of the Act) and upon the passing of such an Ordinary Resolution: |
- 24 -
(i) | the Directors shall thereupon and without further formality be generally and unconditionally authorised to allot relevant securities provided that the nominal amount of such securities where they are shares, and, where such securities are not shares, the nominal amount of the shares in respect of which such securities confer the right to subscribe or convert, shall not exceed in aggregate the sum specified in such Ordinary Resolution; and |
(ii) | any such authority shall (unless otherwise specified in such Ordinary Resolution or varied or abrogated by ordinary resolution passed at an intervening Extraordinary General Meeting) expire at the conclusion of the Annual General Meeting of the Company next following the passing of such Ordinary Resolution save that the Company may before such expiry date make an offer or agreement which would or might require relevant securities to be allotted after such expiry date and the Directors may allot relevant securities in pursuance of such offer or agreement as if the authority conferred hereby had not expired; |
and all, if any, previous authorities under Section 1021of the Act shall thenceforth cease to have effect.
(e) | The Company may at any time and from time to time resolve by a Special Resolution referring to this Article 11(e) that the Directors be empowered to allot equity securities (within the meaning of Section 1023 of the Act) for cash and upon such Special Resolution being passed, the Directors shall (subject to their being authorised to allot relevant securities in accordance with Section 1021 of the Act) thereupon and without further formality be empowered to allot (pursuant to any such authority) equity securities for cash as if Sub-Section 1 of Section 1022 of the Act did not apply to any such allotment provided that such power shall be limited: |
(i) | to the allotment of equity securities in connection with a rights issue in favour of Ordinary shareholders where the equity securities respectively attributable to the interest of all such shareholders are proportionate (as nearly as may be) to the respective value of shares held by them but subject to such exclusions or other arrangements as the Directors may deem necessary or expedient to deal with legal or practical problems in respect of overseas shareholders, fractional entitlements or otherwise; and |
- 25 -
(ii) | to the allotment of equity securities pursuant to the terms of any share scheme for employees approved by the members in General Meeting; and |
(iii) | to the allotment (otherwise than pursuant to subparagraphs (i) or (ii) above) of equity securities having in the case of relevant shares (within the meaning of Section 1023 of the Act) a nominal amount or, in case of other equity securities, giving the right to subscribe for or convert into relevant shares have a nominal amount not exceeding in aggregate the sum specified in such Special Resolution; |
and such power shall (unless otherwise specified in such Special Resolution or varied or abrogated by Special Resolution passed at an intervening Extraordinary General Meeting) expire at the conclusion of the Annual General Meeting of the Company next following the passing of such Special Resolution save that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry date and the Directors may allot equity securities in pursuance of such offer or agreement as if such power had not expired.
12. | The Company may pay commission to any person in consideration of a person subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in the Company or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the Company on such terms and subject to such conditions as the Directors may determine, including, without limitation, by paying cash or allotting and issuing fully or partly paid shares or any combination of the two. The Company may also, on any issue of shares, pay such brokerage as may be lawful. |
13. | Except as required by law, no person shall be recognised by the Company as holding any share upon any trust, and the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share or any interest in any fractional part of a share or (except only as by these Articles or by law otherwise provided) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder. This shall not preclude the Company from requiring the members or the transferee of shares to furnish the Company with information as to the beneficial ownership of any share when such information is reasonably required by the Company. |
- 26 -
14. | (a) | The Directors may at any time and in their absolute discretion, if they consider it to be in the interests of the Company to do so, give to any shareholder or shareholders a notice (hereinafter referred to as an Investigation Notice) requiring such shareholder or shareholders to notify the Company in writing within the prescribed period of full and accurate particulars of all or any of the following matters, namely:- |
(i) | his interest in any shares in the Company; |
(ii) | if his interest in the share does not consist of the entire beneficial interest in it, the interests of all persons having a beneficial interest in the share (provided that one joint shareholder of a share shall not be obliged to give particulars of interests of persons in the share which arise only through another joint shareholder of the Company); and |
(iii) | any arrangement (whether legally binding or not) entered into by him or any person having any beneficial interest in the share whereby it has been agreed or undertaken or the shareholder of such share can be required to transfer the share or any interest therein to any person (other than a joint shareholder of the share) or to act in relation to any meeting of the Company or of any class of shares of the Company in a particular way or in accordance with the wishes or directions of any other person (other than a person who is a joint shareholder of such share). |
(b) | If, pursuant to an Investigation Notice, the person stated to own any beneficial interest in a share or the person in favour of whom any shareholder (or other person having any beneficial interest in the share) has entered into any arrangements referred to in paragraph (a)(iii) is a body corporate, trust, society or any other legal entity or association of individuals and/or entities, the Directors may in their absolute discretion give a further Investigation Notice to the shareholders of, and/or any person whom such shareholder has stated as having any beneficial interest in, such a share requiring them to notify the Company in writing within the prescribed period of full and accurate particulars of the names and addresses of the individuals who control (whether directly or indirectly and through any number of vehicles, entities or arrangements) the beneficial ownership of all the shares, interests, units or other measure of ownership of such body corporate, trust, society or other entity or association wherever the same shall be incorporated, registered or domiciled or wherever such individuals shall reside provided that if at |
- 27 -
any stage of such chain of ownership the beneficial interest in any share shall be established to the satisfaction of the Directors to be in the ownership of any body corporate any of whose share capital is listed or dealt in on any bona fide stock exchange, unlisted securities market or over the counter securities market, it shall not be necessary to disclose details of the individuals ultimately controlling the beneficial interests in the shares of such body corporate. |
(c) | If at any time the Directors are satisfied that: |
(i) | any member has been served with an Investigation Notice, or |
(ii) | any member, or any other person appearing to be interested in shares held by such member has been served with a notice under Section 1062 of the Act (a Section 1062 Notice), |
and is in default for the prescribed period in supplying to the Company the information thereby required, or, in purported compliance with such a notice has made a statement which is false or inadequate, then the Directors may, in their absolute discretion at any time thereafter by notice (a Disenfranchisement Notice) to such member direct that in respect of the shares in relation to which the default occurred (the Default Shares) (which expression shall include any further shares which are issued in respect of such shares) the member shall not be entitled to attend or to vote either personally or by proxy at a general meeting of the Company or a meeting of the holders of any class of shares of the Company or to exercise any other rights conferred by membership in relation to general meetings of the Company or meetings of the holders of any class of shares of the Company.
(d) | Where the Default Shares represent at least three per cent of the issued shares of that class (or such other percentage as may be determined under the provisions of Section 1052 of the Act), then the Disenfranchisement Notice may additionally direct that: |
(i) | any dividend (or part thereof) or other money which would otherwise be payable in respect of the Default Shares shall be retained by the Company without any liability to pay interest thereon when such money is finally paid to the member and/or |
(ii) | no transfer of any shares held by such member shall be registered unless; |
(A) | the member is not himself in default as regards supplying the information required; and |
- 28 -
(B) | the transfer is part only of the members holding and when presented for registration is accompanied by a certificate by the member in a form satisfactory to the Directors to the effect that after due and careful enquiry, the member is satisfied that none of the shares, the subject of the transfer, is a Default Share. |
(e) | The Company shall send to each other person appearing to be interested in the shares, the subject of any Disenfranchisement Notice, a copy of the Disenfranchisement Notice but the failure or omission by the Company to do so shall not invalidate such Disenfranchisement Notice. |
(f) | Save as herein provided, any Disenfranchisement Notice shall have effect in accordance with its terms for so long as the default in respect of which the Disenfranchisement Notice was issued continues and for a period of one week thereafter provided that the Directors may at the request of the member concerned reduce or waive such one week period if they think fit. |
(g) | Any Disenfranchisement Notice shall cease to have effect in relation to any shares which are transferred by such member by means of an approved transfer. |
(h) | For the purpose of this Article: |
(i) | a person shall be treated as appearing to be interested in any shares if the member holding such shares has given to the Company a notification under the said Section 1062 or under the Investigation Notice which either: |
(A) | names such person as being so interested; or |
(B) | fails to establish the identities of those interested in the shares; |
and (after taking into account the said notification and any other relevant Section 1062 notification) the Company knows or has reasonable cause to believe that the person in question is or may be interested in the Shares;
(ii) | in the case of both an Investigation Notice and a Section 1062 Notice, the prescribed period is twenty-eight days from the date of service of the notice except that if the Default Shares represent at least five per cent of the issued shares of that class, the prescribed period is fourteen days from such date; and |
- 29 -
(iii) | a transfer of shares is an approved transfer if, but only if: |
(A) | it is a transfer of shares to an offeror by way of or in pursuance of an acceptance of a takeover offer; or |
(B) | the Directors are satisfied that the transfer is made pursuant to a sale of the whole of the beneficial ownership of the shares to a party unconnected with the member and with other persons appearing to be interested in such shares; or |
(C) | the transfer results from a sale made through a recognised stock exchange. |
15. | The Company shall not give, whether directly or indirectly and whether by means of a loan, guarantee, the provisions of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the Company or in its holding company, but this regulation shall not prohibit any transaction permitted by Section 82 of the Act as amended by Section 1043 of the Act. |
CERTIFICATES
16. | Subject to the proviso hereto, every person whose name is entered as a member in the Register shall be entitled without payment to receive within two months after allotment or lodgement of a transfer (or within such other period as the conditions of issue shall provide) one certificate for all his shares and if he transfers part of his holding, to one certificate for the balance or several certificates each for one or more of his shares, so however that in respect of a share or shares held jointly by several persons the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to all such holders. Every certificate shall be under the Seal or under the official seal kept by the Company by virtue of Section 1017 of the Act and shall specify the number, class and distinguishing numbers (if any) of the shares to which it relates and the amount paid up thereon. PROVIDED ALWAYS that a member shall not be entitled to a certificate for his holding of Income Shares. |
17. | If a share certificate be defaced, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and the payment of out-of-pocket expenses of the Company of investigating evidence as the Directors think fit. |
- 30 -
LIEN
18. | The Company shall have a first and paramount lien on every share (not being a fully paid share) for all moneys (whether immediately payable or not) called or payable at a fixed time in respect of that share, and the Company shall also have a first and paramount lien on all shares (other than fully paid shares) standing registered in the name of a single person for all moneys immediately payable by him or his estate to the Company; but the Directors may at any time declare any share to be wholly or in part exempt from the provisions of this regulation. The Companys lien on a share shall extend to all dividends payable thereon. |
19. | The Company may sell, in such manner as the Directors think fit, any shares on which the Company has a lien, but no sale shall be made unless a sum in respect of which the lien exists is immediately payable, nor until the expiration of fourteen days after a notice in writing, stating and demanding payment of such part of the amount in respect of which the lien exists as is immediately payable, has been given to the registered holder for the time being of the share, or the person entitled thereto by reason of his death or bankruptcy. |
20. | To give effect to any such sale, the Directors may authorise some person to transfer the shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the shares comprised in any such transfer, and he shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale. |
21. | The net proceeds of sale (after payment of all costs) shall be applied in payment of such part of the amounts in respect of which the lien exists as is immediately payable and the residue, if any, shall, (subject to a like lien for sums not immediately payable as existing upon the shares before the sale) be paid to the person entitled to the shares at the date of sale upon surrender (at the option of the Directors) to the Company for cancellation of the certificate for the shares sold. |
CALLS ON SHARES
22. | The Directors may from time to time make calls upon the members in respect of any moneys unpaid on their shares (whether on account of the nominal value of the shares or by way of premium) and not by the conditions of allotment thereof made payable at fixed times, provided that no call shall be payable at less than one month from the date fixed for the payment of the last preceding call, and each member shall (subject to receiving at least fourteen days notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares. A call may be revoked or postponed as the Directors may determine. |
- 31 -
23. | A call shall be deemed to have been made at the time when the resolution of the Directors authorising the call was passed and may be required to be paid by instalments. |
24. | The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof. |
25. | If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest on the sum from the day appointed for payment thereof to the time of actual payment at such rate not exceeding five per cent per annum, as the Directors may determine, but the Directors shall be at liberty to waive payment of such interest wholly or in part. |
26. | Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed date, whether on account of the nominal value of the share or by way of premium shall, for the purpose of these Articles, be deemed to be a call duly made and payable on the date on which, by terms of issue, the same becomes payable, and in case of non-payment of interest all the relevant provisions of these Articles as to payment of interest and expenses, forfeiture or otherwise, shall apply as if such sum had become payable by virtue of a call duly made and notified. |
27. | The Directors may, on the issue of shares, differentiate between the holders as to the amount of calls to be paid and the times of payment. |
28. | The Directors may, if they think fit, receive from any member willing to advance the same, all or part of the moneys uncalled and unpaid upon any shares held by him, and upon all or any of the moneys so advanced may (until the same would, but for such advance, become payable) pay interest at such rate as may be agreed upon between the Directors and the member paying such sum in advance. |
TRANSFER OF SHARES
29. | The instrument of transfer of any shares shall be executed by or on behalf of the transferor, and (in case of a share not fully paid) also by or on behalf of the transferee, and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register in respect thereof. |
30. | Subject to such of the restrictions of these Articles as may be applicable any member may transfer all or any of his shares by instrument in writing in any usual or common form (including an instrument in the form of a stock transfer within the meaning of the Stock Transfer Act 1963 completed and executed in accordance with the requirements of that Act) or any other form of which the Directors may approve. |
- 32 -
31. | (a) | The Directors shall not register the transfer of Ordinary Shares unless at the same time the transferor of such shares shall transfer to the same transferee an equal number of Income Shares held by such transferor. |
(b) | The Directors may, in their absolute discretion and without giving any reason, decline to register the transfer of a share (not being a fully paid share) to a person of whom they do not approve, and they may also decline to register the transfer of a share on which the company has a lien and shall not be bound to give any reason for such refusal. |
32. | The Directors may also decline to recognise any instrument of transfer unless: |
(a) | the instrument of transfer is accompanied by the certificate of the shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer; and |
(b) | the instrument of transfer is in respect of one class of share only other than in respect of transfers of Ordinary and Income Shares which shall be on the same instrument. |
33. | If the Directors refuse to register a transfer they shall send, within two months after the date on which the transfer was lodged with the Company, to the transferee notice of the refusal. |
34. | (a) | All instruments of transfer shall upon their being lodged with the Company remain the property of the Company and the Company shall be entitled to dispose of same as it so desires but any instrument of transfer which the Directors refuse to register shall be returned to the person lodging it when notice of the refusal is given. |
(b) | Notwithstanding the provisions of Articles 14, 16, 29, 30, 32 and 33 the Directors shall be entitled to disapply all or part of the provisions of those Articles so that title to securities (as defined in Section 1086 of the Act) may be evidenced and transferred without a written instrument in accordance with the requirements of the Regulations. |
TRANSMISSION OF SHARES
35. | In the case of the death of a member, the survivor or survivors where the deceased was a joint holder, and the personal representatives of the deceased where he was a sole holder, shall be the only person recognised by the Company as having any title to his interest in the shares; but nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by him with other persons. |
- 33 -
36. | Any person becoming entitled to a share in consequence of the death or bankruptcy of a member may, upon such evidence being produced as may from time to time properly be required by the Directors and subject as hereinafter provided, elect either to be registered himself as holder of the share or to have some person nominated by him registered as the transferee thereof, but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by that member before his death or bankruptcy, as the case may be. |
37. | If a person so becoming entitled elects to be registered himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. If he elects to have another person registered, he shall testify his election by executing to that person a transfer of the share. |
38. | All the limitations, restrictions and provisions of these regulations relating to the right to transfer and registration of transfers of shares shall be applicable to any such notice or transfer as aforesaid as if the death or bankruptcy of the member had not occurred and the notice or transfer were a transfer signed by that member. |
39. | A person becoming entitled to a share by reason of the death or bankruptcy of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company, so however, that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share, and if the notice is not complied with within ninety days the Directors may thereupon withhold payment of all dividends, bonuses, or other moneys payable in respect of the share until the requirements of the notice have been complied with. |
FORFEITURE OF SHARES
40. | If a member or person entitled by transmission fails to pay any call or instalment of a call on the day appointed for payment thereof, the Directors may, at any time thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid together with any interest which may have accrued and all expenses incurred by the Company by reason of such non-payment. |
- 34 -
41. | The notice shall name a further day (not earlier than the expiration of fourteen days from the date of service of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed the shares in respect of which the call was made will be liable to be forfeited. |
42. | If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Directors to that effect. |
43. | A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition the forfeiture may be cancelled on such terms as the Directors think fit. |
44. | A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall notwithstanding remain liable to pay to the Company all moneys which, at the date of forfeiture, were payable by him to the Company in respect of the shares, but his liability shall cease if and when the Company shall have received payment in full of all such moneys in respect of the shares. |
45. | The forfeiture of a share shall involve the extinction at the time of forfeiture of all interest in and all claims and demands against the Company in respect of the share and all other rights and liabilities incidental to the share and between the member whose share is forfeited and the Company, except only such of those rights and liabilities as are by these Articles expressly saved, or as are by the Statutes given or imposed in the case of past members. |
46. | A statutory declaration that the declarant is a Director or the Secretary of the Company, and that a share in the Company has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share. The Company may receive the consideration, if any, given for the share on any sale or disposition thereof, and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of and he shall thereupon be registered as the holder of the share, and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share. |
47. | The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the share or by way of premium, as if the same had been payable by virtue of a call duly made and notified. |
- 35 -
CONVERSION OF SHARES INTO STOCK
48. | The Company may by ordinary resolution convert any paid up shares into stock, and re-convert any stock into paid up shares of any denomination. |
49. | The holders of stock may transfer the same, or any part thereof in the same manner, and subject to the same regulations as and subject to which the shares from which the stock arose might previously to conversion have been transferred, or as near thereto as circumstances admit; and the Directors may from time to time fix the minimum amount of stock transferable but so that such minimum shall not exceed the nominal amount of the shares from which the stock arises. |
50. | The holders of stock shall, according to the amount of stock held by them, have the same rights, privileges and advantages in relation to dividends, voting at meetings of the Company and other matters as if they held the shares from which the stock arose, but no such right, privilege or advantage (except participation in the dividends and profits of the Company and in the assets on winding up) shall be conferred by an amount of stock which would not if existing in shares, have conferred that right, privilege or advantage. |
51. | Such of the Articles of the Company as are applicable to paid up shares shall apply to stock and the words share and shareholder therein shall include stock and stockholder. |
ALTERATION OF CAPITAL
52. | (a) | The Company may from time to time by ordinary resolution increase the share capital by such sum to be divided into shares of such amount, as the resolution shall prescribe. |
(b) | Subject to the provisions of the Acts the new shares shall be issued upon such terms and conditions and with such rights and privileges annexed thereto as the general meeting resolving upon the creation thereof shall direct, or if no such direction be given, as the Directors shall determine. |
(c) | Except so far as otherwise provided by the conditions of issue or by these Articles, any capital raised by the creation of new shares shall be considered part of the original Ordinary Share Capital and shall be subject to the provisions herein contained with reference to the payment of calls and instalments, transfer and transmission, forfeiture, lien and otherwise. |
53. | The Company may by ordinary resolution - |
- 36 -
(a) | consolidate and divide all or any of its share capital into shares of larger amount than its existing shares; |
(b) | subdivide its existing shares, or any of them, into shares of smaller amount than is fixed by the Memorandum of Association subject nevertheless to Section 83(1)(b) of the Act; |
(c) | cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person. |
54. | The Company may by special resolution reduce its share capital, any capital redemption reserve fund, any share premium account or any undenominated capital in any manner and with and subject to any incident authorised, and consent required, by law. |
55. | Subject to the provisions of these Articles, whenever as a result of a consolidation of shares any members would become entitled to fractions of a share, the Directors may, on behalf of those members, sell the shares representing the fractions for the best price reasonably obtainable to any person and distribute the proceeds of sale in due proportion among those members and the Directors may authorise some person to execute an instrument of transfer of the shares to or in accordance with the directions of the purchaser. The transferee shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale. |
GENERAL MEETINGS
56. | All general meetings shall be held in the State. |
57. | The Company shall in each year hold a general meeting as its Annual General Meeting in addition to any other meeting in that year, and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one Annual General Meeting of the Company and that of the next. The Annual General Meeting shall be held at such time and place as the Directors shall appoint. |
58. | All general meetings other than Annual General Meetings shall be called Extraordinary General Meetings. |
59. | (a) | The Directors may, whenever they think fit, convene an Extraordinary General Meeting. |
(b) | The Directors shall also convene an Extraordinary General Meeting on such requisition as is provided by Sections 178 and 1101 of the Act and, in default, the meeting may be convened by such requisitionists as provided by such sections. |
- 37 -
(c) | If at any time there are not within the State sufficient Directors capable of acting to form a quorum any Director or any two members of the Company may convene an Extraordinary General Meeting in the same manner as nearly as possible as that in which meetings may be convened by the Directors. |
NOTICE OF GENERAL MEETINGS
60. | (a) | Subject to the provisions of the Acts allowing a general meeting to be called by shorter notice, an Annual General Meeting and an Extraordinary General Meeting called for the passing of a special resolution shall be called by at least twenty-one clear days notice and any other Extraordinary General Meeting shall also be called by at least twenty-one clear days notice except that it may be called by fourteen clear days notice where: |
(i) | all shareholders, who hold shares that carry rights to vote at the meeting, are permitted to vote by electronic means either before or at the meeting; and |
(ii) | a special resolution reducing the period of notice to fourteen clear days has been passed at the immediately preceding Annual General Meeting, or at a general meeting held since that meeting. |
The notice shall specify the time and place of the meeting and the general nature of the business to be transacted. It shall also give particulars of any Directors who are to retire by rotation or otherwise at the meeting and of any persons who are recommended by the Directors for appointment or re-appointment as Directors at the meeting, or in respect of whom notice has been duly given to the Company of the intention to propose them for appointment or re-appointment as Directors at the meeting. Subject to any restrictions imposed on any shares, the notice shall be given to all the members, to all persons entitled to a share by reason of the death or bankruptcy of a member and to the Directors and the Auditors.
(b) | The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings at the meeting. |
(c) | Any member present either in person or by proxy at any meeting of the Company or the holders of any class of shares in the Company shall be deemed to have received notice of the meeting and, where requisite, of the purposes for which it was called. |
- 38 -
PROCEEDINGS AT GENERAL MEETINGS
61. | (a) | All business that is transacted at an Extraordinary General Meeting shall be deemed special and all business that is transacted at an Annual General Meeting shall also be deemed special with the exception of a declaration of a dividend, the consideration of the companys statutory financial statements and report of the Directors and the report of the Auditors on those statements and the report of the Directors, the review by the members of the companys affairs, the election of Directors, subject to sections 380 and 382 to 385 of the Act, the appointment or re-appointment of the Auditors, the fixing of the remuneration of the Directors and the Auditors and the passing of Resolutions pursuant to Articles 8A, 8B, 11(d) and 11(e). |
(b) | In the case of an Extraordinary General Meeting, a member may request to table a draft resolution under Section 1104(1)(b) of the Act provided that the text of the resolution shall have been received by the Company in hardcopy form or in electronic form at the addresses specified by the Company at least 14 days before the meeting to which it relates. |
62. | No business shall be transacted at any General Meeting unless a quorum of members is present at the time when the meeting proceeds to business; save as herein otherwise provided five members present in person and entitled to vote shall be a quorum. |
63. | The Directors may make any arrangements and impose any restrictions they consider appropriate and reasonable in the circumstances to ensure the safety and security at a meeting. The Chairman is entitled to refuse entry to a meeting to a person who refuses to comply with these arrangements or restrictions. |
64. | If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall be dissolved; in any other case it shall stand adjourned to the same day in the next week, at the same time and place or to such other day and at such other time and place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the members present (if more than one) shall be a quorum. |
65. | The Chairman, if any, of the Board of Directors, or in his absence the Deputy Chairman, if any, shall preside as Chairman at every general meeting of the Company, or if there is no such Chairman or Deputy Chairman or if he is not present within fifteen minutes after the time appointed for the holding of the meeting, or is unwilling to act, the Directors present shall elect one of their number to be Chairman of the meeting. |
- 39 -
66. | If at any meeting no Director is willing to act as Chairman or if no Director is present within fifteen minutes after the time appointed for holding the meeting, the members present shall choose one of their number to be Chairman of the meeting. |
67. | The Chairman may, with the consent of any meeting at which a quorum is present and shall, if so directed by the meeting, adjourn the meeting from time to time and from place to place but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. The Chairman of a general meeting may interrupt or adjourn such meeting without the consent of the meeting where he decides it is necessary to do so in order to (a) secure the proper and orderly conduct of the meeting; (b) allow people entitled to do so a reasonable opportunity of speaking and voting at the meeting or (c) ensure that the business of the meeting is properly disposed of. When a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. |
68. | At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded:- |
(a) | by the Chairman; or |
(b) | by at least three members present in person or by proxy and entitled to vote; or |
(c) | by any member or members present in person or by proxy and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or |
(d) | by a member or members holding shares in the Company conferring the right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right. |
Unless a poll is so demanded, a declaration by the Chairman that a resolution has, on a show of hands, been carried or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book containing the minutes of the proceedings of the Company shall be conclusive evidence of the fact without proof of the number or proportion of votes recorded in favour of or against such resolution. The demand for a poll may be withdrawn before the poll is taken but only with the consent of the Chairman and, if a demand is so withdrawn, a declaration by the Chairman on the result of a resolution on a show of hands, whether taken before or after the demand was withdrawn, shall have effect in accordance with the provisions of the preceding sentence.
- 40 -
69. | Except as provided in Article 70, if a poll is duly demanded it shall be taken in such a manner as the Chairman directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. |
70. | A poll demanded on the election of a Chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the Chairman of the meeting directs, and any business other than that on which a poll is demanded may be proceeded with pending the taking of the poll. |
71. | On a poll taken at a meeting of the Company, or at a meeting of any class of shareholders of the Company, a shareholder, whether present in person or by proxy, entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way. |
72. | Subject to such requirements and restrictions as the Directors may specify, the Company may permit shareholders to vote by correspondence in advance of a general meeting in respect of one or more of the resolutions proposed at a meeting. Where the Company permits shareholders to vote by correspondence, such votes shall only be counted where they are received at the address and before the date and time specified by the Company, provided the date and time is no more than twenty-four hours before the time at which the vote is to be concluded. |
73. | Subject to such requirements and restrictions as the Directors may specify, the Company may permit shareholders who are not physically present at a meeting to vote by electronic means at the general meeting in respect of one or more of the resolutions proposed at the meeting. |
VOTES OF MEMBERS
74. | (a) | In order to exercise their right to participate and vote at general meetings, a person must be entered on the Register by the Record Date for a General Meeting specified in respect of such general meeting and any change to an entry on the Register after the Record Date for a General Meeting shall be disregarded in determining the right of any person to attend and vote at such general meeting; |
(b) | Subject to any special rights or restrictions as to voting upon which any shares may be issued, or may for the time being be held, and subject to the provisions of Article 14, on a show of hands every member present in person and every proxy shall have one vote, so however that no individual shall have more than one vote, and on a poll every member shall have one vote for each share other than an Income Share of which he is a holder. |
- 41 -
75. | Where there are joint holders, the vote of the senior who tenders the vote whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders; and for the purpose, seniority shall be determined by the order in which the names stand in the register. |
76. | A member of unsound mind, or in respect of whom an Order has been made by any Court having jurisdiction in lunacy, may vote whether on a show of hands or on a poll by his committee, receiver, guardian or other person appointed by that Court, and any such committee, receiver, guardian or other person may vote by proxy on a show of hands or on a poll. |
77. | No member shall be entitled to vote at any general meeting unless all calls or other sums immediately payable by him in respect of shares in the Company have been paid. |
78. | No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the Chairman of the meeting whose decision shall be final and conclusive. |
79. | Every member entitled to attend and vote at a general meeting may appoint a proxy or proxies to attend, speak and vote on his behalf provided that, where a shareholder appoints more than one proxy in relation to a general meeting, each proxy must be appointed to exercise the rights attached to a different share or shares held by him. |
80. | A proxy shall have the right to exercise all or any of the rights of his appointor, or (where more than one proxy is appointed) all or any of the rights attached to the shares in respect of which he is appointed as the proxy to attend, and to speak and vote, at a general meeting of the Company. Unless his appointment provides otherwise, a proxy may vote or abstain at his discretion on any resolution put to the vote. |
81. | The appointment of a proxy shall be in writing in any usual form or in any other form which the Directors may approve and shall be executed by or on behalf of the appointor. The signature on such appointment need not be witnessed. A body corporate may execute a form of proxy under its Common Seal or under the hand of a duly authorised officer thereof or in such other manner as the Directors may approve. A proxy need not be a member. The appointment of a proxy in electronic form shall only be effective in such manner as the Directors may approve. |
82. | Where the appointment of a proxy and the power of attorney or other authority, if any, under which it is signed, or a certified copy of that power or authority or any other proof or confirmation of that power or authority acceptable to the Directors is to be received by the Company:- |
- 42 -
(i) | in physical form, it shall be deposited at the Office or at such other place or places (if any) as is specified for that purpose in, or by way of note to, the notice convening the meeting, |
(ii) | in electronic form, it may be so received where an address has been specified by the Company for the purpose of receiving electronic communications:- |
(a) | in the notice convening the meeting; or |
(b) | in any appointment of proxy sent out by the Company in relation to the meeting; or |
(c) | in any invitation contained in an electronic communication to appoint a proxy issued by the Company in relation to the meeting; |
provided that it is so received by the Company not less than forty-eight hours before the time appointed for the holding of the meeting or adjourned meeting or (in the case of a poll taken otherwise than at or on the same day as the meeting or adjourned meeting) for the taking of the poll at which it is to be used, and, in default, the appointment of the proxy shall not be treated as valid PROVIDED THAT:
(a) | in the case of a meeting which is adjourned to, or a poll which is to be taken on, a date which is less than seven days after the date of the meeting which was adjourned or at which the poll was demanded, it shall be sufficient if the appointment of the proxy and any other authority and certification thereof as aforesaid is so received by the Company at the commencement of the adjourned meeting or the taking of the poll; and |
(b) | an appointment of a proxy relating to more than one meeting (including any adjournment thereof) having once been so received for the purposes of any meeting shall not require to be delivered, deposited or received again for the purposes of any subsequent meeting to which it relates. |
83. | Receipt by the Company of an appointment of a proxy in respect of a meeting shall not preclude a member from attending and voting at the meeting or at any adjournment thereof. However, if he votes in person on a resolution, then as regards that resolution his appointment of a proxy will not be valid. |
- 43 -
84. | A vote given or poll demanded in accordance with the terms of an appointment of a proxy or a resolution authorising a representative to act on behalf of a body corporate shall be valid notwithstanding the previous death, insanity or winding up of the principal or revocation of the proxy or of the authority under which the proxy or authority was executed or the transfer of the share in respect of which the proxy or authority is given, provided that no intimation in writing of such death, insanity, winding up, revocation, or transfer as aforesaid is received by the Company at the Office, before the commencement of the meeting. |
85. | The Directors may send, at the expense of the Company, by post, electronic mail or otherwise, to the members forms for the appointment of a proxy (with or without reply-paid envelopes for their return) for use at any general meeting or at any class meeting, either in blank or nominating any one or more of the Directors or any other persons in the alternative. The proxy form may make provision for three-way voting on all resolutions intended to be proposed, other than resolutions which are merely procedural. If, for the purpose of any meeting, invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued at the expense of the Company, such invitations shall be issued to all (and not to some only) of the members entitled to be sent a notice of the meeting and to vote thereat by proxy, but the accidental omission to issue such invitations to, or the non-receipt of such invitations by, any member shall not invalidate the proceedings at any such meeting. |
BODIES CORPORATE ACTING BY
REPRESENTATIVES AT MEETINGS
86. | Any body corporate which is a member of the Company may, by resolution of its directors or other governing body, authorise such person or persons as it thinks fit to act as its representative or representatives at any meeting of the Company or of any class of members of the Company, and any person so authorised shall be entitled to exercise the same powers on behalf of the body corporate which he represents as that body corporate could exercise if it were an individual member of the Company. Where a member appoints more than one representative in relation to a general meeting, each representative must be appointed to exercise the rights attached to a different share or shares held by the member. |
DIRECTORS
87. | (a) | Until otherwise determined by a General Meeting the number of Directors shall be not less than three nor more than fifteen. |
(b) | The persons who are Directors of the Company at the date of the adoption of these Articles as the Articles of Association of the Company shall continue to be the Directors thereof subject to these Articles. |
- 44 -
88. | The qualification of a Director shall be the holding alone and not jointly with any other person of 1,000 Ordinary Shares in the capital of the Company. A Director may act before acquiring his qualification but must acquire the same within two months after his appointment or election. |
89. | (a) | The fees payable to the Directors shall from time to time be determined by the Company in General Meeting. Such fees shall be deemed to accrue from day to day. |
(b) | The Board may grant special remuneration to any of its number who being called upon, shall render any special or extra services to the Company or go or reside abroad in connection with the conduct of any of the affairs of the Company. Such special remuneration may be made payable to such Director in addition to or in substitution for his fees as a Director and may be made payable by a lump sum or by way of salary or by a percentage of the profits or by any or all of those modes as the Board shall determine. |
(c) | The Directors shall also be entitled to be paid all travelling, hotel and other expenses properly incurred by them in attending and returning from meetings of the Board or any Committee of the Board or general meeting of the Company or in connection with the business of the Company. |
90. | A Director of the Company may be or become a Director or other officer of, or otherwise interested in, any company promoted by the Company or in which the Company may be interested as shareholder or otherwise, and no such Director shall be accountable to the Company for any remuneration or other benefits received by him as a Director or officer of, or from his interest in, such other company unless the Company otherwise directs. |
BORROWING POWERS
91. | The Directors may exercise all powers of the Company to borrow money and to mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company and to issue debentures and other securities whether outright or as collateral security for any debt, liability or obligation of the Company or any subsidiary or of any third party. |
The Directors shall restrict the borrowings of the Company and exercise all rights exercisable by the Company in relation to its subsidiaries so far as to secure (as regards subsidiaries so far as by such exercise it can secure) that, save with the previous
- 45 -
sanction of a special resolution, no money shall be borrowed if the aggregate principal amount of the indebtedness for borrowed money (as hereinafter defined) of the Company and its subsidiaries less the principal amount of the cash balances of the Company and its subsidiaries in hand or with Banks (both calculated on a consolidated basis) exceeds an amount equal to twice the aggregate of:
(a) | the amount of capital of the Company for the time being issued, paid up, or credited as paid up and the amount for the time being of the share premium account (as defined in section 71 of the Act); and |
(b) | the amount standing to the credit of retained income, foreign currency translation reserve and other reserves, capital grants, deferred taxation and minority shareholders interest, less the amount of any repayable Government grants, all as shown in the then latest audited consolidated financial statements of the Company; less |
(c) | the aggregate amount for the time being of treasury shares and own shares held by the Company (such terms as used in the latest audited consolidated financial statements of the Company). |
For the purpose of the above, indebtedness for borrowed money shall mean any obligation (whether incurred as principal or surety and whether present or future, actual or contingent) for the payment of:
(a) | monies borrowed, and |
(b) | monies raised pursuant to any acceptance credit, any discounted bills of exchange receivable, any guarantee of monies borrowed or raised by others, any amounts due in relation to any hire purchase, leasing or deferred credit agreements (excluding finance charges thereon) entered into in respect of machinery or equipment, any note purchase facility or any issue of notes, bonds, debentures or other debt instruments, but excluding normal trade creditors. |
No debt incurred or security given in respect of indebtedness for borrowed money or to be taken into account as indebtedness for borrowed money in excess of the aforesaid limit shall be invalid or ineffectual except in the case of express notice to the lender or the recipient of the security at the time when the debt was incurred or security given that the limit hereby imposed had been or was thereby exceeded but no lender or other person dealing with the Company shall be concerned to see or enquire whether such limit is observed.
- 46 -
POWERS AND DUTIES OF DIRECTORS
92. | The business of the Company shall be managed by the Directors, who may exercise all such powers of the Company as are not, by the Act or by these Articles, required to be exercised by the Company in general meeting, subject nevertheless to any of these Articles, to the provisions of the Act and to such directions, being not inconsistent with the aforesaid Articles or provisions, as may be given by the Company in General Meeting; but no direction given by the Company in General Meeting shall invalidate any prior act of the Directors which would have been valid if that direction had not been given. |
93. | The Directors may from time to time and at any time by power of attorney appoint any company, firm or person or body of persons whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such power of attorney may contain such provisions for the protection of persons dealing with any such attorney as the Directors may think fit, and may also authorise any such attorney to delegate all or any of the powers, authorities and discretions vested in him. |
94. | The Company may exercise the powers conferred by Section 44 of the Act with regard to having an official seal for use abroad, and such powers shall be vested in the Directors. |
95. | A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company shall declare the nature of his interest at a meeting of the Directors in accordance with Section 231 of the Act. |
96. | (a) | Save as herein provided, a Director shall not vote in respect of any contract or arrangement or any other proposal whatsoever in which he has any material interest otherwise than by virtue of his interests in shares or debentures or other securities of or otherwise in or through the Company. A Director shall not be counted in the quorum at a meeting in relation to any resolution on which he is debarred from voting. |
(b) | A Director shall (in the absence of some other material interest than is indicated below) be entitled to vote (and be counted in the quorum) in respect of any resolution concerning any of the following matters, namely:- |
(i) | The giving of any security or indemnity to him in respect of money lent or obligations incurred by him at the request of or for the benefit of the Company or any of its subsidiaries. |
- 47 -
(ii) | The giving of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which he himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security. |
(iii) | Any proposal concerning an offer of shares or debentures or other securities of or by the Company or any of its subsidiaries for subscription or purchase in which offer he is or is to be interested as a participant in the underwriting or sub-underwriting thereof. |
(iv) | Any proposal concerning any other company in which he is interested, directly or indirectly and whether as an officer or shareholder or otherwise howsoever, provided that he is not the holder of or beneficially interested in 1 per cent or more of any class of equity share capital of such company (or third company through which his interest is derived) or of the voting rights available to members of the relevant company (any such interest being deemed for the purpose of this Article to be a material interest in all circumstances). |
(v) | Any proposal concerning the adoption, modification or operation of a superannuation fund or retirement benefits scheme under which he may benefit and which has been approved by or is subject to and conditional upon approval by the Revenue Commissioners for taxation purposes. |
(c) | If any question shall arise at any meeting as to the materiality of a Directors interest or as to the entitlement of any Director to vote and such question is not resolved by his voluntary agreeing to abstain from voting, such question shall be referred to the Chairman of the meeting and his ruling to any other Director shall be final and conclusive except in a case where the nature or extent of the interests of the Director concerned have not been fairly disclosed. |
(d) | Nothing in section 228 of the Act shall restrict a Director from entering into any commitment which has been approved by the Board or has been approved pursuant to such authority as may be delegated by the Board in accordance with these articles. It shall be the duty of each Director to obtain the prior approval of the Board, before entering into any commitment permitted by Section 228 of the Act. |
- 48 -
(e) | The Company may by Ordinary Resolution suspend or relax the provision of this Article to any extent or ratify any transaction not duly authorised by reason of a contravention of this Article. |
97. | A Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine, and no Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to tenure of any such other office or place of profit or a vendor, purchaser, or otherwise, nor shall any such contract or any contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested, be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relationship thereby established. |
98. | Where proposals are under consideration concerning the appointment (including fixing or varying the terms of appointment) of two or more Directors to offices or employments with the Company or any company in which the Company is interested, such proposals may be divided and considered in relation to each Director separately and in such cases each of the Directors concerned (if not debarred from voting under the proviso to paragraph (b)(iv) of Article 96) shall be entitled to vote (and be counted in the quorum) in respect of each resolution except that concerning his own appointment. |
99. | Any Director may act by himself or his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional service as if he were not a Director; but nothing herein contained shall authorise a Director or his firm to act as Auditor for the Company. |
100. | All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for money paid to the Company shall be signed, drawn, accepted, endorsed, or otherwise executed, as the case may be by such person or persons and in such manner as the Directors shall from time to time by resolution determine. |
101. | The Directors shall cause minutes to be made in books provided for the purpose - |
(a) | of all appointments of officers made by the Directors; |
(b) | of the names of the Directors present at each meeting of the Directors and of any committee of Directors; |
- 49 -
(c) | of all resolutions and proceedings at all meetings of the Company and of the Directors and of committees of Directors. |
102. | The Directors shall have power to grant pensions, allowances, gratuities, and bonuses to Directors, ex-Directors, officers, ex-officers, employees or ex-employees of the Company or its predecessors in business or the relatives or dependants of such persons and to establish and maintain or concur in establishing and maintaining Trusts, Funds, or Schemes (whether contributory or non-contributory) with a view to providing pensions or other benefits for any such persons as aforesaid, their relatives or dependants and to make payments towards insurance for any such benefits. |
103. | Any Director may, with the approval of a majority of all the Directors, appoint any person to be an Alternate Director, and such appointment shall have effect, and such appointee while he holds office as an Alternate Director shall be entitled to notice of meetings of the Directors and to attend and vote thereat as a Director when the Director appointing him is not personally present and where he is a Director he shall have a separate vote on behalf of the Director he is representing in addition to his own vote, but he shall ipso facto vacate office if and when the appointer himself vacates office or removes the appointee from office. Every appointment and removal under this Article shall be effected by notice in writing to the Company under the hand of the Director making the same. Every such Alternate shall be an officer of the Company and shall not be deemed to be the agent of the Director appointing him. An Alternate Director shall not be entitled to be remunerated otherwise than out of the remuneration of the Director appointing him, and the proportion of such remuneration shall be agreed between them. An Alternate Director need not hold any share qualification and shall not be taken into account in reckoning the minimum or maximum number of Directors allowed for the time being but he shall be counted for the purpose of reckoning whether a quorum is present at any meeting of the Directors attended by him at which he is entitled to vote. |
DISQUALIFICATION OF DIRECTORS
104. | The office of a Director shall be vacated if the Director - |
(a) | ceases to be a Director by virtue of Section 136 of the Act; or |
(b) | is adjudged bankrupt in the State or Northern Ireland or Great Britain or in any other country or makes an arrangement or composition with his creditors generally; or |
(c) | is restricted or disqualified to act as a Director under the provisions of Part 14 of the Act; or |
- 50 -
(d) | if found lunatic or becomes of unsound mind; or |
(e) | resigns his office by notice in writing to the Company; or |
(f) | is convicted of an indictable offence, unless the Directors otherwise determine; or |
(g) | is for more than six months absent without permission of the Directors from meetings of the Directors held during that period, and they pass a resolution that he has by reason of such absence vacated office; or |
(h) | if not less than five-sixths of the Directors of the Company for the time being sign a request addressed to him that he resign; or |
(i) | is in full time employment of the Company, or of a subsidiary of the Company, on the termination of such employment save where the Board at its discretion invites him to remain as a non-Executive Director. |
ROTATION OF DIRECTORS
105. | At the Annual General Meeting in every year, one-third of the Directors for the time being, or, if their number is not three or a multiple of three, then the number nearest to one-third shall retire from office, so that all Directors shall be required to submit themselves for re-election at intervals of not more than three years. |
106. | The Directors to retire in every year shall be those who have been longest in office since their last election but as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by lot. |
107. | A retiring Director shall be eligible for re-election. |
108. | The Company, at the meeting at which a Director retires in the manner aforesaid, may fill up the vacated office by electing a person thereto, and in default the retiring Director shall, if offering himself for re-election, be deemed to have been re-elected, unless at such meeting it is expressly resolved not to fill such vacated office, or unless a resolution for the re-election of such Director has been put to the meeting and lost. |
109. | No person other than a Director retiring at the meeting shall, unless recommended by the Directors, be eligible for election to the office of Director at any General Meeting unless not less than seven nor more than twenty-one days before the day appointed for the meeting there shall have been left at the office notice in writing signed by a member duly qualified to attend and vote at the meeting for which such notice is given, of his intention to propose such person for election and also notice in writing signed by that person of his willingness to be elected. |
- 51 -
110. | The Company may from time to time by ordinary resolution increase or reduce the number of Directors and may also determine in what rotation the increased or reduced number is to go out of office. |
111. | The Directors shall have power at any time and from time to time to appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors. Any director so appointed shall hold office only until the next following Annual General Meeting, and shall be eligible for re-election but shall not be taken into account in determining the Directors who are to retire by rotation at such meeting. |
112. | The Company may, by Ordinary Resolution, of which notice has been given in accordance with Section 146(3) of the Act, remove any Director before the expiration of his period of office notwithstanding anything in these Articles or in any agreement between the Company and such Director. Such removal shall be without prejudice to any claim such Director may have for damages for breach of any contract of service between him and the Company. |
113. | The Company may, by Ordinary Resolution, appoint another person in place of a Director removed from office under Article 112 and without prejudice to the powers of the Directors under Article 111 the Company in general meeting may appoint any person to be a Director either to fill a casual vacancy or an additional Director. A person appointed in place of a Director so removed or to fill such a vacancy shall be subject to retirement at the same time as if he had become a Director on the day on which the Director in whose place he is appointed was last elected a Director. |
PROCEEDINGS OF DIRECTORS
114. | The Directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit. Questions arising at any meeting shall be decided by a majority of votes. Where there is an equality of votes the Chairman shall have a second or casting vote. A Director may, and the Secretary on the requisition of a Director shall, at any time summon a meeting of the Directors. If the Directors so resolve, it shall not be necessary to give notice of a meeting of Directors to any Director who, being resident in the State, is for the time being absent from the State. |
115. | The quorum necessary for the transaction of the business of the Directors may be fixed by the Directors, and unless so fixed shall be three including Alternate Directors (if any). |
- 52 -
116. | The continuing Directors may act notwithstanding any vacancy in their number but if and so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors or Director may act for the purpose of increasing the number of Directors to that number or of summoning a general meeting of the Company, but for no other purpose. |
117. | The Directors may from time to time elect a Chairman and deputy Chairman of their meetings and determine the respective periods for which each of them is to hold office. In the absence of the Chairman, the Deputy Chairman, if present and willing to act, shall preside at meetings of the Directors and be entitled to a second or casting vote where there is an equality of votes. If no such Chairman or Deputy Chairman is elected or if at any meeting neither the Chairman nor the Deputy Chairman is present within five minutes of the time appointed for holding the same, the Directors present may choose one of their number to be Chairman of the meeting. |
118. | The Directors may delegate any of their powers to committees consisting of such member or members of the Board as they think fit; any committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on it by the Directors. |
119. | A Committee may elect a Chairman of its members; if no such Chairman is elected, or if at any meeting the Chairman is not present within five minutes after the time appointed for holding the same, the members present may choose one of their number to be Chairman of the meeting. |
120. | A Committee may meet and adjourn as it thinks proper. Questions arising at any meeting shall be determined by a majority of votes of the members present, and where there is an equality of votes the Chairman shall have a second or casting vote. |
121. | All acts done by any meeting of the Directors or of a committee of Directors or by any person acting as a Director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director. |
122. | (a) | A resolution in writing signed by all the Directors (other than Alternate Directors) for the time being entitled to receive notice of a meeting of the Directors shall be as valid as if it had been passed at a meeting of the Directors duly convened and held and may consist of several documents in the like form, each signed by one or more of the Directors. |
- 53 -
(b) | Any Director or Alternate Director may participate in a meeting of the Directors or any committee of the Directors by means of conference telephone or other telecommunications equipment by means of which all persons participating in the meeting can hear each other and such participation in a meeting shall constitute presence in person at the meeting. |
MANAGING DIRECTOR OR CHIEF EXECUTIVE
123. | The Directors may from time to time appoint one or more of themselves to the office of Managing Director or Chief Executive for such period and on such terms as to remuneration and otherwise as they think fit, and, subject to the terms of any agreement entered into in any particular case, may revoke such appointment. Without prejudice to any claim he may have for damages for breach of any contract of service between him and the Company, his appointment shall be automatically determined if he ceases from any cause to be a Director. |
124. | A Managing Director or Chief Executive shall receive such remuneration whether by way of salary, commission, or participation in the profits, or partly in one way and partly in another, as the Directors may determine. |
125. | The Directors may entrust to and confer upon a Managing Director or Chief Executive any of the powers exercisable by them upon such terms and conditions and with such restrictions as they may think fit, and either collaterally with or to the exclusion of their own powers, and may from time to time revoke, withdraw, alter or vary all or any of such powers. |
PRESIDENT
126. | The Directors may from time to time appoint any former Director of the Company or other person who, in their opinion, has rendered outstanding services to the Company to be President of the Company. The President shall not, by virtue of his office, be deemed to be a Director or be entitled to any remuneration. Nevertheless, by invitation of the Directors, he may attend meetings of the Directors for the purpose of giving advice and the Directors may pay the President, in respect of advice and assistance from time to time so given by him, such remuneration as the Directors may determine. |
SECRETARY
127. | The Secretary shall be appointed by the Directors for such term, at such remuneration and upon such conditions as they may think fit, and any Secretary so appointed may be removed by them. The Directors may appoint an Assistant or Deputy Secretary and any provision of these Articles requiring or authorising a thing to be done by or to the Secretary shall be satisfied by it being done by or to an Assistant or Deputy Secretary. |
- 54 -
128. | A provision of the Acts or these Articles requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by it being done by or to the same person acting both as Director and as, or in the place of, the Secretary. |
USE OF ELECTRONIC COMMUNICATION
129. | Notwithstanding anything to the contrary contained in these Articles, whenever any person (including without limitation the Company, a Director, the Secretary, a member or any officer or person) is required or permitted by these Articles, the Acts or any other enactment of the State to give information in writing, such information may be given by electronic means or in electronic form, whether as electronic communication or otherwise, but only if the use of such electronic or other communication conforms with all relevant legislation and provided further that the electronic means or electronic form used has been approved of by the Directors. |
THE SEAL
130. | (a) | The Directors shall provide for the safe custody of the Seal and the Seal shall not be used except by the authority of a resolution of the Directors or of a committee of the Directors authorised in that behalf by the Directors. |
(b) | The Directors may from time to time make such regulations as they think fit determining the persons and the number of such persons who shall sign every instrument to which the Seal is affixed and until otherwise so determined every such instrument shall be signed by one Director and shall be countersigned by the Secretary, the Assistant Secretary or by a second Director, provided however that in respect of certificates under the Seal for shares, debentures or other securities of the Company no such signatures shall be required and the Directors shall make such regulations as they think fit regarding procedures to be followed in respect of the sealing of such certificates. |
DIVIDENDS AND RESERVES
131. | The Company in general meeting may declare dividends, but no dividend shall exceed the amount recommended by the Directors. |
- 55 -
132. | The Directors may from time to time pay to the members such interim dividends as appear to the Directors to be justified by the profits of the Company. |
133. | No dividend shall (except as by the Acts expressly authorised) be paid otherwise than out of profits. |
134. | The Directors may, before recommending any dividend, set aside out of the profits of the Company such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose to which the profits of the Company may be properly applied, and pending such application may, at the like discretion, either be employed in the business of the Company or be invested in such investments as the Directors may lawfully determine. The Directors may also without placing the same to reserve, carry forward any profits which they may think it prudent not to divide. |
135. | (a) | Subject to paragraph (b) and to the rights of persons, if any, entitled to shares with special rights as to dividends, all dividends shall be declared and paid according to the amounts paid or credited as paid on the shares in respect whereof the dividend is paid, but no amount paid or credited as paid on a share in advance of calls shall be treated for the purposes of this Article as paid on the share. All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the share during any portion or portions of the period in respect of which the dividend is paid, but if any share is issued on terms providing that it shall rank for dividend as from a particular date, such share shall rank for dividend accordingly. |
(b) |
(i) |
Notwithstanding paragraph (a), the holder of Ordinary Shares who also holds an equal number of Income Shares may at any time elect in respect of all but not some of his Ordinary Shares to forego dividends on those Ordinary Shares and in lieu thereof to receive a dividend on those Income Shares by serving a Notice in writing on the Company in such form as may be approved by the Directors. For this purpose, the holder of any shares in separate accounts shall be regarded as a separate holder of shares in respect of each such amount. An election so made shall take effect and remain in force subject to sub-paragraphs (ii) and (iii) of this Article 135(b) in relation to all dividends and other distributions declared on his Ordinary Shares which the shareholder would have been entitled to receive if he had not made the election from the receipt by the Company of the Election Notice other than within a period of twenty-one days prior to a payment date of such dividend or distribution when the Notice shall take effect immediately after such period. A shareholder who has not so elected shall not be entitled to a dividend on his holding of Income Shares. |
- 56 -
(ii) | A holder of Ordinary Shares in respect of which an election form is in force pursuant to paragraph (b)(i) may, by serving Notice in writing on the Company, revoke that election, which revocation shall take effect in relation to all dividends or other distributions declared on his Ordinary Shares from the receipt by the Company of the Revocation Notice other than within a period of twenty-one days prior to a payment date of a dividend or distribution when the Notice shall take effect immediately after such period. |
(iii) | An election shall be personal to the member concerned and shall in respect of any shares transferred by him or transmitted on his death or bankruptcy automatically cease to have effect upon registration of the transfer or transmission of the relevant shares but shall continue in effect in respect of any shares which may be retained by him. |
(iv) | A holder of Ordinary Shares who has made an election pursuant to paragraph (b)(i) shall be deemed to have made a like election in respect of any further Ordinary Shares which may subsequently be registered in his name in the same account and in relation to all dividends and other distributions declared on such further Ordinary Shares by reference to a record date occurring at any time after he has been so registered and shall continue in effect in respect of all the Ordinary Shares held by him from time to time until such election has been effectively revoked. |
(v) | An election made pursuant to paragraph (b)(i) of this Article shall be deemed to be withdrawn with effect from 8th May, 2002. |
136. | The Directors may deduct from any dividend payable to any member all sums of money (if any) immediately payable by him to the Company on account of calls or otherwise in relation to the shares of the Company. |
137. | (a) | Any general meeting declaring a dividend or a bonus may direct payment of such dividend or bonus wholly or partly by the distribution of specific assets and in particular of paid up shares, debentures or debenture stock of any other company or in any or more of such ways, and the Directors shall give effect to such resolution, and where any difficulties arise in regard to |
- 57 -
such distribution, the Directors may settle the same as they think expedient, and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any members upon the footing of the value so fixed, in order to adjust the rights of all the parties, and may vest any such specific assets in trustees as may seem expedient to the Directors. |
(b) | The Directors may, if authorised by an ordinary resolution of the Company (and provided that an adequate number of unissued Ordinary Shares and Income Shares are available for the purpose and subject always to the provisions of Article 11), offer Ordinary shareholders the right, prior to or contemporaneously with their announcement of the dividend in question and any related information as to the Companys profits for such financial period or part thereof, to elect to receive in lieu of such dividend (or part thereof) an allotment of additional Ordinary Shares and an equivalent number of Income Shares credited as fully paid. In any such case the following provisions shall apply:- |
(i) | The ordinary resolution may specify a particular dividend (whether or not already declared) or may specify all or any dividends declared within a specified period being a period expiring not later than the commencement of the fifth Annual General Meeting next following the date of the Annual General Meeting at which the resolution is passed. |
(ii) | The basis of allotment shall be determined by the Directors so that, as nearly as may be considered convenient, the value (calculated by reference to the average price) of the additional Ordinary Shares (excluding any fractional entitlement) to be allotted in lieu of any amount of dividend shall equal such amount. For such purpose the average price of an Ordinary Share shall be the average of the daily high and daily low share prices as derived from the information published in the Irish Stock Exchange Daily Official List (where the Directors resolve that the issue price of the shares is to be denominated in euro) or the Daily Official List of the London Stock Exchange (where the Directors resolve that the issue price of the shares is to be denominated in Sterling (GB) pence) reporting the business done on each of the first three business days on which the Ordinary Shares are quoted ex the relevant dividend. |
- 58 -
(iii) | The Directors shall give notice in writing to the Ordinary shareholders of the right of election accorded to them and shall send with or following such notice forms of election and specify the procedure to be followed and the place at which the latest date and time by which duly completed forms of election must be lodged in order to be effective. The Directors may from time to time establish or vary a procedure for election mandates under which a holder of shares may elect to receive additional shares credited as fully paid up instead of cash in respect of future dividends not yet declared or resolved (and, accordingly, in respect of which the basis of allotment shall not have been determined) offered to that holder under this Article until the election mandate is revoked or deemed to be revoked in accordance with the procedure. |
(iv) | The dividend (or that part of the dividend in respect of which a right of election has been accorded) shall not be payable on Ordinary Shares or Income Shares, as the case may be, in respect whereof the share election has been duly exercised (the Elected Shares) and in lieu thereof additional Ordinary and Income Shares, (but not any fraction of a Share) shall be allotted to the holders of the Elected Shares on the basis of allotment determined as aforesaid and for such purpose the Directors shall capitalise, out of such of the sums standing to the credit of reserves (including any share premium account, capital redemption reserve fund or any undenominated capital) or profit and loss account as the Directors may determine a sum equal to the aggregate nominal amount of additional Ordinary Shares and Income Shares to be allotted on such basis and apply the same in paying up in full the appropriate number of unissued Ordinary Shares and Income Shares for allotment and distribution to and amongst the holders of the Elected Shares on such basis. |
(v) | The additional Ordinary and Income Shares so allotted shall rank pari passu in all respects with the fully-paid Ordinary and Income Shares then in issue save only as regards participation in the relevant dividend or share election in lieu. |
(vi) | The Directors may do all acts and things considered necessary or expedient to give effect to any such capitalisation with full power to the Directors to make such provisions as they think fit for the case of shares becoming distributable in fractions (including provisions whereby, in whole or in part, fractional entitlements are disregarded and the benefit of fractional entitlements accrues |
- 59 -
to the Company rather than to the members concerned). The Directors may authorise any person to enter on behalf of all the members interested into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned. |
(vii) | The Directors may on any occasion determine that rights of election shall not be made available to any Ordinary shareholders who are citizens of or residents of any territory where the circulation of an offer of rights of election or any exercise of rights of election or any purported acceptance of the same would or might be unlawful, and in such event the provisions aforesaid shall be read and construed subject to such determination. |
138. | (a) | Any dividend, interest or other moneys payable in cash in respect of any shares may be paid by cheque or warrant sent through the post direct to the registered address of the holder or, where there are joint holders, to the registered address of that one of the joint holders who is first named on the Register or to such person and to such address as the holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. |
(b) | The Directors may also, in circumstances which they consider appropriate, arrange for the payment of dividends or other payments to any particular holder or holders by Electronic Funds Transfer, bank transfer or by any other method selected by the Directors from time to time. In particular, in respect of shares in uncertificated form where the Company is authorised to do so by or on behalf of the holder or joint holders in such manner as the Directors shall from time to time consider sufficient, the Directors may pay any dividend interest or other monies by means of the Relevant System concerned (subject always to the facilities and requirements of that Relevant System). |
(c) | Every such payment made by Electronic Funds Transfer or bank transfer shall be made to the holder or joint holders or to or through such other person as the holder or joint holders may in writing direct. In respect of shares in uncertificated form, every such payment made by means of the Relevant System concerned, as referred to in (b) above, shall be made in such manner as may be consistent with the facilities and requirements of the Relevant System concerned. Without prejudice to the generality of the foregoing, in respect of shares in uncertificated form, such payment may include the sending by the Company or by any person on its behalf, of an instruction to the Operator of the Relevant System to credit the Cash Memorandum Account of the holder or joint holders or of such person as the holder or joint holders may in writing direct. |
- 60 -
(d) | The Company shall not be responsible for any loss of any such cheque, warrant or order and any payment made by Electronic Funds Transfer, bank transfer or through a Relevant System shall be at the sole risk of the holder or joint holders. Without prejudice to the generality of the foregoing, if any such cheque, warrant or order has or shall be alleged to have been lost, stolen or destroyed, the Directors may at the request of the persons entitled thereto issue a replacement cheque, warrant or order subject to compliance with such conditions as to evidence and indemnity and the payment of out-of-pocket expenses of the Company in connection with the request as the Directors may think fit. |
(e) | Payment of a cheque, warrant or order, or the debiting of the Companys account in respect of the appropriate amount in accordance with the provisions of this Article, or, in respect of shares in uncertificated form, the making of payment in accordance with the facilities and requirements of the Relevant System concerned, shall be a good discharge of the Company. |
(f) | Any dividend or other payment to any particular holder or holders may be paid in such currency or currencies as may from time to time be determined by the Directors and any such payment shall be made in accordance with such rules and regulations (including, without limitation, in relation to the conversion rate or rates) as may be determined by the Directors in relation thereto. |
(g) | Any one of two or more joint holders may give effectual receipts for any dividends or other monies payable in respect of the shares held by him as joint holder. |
139. | (a) | All unclaimed dividends may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed. No dividend shall bear interest against the Company. |
(b) | Any dividend which has remained unclaimed for twelve years from the date of its declaration shall, if the Directors so decide, be forfeited and cease to remain owing by the Company. The payment by the Directors of any unclaimed dividend or other moneys payable in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof. |
- 61 -
ACCOUNTING RECORDS
140. | The Directors shall, in accordance with Chapter 2 of Part 6 of the Act, cause to be kept adequate accounting records, whether in the form of documents, electronic form or otherwise, that- |
(a) | correctly record and explain the transactions of the Company; |
(b) | will enable, at any time, the assets, liabilities, financial position and profit or loss of the Company to be determined with reasonable accuracy; |
(c) | will enable the Directors to ensure that any financial statements of the Company comply with the requirements of the Acts; and |
(d) | will enable the financial statements of the Company so prepared to be readily and properly audited. |
Adequate accounting records shall be deemed to have been maintained if they comply with the provisions Chapter 2 of Part 6 of the Act and explain the Companys transactions and facilitate the preparation of financial statements that give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and, if relevant, the Group and include any information and returns referred to in Section 283(2) of the Act.
141. | The accounting records shall be at the office at such place as the Directors think fit and shall at all reasonable times be open to inspection by the officers of the Company and by any other persons entitled pursuant to the Act to inspect the accounting records of the Company. |
142. | The Directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounting records of the Company shall be open to the inspection of members, not being Directors, and no member (not being a Director) shall have any right of inspecting any financial statement or accounting record of the Company except as conferred by statute or authorised by the Directors or by the Company in general meeting. |
143. | The Directors shall from time to time, in accordance with the Acts cause to be prepared and to be laid before the Annual General Meeting of the Company such statutory financial statements of the Company and reports as are required by the Acts to be prepared and laid before the Annual General Meeting of the Company. |
- 62 -
144. | In addition to sending these documents to such other persons as may be required by the Act to receive them, the Directors shall not less than twenty-one days before the date of the Annual General Meeting send to every member who is entitled to notice of the meeting:- |
(a) | a copy of the statutory financial statements of the Company (including every document required by law to be annexed thereto) which is to be laid before the Annual General Meeting of the Company together with a copy of the Directors report and Auditors report; or |
(b) | summary financial statements prepared in accordance with Section 1119 of the Act. |
PROVIDED HOWEVER, where the Directors elect to send summary financial statements to the members, any member may request that he be sent a copy of the statutory financial statements of the Company and the Company shall also make available the requisite number of copies of these documents as required by law and the rules of the stock exchanges on which the Company is listed.
CAPITALISATION OF PROFITS
145. | The Company in general meeting may upon the recommendation of the Directors resolve that any sum for the time being standing to the credit of any of the Companys reserves (including any capital redemption reserve, share premium account or any undenominated capital) or to the credit of profit and loss account be capitalised and be set free for distribution amongst the members who would have been entitled thereto if distributed by way of dividend and in the same proportions on the footing that they become entitled thereto as capital and on condition that the same be not paid in cash but be applied either in or towards paying any amounts for the time being unpaid on any shares held by such members respectively or paying up in full unissued shares or debentures of the Company to be allotted and distributed credited as fully paid up to and amongst such members in the proportions aforesaid, or partly in the one way and partly in the other; and the Directors shall give effect to such resolution provided that a share premium account, a capital redemption reserve fund or any undenominated capital may, for the purposes of this Article, only be applied for purposes permitted by the Acts. |
146. | Whenever such a resolution as aforesaid shall have been passed, the Directors shall make all appropriations and applications of the undivided profits resolved to be capitalised thereby and all allotments and issues of fully paid shares or debentures, if any, and generally do all acts and things required to give effect thereto with full power to the Directors to make such provision as they shall think fit for the case of shares or debentures becoming distributable in fractions (and, in particular, without prejudice to the generality of the foregoing, either to disregard such fractions or to sell the shares or debentures represented by such fractions and distribute the net proceeds of such sale to and |
- 63 -
for the benefit of the Company or to and for the benefit of the members otherwise entitled to such fractions in due proportions) and also to authorise any person to enter on behalf of all the members concerned into an agreement with the Company providing for the allotment to them respectively credited as fully paid up of any further shares or debentures to which they may become entitled on such capitalisation or, as the case may require, for the payment up by the application thereto of their respective portions of the profits resolved to be capitalised of the amounts remaining unpaid on their existing shares and any agreement made under such authority shall be effective and binding on all such members. |
AUDIT
147. | Auditors shall be appointed and their duties regulated in accordance with the Acts. |
NOTICES
148. | (a) | A notice may be given to, served on or delivered to any member by the Company by handing same to him or his authorised agent; by leaving the same at his registered address or by sending the same by post to him at his registered address. Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the notice, and to have been effected in the case of the notice of a meeting at the expiration of twenty-four hours after the letter containing the same is posted, and, in any other case, at the time at which the letter would be delivered in the ordinary course of post. Where a notice or document is given, served or delivered in accordance with this Article, the giving, service or delivery thereof shall be deemed to have been effected at the time the same was handed to the member or his authorised agent or left at his registered address (as the case may be). |
(b) | If at any time by reason of the suspension or curtailment of postal services within the State and/or Great Britain the Company is unable effectively to convene a general meeting by notices sent through the post, the general meeting may be convened by a notice advertised on the same date as the notice in at least two leading daily newspapers circulating in the State and/or Great Britain (as the circumstances require) and such notice shall have been deemed to have been duly served on all members entitled thereto at noon on the day on which the said advertisement shall appear. Notwithstanding anything contained in this Article, the Company shall not be obliged to take account of or make any investigations as to the existence of any suspension or curtailment of postal services within or in relation to all or any part of any jurisdiction or area other than the State. |
- 64 -
149. | A notice may be given by the Company to the joint holders of a share by giving the notice to the joint holder first named in the Register in respect of the share. |
150. | (a) | Any notice addressed to any member and sent by post to or left at his registered address in pursuance of these Articles shall, notwithstanding that such member be then deceased or bankrupt, be deemed to have been duly served in respect of any shares (whether held solely or jointly with other persons by such member) unless and until the Company shall have received notice in writing of his decease or bankruptcy. |
(b) | A notice may be given by the Company to the person entitled to a share in consequence of the death or bankruptcy of a member by sending it through the post in a prepaid letter addressed to them by name or by the title of representatives of the deceased or Official Assignee in bankruptcy or by any like description at the address supplied for the purpose by the persons claiming to be so entitled, or (until such an address has been so supplied) at the registered address of such deceased or bankrupt member. |
(c) | Service in manner aforesaid shall for all purposes be deemed a sufficient service of such notice on all persons interested (whether jointly with or claiming through or under such deceased or bankrupt member) in any such shares. |
151. | Notice of every general meeting shall be given in any manner hereinbefore authorised to:- |
(a) | every member holding at least one Ordinary Share in the Capital of the Company; and |
(b) | every person upon whom the ownership of a share devolves by reason of his being a personal representative or the Official Assignee in bankruptcy of a member, where the member but for his death or bankruptcy would be entitled to receive notice of the meeting; and |
(c) | the Auditor for the time being of the Company. |
Subject to Articles 5 and 6(v) no other person shall be entitled to receive notices of general meetings.
- 65 -
WINDING UP
152. | If the Company shall be wound up and the assets available for distribution among the members as such shall be insufficient to repay the whole of the paid up share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up or credited as paid up or which ought to have been paid up at the commencement of the winding up on the shares held by them respectively. If in a winding up the assets available for distribution among the members shall be more than sufficient to repay the whole of the capital paid up or credited as paid up at the commencement of the winding up, the excess shall be distributed among the members in proportion to the capital at the commencement of the winding up paid up or credited as paid up or which ought to have been paid up on the shares held by them respectively; PROVIDED that this Article is without prejudice to the rights of the holders of the 5 per cent Cumulative Preference Shares, the A Preference Shares or any other shares issued upon special terms and conditions. |
153. | If the Company is wound up, the liquidator may with the sanction of a Special Resolution of the Company and any other sanction required by the Acts, divide among the members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the members or different classes of members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories the liquidator, with the like sanction, shall think fit, but so that no member shall be compelled to accept any shares or other securities whereon there is any liability. |
DESTRUCTION OF RECORDS
154. | The Company shall be entitled to destroy all instruments of transfer which have been registered at any time after the expiration of twelve years from the date of registration thereof, all notifications of change of address at any time after the expiration of two years from the date of recording thereof and all share certificates and dividend mandates which have been cancelled or ceased to have effect at any time after the expiration of one year from the date of such cancellation or cessation. It shall be conclusively presumed in favour of the Company that every entry in the Register purporting to have been made on the basis of an instrument of transfer or other document so destroyed was duly and properly made and every instrument duly and properly registered and every share certificate so destroyed was a valid and effective document duly and properly cancelled and every other document hereinbefore mentioned so destroyed was a valid and effective document in accordance with the recorded particulars thereof in the books or records of the company; PROVIDED ALWAYS that:- |
- 66 -
(a) | the provision aforesaid shall apply only to the destruction of a document in good faith and without notice of any claim (regardless of the parties thereto) to which the document might be relevant; |
(b) | nothing herein contained shall be construed as imposing upon the Company any liability in respect of the destruction of any document earlier than as aforesaid or in any other circumstances which would not attach to the Company in the absence of this Article; and |
(c) | reference herein to the destruction of any document includes references to the disposal thereof in any manner. |
INDEMNITY
155. | Subject to the provisions of and so far as may be admitted by the Acts, every Director, Managing Director, Chief Executive, Auditor, Secretary or other Officer of the Company shall be entitled to be indemnified by the Company against all costs, charges, losses, expenses and liabilities incurred by him in the execution and discharge of his duties or in relation thereto including any liability incurred by him in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of the Company and in which judgment is given in his favour (or the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his part) or in which he is acquitted or in connection with any application under any statute for relief from liability in respect of any such act or omission in which relief is granted to him by the Court. |
The Directors shall have power to purchase and maintain for or for the benefit of any persons who are or were at any time Directors or Officers of the Company, or who are or were at any time trustees of any pension fund in which employees of the Company are interested, insurance against any liability incurred by such persons in respect of any act or omission when in the actual or purported execution or discharge of their duties or in the exercise or purported exercise of their powers or otherwise in relation to their duties, powers or offices in relation to the Company or any pension fund of the Company and shall be entitled to vote (and be counted in the quorum) in respect of any resolution concerning the purchase of such insurance.
- 67 -
INDEX
CRH
public limited company
Article No. | ||
ACCOUNTS |
140 - 144 | |
AUDIT |
147 | |
BORROWING POWERS |
91 | |
CAPITAL |
||
Amount |
4 | |
5% Cumulative Preference |
5 | |
7% A Cumulative Preference |
6 | |
Alteration of |
52 - 55 | |
CAPITALISATION OF PROFITS AND RESERVES |
145 - 146 | |
CHAIRMAN |
117 | |
CONTROL |
3 | |
CORPORATIONS ACTING BY REPRESENTATIVES |
86 | |
DIRECTORS |
||
Alternate |
103 | |
Appointment |
111, 113 | |
Chairman |
117 | |
Chief Executive or Managing Director |
123 - 125 | |
Committees of |
118 - 121 | |
Deputy Chairman |
117 | |
Disqualification |
104 |
- 68 -
Article No. | ||
Indemnity |
155 | |
Insurance |
155 | |
Meetings |
114 | |
Number |
87 | |
Other Company |
90 | |
Participation at meetings |
122 (b) | |
Powers and duties |
92 - 103 | |
Proceedings |
114 - 122 | |
Quorum |
115 | |
Removal |
112 | |
Remuneration |
89 | |
Resolution in writing |
122(a) | |
Rotation and retirement |
105 - 113 | |
Share qualification |
88 | |
Shares - power to allot |
11 (d) | |
DIVIDENDS AND RESERVES |
131 - 139 | |
ELECTRONIC COMMUNICATION USE OF |
129 | |
GENERAL MEETINGS |
||
Adjournment |
64,67 | |
Annual General Meeting |
57 | |
Business of |
61 | |
Calling or convening |
59 | |
Chairman |
65 - 66 | |
Extraordinary General Meeting |
58 - 59 | |
Held in State |
56 | |
Notice |
60 | |
Poll |
68 - 73 | |
Proceedings at |
61 - 73 |
- 69 -
Article No. | ||
Proxy |
79 - 85 | |
Quorum |
62 | |
Security and Safety |
63 | |
Votes |
74 - 85 | |
INDEMNITY |
155 | |
MINUTES |
101 | |
MODIFICATION OF RIGHTS |
10 | |
NOMINEE SHAREHOLDERS |
13 - 14 | |
NOTICES |
148 - 151 | |
OPTIONS |
11 | |
POSTAL SERVICES DISRUPTION |
148 (b) | |
PRESIDENT |
126 | |
RECORDS - DESTRUCTION OF |
154 | |
RESERVES |
134 | |
SEAL |
130 | |
SECRETARY |
127 - 128 | |
SHARES |
||
Allotment |
11 | |
Calls |
22 - 28 | |
Certificates |
16 - 17 | |
Commission |
12 | |
Conversion into Redeemable |
8 | |
Conversion into Stock |
48 - 51 | |
Disapplication of statutory pre-emption rights |
11 (e) | |
Disenfranchisement |
14 |
- 70 -
Article No. | ||
Financial Assistance for purchase of - prohibited |
15 | |
Forfeiture |
40 - 47 | |
Issue with Special Rights |
9 | |
Lien |
18 - 21 | |
Options |
11 | |
Purchase of own |
8, 8A | |
Redeemable - issue of |
8 | |
Redemption of Preference Shares |
7 | |
Transfer |
29 - 34 | |
Transmission |
35 - 39 | |
Treasury Shares - re-issue of |
8B | |
Trust - not recognised |
13 | |
Warrants |
11 | |
VOTES OF MEMBERS |
74 - 85 | |
WINDING UP |
152 - 153 |
- 71 -
Exhibit 4.1
THE USE OF THE FOLLOWING NOTATION IN THIS EXHIBIT INDICATES THAT THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION: [***]
10 July 2015
HOLCIM LTD
LAFARGE S.A.
CRH INTERNATIONAL
CRH FÜNFTE VERMÖGENSVERWALTUNGS GMBH
and
CRH PLC
AMENDED AND RESTATED AGREEMENT
for the sale and purchase of the
PROJECT CITIES SHARES AND
HOLCIM US ASSETS
CONTENTS
Clause | Page | |||||
1. |
DEFINITIONS AND INTERPRETATION | 2 | ||||
2. |
SALE AND PURCHASE | 32 | ||||
3. |
PRICE | 33 | ||||
4. |
PRICE ADJUSTMENT | 34 | ||||
5. |
CONDITIONS TO CLOSING | 39 | ||||
6. |
PRE-CLOSING UNDERTAKINGS | 44 | ||||
7. |
CLOSING | 48 | ||||
8. |
INTER-COMPANY TRADING AMOUNTS AND INTER-COMPANY NON-TRADING | |||||
AMOUNTS | 54 | |||||
9. |
SELLER WARRANTIES | 56 | ||||
10. |
INDEMNITIES | 63 | ||||
11. |
LIMITATIONS ON LIABILITY | 65 | ||||
12. |
PURCHASER WARRANTIES | 76 | ||||
13. |
TRANSFER TAXES AND TAX CONSOLIDATION EXIT AGREEMENTS | 78 | ||||
14. |
INSURANCE | 79 | ||||
15. |
GUARANTEES AND OTHER THIRD PARTY ASSURANCES | 80 | ||||
16. |
CHANGES OF NAME | 80 | ||||
17. |
INFORMATION, RECORDS AND ASSISTANCE POST-CLOSING | 81 | ||||
18. |
POST-CLOSING COVENANTS | 82 | ||||
19. |
US DELAYED CLOSING DATE | 85 | ||||
20. |
NO RIGHTS OF RESCISSION OR TERMINATION | 85 | ||||
21. |
PAYMENTS | 86 | ||||
22. |
ANNOUNCEMENTS | 87 | ||||
23. |
CONFIDENTIALITY | 88 | ||||
24. |
ASSIGNMENT | 89 | ||||
25. |
FURTHER ASSURANCES | 90 | ||||
26. |
WRONG POCKETS | 90 | ||||
27. |
COSTS | 91 | ||||
28. |
NOTICES | 91 | ||||
29. |
CONFLICT WITH OTHER AGREEMENTS | 93 | ||||
30. |
WHOLE AGREEMENT | 93 | ||||
31. |
WAIVERS, RIGHTS AND REMEDIES | 94 | ||||
32. |
COUNTERPARTS | 95 | ||||
33. |
VARIATIONS | 95 | ||||
34. |
INVALIDITY | 95 | ||||
35. |
NO THIRD PARTY ENFORCEMENT RIGHTS | 95 | ||||
36. |
NO PARTNERSHIP | 95 | ||||
37. |
GOVERNING LAW AND ARBITRATION | 95 |
(The following schedules to the agreement have been omitted in reliance upon Rule 601(b)(2) of Regulation S-K. The Registrant hereby undertakes to furnish such schedules to the Commission supplementally upon request.)
SCHEDULE 1 |
HOLCIM LOCAL SCHEDULE BRAZIL | |
SCHEDULE 2 |
HOLCIM LOCAL SCHEDULE CANADA | |
SCHEDULE 3 |
HOLCIM LOCAL SCHEDULE FRANCE | |
SCHEDULE 4 |
HOLCIM LOCAL SCHEDULE HUNGARY | |
SCHEDULE 5 |
HOLCIM LOCAL SCHEDULE SERBIA | |
SCHEDULE 6 |
HOLCIM LOCAL SCHEDULE SLOVAKIA | |
SCHEDULE 7 |
LAFARGE LOCAL SCHEDULE BRAZIL | |
SCHEDULE 8A |
LAFARGE LOCAL SCHEDULE FRANCE (KERCIM) | |
SCHEDULE 8B |
LAFARGE LOCAL SCHEDULE GERMANY | |
SCHEDULE 9 |
LAFARGE LOCAL SCHEDULE LA REUNION | |
SCHEDULE 10 |
LAFARGE LOCAL SCHEDULE ROMANIA | |
SCHEDULE 11 |
LAFARGE LOCAL SCHEDULE UNITED KINGDOM | |
SCHEDULE 12 |
HOLCIM PRICE ALLOCATION | |
SCHEDULE 13 |
LAFARGE PRICE ALLOCATION | |
SCHEDULE 14 |
LAFARGE-TARMAC | |
SCHEDULE 15 |
ACCOUNTING PRINCIPLES | |
SCHEDULE 16 |
SAMPLE CALCULATIONS OF ACCOUNTING ITEMS | |
SCHEDULE 17 |
BRAZIL | |
SCHEDULE 18 |
MATERIAL CONTRACTS | |
SCHEDULE 19 |
CLAUSE 9.24 MATERIAL CONTRACTS | |
SCHEDULE 20 |
TRANSACTION DOCUMENTS | |
SCHEDULE 21 |
LAFARGE SUPPLY AGREEMENTS | |
SCHEDULE 22 |
HOLCIM NON-CONTROLLING INTERESTS | |
SCHEDULE 23 |
LAFARGE NON-CONTROLLING INTERESTS | |
SCHEDULE 24 |
HOLCIM SUBSIDIARIES | |
SCHEDULE 25 |
LAFARGE SUBSIDIARIES | |
SCHEDULE 26 |
DIVESTITURE TRUSTEE MANDATES | |
SCHEDULE 27 |
ANTIRUST DISCLOSURES | |
SCHEDULE 28 |
HOLCIM SUPPLY AGREEMENTS |
AGREEMENT
dated 10 July 2015
BETWEEN:
1. | HOLCIM LTD of Zürcherstrasse 156, 8645 Jona, Switzerland (Holcim); |
2. | LAFARGE S.A. of 61, rue des Belles Feuilles, 75116 Paris, France (Lafarge and with Holcim, each a Seller and together, acting severally and not jointly for the purposes of this Agreement, the Sellers); |
3. | CRH INTERNATIONAL of Belgard Castle, Clondalkin, Co. Dublin, Ireland (the Purchaser); |
4. | CRH FÜNFTE VERMÖGENSVERWALTUNGS GMBH of Theodorstraße 297, 40472 Düsseldorf, Germany (the German Local Purchaser); and |
5. | CRH PLC of 42 Fitzwilliam Square, Dublin 2, Ireland (CRH) |
(each a Party and together the Parties).
WHEREAS:
(A) | On 7 April 2014, the Sellers announced their intention to merge their businesses (the Merger), such merger to be implemented by a tender offer by Holcim for the shares of Lafarge (the Tender Offer). |
(B) | In order to obtain the regulatory clearances necessary to complete the Merger, the Sellers must agree to divest certain of their businesses. |
(C) | On 31 January 2015, the Purchaser made a binding irrevocable offer to acquire from the Sellers the Holcim Sale Companies Shares, the Lafarge Sale Companies Shares and the Holcim US Assets on the terms of the Binding Offer Letter and Original SPA. The Binding Offer Letter was accepted by the Sellers on 26 May 2015 at which point the Original SPA came into effect. This Agreement amends, restates and supersedes the Original SPA. |
(D) | On 19 March 2015, the CRH Shareholders have passed the Resolution at the CRH Shareholders Meeting. |
(E) | The Sellers have accordingly agreed to sell (through the Holcim Designated Sellers and the Lafarge Share Sellers respectively), and the Purchaser has agreed to purchase (through the Designated Purchasers), the Holcim Sale Companies Shares, the Lafarge Sale Companies Shares and the Holcim US Assets respectively on the terms set out in this Agreement. |
(F) | CRH is a Party to this Agreement only for the purposes of the guarantee of the Purchasers obligations set out in clause 2.8 and shall be deemed to be a Party only in the context of those provisions. |
IT IS AGREED:
1. DEFINITIONS AND INTERPRETATION
1.1 | Definitions. In this Agreement, the following words and expressions shall have the following meanings: |
Accounting Principles has the meaning given in clause 4.4;
Additional Consideration has the meaning given in clause 18.11;
Affiliate means, in relation to any person, any other person that directly or indirectly Controls, or is under common Control with, or is Controlled by such person, it being specified that when used in relation to a fund, portfolio companies held or managed by or on behalf of such fund shall not be deemed to be an Affiliate;
Agreed Form means, in relation to a document, the form of that document as initialled, or otherwise identified in a manner agreed by the Parties, on the date of the Binding Offer Letter or on the date of this Agreement for the purpose of identification by or on behalf of the Sellers and the Purchaser (in each case with such amendments as are expressly permitted by this Agreement or otherwise as may be agreed in writing by the Sellers and the Purchaser);
Ancillary Agreements means the US APA and any ancillary agreements related thereto, the Transitional Services Agreement, the Deed of Tax Covenant, the Holcim IP Licence, the Lafarge Supply Agreements, the Holcim Supply Agreements, the Lafarge IP Licence, the Configuration Rights Letter and the Configuration Rights Agreement;
Anti-Bribery Law means (i) the UK Bribery Act 2010, (ii) the US Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations issued thereunder, and (iii) any other applicable Law that relates to bribery or corruption, in each case as amended or replaced from time to time;
Antitrust Claim means any Antitrust Warranty Claim or Antitrust Indemnity Claim;
Antitrust Clearances means the EU Antitrust Clearance, the Canada Antitrust Clearance, the Serbian Antitrust Clearance and the US Antitrust Clearance;
Antitrust Damages means:
(a) | any administrative fine, or equivalent penalty under applicable law, imposed on any Target Companies by any antitrust authority of competent jurisdiction or court of competent jurisdiction and directly relating to any Infringement; and |
(b) | any external costs and expenses actually and reasonably incurred by any Target Company in connection with any order, decision, ruling, decree or judgment in any proceeding or any investigation initiated or performed by the Relevant Antitrust Authority, in relation to any Infringement; |
Antitrust Indemnity has the meaning given in clause 10.3;
Antitrust Indemnity Claim means any Claim under the Antitrust Indemnity;
Antitrust Warranty Claim means any Claim relating to antitrust matters under or for breach of the Warranties;
- 2 -
Benefit Plan means each employee pension benefit plan and each long term employee benefit plan (including Jubilee plans, early retirement plans, retirement indemnity plans and deferred compensation plans) currently maintained or contributed to, or required to be maintained or contributed to, by any Target Company for the benefit of any present or former officers or employees of any Target Company;
Best Practice Guidelines means Best Practice Guidelines: the Commissions Model Texts for Divestiture Commitments and the Trustee Mandate under the EU Merger Regulation, issued by the European Commission on 5 December 2013;
Binding Offer Letter means the binding offer letter dated 31 January 2015 from the Purchaser to the Sellers pursuant to which the Purchaser made a binding and irrevocable offer to acquire the Holcim Sale Companies Shares, the Lafarge Sale Companies Shares and the Holcim US Assets, which was accepted by the Sellers on 26 May 2015;
Brazil Commitments means the commitments given by the Sellers to CADE dated 10 December 2014, as amended from time to time;
[***]
[***]
[***] |
[***] |
Business Day means:
(a) | for all purposes other than the date of Closing, a day other than a Saturday or Sunday or public holiday in England, Switzerland or France on which banks are open in London, Zurich and Paris for general commercial business; and |
(b) | for purposes of the date of Closing, a day other than a Saturday or Sunday or public holiday in any jurisdiction in which the Sellers and the Purchaser and a Target Company is incorporated on which banks are open in each such jurisdiction for general commercial business; |
CADE means the Brazilian Administrative Council for Economic Defense;
Canada Antitrust Clearance means, with respect to the Proposed Transactions, the expiry, waiver or termination of any applicable waiting period under Part IX of the Competition Act (Canada) provided that no order is in place that would prevent the consummation of the Proposed Transactions;
Canada Commitments means the commitments to be given by the Sellers and agreed with the Canadian Competition Bureau in its consent agreement, all as amended from time to time;
Cash means, as at the Closing Date, the aggregate of the cash and cash equivalents and short term financial assets items as defined for purposes of the preparation of the Transaction Perimeter Financial Information, including, for the avoidance of doubt, Inter-
- 3 -
Company Non-Trading Receivables, of the Holcim Target Companies or, as the case may be, the Lafarge Target Companies, in each case on a combined basis consistent with the Transaction Perimeter Financial Information, a sample calculation of which is set out in Schedule 16;
[***]
Circular means the shareholder circular posted by CRH to CRH Shareholders in connection with the CRH Shareholders Meeting, which incorporated the CRH Recommendation and the notice of the CRH Shareholders Meeting containing the Resolution;
Claim means any claim under or for breach of this Agreement (including any claim under clause 13), the US APA or the Deed of Tax Covenant;
Claimant Party has the meaning given in clause 11.23(b);
Clearances means the Antitrust Clearances and any other consents, approvals or actions of any Governmental Entity required to consummate the Proposed Transactions (including the Purchaser Competition Approvals);
Clearance Date means the date on which the last of the Clearances occurs;
Closing means, as applicable, the completion of the sale and purchase of the Shares and the Holcim US Assets (subject to clauses 7.1(a) and 7.1(b)), in each case in accordance with the provisions of this Agreement;
Closing Date means in relation to the transfer of the Shares and/or the transfer of the Holcim US Assets, the Main Closing Date provided that if the US Delayed Closing Trigger occurs, Closing Date shall mean, in relation to the Holcim US Assets, the relevant US Delayed Closing Date and, in relation to the Holcim Sale Company based in Canada the Main Closing Date or, as applicable, the relevant US Delayed Closing Date;
Closing Statements means the Holcim Closing Statement and Lafarge Closing Statement and each of them, a Closing Statement;
Closing Statement Notice has the meaning given in clause 4.8;
Commitments means the Brazil Commitments, the Canada Commitments, the Serbian Commitments and the EU Commitments;
Conditions means the conditions to Closing set out in clause 5.1, and Condition means any of them;
Confidential Information has the meaning given in clause 23.1(a);
Configuration Rights Letter means the letter dated 10 July 2015 from Holcim and Lafarge to the Purchaser, setting out core principles in relation to the provision and licensing to the Purchaser and the Target Companies of the rights (and associated documentation and know-how) required to implement a Clone & Go methodology for the IT Systems of the Target Companies and to use such IT Systems from Closing;
- 4 -
Configuration Rights Agreement means an agreement between the Sellers and the Purchaser, following the principles outlined in the Configuration Rights Letter, to be negotiated in good faith prior to Closing based on the Letter and executed at Closing;
Connected Persons means (in relation to a Party) the officers, employees, agents and advisers of that Party or any of its Affiliates including, on the part of the Purchaser after the Closing Date, the Target Companies;
Consent Order means the Decision and Order contained in the Consent Agreement dated April 16, 2015 entered by the US Federal Trade Commission in relation to the proposed acquisition by Holcim Ltd. of certain voting securities of Lafarge S.A.;
Contamination means (i) the presence of Hazardous Substances in the soil or groundwater at or under any Real Estate or Purchaser Indemnified Property at or prior to the Closing Date and (ii) the presence of Hazardous Substances prior to, at or after Completion to the extent resulting from migration through soil or groundwater of Hazardous Substances identified in (i) above from any Real Estate or Purchaser Indemnified Property;
Contamination Losses means any Losses relating to Contamination;
Contamination Proceeding means the receipt after the Closing Date by any relevant Target Company of a formal written notice from any Environmental Authority or a formal written notice from any other person (except any member of the Purchaser Group, any Relevant Person and/or any person associated or affiliated with any member of the Purchaser Group) of the commencement of or an intention to commence, civil, regulatory or criminal proceedings in respect of Contamination;
Control, including with its correlative meanings, Controlled by and under common Control with, means, when used in respect of a person, the power and authority to manage such person, whether directly or indirectly, through the holding of equity interests, through a contract or otherwise; it being specified that when used in respect of a fund, Control, including with its correlative meanings, Controlled by and under common Control with, means the power to advise or manage such fund;
Conversion Rate means the close spot mid-trade composite (London) rate for a transaction between the two currencies in question as quoted on Bloomberg at 11:00 am GMT on the date immediately preceding the Relevant Date or, if no such rate is quoted on that date, on the preceding date on which such rates are quoted;
Cookstown Cement Plant has the meaning given to that term in Schedule 14;
Corporate Marks means the Holcim Corporate Marks and the Lafarge Corporate Marks;
CPC means the Commission for Protection of Competition of the Republic of Serbia;
CRH Board means the board of directors of CRH from time to time;
CRH Board Commitments means the commitment entered into by each member of the CRH Board holding shares in CRH on or around the date of the Binding Offer Letter;
CRH Income Shares means the unlisted shares of 0.02 each in the capital of CRH issued with and tied to each ordinary share of 0.32 each in the capital of CRH;
- 5 -
CRH Recommendation means the recommendation by the CRH Board of the Proposed Transactions substantially in the form set out below:
The CRH Board, which has received financial advice from [], considers the terms of the Proposed Transactions to be fair and reasonable. In providing such financial advice to the CRH Board, [] has taken into account the CRH Boards commercial assessment of the Proposed Transactions.
The CRH Board believes the Proposed Transactions and the Resolution to be in the best interests of the CRH Shareholders as a whole and, accordingly, unanimously recommends that the CRH Shareholders vote in favour of the Resolution to be proposed at the CRH Shareholders Meeting, as each member of the CRH Board intends to do in respect of their own beneficial holdings of, in aggregate, [] CRH Shares, representing approximately [] per cent. of the issued and outstanding share capital of CRH as at [] 2015, being the last practicable day before the publication of this document.;
CRH Shareholders means the holders of CRH Shares from time to time;
CRH Shareholders Meeting means the general meeting of CRH Shareholders at which the Resolution was approved;
CRH Shares means the ordinary shares of 0.32 each in the capital of CRH, including, where the context so admits, the CRH Income Shares;
Current Assets means, as at the Closing Date for each Target Company and/or, with respect only to Holcim, attributable to the Holcim US Assets, the aggregate of the items entitled accounts receivables, inventories and prepaid expenses and other current assets as defined for purposes of the preparation of the Transaction Perimeter Financial Information and calculated in accordance with the same principles, provided that, for the avoidance of doubt Cash is not included in Current Assets, a sample calculation of which is set out in Schedule 16;
Current Liabilities means, as at the Closing Date for each Target Company and/or, with respect only to Holcim, attributable to the Holcim US Assets, the aggregate of the items entitled trade account payables, current income tax liabilities and other current liabilities as defined for purposes of the preparation of the Transaction Perimeter Financial Information and calculated in accordance with the same principles, provided that, for the avoidance of doubt, Debts are not included in Current Liabilities, a sample calculation of which is set out in Schedule 16;
Data Room means the data room comprising (a) the documents and information made available to the Purchaser (i) from 12 November 2014 until 27 January 2015 (the Initial Disclosure); (ii) from 27 January until 31 January 2015 (the Additional Disclosure); and (iii) from 12 February 2015 to 30 June 2015 (the US Assets Disclosure) and (b) the questions submitted by the Purchaser and its advisers via that data room and responses to those questions provided by Holcim and Lafarge and their advisers (the Q&A):
(a) | which has been copied, with respect to the Initial Disclosure, onto four (4) exact copies in the form of four (4) identical hard drives (and/or CD-ROMs) produced by Intralinks, of which: |
(i) | one copy will be retained by Holcim; |
- 6 -
(ii) | one copy will be retained by Lafarge; and |
(iii) | two copies will be delivered jointly by the Parties to an escrow agent pursuant to an escrow agreement, in Agreed Form, |
it being confirmed that promptly after the date of the Binding Letter Offer, Intralinks issued a certificate relating to the preparation and contents of the Data Room relating to the Initial Disclosure;
(b) | which has been copied, with respect to the Q&A, onto four (4) exact copies in the form of four (4) identical hard drives (and/or CD-ROMs) produced by Intralinks, of which: |
(i) | one copy will be retained by Holcim; |
(ii) | one copy will be retained by Lafarge; and |
(iii) | two copies will be delivered jointly by the Parties to an escrow agent pursuant to an escrow agreement, in Agreed Form, |
it being confirmed that promptly after the date of the Binding Letter Offer, Intralinks issued a certificate relating to the preparation and contents of the Data Room relating to the Q&A; and
(c) | which has been copied, with respect to the Additional Disclosure, onto four (4) exact copies in the form of four (4) identical hard drives (and/or CD-ROMs) produced by Intralinks, of which; |
(i) | one copy will be retained by Holcim; |
(ii) | one copy will be retained by Lafarge; and |
(iii) | two copies will be delivered jointly by the Parties to an escrow agent pursuant to an escrow agreement, in Agreed Form, |
it being confirmed that, promptly after the date of the Binding Letter Offer, Intralinks issued a certificate relating to the preparation and contents of the Data Room relating to the Additional Disclosure;
(d) | which has been copied, with respect to the US Assets Disclosure, onto four (4) exact copies in the form of four (4) identical hard drives (and/or CD-ROMs) produced by Intralinks, of which: |
(i) | one copy will be retained by Holcim; |
(ii) | one copy will be retained by Lafarge; and |
(iii) | two copies will be delivered jointly by the Parties to an escrow agent pursuant to an escrow agreement in Agreed Form, |
it being specified that promptly after the date hereof, Intralinks shall issue a certificate relating to the preparation and contents of the Data Room relating to the US Assets Disclosure;
- 7 -
Debt means, as at the Closing Date, the aggregate of the long term financial liabilities and the current financial liabilities items as defined for purposes of the preparation of the Transaction Perimeter Financial Information, including, for the avoidance of doubt, Inter-Company Non-Trading Payables, of the Holcim Target Companies or, as the case may be, the Lafarge Target Companies, in each case on a combined basis consistent with the Transaction Perimeter Financial Information, a sample calculation of which is set out in Schedule 16;
Deed of Tax Covenant means the deed of Tax Covenant in the Agreed Form to be entered into on the Main Closing Date among the Sellers and the Purchaser;
Default Interest means interest at [***];
Defendant Party has the meaning given in clause 11.23(b);
Designated Purchasers means the Share Purchasers and any member of the Purchaser Group established as the purchaser of the Holcim US Assets pursuant to the US APA or clause 7.4, and Designated Purchaser means any one of them;
Designated Sellers means the Holcim Designated Sellers and the Lafarge Share Sellers, and Designated Seller means any one of them;
Detroit Terminal Site means 101 N. Forman, Detroit, MI 48209, United States;
Disposal means any sale by the Divestiture Trustee of one or more Holcim Target Companies or Lafarge Target Companies, as the case may be, or in each case all of the assets thereof, or the Holcim US Assets, in accordance with clause 7.14;
Divestiture Trustee means one or more natural or legal person(s) to be approved by (a) CADE, (b) the Canadian Competition Bureau, (c) the CPC, (d) the European Commission and (e) the US Federal Trade Commission, as required, and appointed by the Sellers and who has/have received from the Sellers the exclusive Divestiture Trustee Mandate(s);
Divestiture Trustee Mandate(s) has the meaning given in clause 7.14(c);
Divestiture Trustee Trigger has the meaning given in clause 7.1;
Encumbrance means any interest or equity of any person (including any right to acquire, option or right of pre-emption or conversion) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention, easement, covenant or any other security agreement or arrangement, or any agreement to create any of the above, in each case excluding any licence of Intellectual Property Rights;
Environment means all or any of the following media, namely air (including the air within buildings or other natural or man-made structures above or below ground), water, land and soil;
Environmental Authority means any Governmental Entity with enforcement powers to require Remedial Action;
Environmental Claim means any Environmental Warranty Claim or Environmental Indemnity Claim;
- 8 -
Environmental Consents means any material permit, licence, authorisation, approval or consent required under Environmental Laws for the carrying on of the business of the relevant Target Companies at Closing;
Environmental Indemnity has the meaning given in clause 10.10;
Environmental Indemnity Claim means any Claim under the Environmental Indemnity;
Environmental Laws means all Laws to the extent they relate to Environmental Matters;
Environmental Losses means any Losses relating to Contamination or other Environmental Matters;
Environmental Matters means all matters relating to the pollution or protection of the Environment;
Environmental Proceeding means the receipt after the Closing Date by any Target Company of notice from any Environmental Authority or a formal written notice from any other person (except any member of the Purchaser Group, any Relevant Person and/or any person associated or affiliated with any member of the Purchaser Group) of the commencement of or an intention to commence, civil, regulatory or criminal proceedings in respect of Environmental Matters;
Environmental Warranty Claim means any Claim under or for breach of the Warranties set out in clauses 9.31 and 9.32;
ERM Report means the final overview report dated 24 October 2013 produced by Environmental Resources Management Limited, provided as document 18.17.22 in the UK section of the Data Room;
Estimated Cash means, in respect of each Seller, that Sellers estimate of what the Cash attributable to that Sellers Target Companies (including the Estimated Inter-Company Non-Trading Receivables) will be as at the Closing Date;
Estimated Debt means, in respect of each Seller, that Sellers estimate of what the Debt (including the Estimated Inter-Company Non-Trading Payables) attributable to that Sellers Target Companies will be as at the Closing Date;
Estimated Inter-Company Non-Trading Payables means, in respect of each Seller, that Sellers estimate of what the Inter-Company Non-Trading Payables attributable to that Sellers Target Companies will be as at the Closing Date;
Estimated Inter-Company Non-Trading Receivables means, in respect of each Seller, that Sellers estimate of what the Inter-Company Non-Trading Receivables attributable to that Sellers Target Companies will be as at the Closing Date;
Estimated Price means, in relation to Holcim, the Holcim Estimated Price and, in relation to Lafarge, the Lafarge Estimated Price;
Estimated Working Capital means, in respect of each Seller, that Sellers estimate of what the Working Capital attributable to that Sellers Target Companies and/or, with respect only to Holcim, the Holcim US Assets will be as at the Closing Date;
- 9 -
Estimated Working Capital Adjustment means, in respect of the Target Companies of the relevant Seller and/or, with respect only to Holcim, the Holcim US Assets, that Sellers estimate of the Working Capital Adjustment;
EU Antitrust Clearance means, in so far as the Proposed Transactions:
(A) constitute a concentration with a European Union dimension within the scope of the EU Merger Regulation, the:
(a) | issuance of a decision by the European Commission declaring the Proposed Transactions compatible with the common market pursuant to Article 6(1)(b) of the EU Merger Regulation; or |
(b) | expiry of the deadlines to issue a decision with the consequence that the Proposed Transactions are being deemed compatible with the common market pursuant to Article 10(6) of the EU Merger Regulation; or |
(c) | in the event that the Proposed Transactions are referred pursuant to Article 9(3)(b) of the EU Merger Regulation or deemed to have been referred pursuant to Article 9(5) of the EU Merger Regulation, referral: |
(i) | to one or more national competition authorities where the Proposed Transactions may be consummated before clearance is obtained according to the applicable national Law, including but not limited to the United Kingdom (Voluntary Regime), the European Commission indicating that it intends to refer the Proposed Transactions to any Voluntary Regime in accordance with Article 9(3) of the Regulation and, where applicable, the European Commission granting (or being deemed to grant) clearance in respect of the part of the Proposed Transactions not being referred declaring the Proposed Transactions compatible with the common market pursuant to Article 6(1)(b) of the EU Merger Regulation; |
(ii) | to one or more national competition authorities where the Proposed Transactions must not be consummated before clearance is obtained according to the applicable national Law, such national competition authority(ies) clearing the whole or relevant part of the Proposed Transactions as the case may be and, where applicable, the European Commission granting (or being deemed to grant) clearance in respect of the part of the Proposed Transactions not being referred declaring the Proposed Transactions compatible with the common market pursuant to Article 6(1)(b) of the EU Merger Regulation; or |
(iii) | to one or more of the national competition authority/authorities mentioned in paragraph (ii) above not issuing a decision within the required deadlines with the consequence that the Proposed Transactions are being deemed approved according to local competition Laws, and, where applicable, the European Commission granting (or being deemed to grant) clearance in respect of the part of the Proposed Transactions not being referred declaring the Proposed Transactions compatible with the common market pursuant to Article 6(1)(b) of the EU Merger Regulation; or |
(B) do not constitute a concentration with a European Union dimension within the scope of the EU Merger Regulation, but do, however, require clearance from the national competition authorities of one or more EU Member States prior to consummation:
- 10 -
(a) | the issuance of a clearance decision by such national competition authority(ies) declaring the Proposed Transactions compatible with its/their national Law; or |
(b) | the expiry of the deadlines to issue such a decision with the consequence that the Proposed Transactions are being deemed compatible with its/their national Law; or |
(c) | in the event of a request for a referral to the European Commission pursuant to Article 22(2) of the EU Merger Regulation to review all of part of the Proposed Transactions and such a request being accepted or in the event of a reasoned submission for a referral to the European Commission pursuant to Article 4(5) of the EU Merger Regulation (which shall be filed only if agreed upon by the Sellers) and no competent EU Member State having expressed its disagreement with such submission in accordance with Article 4(5) of the EU Merger Regulation: |
(i) | the issuance of a decision by the European Commission declaring the Proposed Transactions compatible with the common market pursuant to Article 6(1)(b) of the EU Merger Regulation applied directly or pursuant to Article 22(4) subparagraph 1 of the EU Merger Regulation in respect of all parts of the Proposed Transactions which were the subject of such a request; or |
(ii) | expiry of the deadlines to issue a decision with the consequence that the Proposed Transactions are being deemed compatible with the common market pursuant to Article 10(6) of the EU Merger Regulation; or |
(iii) | all parts of the Proposed Transactions which were the subject of the request having been deemed compatible with the common market pursuant to Article 10(6) of the EU Merger Regulation applied directly or pursuant to Article 22(4) subparagraph 1 of the EU Merger Regulation; |
EU Commitments means the commitments given by the Sellers to the European Commission dated 27 October 2014, as amended from time to time;
EU Merger Regulation means Council Regulation (EC) No 139/2004, as amended or replaced from time to time;
EURIBOR means the Euro interbank offered rate per annum for deposits in EUR for a period of three months which is quoted on Bloomberg at 11.00 a.m. GMT on the Relevant Date;
Excluded Assets means (in each case, for the avoidance of doubt, excluding the Holcim US Assets):
(a) | an asset which, at or before Closing, constituted part of or was used principally or wholly in respect of the business of a Seller or its Affiliates (for the avoidance of doubt, excluding the business of any Target Company); |
(b) | the Holcim Corporate Product Marks, any Intellectual Property Rights for or containing the mark HOLCIM (or any other Holcim Corporate Mark), the Holcim French Patents, the Holcim Slovakia Patents, the Brazil Local Licensed Marks, the Holcim Software, any mark that is not a Holcim Local Mark or any other mark designated as the subject of a licence in any Annex to the Holcim IP Licence, in each case as such terms are defined in the Holcim IP Licence; |
- 11 -
(c) | the Lafarge Corporate Product Marks, any Intellectual Property Rights for or containing the mark LAFARGE (or any other Lafarge Corporate Mark), the Lafarge Patents, the Lafarge Software and Lafarges co-ownership interest in the Lafarge-Tarmac Co-Owned Marks, in each case as such terms are defined in the Lafarge IP Licence; |
(d) | all Intellectual Property Rights licensed by Lafarge to a Lafarge Target Company immediately prior to Closing pursuant to the Lafarge Licenses and Services Agreements; and |
(e) | all Intellectual Property Rights other than those Intellectual Property Rights comprised in the Included Assets; |
Fairly Disclosed means, in respect of any fact, matter or circumstance, fairly disclosed in a manner such that a prudent buyer would be reasonably likely to identify the nature and extent of the matter disclosed taking into consideration the fact that:
(a) | the Purchaser undertakes the same business as, and is a competitor of, the Target Companies; and |
(b) | the documents contained in the Data Room were accessible continuously for inspection by the Purchaser and its advisers (i) between 12 November 2014 and 27 January 2015 with respect to the Initial Disclosure (as defined in the definition of Data Room); (ii) between 27 January 2015 and 31 January 2015 with respect to the Additional Disclosure (as defined in the definition of Data Room); and (iii) between 12 February 2015 and 30 June 2015 with respect to the US Assets Disclosure (as defined in the definition of Data Room). |
Final Price means in respect of Holcim the amount which results from taking the Holcim Estimated Price, and in respect of Lafarge the amount which results from taking the Lafarge Estimated Price, and in each case as adjusted in accordance with clauses 4.16 to 4.19;
Financial Information Date means:
(a) | 31 December 2013, in respect of the balance sheet and income statement for Holcim Brazil as set out in document 2.3.2 in the Global exchange in the Data Room and the balance sheet and income statement for Lafarge Brazil as set out in document 2.3.2 in the Global exchange in the Data Room; and |
(b) | 30 September 2014, in respect of all the other financial information set out in the definition of Transaction Perimeter Financial Information in this clause 1; |
Financing has the meaning given in clause 6.6;
Firm has the meaning given in clause 4.11;
FTC Assets has the meaning given in the US Antitrust Clearance definition;
Governmental Entity means any supra-national, national, state, municipal or local government (including any subdivision, court, tribunal, administrative agency or commission or other authority thereof) or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority, including the European Union;
- 12 -
HAB means [***];
Hazardous Substances means any substance or material (whether liquid, solid or gas) which in the particular circumstances in which it is present is an actual or likely cause of significant harm or damage to or adverse interference with the Environment;
Holcim Bank Account means the bank account of Holcim, details of which Holcim shall notify to the Purchaser in writing no later than 3 Business Days prior to the Main Closing Date (and/or such other account(s) as Holcim and the Purchaser may agree in writing);
Holcim Brazil Franchise Agreement means the franchising agreement between Holcim Technology and Holcim (BRASIL) S.A. dated 10 June 2009;
Holcim Canada Franchise Agreement means the franchising agreement between Holcim Technology and Holcim (Canada) Inc. dated 13 November 2012;
Holcim Closing Statement has the meaning given in clause 4.6;
Holcim Corporate Marks has the meaning given in the Holcim IP Licence;
Holcim Designated Sellers means (i) the Holcim Share Sellers and/or (iii) any member of the Holcim Group established as the seller of the Holcim US Assets pursuant to the US APA or clause 7.3;
Holcim Designated Seller means any one of the Holcim Designated Sellers, and for the avoidance of doubt any reference to a Holcim Share Seller in connection with this Agreement or any Ancillary Agreement shall be deemed to refer to Holcim Designated Seller;
Holcim Disposal Proceeds means the consideration receivable by the Divestiture Trustee on behalf of Holcim for any divestment of the Holcim US Assets or a Holcim Target Company or all of the assets of a Holcim Target Company pursuant to a Divestiture Trustee Mandate, after deducting any reasonable expenses which are incurred by the Divestiture Trustee or any of the Holcim Target Companies with respect to that Disposal;
Holcim Estimated Price has the meaning given in clause 4.1;
Holcim France Franchise Agreement means the franchising agreement between Holcim Technology and Holcim (France) S.A.S. dated 8 November 2012;
Holcim Franchise Agreements means the Holcim Brazil Franchise Agreement, the Holcim Canada Franchise Agreement, the Holcim France Franchise Agreement, the Holcim Hungary Franchise Agreement, the Holcim Serbia Franchise Agreement and the Holcim Slovakia Franchise Agreement;
Holcim Group means Holcim and its Affiliates from time to time but excluding the Target Companies and any member of the Lafarge Group;
Holcim Hungary Franchise Agreement means the franchising agreement between Holcim Technology and Holcim Magyarország Kft. dated 3 October 2012;
Holcim IP Licence means the intellectual property licence between Holcim, Holcim Technology, Holcim (Belgique) S.A., Holcim (Brasil) S.A. and a member (to be agreed by the
- 13 -
Parties) of the Purchaser Group (including the Target Companies) to be negotiated in good faith prior to Closing based on the term sheet in the Agreed Form and executed at Closing;
Holcim Local Schedules means Schedule 1 to Schedule 6;
Holcim Price has the meaning given in clause 3.1;
Holcim Sale Company Based in Canada means Holcim (Canada) Inc.;
Holcim Sale Companies means the companies the shares of which shall be transferred pursuant to the Proposed Transactions and which are listed in column 2 of Part A of each of the Holcim Local Schedules;
Holcim Sale Companies Shares means the shares of the Holcim Sale Companies that are owned by a member of the Holcim Group;
Holcim Secured Price means the amount of the Holcim Price allocated pursuant to clause 3.4 to the Holcim Target Companies or the Holcim US Assets in respect of which any Clearance has not been obtained, as shall be deposited into the Holcim Security Account on the Long Stop Date or other applicable date if clause 7.14 applies;
Holcim Secured Price Allocation means the portion of the Holcim Secured Price allocated (pursuant to clause 3.4) to the Holcim US Assets or to the Holcim Target Companies (or the assets thereof) that are the subject of a Disposal;
Holcim Security Account has the meaning given in the definition of Security Account in this clause 1;
Holcim Serbia Franchise Agreement means the franchising agreement between Holcim Technology and Holcim (Srbija) d.o.o. dated 29 August 2012;
Holcim Share Sellers means the members of the Holcim Group set out in column 1 of Part A of each of the Holcim Local Schedules and/or any member of the Holcim Group established as a Holcim Share Seller of any Holcim Sale Companies Shares pursuant to clause 7.3, and Holcim Share Seller means any one of them;
Holcim Slovakia Franchise Agreement means the franchising agreement between Holcim Technology and Holcim (Slovensko) dated 19 July 2012;
[***]
Holcim Supply Agreements means the supply agreements listed in Schedule 28 which will have been entered into by the Closing Date;
Holcim Supply Term Sheet means the term sheet in the Agreed Form which sets out the principles according to which Holcim and its Affiliates, on the one hand, and the Purchaser and its Affiliates (including, after Closing, the Target Companies), on the other hand, intended to implement certain supply arrangements;
Holcim Target Companies means: (i) the Holcim Sale Companies; and (ii) each of the Subsidiaries of such companies, and Holcim Target Company means any of them;
Holcim Technology means Holcim Technology Ltd;
- 14 -
Holcim Termination Fee means an amount equal to 50 per cent. of the Purchaser Termination Fee;
Holcim US Assets means the Purchased Assets (as defined in the US APA) and those Affected Employees (as defined in the US APA) who agree to employment with the Purchaser (as defined in the US APA) as of the US Assets Closing;
Holcim US Terminals at Grandville and Elmira means (i) the cement operations terminal, including all land, buildings, improvements and equipment, located at 8649 Parameter Road, Elmira, Michigan, consisting of approximately thirty-four (34) acres of land; and (ii) cement operations terminal, including all land, buildings, improvements and equipment, located at 3443 Viaduct Street South West, Grandville, Michigan, consisting of approximately six (6) acres of land;
Included Assets means:
(a) | the Holcim Local Marks designated for transfer in the Holcim IP Licence; |
(b) | the Romania Product Mark and the Brazil Product Marks, as such term is defined in the Lafarge IP Term Sheet; |
(c) | Lafarge-Tarmacs co-ownership interest in the Lafarge-Tarmac Co-Owned Marks, as such term is defined in the Lafarge IP Licence; and |
(d) | any unregistered Intellectual Property Rights (other than copyright in software) used exclusively by a Target Company in the 12 months prior to Closing; |
Indemnified Issue means:
(a) | [***] |
(b) | [***]; |
(c) | [***]; |
Indemnities means the indemnities set out in clause 10 of this Agreement;
Indemnity Claim means any Antitrust Indemnity Claim, Environmental Indemnity Claim and any Claim under any of the other Indemnities;
Infringement means [***]
- 15 -
Insolvency Proceedings means proceedings under any applicable insolvency, reorganisation or similar Laws in any jurisdiction;
Intellectual Property Rights means patents (including supplementary protection certificates), trademarks, service marks, registered designs, utility models, design rights, topography rights, copyrights (including copyright in computer programs) database rights, rights in inventions, rights in know-how, business or trade names, get-up, domain names, and all other intellectual property and neighbouring rights and rights of a similar or corresponding character (including all associated goodwill), enforceable anywhere in the world (whether or not the same are registered or capable of registration) and all applications for, or for the protection of, any of the foregoing;
Inter-Company Non-Trading Amounts means any Inter-Company Non-Trading Payables and any Inter-Company Non-Trading Receivables;
Inter-Company Non-Trading Payables means, as at the Closing Date and in relation to each Target Company, all current and non-current financing payables and loans due by it to any member of its Seller Group as disclosed in the Transaction Perimeter Financial Information as part of the line items Long-term financial liabilities and/or current financial liabilities;
Inter-Company Non-Trading Receivables means, as at the Closing Date and in relation to each Target Company, any short and long term financial assets and receivables due to it by any member of its Seller Group as disclosed in the Transaction Perimeter Financial Information;
Inter-Company Trading Amounts means all amounts owed, outstanding or accrued in the ordinary course of trading, including any VAT arising on such amounts, as between any Target Company and any member of its Seller Group as at Closing in respect of inter-company trading activities and the provision of services, facilities and benefits between them; for the avoidance of doubt, Inter-Company Trading Amounts:
(a) | includes, where applicable, amounts owed in respect of salaries or other employee benefits (including payroll taxes thereon but excluding any bonuses and related taxes), insurance (including health and motor insurance), pension and retirement benefit payments, management training or management services (pursuant to the Holcim Franchise Agreements and/or Lafarge Licenses and Services Agreements or otherwise) provided between them up to Closing, and any other inter-company payables and receivables that are not Inter-Company Non-Trading Amounts; but |
(b) | excludes amounts due in respect of matters which would in the ordinary course of business of the relevant Target Companies remain outstanding or otherwise have the characteristics of an intra-group loan, and also excludes any amounts in respect of tax or any surrender; |
Interim Financial Statements means the unaudited consolidated interim income statements, balance sheets and cash flow statements as set out in documents 4.2, 4.4, 4.7, 4.10 and 4.15 in the Global exchange in the Data Room in each case prepared as at the Financial Information Date or, as the case may be, for the period from 1 January 2014 to the Financial Information Date for the purpose of the financial reporting of the group consolidation of Holcim or, as the case may be, Lafarge as at the same date or relating to the same period;
Investigative Works means inspection, investigation, sampling or monitoring;
- 16 -
IT Systems means the material information and communications technologies used by the Target Companies;
Knowledge of Seller means, [***]:
(a) | [***] |
(b) | [***], |
[***];
Lafarge Bank Account means the bank account of Lafarge, details of which Lafarge shall notify to the Purchaser in writing no later than 3 Business Days prior to the Main Closing Date (and/or such other account(s) as Lafarge and the Purchaser may agree in writing);
Lafarge Closing Statement has the meaning given in clause 4.6;
Lafarge Corporate Marks has the meaning given in the Lafarge IP Licence;
Lafarge Disposal Proceeds means the consideration receivable by the Divestiture Trustee on behalf of Lafarge for any divestment of a Lafarge Target Company or all of the assets of a Lafarge Target Company pursuant to a Divestiture Trustee Mandate, after deducting any reasonable expenses which are incurred by the Divestiture Trustee or any of the Lafarge Target Companies with respect to that Disposal;
Lafarge Estimated Price has the meaning given in clause 4.1;
Lafarge Group means Lafarge and its Affiliates from time to time but excluding the Target Companies and any member of the Holcim Group;
Lafarge IP Licence means the intellectual property licence between any member(s) of the Lafarge Group and a member (to be agreed by the Parties) of the Purchaser Group (including the Target Companies) to be negotiated in good faith prior to Closing based on the Lafarge IP Term Sheet and executed at Closing;
Lafarge IP Term Sheet means the term sheet in the Agreed Form which sets out the principles according to which Lafarge and its Affiliates, on the one hand, and the Purchaser and its Affiliates (including, after Closing, the Target Companies), on the other hand, will own and use certain Intellectual Property Rights;
Lafarge Licenses and Services Agreements means:
(a) | in respect of Brazil: |
(i) | the industrial technology agreement between Lafarge, Lafarge Brasil S.A. and Companhia de Cimento Portland Lacim dated 20 December 2010; |
- 17 -
(ii) | the IT services agreement between Lafarge Canada Inc. and Lafarge Brasil S.A. dated 28 August 2014; |
(iii) | the transfer of technology agreement between Lafarge and Lafarge Brasil S.A. dated 15 February 2011; and |
(iv) | the trademark licence agreement between Lafarge and Companhia de Cimento Portland Lacim dated 1 January 2011; |
(b) | in respect of Germany: |
(i) | the services agreements between Lafarge and Lafarge Beton GmbH and between Lafarge and Lafarge Zement GmbH effective as from 1 January 2011; |
(ii) | the master brand agreements between Lafarge and Lafarge Beton GmbH and between Lafarge and Lafarge Zement GmbH effective as from 1 January 2011; and |
(iii) | the intellectual property licence agreements between Lafarge and Lafarge Beton GmbH and between Lafarge and Lafarge Zement GmbH effective as from 1 January 2011; |
(c) | in respect of Romania: |
(i) | the engineering services agreement between Lafarge and Lafarge Ciment (Romania) dated 9 November 2011; |
(ii) | the master brand agreement between Lafarge and Lafarge Ciment (Romania) dated 9 November 2011; and |
(iii) | the intellectual property licence agreement between Lafarge and Lafarge Ciment (Romania) dated 9 November 2011; and |
(d) | in respect of the UK: |
(i) | the industrial license agreement between Lafarge and Lafarge-Tarmac dated 7 January 2013; |
(ii) | the master branding agreement between Lafarge and Lafarge-Tarmac dated 7 January 2013; |
(iii) | the framework consultancy agreement between Lafarge and Lafarge-Tarmac dated 7 January 2013; and |
(iv) | the transitional services agreement between Lafarge UK Holdings Limited and TL One Limited (now Lafarge-Tarmac) entered into in 2011; |
Lafarge Local Schedules means Schedule 7 to Schedule 11;
Lafarge Price has the meaning given in clause 3.2;
- 18 -
Lafarge Sale Companies means the companies the shares of which shall be transferred pursuant to the Proposed Transactions and which are listed in column 2 of Part A of each of the Lafarge Local Schedules;
Lafarge Sale Companies Shares means the shares of the Lafarge Sale Companies that are owned by a member of the Lafarge Group;
Lafarge Supply Agreements means the supply agreements between any member(s) of the Lafarge Group and any member(s) of the Purchaser Group (including the Target Companies) in respect of those supplies identified in the indicative list in Schedule 21 to be negotiated in good faith prior to Closing on terms equivalent to the current terms and conditions for such supply, and executed at Closing;
Lafarge Secured Price means the amount of the Lafarge Price allocated (pursuant to clause 3.5) to the Lafarge Target Companies in respect of which any Clearance has not been obtained, as shall be deposited into the Lafarge Security Account on the Long Stop Date if clause 7.14 applies;
Lafarge Secured Price Allocation means the portion of the Lafarge Secured Price allocated (pursuant to clause 3.5) to the Lafarge Target Companies (or the assets thereof) the subject of a Disposal;
Lafarge Security Account has the meaning given in the definition of Security Account in this clause 1;
Lafarge Share Sellers means the members of the Lafarge Group set out in column 1 of Part A of each of the Lafarge Local Schedules and/or any member of the Lafarge Group established as a Lafarge Share Seller of any Lafarge Sale Companies Shares pursuant to clause 7.3, and Lafarge Share Seller means any one of them;
Lafarge Target Companies means: (i) the Lafarge Sale Companies; and (ii) each of the Subsidiaries of such companies, and Lafarge Target Company means any of them;
Lafarge-Tarmac means LAFARGE TARMAC HOLDINGS LIMITED, a company incorporated in England and Wales with registered number 07533961 whose registered office is at Portland House, Bickenhill Lane, Solihull, Birmingham B37 7BQ;
Lafarge-Tarmac Perimeter Assets has the meaning given to that term in Schedule 14;
Lafarge Termination Fee means an amount equal to 50 per cent. of the Purchaser Termination Fee;
Law means, with respect to any person, any binding supranational, federal, state, national or local statute, law, ordinance, rule, regulation, order, writ, injunction, directive, judgment or, decree, or other requirement of any Governmental Entity applicable to such person or any of its Affiliates or any of their respective properties, assets, officers, directors, employees, consultants or agents (in connection with such officers, directors, employees, consultants or agents activities on behalf of such person or any of its Affiliates);
Listing Rules means the listing rules made by the UKLA under Part VI of the Financial Services and Markets Act 2000;
Local Agreements means the local sale and purchase agreements referred to in clause 7.5, and Local Agreement means any one of them;
- 19 -
Local Closing Deliverables means any of items to be delivered at Closing as set out in Part F of each of the Local Schedules;
Local Currency means:
(a) | for Holcim, the currencies set out in paragraph (a) of the definition of Reference Working Capital; and |
(b) | for Lafarge, the currencies set out in paragraph (b) of the definition of Reference Working Capital; |
Local Reorganisations means the reorganisations described in the Local Reorganisation Conditions;
Local Reorganisation Conditions means the condition(s) to completion of the transfer of any Set of Shares, as set out in Part E of each of the Local Schedules, which for the avoidance of doubt shall exclude any clearance or other authorisation or formality with any Governmental Entity in connection with the completion by the Purchaser (directly or through its Share Purchasers) of the transactions contemplated in this Agreement;
Local Reorganisation Key Documents means each of the documents referred to in the Local Reorganisation Conditions which, subject to clause 5.9, shall be entered into:
(a) | for Hungary and Brazil, substantially in the form set out in (i) documents 10.1.1 to 10.1.8 and (ii) documents 10.8.1.1.1.1 to 10.8.1.1.1.11 in the Global section of the Data Room; and |
(b) | for France, substantially in the Agreed Form; |
Local Schedules means the Lafarge Local Schedules and the Holcim Local Schedules;
Local Steps Plans means:
(a) | for the reorganisation steps plans in respect of (i) the Holcim businesses in Brazil and Hungary and (ii) the Lafarge businesses in Brazil , in each case in the forms set out in documents 8.1.3 to 8.1.6 in the Global section of the Data Room; and |
(b) | for the reorganisation steps plan in respect of the Holcim business in France, substantially in the Agreed Form; |
Long Stop Date means the earlier of (i) the day which is 3 months following the date on which Settlement occurs or (ii) 31 December 2015, but in any case no earlier than 31 August 2015;
Loss means:
(a) | in respect of any Antitrust Indemnity Claim, the Antitrust Damages; |
(b) | [***]; [***] |
(c) | [***] |
- 20 -
[***];
Main Closing Date has the meaning given in clause 7.1;
Material Contract means any of the following contracts to which any Target Company is a party or by which any Target Company is bound as of the date of the Binding Offer Letter:
(a) | written contracts with key customers and suppliers as identified in Schedule 18; |
(b) | any long-term partnership or joint venture agreement relating to a company or business producing annual EBITDA in excess of [***] (on the basis of the latest available annual financial statements); and |
(c) | any contract under which the relevant Target Company has outstanding payment obligations or has outstanding rights to receive payments, in each case over the remainder of the current term of the contract, in excess of [***]; |
Material Real Estate means:
(a) | any real property occupied by a Holcim Target Company or a Lafarge Target Company on which is located a cement plant operated by the relevant Target Company or a quarry that supplies such a cement plant; |
(b) | any real property occupied by a Holcim Target Company or a Lafarge Target Company which is recorded in the books of the relevant Target Company for a book value greater than [***]; |
(c) | any real property occupied by a Holcim Target Company or a Lafarge Target Company which is material to the business of any Target Company; or |
(d) | in respect of the Holcim US Assets, the Real Property (as defined in the US APA); |
Merger has the meaning given in Recital (A);
[***] |
Monitoring Trustee means one or more natural or legal persons, independent from the Parties, who is approved by CADE, the Canadian Competition Bureau, the CPC and/or the European Commission, as applicable, and appointed by the Sellers, and who has the duty to monitor the Sellers compliance with the Commitments and/or, any person or entity appointed by the U.S. Federal Trade Commission pursuant to Paragraph IV of the U.S. Federal Trade Commissions final Decision and Order issued June 11, 2015, to act as a monitor, or the Person approved by the U.S. Federal Trade Commission to serve as a Hold Separate Monitor pursuant to the Hold Separate Order issued by the U.S. Federal Trade Commission on May 4, 2015, with respect to the combination of Holcim and Lafarge;
No Disposal Period has the meaning given in clause 18.10;
Non-Controlling Interests means the joint venture and minority interests referred to in Part D of each of the Local Schedules;
- 21 -
Non-US Clearance Date means the date on which the last of the Clearances, other than the US Antitrust Clearance, occurs;
Non-Wholly-Owned Target Company means any Target Company the entire issued share capital of which is not wholly-owned by either another Target Company or any member of either Seller Group;
Original SPA means the form of Share Purchase Agreement appended to the Binding Offer Letter;
Permitted Encumbrances means:
(a) | Encumbrances arising in the ordinary course of business or by operation of Law including Encumbrances for Taxes and other governmental charges; |
(b) | survey exceptions, easement and other customary charges or Encumbrances on title to real property if such Encumbrance would not reasonably be expected to be material to any of the Target Companies; and |
(c) | Encumbrances that will be released at or prior to Closing; |
Phase-Out Period has the meaning given in clause 16.1;
Policies means all policies of insurance maintained by the Target Companies or by either of the Sellers (or its Seller Group) in relation to its Target Companies and their businesses (whether under polices maintained with third party insurers or other members of its Seller Group);
Press Release means the press announcements to be made (i) immediately following execution of this Agreement, and (ii) immediately following Closing, in each case in a form to be agreed by the Parties;
Proposed Transactions means the transactions contemplated by the Transaction Documents;
Purchased Assets has the meaning given in the US APA.
Purchaser Competition Approvals means the approval of the terms of the Transaction Documents and of the identity of the Purchaser by each of (a) CADE pursuant to the Brazil Commitments, (b) the Canadian Competition Bureau pursuant to the Canada Commitments, (c) the CPC pursuant to the Serbian Commitments, (d) the European Commission pursuant to the EU Commitments, and (e) the US Federal Trade Commission pursuant to the Consent Order;
Purchaser Financing Agreement means the term facilities agreement dated on or about the date of the Binding Offer Letter between CRH Finance Limited and CRH Belgard Limited as Original Borrowers, CRH plc as Guarantor, CRH Finance Limited as CRH Agent, Bank of America Merrill Lynch International Limited, J.P. Morgan Limited and UBS Limited as the Arrangers, Bank of America Merrill Lynch International Limited as Agent and Bank of America, N.A., JPMorgan Chase Bank, N.A., London Branch and UBS AG, London Branch as Original Lenders;
Purchaser Group means the Purchaser and its Affiliates from time to time;
- 22 -
Purchaser Obligation means any representation, warranty or covenant to pay given by the Purchaser to the Sellers or obligation of the Purchaser to pay damages to the Sellers for a breach of any of its obligations, in each case under this Agreement or the US APA;
Purchasers Bank Account means the bank account of the Purchaser, details of which the Purchaser shall notify to the Sellers in writing no later than 3 Business Days prior to the Main Closing Date (and/or such other account(s) as the Sellers and the Purchaser may agree in writing);
Purchaser Indemnified Property means [***];
Purchasers Relief has the meaning set out in the Deed of Tax Covenant;
Purchaser Termination Fee means 157,800,000;
Real Estate means any real property owned or occupied by a Holcim Target Company or a Lafarge Target Company and, in respect of Holcim US Assets, the Real Property (as defined in the US APA);
Records has the meaning given in clause 17.1(a);
Reference Working Capital means:
(a) | in relation to the Holcim Target Companies, the aggregate of the following : |
(i) | in the case of Holcim Target Companies based in France, [***]; |
(ii) | in the case of Holcim Target Companies based in Serbia, [***]; |
(iii) | in the case of Holcim Target Companies based in Slovakia, [***]; |
(iv) | in the case of the Holcim Sale Company based in Canada and its Subsidiaries, [***]; |
(v) | in the case of the Holcim US Assets, [***]; |
(vi) | in the case of Holcim Target Companies based in Brazil, [***]; and |
(vii) | in the case of Holcim Target Companies based in Hungary, [***]; and |
(b) | in relation to the Lafarge Target Companies, the aggregate of the following: |
(i) | in the case of Lafarge Target Companies based in France, [***]; |
(ii) | in the case of Lafarge Target Companies based in the United Kingdom, [***]; |
(iii) | in the case of Lafarge Target Companies based in Germany, [***]; |
(iv) | in the case of Lafarge Target Companies based in Romania, [***]; |
- 23 -
(v) | in the case of Lafarge Target Companies based in La Reunion, [***]; and |
(vi) | in the case of Lafarge Target Companies based in Brazil, [***]; |
Relevant Antitrust Authority means the European Commission and the German antitrust authority;
Relevant Currency means Euro () and CAD in the case of Holcim and Euro (), CAD and Pound Sterling (£) in the case of Lafarge;
Relevant Date means the date on which a payment or an assessment is to be made, and for the following purposes shall mean:
(a) | for the purposes of converting Local Currencies into Relevant Currencies for the calculation of Estimated Cash, Estimated Working Capital Adjustment and Estimated Debt in the Holcim Estimated Price and Lafarge Estimated Price, respectively, the date on which the Sellers shall notify to the Purchaser the Holcim Estimated Price and the Lafarge Estimated Price pursuant to clause 4.1; |
(b) | for the purposes of converting Local Currencies into Relevant Currencies for the calculation of Cash, Working Capital Adjustment and Debt in the Holcim Final Price and the Lafarge Final Price, respectively, the Closing Date; |
(c) | for the purposes of clause 6.1, the date of the Binding Offer Letter; |
(d) | for the purposes of converting Local Currencies into EUR, as the case may be, to determine whether the amount of any Loss exceeds a relevant threshold set out in clause 9 in respect of any Warranty (including, for the purposes of the Warranties in clauses 9.22, 9.24, 9.25, 9.31, 9.37, 9.42 and 9.43), the date on which the relevant Claim is notified to the Sellers pursuant to clause 11.2; |
(e) | for the purposes of converting Local Currencies into EUR, as the case may be, for the calculation of the amount of any Loss that is the subject of a Claim under this Agreement, the date on which the relevant Claim is made; and |
(f) | for the purposes of Schedule 12 and Schedule 13 in relation to the conversion of the relevant proportion of the Holcim Price or Lafarge Price (as the case may be) from the Relevant Currencies into the relevant Local Currencies, the Closing Date; |
Relevant Person means any Purchaser, its Affiliates or any of its or their directors, officers, employees or successors in title;
Relief includes, unless the context otherwise requires, any allowance, credit, rebate, deduction, exemption or set off in respect of any Tax or relevant to the computation of any income, profits or gains for the purposes of any Tax, or any saving, refund, or repayment of Tax (including any interest, fines and penalties in respect of Tax);
Remedial Action means those measures necessary to remove, remedy, abate, contain, control, treat or ameliorate Contamination or the impacts of the Contamination;
Representatives has the meaning given in clause 23.1(b);
- 24 -
Required Works means Works that do not exceed such Works as are the minimum necessary to comply with relevant Environmental Laws or if applicable the final decision of a Governmental Entity in relation to relevant Contamination Proceedings;
Resolution means the ordinary resolution of CRH Shareholders which approved the Proposed Transactions;
[***];
Sale Companies means the Holcim Sale Companies and Lafarge Sale Companies, and Sale Company means any one of them;
[***]
[***];
Secured Price means the sum of the Holcim Secured Price and the Lafarge Secured Price;
Secured Price Allocation means a Holcim Secured Price Allocation or a Lafarge Secured Price Allocation;
Security means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect;
Security Accounts means the interest-bearing accounts:
(a) | in the Relevant Currencies opened in the name of Holcim (the Holcim Security Account) and in the name of Lafarge (the Lafarge Security Account), respectively, with a bank of international repute not located in the United Kingdom; |
(b) | which are identified in a letter between the Sellers and the Purchaser as being the Security Accounts; |
(c) | which are subject to Security in favour of the Purchaser which Security is in the form of the Security Documents; and |
(d) | from which no withdrawals may be made by any person except as contemplated by this Agreement or as otherwise agreed in writing by the Parties to this Agreement; |
Security Account Interest has the meaning given in clause 7.15(f);
Security Documents mean charges dated on or about the Long Stop Date or the US Long Stop Date, as applicable, between the Purchaser and the Sellers, and in form and substance reasonably satisfactory to the Sellers and the Purchaser, pursuant to which each of the Sellers agrees, inter alia, to grant certain rights over its Security Account in favour of the Purchaser, as security for its undertakings under clause 7.14(e);
Seller Group means:
(a) | in respect of Holcim or a Holcim Target Company, the Holcim Group; and |
- 25 -
(b) | in respect of Lafarge or a Lafarge Target Company, the Lafarge Group; |
Seller Obligation means, in respect of each Seller, any warranty or covenant to pay given by that Seller to the Purchaser or obligation of the Seller to pay damages to the Purchaser for a breach of any of its obligations, in each case under this Agreement or the US APA, and includes the undertaking to pay in clause 4;
Senior Manager means any employee engaged by a Target Company or a member of a Seller Group (as applicable) who is a member of the executive committee (or equivalent) of a Target Company or any member of a Seller Group (as applicable);
Serbian Antitrust Clearance means, in so far as the Proposed Transactions constitute qualifying transactions under the Law on the Protection of Competition of 1 November 2009, as amended:
(a) | the issuance of a decision by the Serbian Commission for the Protection of Competition clearing the Proposed Transactions in summary proceedings (Phase I) after the submission of a complete notification; or |
(b) | if the Serbian Commission for the Protection of Competition does not take a decision within one month after the submission of a complete notification and the Proposed Transactions are deemed cleared by application of law; |
Serbian Commitments means the commitments given by the Sellers to the CPC dated 17 December 2014, as amended from time to time;
Set of Shares means, in relation to a Share Seller, the shares comprising issued share capital of any particular Sale Company which are to be sold by that Share Seller under this Agreement;
Settlement has the meaning given in clause 5.1(b);
[***];
Share Purchasers means any member of the Purchaser Group established as a Share Purchaser of any Shares pursuant to clause 7.4, and Share Purchaser means any one of them;
Share Sellers means the Holcim Share Sellers and the Lafarge Share Sellers, and Share Seller means any one of them;
Shares means the Holcim Sale Companies Shares and the Lafarge Sale Companies Shares;
[***];
[***]
Subsidiaries means the companies details of which are referred to in Part C of each Local Schedule and Subsidiary means any one of them;
- 26 -
Surviving Provisions means clauses 1 (Definitions and Interpretation), 5.19 to 5.22 (Termination Fees) 6.7 and 6.8 (Pre-Closing Undertakings), 22 (Announcements), 23 (Confidentiality), 24 (Assignment), 28 (Costs), 29 (Notices), 30 (Conflict with other Agreements), 31 (Whole Agreement), 32 (Waivers, Rights and Remedies), 34 (Variations), 35 (Invalidity), 36 (No Third Party Enforcement Rights), and 38 (Governing Law and Arbitration);
Target Companies means the Holcim Target Companies and the Lafarge Target Companies, and Target Company means any of them;
Target Percentage means, in respect of any Non-Wholly-Owned Subsidiary, the percentage of the issued share capital of that Non-Wholly-Owned Subsidiary that is directly held by either another Target Company or any member of either Seller Group;
Target Sub-Group means in relation to any Sale Company, that Sale Company and all Subsidiaries of that Sale Company at Closing;
Tax or Taxes has the meaning set out in the Deed of Tax Covenant;
Tax Authority means, with respect to any Tax, the Governmental Entity in charge of imposing and/or collecting any Tax;
Tax Claim means a Tax Warranty Claim or a Tax Deed Claim;
Tax Consolidation Exit Agreements means the tax consolidation exit agreements, a form of which has been posted in the Data Room, to be entered into, before the Closing Date, between Holcim (Investments France) SAS, a French société par actions simplifiée whose registered office is located in Levallois Perret (92300) 49 avenue Georges Pompidou, incorporated with the Companies and Commercial Registry of Paris under number 945 651 891, on the one hand and (i) Holcim France S.A.S., a French société par actions simplifiée whose registered office is located in Levallois Perret (92300) 49 avenue Georges Pompidou, incorporated with the Companies and Commercial Registry of Paris under number 377 917 067, (ii) Holcim Granulats France, a French société par actions simplifiée whose registered office is located in Levallois Perret (92300) 49 avenue Georges Pompidou, incorporated with the Companies and Commercial Registry of Paris under number 333 892 610, (iii) Holcim Bétons France, a French société par actions simplifiée whose registered office is located in Levallois Perret (92300) 49 avenue Georges Pompidou, incorporated with the Companies and Commercial Registry of Paris under number 945 550 549, (iv) Holcim Bétons (Ouest), a French société par actions simplifiée whose registered office is located in Levallois Perret (92300) 49 avenue Georges Pompidou, incorporated with the Companies and Commercial Registry of Paris under number 507 885 507 and (v) VDN, a French société par actions simplifiée whose registered office is located in Levallois Perret (92300) 49 avenue Georges Pompidou, incorporated with the Companies and Commercial Registry of Paris under number 434 385 456, on the other hand;
Tax Deed Claim means a claim under or for breach of the Deed of Tax Covenant;
Tax Liability means a liability of any Target Company to make or suffer an actual payment of Tax;
Tax Returns means all returns, reports (including elections, declarations, disclosures, schedules, estimates and information returns) and other information filed or required to be filed with any Tax Authority relating to Taxes;
- 27 -
Tax Warranties means the warranties set out in clauses 9.26 to 9.28 (inclusive);
Tax Warranty Claim means a claim under or for breach of any Tax Warranties;
Tender Offer has the meaning given in Recital (A);
Third Party Assurances means all guarantees, indemnities, counter-indemnities and letters of comfort of any nature given: (i) to a third party by a Target Company in respect of any obligation of a member of its Seller Group; and/or (as the context may require); and (ii) to a third party by a member of its Seller Group in respect of any obligation of a Target Company;
Third Party Claim has the meaning given in clause 11.20;
Third Party Consideration has the meaning given in clause 18.11;
Third Party Disposal has the meaning given in clause 18.10;
Title Claim means a claim for a breach of any of the Title Warranties;
Title Warranties means the warranties set out in clauses 9.3 to 9.12 (inclusive) and 9.44;
Transaction Documents means this Agreement, the Local Agreements, the Ancillary Agreements and the Tax Consolidation Exit Agreements;
Transaction Perimeter Financial Information means the following financial information prepared in each case as at the Financial Information Date:
(a) | the combined statements of income, statements of financial position, cash flow statements and selected notes of the Holcim European Business Proposed for Divestment as set out, and more fully described, in document 4.3 in the Global exchange in the Data Room; |
(b) | the combined statements of income, statements of financial position, cash flow statements and selected notes of the Lafarge Continental Europe Divested Businesses as set out, and more fully described, in document 4.1 in the Global exchange in the Data Room; |
(c) | the combined statements of income, statements of financial position, cash flow statements and selected notes of the Holcim Canadian Business Proposed for Divestment as set out, and more fully described, in document 4.6 in the Global exchange in the Data Room; |
(d) | the consolidated income statement, consolidated balance sheet and consolidated cash flow statement of Lafarge-Tarmac as set out in document 4.9 in the Global exchange in the Data Room; |
(e) | the balance sheet and income statement for Holcim Brazil as set out in document 2.3.2 in the Global exchange in the Data Room; |
(f) | the balance sheet and income statement for Lafarge Brazil as set out in document 2.3.2 in the Global exchange in the Data Room; and |
- 28 -
(g) | the combined statements of income, statements of financial position, cash flow statements and selected notes of Lafarge La Réunion as set out, and more fully described, in document 3.2.4.1 in the Global exchange in the Data Room; |
Transfer Tax or Transfer Taxes means any stamp duty, registration duty or other transfer or transaction duty or Tax (including interest, fines and penalties);
Transferred Employees means the employees (i) of any of the Target Companies as at the Closing Date or (ii) whose employment is transferred to the Purchaser or any Designated Purchaser in connection with or by reason of this Agreement, the US APA or pursuant to applicable Law or (iii) those employees who are employed by a member of a Seller Group other than a Target Company but whose professional time is dedicated in all material respects to the Target Companies as at the date of the Binding Offer Letter;
Transitional Services Agreement means the transitional services agreement between any member of a Seller Group and any member of the Purchaser Group (including the Target Companies) to be negotiated in good faith prior to Closing based on the term sheet in the Agreed Form and executed at Closing;
Trident Plant means the assets of the Trident cement plant located in Montana, USA whose actual address is Trident Plant 4070 Trident Road, Three Forks, Montana, 59752 United States;
Trigger Event means (i) in relation to an Environmental Indemnity Claim, [***] to claim under the Environmental Indemnity, and (ii) in relation to an Environmental Warranty Claim that relates to [***];
UKLA means the United Kingdom Financial Conduct Authority acting in its capacity as the competent authority for listing in the United Kingdom for the purposes of Part VI of the Financial Services and Markets Act 2000;
Unconditional Date has the meaning given in clause 5.17;
US Antitrust Clearance means the publication by the US Federal Trade Commission of a letter approving Holcims proposed divestiture of the (i) Holcim US Assets; (ii) the cement plant located in Mississauga, Ontario, Canada; and (iii) the terminals located in the province of Alberta, Canada, ((i), (ii) and (iii) being defined together as the FTC Assets), to CRH as set forth in Holcims application to the US Federal Trade Commission;
US APA means the asset purchase agreement dated on or around the date of this Agreement between Holcim, CRH, the relevant Holcim Designated Seller and the relevant Designated Purchaser in respect of the Holcim US Assets;
US Assets Closing has the meaning given in the US APA;
US Clearance Date means the date on which the last of the Clearances relating to the Holcim US Assets, the cement plant located in Mississauga, Ontario, Canada and the terminals located in the province of Alberta, Canada, including the US Antitrust Clearance, occurs;
- 29 -
US Delayed Closing Date has the meaning given in clause 7.16 and clause 7.17. In the circumstances outlined in clause 7.17, there shall be two separate US Delayed Closing Dates, first in time relating to the Holcim Sale Company based in Canada and the second in time relating to the Holcim US Assets;
US Delayed Closing Trigger has the meaning given in clause 7.1(b)(i);
US Divestiture Trustee Trigger has the meaning given in 7.1(b)(ii);
US Long Stop Date has the meaning given in the US APA;
US Unconditional Date has the meaning given in the US APA;
VAT means value added tax and any similar sales or turnover tax;
Warranties means the warranties set out in clauses 9.3 to 9.44 (inclusive), including the Tax Warranties;
Warranty Claim means any claim under or for breach of the Warranties;
Working Capital means, as at the Closing Date, the aggregate of the Current Assets less the aggregate of the Current Liabilities of the Holcim Target Companies and/or, with respect only to Holcim, attributable to Holcim US Assets or, as the case may be, the Lafarge Target Companies, in each case on a combined basis consistent with the Transaction Perimeter Financial Information less the agreed adjustments to the Working Capital set out in Schedule 15 and a sample calculation of which is set out in Schedule 16;
Working Capital Adjustment means, in respect to the Target Companies of the relevant Seller and/or, with respect only to Holcim, the Holcim US Assets, the amount of the difference between the Working Capital and the Reference Working Capital, calculated in accordance with clause 4, and, if the Working Capital is greater than the Reference Working Capital, such amount shall be expressed as a positive number (or, if the Working Capital is less than the Reference Working Capital, such amount shall be expressed as a negative number);
Working Hours means 9.30am to 5.30pm in the relevant location on a Business Day; and
Works means (a) Investigative Works and (b) the carrying out of any Remedial Action.
1.2 | Interpretation. In this Agreement, unless the context otherwise requires: |
(a) | references in respect of a Seller to its Shares, its Target Companies, its Share Sellers, or its Seller Group or any similar expression means: |
(i) | where the Seller is Holcim, the Holcim Sale Companies Shares, the Holcim Target Companies, the Holcim Share Sellers and the Holcim Group respectively; and |
(ii) | where the Seller is Lafarge, the Lafarge Sale Companies Shares, the Lafarge Target Companies, the Lafarge Share Sellers and the Lafarge Group respectively; |
(b) | references in respect of a Seller to its Designated Seller or any similar expression means: |
- 30 -
(i) | where the Seller is Holcim, the Holcim Designated Sellers; and |
(ii) | where the Seller is Lafarge, the Lafarge Share Sellers; |
(c) | references in respect of a Target Company to its Seller, its Shares, its Share Sellers or its Seller Group or any similar expression means: |
(i) | where the Target Company is a Holcim Target Company, Holcim, the Holcim Sale Companies Shares, the Holcim Share Sellers and the Holcim Group respectively; and |
(ii) | where the Target Company is a Lafarge Target Company, Lafarge, the Lafarge Sale Companies Shares, the Lafarge Share Sellers and the Lafarge Group respectively; |
(d) | references to a person include any individual, firm, body corporate (wherever incorporated), government, state, any Governmental Entity or agency of a state or any joint venture, association, partnership, works council or employee representative body (whether or not having separate legal personality); |
(e) | headings do not affect the interpretation of this Agreement; the singular shall include the plural and vice versa; and references to one gender include all genders; |
(f) | references to any English legal term or concept shall, in respect of any jurisdiction other than England, be construed as references to the term or concept which most nearly corresponds to it in that jurisdiction; |
(g) | references to compliance (or, as the case may be, non-compliance) with any Law, including any Environmental Law, in all material respects or in any material respect (or any similar expression) shall be construed with reference to industry standards and practices in the relevant market and to practice within the relevant Target Companies; and |
(h) | any phrase introduced by the terms including, include, in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms. |
1.3 | Currency. In this Agreement: |
(a) | references to Pounds sterling or £ are references to the lawful currency from time to time of the United Kingdom; |
(b) | references to Euro, EUR or are references to the lawful currency from time to time of the member states of the European Union; |
(c) | references to Canadian dollars or CAD are references to the lawful currency from time to time of Canada; and |
(d) | references to USD or $ are references to the lawful currency from time to time of the United States of America. |
1.4 No contra-preferentum. This Agreement has been negotiated and reviewed by the Parties and their respective counsel and professional advisers. Accordingly, in interpreting
- 31 -
this Agreement, no regard shall be had to which Party or its counsel drafted any provision being interpreted.
1.5 Calculation of time. In this Agreement:
(a) | where a period expressed in days, weeks, months or years is to be calculated from the moment at which an event occurs or an action takes place, the day during which that event occurs or that action takes place shall not be counted as falling within the period in question; and |
(b) | a period expressed in weeks, months or years shall end with the expiry of whichever day in the last week, month or year (as applicable) of such period is the same day of the week (in the case of weeks), or falls on the same date (in the case of months or years), as the day on which the event or action from which the period is to be calculated occurred or took place. If, for a given period expressed in months, the last day of such period does not fall during the last month expressed to be in such period, such period shall end on the last day of that month. |
1.6 Schedules. The Schedules comprise schedules to this Agreement and form part of this Agreement.
2. SALE AND PURCHASE
2.1 Holcim (directly and through its Designated Sellers) shall sell, and the Purchaser (directly and through its Designated Purchasers) shall purchase, the Holcim Sale Companies Shares identified in Part A of each of the relevant Local Schedules and the Holcim US Assets with full title guarantee and on the terms set out in this Agreement.
2.2 Lafarge (directly and through its Share Sellers) shall sell, and the Purchaser (directly and through its Designated Purchasers) shall purchase the Lafarge Sale Companies Shares identified in Part A of each of the relevant Local Schedules with full title guarantee and on the terms set out in this Agreement. For the Lafarge Gips Share and the Lafarge Zement Share (as defined in the German Local Agreement), the Share Purchaser shall be the German Local Purchaser. For the avoidance of doubt, the German Local Purchaser is a party to this Agreement solely for the purposes of agreeing to acquire the Lafarge Gips Share and the Lafarge Zement Share, and the Parties acknowledge that the German Local Purchaser shall have no other rights or obligations under this Agreement.
2.3 Any undertaking or agreement given by a Seller under this Agreement (including any Seller Obligation) is given, and any undertaking or agreement given by the Purchaser under this Agreement (including any Purchaser Obligation) is received, by that Seller as principal and, to the extent that the relevant undertaking or agreement relates to a particular Set of Shares (or its Target Sub-Group) or, in the case of Holcim, the Holcim US Assets, being sold by one of its Designated Sellers, as agent for the Designated Seller which is selling that particular Set of Shares or the Holcim US Assets, as applicable.
2.4 Any undertaking or agreement given by the Purchaser under this Agreement (including any Purchaser Obligation) is given, and any undertaking or agreement given by a Seller under this Agreement (including any Seller Obligation) is received, by the Purchaser as principal and, to the extent that the relevant undertaking or agreement relates to a particular Set of Shares (or its Target Sub-Group) or the Holcim US Assets, as agent for the Designated Purchaser which is acquiring that particular Set of Shares or the Holcim US Assets, as applicable.
- 32 -
2.5 Notwithstanding any other provisions of this Agreement, the obligations of each Seller under this Agreement are several (not joint or joint and several). In particular:
(a) | Holcim assumes no responsibility or liability whatsoever in respect of any obligations of Lafarge or any matter concerning the Lafarge Sale Companies Shares, the Lafarge Group, the Lafarge Target Companies or the Lafarge Share Sellers and gives no commitment, undertaking, warranty or indemnity regarding the same; and |
(b) | Lafarge assumes no responsibility or liability whatsoever in respect of any obligations of Holcim or any matter concerning the Holcim Sale Companies Shares, the Holcim US Assets, the Holcim Group, the Holcim Target Companies or the Holcim Designated Sellers and gives no commitment, undertaking, warranty or indemnity regarding the same. |
2.6 Subject to Closing having taken place, Holcim shall irrevocably and unconditionally guarantee, as primary obligor, Lafarges obligations and liabilities under this Agreement or any other Transaction Document where Lafarge is dissolved or becomes the subject of any administrative, winding up or similar order or if Lafarges net assets are reduced below 5 billion following the Merger.
2.7 Subject to Closing having taken place, Lafarge shall irrevocably and unconditionally guarantee as primary obligor Holcims obligations and liabilities under this Agreement or any other Transaction Document where Holcim is dissolved or becomes the subject of any administrative, winding up or similar order or if Holcims net assets are reduced below 5 billion following the Merger.
2.8 CRH hereby irrevocably and unconditionally guarantees, as primary obligor, all of the obligations of the Purchaser under this Agreement or any other Transaction Document.
2.9 Notwithstanding the provisions of clauses 2.1 and 2.2, but subject to clauses 7.1, 7.14, 7.15 and 7.16:
(a) | the Purchaser cannot acquire, and Holcim and the Holcim Designated Sellers cannot sell, the Holcim Sale Companies Shares or the Holcim US Assets unless the Purchaser acquires the Lafarge Sale Companies Shares at the same time; and |
(b) | the Purchaser cannot acquire, and Lafarge and the Lafarge Share Sellers cannot sell, the Lafarge Sale Companies Shares unless the Purchaser acquires the Holcim Sale Companies Shares and the Holcim US Assets at the same time. |
2.10 This Agreement amends, restates and supersedes the Original SPA.
3. PRICE
Price for the Shares
3.1 The price for the Holcim Sale Companies Shares and the Holcim US Assets shall be:
(a) | [***]; and |
(b) | [***]. |
(the Holcim Price).
- 33 -
3.2 The price for the Lafarge Sale Companies Shares shall be:
(a) | [***]; |
(b) | [***]; and |
(c) | [***]. |
(the Lafarge Price).
3.3 The Holcim Price and the Lafarge Price will be adjusted:
(a) | before Closing, in accordance with the provisions of clause 4.1, to determine the relevant Estimated Price; and |
(b) | after Closing, in accordance with the provisions of clause 4.2, to determine the relevant Final Price. |
Price Allocation
3.4 The Holcim Price shall be allocated between the Holcim Sale Companies Shares and the Holcim US Assets listed in Schedule 12 in accordance with the prices set out in such Schedule, such that the aggregate of all such prices shall be the Holcim Price.
3.5 The Lafarge Price shall be allocated between the Lafarge Sale Companies Shares listed in Schedule 13 in accordance with the prices set out in such Schedule, such that the aggregate of all such prices shall be the Lafarge Price.
3.6 The allocations set out above shall be final, non-appealable and binding on the Parties and, except to the extent required under applicable Law, the Parties shall not and shall cause their Affiliates not to take a position inconsistent with such allocation. The Parties agree to consider in good faith the reasonable comments of each other with respect to any audit, controversy or litigation relating to such allocation, including in particular by any Tax Authority, and shall cooperate in good faith in order to preserve the effectiveness of such allocation.
4. PRICE ADJUSTMENT
Estimated Price
4.1 By no later than five (5) Business Days before the Closing Date, the Sellers shall notify to the Purchaser (i) the amounts in Euro () and CAD being the Holcim Price provided for in clause 3.1 (together, as adjusted under this clause 4.1, the Holcim Estimated Price), and (ii) the amounts in Euro () and Pounds Sterling (£) and CAD (together, as adjusted under this clause 4.1, the Lafarge Estimated Price) being the Lafarge Price provided for in clause 3.2, in each case:
(a) | minus the Estimated Debt (expressed in respect of the Holcim Estimated Price in EUR and in respect of the Lafarge Estimated Price in EUR); |
(b) | plus the Estimated Cash (expressed in respect of the Holcim Estimated Price in EUR and in respect of the Lafarge Estimated Price in EUR); and |
- 34 -
(c) | plus the Estimated Working Capital Adjustment (which, for the avoidance of doubt, can be a positive or negative number) (expressed in respect of the Holcim Estimated Price in EUR and in respect of the Lafarge Estimated Price in EUR). |
The adjustments set out in paragraphs (a), (b) and (c) above shall be imputed:
(d) | first, in the case of Holcim, on that part of the Holcim Estimated Price that is expressed in EUR and, in the case of Lafarge, on that part of the Lafarge Estimated Price that is expressed in EUR; and |
(e) | then, in the other Relevant Currencies in the order of declining magnitude in which they comprise the Holcim Price or Lafarge Price (as the case may be). |
The notice referred to in this clause 4.1 shall contain two documents in the form, or substantially in the form, of the Holcim Closing Statement and the Lafarge Closing Statement.
On the Closing Date, the Purchaser shall pay the Holcim Estimated Price to Holcim and the Lafarge Estimated Price to Lafarge in accordance with clause 7.8(b), clause 7.8(c) and clause 7.16 respectively.
Final Price
4.2 Each Sellers Final Price shall be calculated after the Closing Date on the basis set out in clauses 4.3 to 4.19 (inclusive). Any payments required to be made under clauses 4.3 to 4.19 (inclusive) shall be treated as adjusting the Estimated Price to provide the Final Price, and shall be paid:
(a) | in respect of the Holcim Price, in EUR; and |
(b) | in respect of the Lafarge Price, in EUR. |
The Final Price shall (subject to any further adjustment, if applicable, pursuant to clause 21) be adopted for all Tax reporting purposes.
Adjustments: Preliminary
4.3 In preparing each Closing Statement, the items and amounts to be included in the calculation of Debt, Cash and Working Capital for the purposes of the Closing Statement shall be identified by applying the relevant definition (subject, where applicable, to this clause 4.3 and clauses 4.4 and 4.5).
4.4 In applying the provisions of clause 4.3, this clause 4.4 and clause and 4.5 and determining which items and amounts are to be included in the Closing Statement, the accounting principles, policies, treatments, practices and categorisations set out in Schedule 15 shall apply (the Accounting Principles).
4.5 If any insured event occurs after the date of the Binding Offer Letter but before Closing in relation to any asset (excluding any assets that are part of Cash or Working Capital) of a Target Company and/or, with respect only to Holcim, of the Holcim US Assets, which needs to be replaced or restored in order for the relevant business to continue to be conducted in the ordinary course, then, to the extent that a member of the relevant Seller Group recovers any proceeds or is entitled to a receivable under a policy but the relevant asset is not replaced or restored before Closing, any such proceeds shall for the purposes of the
- 35 -
relevant Closing Statement be deducted from Cash and any such receivable shall not be included in Working Capital and, accordingly, shall not, in each case, be included in the Closing Statement.
Adjustments: Closing Statement
4.6 Holcim shall, or shall procure that Holcims accountants shall, after the Closing Date (which for the avoidance of doubt shall be the US Delayed Closing Date if the US Delayed Closing Trigger occurs) prepare a draft statement (the Holcim Closing Statement) showing the Debt, Cash and Working Capital and the Working Capital Adjustment relating to the Holcim Target Companies and/or, with respect only to Holcim, attributable to the Holcim US Assets, and the resulting draft Holcim Price. Lafarge shall, or shall procure that Lafarges accountants shall, after Closing prepare a draft statement (the Lafarge Closing Statement) showing the Debt, Cash and Working Capital and the Working Capital Adjustment relating to the Lafarge Target Companies and the resulting draft Lafarge Price.
4.7 Each Closing Statement shall be in the form of Schedule 16 showing the calculation of the Working Capital and the Working Capital Adjustment, Cash and Debt. Each Seller shall deliver its Closing Statement to the Purchaser within 45 Business Days of Closing.
4.8 The Purchaser shall notify the Sellers in writing (such notice being a Closing Statements Notice) within 30 Business Days after receipt of the Closing Statements to confirm whether or not it accepts the draft Closing Statements (or either of them) for the purposes of this Agreement. If the Purchaser does not accept the draft Closing Statements (or either of them), the Closing Statements Notice shall set out in detail the Purchasers reasons for such non-acceptance and specify the adjustments which, in the Purchasers opinion, should be made to the draft Closing Statement (or draft Closing Statements) in order for it (or them) to comply with the requirements of this Agreement. Except for the matters specifically set out in the Closing Statements Notice, the Purchaser shall be deemed to have agreed each draft Closing Statement in full.
4.9 If the Purchaser serves a Closing Statements Notice in accordance with clause 4.8, stating in the Closing Statements Notice that the Purchaser does not accept the Closing Statements (or either of them), the Sellers (or the relevant Seller) and the Purchaser shall use all reasonable efforts to meet and discuss the objections of the Purchaser and to agree the adjustments (if any) required to be made to the draft Closing Statement (or draft Closing Statements), in each case within 10 Business Days after receipt by the Sellers of the Closing Statements Notice.
4.10 If the Purchaser is satisfied with the draft Closing Statements (either as originally submitted or after adjustments agreed between the Sellers and the Purchaser pursuant to clause 4.9) or if the Purchaser fails to give a valid Closing Statements Notice within the 30 Business Day period referred to in clause 4.8, then the draft Closing Statements (incorporating any agreed adjustments) shall constitute the Closing Statements for the purposes of this Agreement.
4.11 If the Sellers and the Purchaser do not reach agreement within 10 Business Days after receipt by the Sellers of the Closing Statements Notice, then the matters in dispute may be referred (on the application of either one of the Sellers, or of the Purchaser) for determination by such independent firm of chartered accountants of international standing (a) as the Seller and the Purchaser shall agree or, (b) failing agreement or if such firm is unable or unwilling to act, within 5 Business Days after the end of the above 10 Business Days period, appointed by the President for the time being of the Institute of Chartered Accountants in England and Wales (the Firm). The Firm shall be requested to make its decision within 60 Business Days
- 36 -
(or such later date as the Sellers, the Purchaser and the Firm agree in writing) of confirmation and acknowledgement by the Firm of its appointment. The following provisions shall apply once the Firm has been appointed:
(a) | the Sellers (or the relevant Seller) and Purchaser shall each prepare a written statement within 15 Business Days after the Firms appointment on the matters in dispute which (together with the relevant supporting documents) shall be submitted to the Firm for determination and copied at the same time to the others; |
(b) | following delivery of their respective submissions, the Purchaser and the Sellers (or the relevant Seller) shall each have the opportunity to comment once only on the others submission by written comment delivered to the Firm not later than 15 Business Days after receipt of the others submission and, thereafter, the Sellers (or the relevant Seller) and the Purchaser shall not be entitled to make further statements or submissions except insofar as the Firm so requests (in which case it shall, on each occasion, give the other Party(ies) (unless otherwise directed) 15 Business Days to respond to any statements or submission so made); |
(c) | in giving its determination, the Firm shall state what adjustments (if any) are necessary, solely for the purposes of this Agreement, to the draft Closing Statement (or both draft Closing Statements), in respect only of the matters in dispute, in order to comply with the requirements of this Agreement and to determine finally the Closing Statement (or Closing Statements), provided that such determination shall not result in an adjustment that is higher than the higher figure submitted by the Purchaser or the Sellers (or the relevant Seller) and shall not result in an adjustment that is lower than the lower figure submitted by the Purchaser or the Sellers (or the relevant Seller); |
(d) | the Firm shall act as an expert (and not as an arbitrator) in making its determination which shall, in the absence of manifest error, be final and binding on the Parties and, without prejudice to any other rights which they may respectively have under this Agreement, the Parties expressly waive, to the extent permitted by law, any rights of recourse they may otherwise have to challenge it; and |
(e) | in making its determination, the Firm shall apply the Accounting Principles and the definitions provided under this Agreement. |
4.12 The Sellers and the Purchaser shall each be responsible for their own costs in connection with the preparation, review and agreement or determination of the Closing Statements. The fees and expenses of the Firm shall be borne equally between the Sellers on the one hand and the Purchaser on the other, or in such other proportions as the Firm shall determine.
4.13 To enable each Seller to exercise its rights and meet its obligations under this clause 4, the Purchaser shall provide to each Seller and each Sellers accountants full access to the books and records, employees and premises of the Target Companies and, where relevant, of the Purchaser for the period from Closing to the date that each draft Closing Statement is agreed or determined. If the Purchaser serves a Closing Statements Notice stating that it does not accept the Closing Statements (or either one of them), it shall ensure that each Seller and each Sellers accountants shall be given reasonable access to the Purchasers and the Purchasers accountants working papers relating to the adjustments proposed in the Closing Statements Notice and any other submissions by or on behalf of the Purchaser in relation to each Closing Statement. The Purchaser shall co-operate fully with the Sellers and shall permit each Seller and/or each Sellers accountants to take copies (including electronic
- 37 -
copies) of the relevant books and records and shall provide all assistance reasonably requested by the Sellers to facilitate the preparation of the Closing Statements.
4.14 When the Closing Statements have been agreed or determined in accordance with the preceding clauses, then the amounts shown in the Closing Statement as Cash, Debt and Working Capital and the Working Capital Adjustment for each Target Company and/or, with respect only to Holcim, attributable to the Holcim US Assets, shall be final and binding for the purposes of this Agreement.
4.15 The Sellers and the Purchaser agree that they shall each engage the separate teams within PwC that have advised them respectively in connection with this Agreement to assist with the processes specified in this clause 4 in order to ensure:
(a) | consistency between the Transaction Perimeter Financial Information, the Holcim Estimated Price and Lafarge Estimated Price, and the finally agreed or determined (as the case may be) Closing Statement; and |
(b) | transparency in relation to the calculation of the Holcim Estimated Price and Lafarge Estimated Price, and the finally agreed or determined (as the case may be) Closing Statement. |
Adjustments: Financial Adjustments
4.16 When the Closing Statements have been finally agreed or determined in accordance with clauses 4.6 to 4.15 (inclusive), the following adjustments shall be made to each Sellers Estimated Price:
(a) | in relation to Debt: |
(i) | if the Debt relating to the Target Companies of the relevant Seller is less than the corresponding Estimated Debt, then the Purchaser shall owe an amount equal to the difference to the relevant Seller; or |
(ii) | if the Debt relating to the Target Companies of the relevant Seller is greater than the corresponding Estimated Debt, then the relevant Seller shall owe an amount equal to the difference to the Purchaser; |
(b) | in relation to Cash: |
(i) | if the Cash relating to the Target Companies of the relevant Seller is greater than the corresponding Estimated Cash, then the Purchaser shall owe an amount equal to the difference to the relevant Seller; or |
(ii) | if the Cash relating to the Target Companies of the relevant Seller is less than the corresponding Estimated Cash, then the relevant Seller shall owe an amount equal to the difference to the Purchaser; and |
(c) | in relation to the Working Capital Adjustment: |
(i) | if the Working Capital Adjustment relating to the relevant Sellers Target Companies and/or, with respect only to Holcim, attributable to the Holcim US Assets is a greater amount than the corresponding Estimated Working Capital Adjustment, then the Purchaser shall owe an amount equal to the difference to the relevant Seller; or |
- 38 -
(ii) | if the Working Capital Adjustment relating to the relevant Sellers Target Companies and/or, with respect only to Holcim, attributable to the Holcim US Assets is a lesser amount than the corresponding Estimated Working Capital Adjustment, then the relevant Seller shall owe an amount equal to the difference to the Purchaser. |
Adjustments: General
4.17 Any amount payable pursuant to clause 4.16 shall be increased by an amount equivalent to interest on such amount at a rate of [***] for the period from (but excluding) the Closing Date to (and including) the due date for payment of such amount, calculated on a daily basis.
4.18 Each Seller and the Purchaser agrees that, once the Closing Statements have been agreed or determined in accordance with the provisions of clauses 4.6 to 4.15 (inclusive), the sums which each is respectively obliged to pay pursuant to clauses 4.16 shall be aggregated and netted off against each other.
4.19 Whichever of the relevant Seller or Purchaser is then left with any payment obligation under clauses 4.16 shall make the applicable payment(s) within 5 Business Days after the date on which the Closing Statements are agreed or so determined. Any such payment shall be made in accordance with the provisions of clause 20 of this Agreement.
5. CONDITIONS TO CLOSING
5.1 Closing shall be conditional on the following Conditions having been fulfilled or waived in accordance with this Agreement:
(a) | the agreement between the Sellers dated 7 July 2014 with respect to the Merger not having been terminated pursuant to articles 6.2 to 6.4 thereof; |
(b) | successful completion (being evidenced by the settlement (règlement-livraison)) of the Tender Offer in accordance with the General Regulations of the AMF and the Rules of Euronext Paris (the Settlement); and |
(c) | subject to clause 5.9, the satisfaction of each of the Local Reorganisation Conditions. |
Purchaser and Seller Obligations
5.2 Without prejudice to the obligations of the Seller in clause 5.4, the Purchaser shall, at its own cost, use all reasonable endeavours to obtain all required consents, approvals or actions of any Governmental Entity required by it to consummate the Proposed Transactions promptly after the date of this Agreement.
5.3 The Purchaser shall have primary responsibility for obtaining all such consents, approvals or actions (subject to clause 5.4) and shall take all steps necessary for that purpose (including making pre-notification contacts, appropriate submissions, notifications and filings, as appropriate in light of normal practice, in consultation with, and where necessary and to the extent reasonable with the assistance and cooperation of, each Seller (to the extent not already done) within 15 Business Days after the date of this Agreement). The Purchaser shall, unless expressly prohibited by a Governmental Entity and in respect of clause 5.3(e) only, where permitted by the Governmental Entity, for this purpose:
- 39 -
(a) | provide all information and take all other measures or actions that are required by any such Governmental Entity, including for the purpose of obtaining the Clearances, and comply as promptly as practicable with any reasonable requests for additional information requested by any Governmental Entity; |
(b) | promptly notify each Seller (and provide copies or, in the case of non-written communications, details) of any communications from any such Governmental Entity relating to any such consent, approval or action, except that Purchaser is not required to notify either Seller with respect to any such communications with the US Federal Trade Commission; |
(c) | except for communications that are administrative or procedural in nature, communicate with any such Governmental Entity only after prior consultation with each Seller and/or its advisers (taking into account their reasonable comments and requests) and provide each Seller (and/or its advisers) with copies of all such submissions, notifications, filings and other communications in the form submitted or sent, except that the Purchaser is not required to consult in advance with either Seller and/or their advisers with respect to any such communications with the US Federal Trade Commission or to provide either Seller with copies of any submissions, notifications, filings or other communications submitted to the US Federal Trade Commission; |
(d) | (without limiting paragraph (c) above) provide each Seller (or its advisers) with a final draft of all submissions, notifications, filings and other communications to any Governmental Entity at such time as will allow each Seller (or its advisers) a reasonable opportunity to provide comments and for the Purchaser to take account of any reasonable comments of each Seller (or its advisers) on such drafts prior to their submission, except that Purchaser is not required at any time to provide either Seller (or their advisors) with a final draft of any submissions, notifications, filings or other communications submitted to the US Federal Trade Commission or to allow either Seller (or their advisors) an opportunity to provide comment on any such drafts prior to submission to the US Federal Trade Commission; |
(e) | allow persons nominated by each Seller to attend all meetings (and participate in all telephone or other conversations, except any conversations that are administrative or procedural in nature) with the Governmental Entity and to make oral submissions at the meetings (or in telephone or other conversations), except that Purchaser is not required to allow either Seller to attend any meetings (or participate in any telephone or other conversations) with the US Federal Trade Commission or to make oral submissions at any meetings (or in telephone or other conversations) with the US Federal Trade Commission; and |
(f) | regularly review with each Seller the progress of any notifications or filings (including, where necessary, seeking to identify appropriate commitments to address any concerns identified by any Governmental Entity) and discussing with each Seller the scope, timing and tactics of any such commitments with a view to obtaining clearance from the Governmental Entity at the earliest reasonable opportunity, |
save that for these purposes the Purchaser shall only be required to provide information of a commercially sensitive nature to Sellers counsel on a counsel-to-counsel basis and shall not be required to take any action that would constitute a breach of Law, regulation or contract.
5.4 The Sellers shall use all reasonable endeavours to obtain the Purchaser Competition Approvals as soon as reasonably practicable and shall be responsible for submitting a
- 40 -
reasoned proposal, including an executed copy of this Agreement, to relevant Governmental Entities in order to obtain the Purchaser Competition Approvals. The Purchaser acknowledges that, in order to obtain the Purchaser Competition Approvals, the Sellers will need to be able to demonstrate, and the relevant Governmental Entities will need to verify, that the Purchaser meets the relevant purchaser requirements and that, by means of this Agreement, the Shares are sold and the Proposed Transactions are performed in a manner consistent with the Commitments. The Purchaser shall promptly, and in any case by no later than 5 Business Days following the Sellers request, provide the Sellers (or the Monitoring Trustee) with any information or documentation relating to the Purchaser and any other assistance (including participation in meetings and phone calls with the Monitoring Trustee) that the Seller may reasonably request or that is required by the relevant Governmental Entity and/or the Monitoring Trustee to make the reasoned proposal and/or to obtain the relevant Purchaser Competition Approval. Following submission of the reasoned proposal, the Sellers shall keep the Purchaser reasonably informed of discussions between the Seller and the relevant Governmental Entities and/or the Monitoring Trustee in relation thereto. The Sellers and the Purchaser shall promptly consult with each other and each use its reasonable efforts to: (i) overcome any obstacle to the making of the reasoned proposal and to the granting of the Purchaser Competition Approvals; and (ii) carry out any appropriate measure in order to procure that the Purchaser Competition Approvals are obtained. In circumstances in which the Purchasers compliance with this clause 5.4 requires the Purchaser to provide information of a commercially sensitive nature to the Seller, such information shall be provided to Sellers counsel on a counsel-to-counsel basis and the Purchaser shall not be required to take any action that would constitute a breach of Law, regulation or contract. This clause 5.4 is without prejudice to the obligations of the Purchaser in clause 5.7.
5.5 Each Seller shall provide the Purchaser and any Governmental Entity with any necessary information and documents reasonably required for the purpose of making any submissions, notifications and filings to any such Governmental Entity, and shall make any notifications that may be required of the Seller by such Governmental Entity in order to obtain any relevant consents or approvals, save that each Seller shall only be required to provide information of a commercially sensitive nature to the Purchasers counsel on a counsel-to-counsel basis and shall not be required to take any action that would constitute a breach of Law, regulation or contract.
5.6 The Purchaser shall not make any filing with any Governmental Entity which is not required without obtaining the prior written consent of each Seller to the making of it and to its form and content.
5.7 If it becomes apparent that any Governmental Entity referred to in this clause 5 indicates that it will only provide any consents or approvals that are necessary to satisfy the obligations set out in this clause 5 and/or obtain the Clearances subject to certain conditions being satisfied or undertakings being made, or if it becomes apparent that any Governmental Entity referred to in this clause 5 will not provide any Clearance on or before the Long Stop Date, or the US Long Stop Date, as applicable, the Purchaser shall:
(a) | structure its acquisition of the Target Companies or the Holcim US Assets so as to comply with the applicable requirements for obtaining the Clearances or offer (and not withdraw) such undertakings to such Governmental Entity as may be deemed necessary by the Sellers to secure such Governmental Entitys consent or clearance without undue delay and in any event without the need for an in-depth review by such Governmental Entity. For the avoidance of doubt, such undertakings may include any condition, obligation, undertaking or modification relating in any manner whatsoever to: (i) any undertaking, or any business, activities or assets of any |
- 41 -
undertaking, that is Controlled by any member of the Purchasers Group; (ii) any Target Company, or any business, activities or assets of any Target Company or (iii) the Holcim US Assets; |
(b) | if such Governmental Entity makes clear that the offer made under clause 5.7(a) above is not sufficient, the Purchaser shall make such further or better offers (and not withdraw such offers) to restructure or divest any or all undertakings, businesses, activities or assets as necessary to satisfy such Governmental Entity, including by way of an up-front buyer or fix-it first remedy, as appropriate; and |
(c) | (where the Purchaser cannot structure its acquisition of the Target Companies or the Holcim US Assets so as to obtain the Clearances on or before the Long Stop Date) structure its acquisition of the Target Companies or the Holcim US Assets in such a way as to allow for Closing to occur without obtaining any such Clearance (for illustrative purposes only, including, so as to allow Closing to occur without obtaining the [***], by acquiring at Closing only [***] of the shares of the [***] at Closing and otherwise complying with the obligations in [***]). |
5.8 In seeking the approval of any Governmental Entity required in connection with the Proposed Transactions, neither the Purchaser nor any of its Representatives has engaged or will engage in any conduct in breach of any applicable Anti-Bribery Law. The Purchaser shall promptly notify the Sellers of any solicitation, demand or other request for anything of value, by or on behalf of any official, employee or representative of, or any other person acting in an official capacity for or on behalf of any Governmental Entity, relating to the Proposed Transactions including any approval referred to in this clause 5.8.
Local Reorganisations
5.9 Between the date of the Binding Offer Letter and the Closing Date the Sellers shall use reasonable endeavours to implement the Local Reorganisations. If, in the reasonable opinion of the Sellers it is preferable to implement any Local Reorganisation in a manner other than that described in the relevant Local Steps Plan, the Seller may implement the Local Reorganisation in any alternative manner, provided that such alternative reorganisation is economically equivalent for the Purchaser.
5.10 Each Seller shall keep the Purchaser reasonably informed of the progress of the Local Reorganisations and shall provide the Purchaser with draft documents for its review in good time prior to execution and shall provide all executed Local Reorganisation Key Documents to the Purchaser as they become available. The Purchaser may offer suggestions on the draft documents relating to the Local Reorganisations but the Sellers are not obliged to accept any such suggestions.
5.11 If at any time until the date that is 9 months after Closing:
(a) | a Seller or any of its Affiliates holds any asset (including any transferrable permit) that should have been transferred to the relevant Target Company under the terms of the applicable Local Reorganisation, or receives any amount in respect of any such asset, then that Seller shall (or, in the case of a transferrable permit, shall use reasonable endeavours to), as promptly as reasonably practicable, remit, or cause to be remitted, at no cost, such amount or asset to the Purchaser or its relevant Affiliate, as the case may be; |
- 42 -
(b) | the Purchaser or any Target Company, or any of their respective Affiliates, holds any asset (including any transferrable permit) that should not have been transferred to the relevant Target Company under the terms of the applicable Local Reorganisation, or receives any amount in respect of any such asset, then the Purchaser shall (or, in the case of a transferrable permit, shall use reasonable endeavours to), or the Purchaser shall procure that the relevant Target Company or Affiliate shall (or, in the case of a permit, shall use reasonable endeavours to), as promptly as reasonably practicable, remit, or cause to be remitted, at no cost, such amount or asset to the Seller or its relevant Affiliate, as the case may be; |
(c) | a Seller or any of its Affiliates is required to make (and effectively makes) any payment in respect of any asset that should have been transferred to the relevant Target Company under the terms of the applicable Local Reorganisation, the Purchaser shall, as promptly as reasonably practicable, remit an amount equal to the amount of such payment to that Seller or its relevant Affiliate, as the case may be; or |
(d) | the Purchaser or any of its Affiliates is required to make (and effectively makes) any payment in respect of any asset that should have not been transferred to the relevant Target Company under the terms of the applicable Local Reorganisation, the relevant Seller shall, as promptly as reasonably practicable, remit an amount equal to the amount of such payment to the Purchaser or its relevant Affiliate, as the case may be. |
5.12 The Sellers shall provide such assistance to the Purchaser as it reasonably requires for the purpose of clause 5.11 and covenants with the Purchaser and each of its Affiliates to pay to the Purchaser or to the relevant Affiliates of such other an amount equal to any and all Losses suffered or incurred by them in relation to the transfer or as a result of holding the relevant interest for the period from Closing until it is so transferred.
5.13 The Purchaser shall provide such assistance to each Seller as each Seller reasonably requires for the purpose of clause 5.11 and covenants with each Seller and each of its Affiliates to pay to the relevant Seller or to the relevant Affiliates of such Seller an amount equal to any and all Losses suffered or incurred by them in relation to the transfer or as a result of holding the relevant interest for the period from Closing until it is so transferred.
5.14 The Purchaser and the Sellers shall ensure that their relevant Affiliates shall comply with the terms of any agreement entered into by such Affiliates for the purposes of implementing any of the Local Reorganisations.
5.15 Notwithstanding anything to the contrary herein, the Purchaser and the Sellers shall, and shall ensure that their relevant Affiliates shall, comply with the provisions of Schedule 14, relating to Lafarge-Tarmac.
General
5.16 The Conditions in clause 5.1(a) and 5.1(b) may be waived by joint notice from the Sellers. The Condition in clause 5.1(c) may only be waived by the written agreement of the Sellers and the Purchaser.
5.17 Each Seller and the Purchaser shall each notify the other promptly upon becoming aware that any of the Conditions have been fulfilled. The first Business Day on or by which all Conditions have been fulfilled (or waived in accordance with clause 5.16) is the Unconditional Date.
- 43 -
5.18 If any of the Conditions has not been satisfied or waived as set forth in clause 5.16 by the Long Stop Date, this Agreement shall automatically terminate (other than the Surviving Provisions).
Termination Fees
5.19 If this Agreement terminates pursuant to clause 5.18 as a result of any of the Conditions set out in clauses 5.1(a) or 5.1(b) not having been satisfied or waived on the Long Stop Date, Holcim shall pay the Purchaser, by way of compensation for any loss suffered, the Holcim Termination Fee and Lafarge shall pay the Purchaser, by way of compensation for any loss suffered, the Lafarge Termination Fee, in each case within 5 Business Days following the date of such termination and in accordance with clause 21.
5.20 Any payment by the Purchaser of the Purchaser Termination Fee to the Sellers shall be without prejudice to (and shall in no way reduce or restrict) the Sellers ability to bring a claim for breach of contract against the Purchaser in respect of the breach by the Purchaser of any provision or term of this Agreement or any other Transaction Document.
5.21 Any payment by Holcim or Lafarge of the Holcim Termination Fee or the Lafarge Termination Fee, respectively, to the Purchaser shall be without prejudice to (and shall in no way reduce or restrict) the Purchasers ability to bring a claim for breach of contract against the Sellers in respect of the breach by either Seller of any provision or term of this Agreement or any other Transaction Document.
5.22 The Parties anticipate, and shall use all reasonable endeavours to secure, that any Purchaser Termination Fee, Holcim Termination Fee and/or Lafarge Termination Fee is not and will not be treated as consideration for a taxable supply for the purposes of VAT or any equivalent sales tax.
6. PRE-CLOSING UNDERTAKINGS
6.1 From the date of the Binding Offer Letter until Closing, each Seller shall (unless otherwise required or permitted by the terms of any Transaction Document, by applicable Law, or by any Governmental Entity or as part of any Local Reorganisation or in accordance with any Local Steps Plan, or in connection with the implementation of the Merger or as fairly disclosed in documents 5.1.24, 10.3.2 and 10.3.3 in the Global exchange of the Data Room or as may be approved by the Purchaser and the other Seller, such approval not to be unreasonably withheld or delayed) ensure (in respect of any of its Non-Wholly-Owned Target Companies, only so far as it is able, taking into account any restrictions in any joint venture or shareholders agreements or other similar documents) that the business of its Target Companies is carried on in all material respects only in the ordinary course and that:
(a) | subject to clause 23 and to applicable Law, the Purchasers representatives shall be allowed such access as is reasonably requested, upon reasonable notice and at reasonable times, locations and intervals, to (i) the books and records of each of its Target Companies (including all statutory and minute books) and (ii) the premises used by, and management of, each of its Target Companies; |
(b) | none of its Target Companies declares or pays any dividend or other distribution (whether in cash, stock or in kind) or reduces its paid-up share capital, save to another Target Company; |
- 44 -
(c) | none of its Target Companies issues or agrees to issue or allots any share capital (except to another of its Target Companies); |
(d) | none of its Target Companies modifies its by-laws or other equivalent organisational document; |
(e) | none of its Target Companies makes any change in the accounting methods or practices other than in the ordinary course of business (other than such changes required by applicable local accounting principles); |
(f) | all transactions between any of its Target Companies and any member of its Seller Group (other than another Target Company) take place (i) pursuant to the terms of existing agreements between Target Companies and such member of its Seller Group as disclosed in the Data Room, or (ii) in a manner and on terms consistent with previous practice in the 12 months prior to the date of the Binding Offer Letter; |
(g) | none of its Target Companies sells or acquires, or agrees to sell or acquire, any business that is material to its Target Sub-Group and, with respect to the FTC Assets only, the Designated Seller does not sell, transfer, or relocate or agree to sell, transfer or relocate, any related asset or business that is material to (i) the Business (as defined in the US APA) with respect to the Holcim US Assets only, or (ii) the relevant Target Sub-Group with respect the other FTC Assets; |
(h) | none of its Target Companies: (i) employs or agrees to employ any new persons, full or part time, in a Senior Manager capacity (other than to fill a vacancy) or (ii) make changes (other than those required by Law) in terms of employment (including pension fund commitments) in each case in circumstances which increases in aggregate the level of staff costs of all its Target Companies by more than [***] per cent. per annum; |
(i) | none of its Target Companies incurs capital expenditure in a total aggregate amount in excess of [***] per cent. of the total aggregate amount of capital expenditure for the relevant period set forth in the relevant Target Companys budget; |
(j) | none of its Target Companies creates any Encumbrance over the Shares, the Non-Controlling Interests or the shares or assets of any of its Target Companies other than a Permitted Encumbrance; |
(k) | none of those of its Target Companies which, individually or with their respective Affiliates, generated more than [***] of that Sellers [***] ceases or proposes to cease to carry on its business or be wound up or enter into receivership, or any form of management or administration over its assets; |
(l) | none of its Target Companies permits any of its insurances to lapse or do anything which would make any policy of insurance void, null or voidable; |
(m) | none of its Target Companies enters into or gives or permits or suffers to subsist any guarantee of or indemnity or contract of suretyship for or otherwise commit itself in respect of the due payment of money or the performance of any contract, engagement or obligation of any other person or body which if called upon or otherwise exercised by the relevant counterparty would result in a cost to the Target Companies of [***] or more; |
- 45 -
(n) | in relation to any Material Real Estate of its Target Companies, none of its Target Companies terminates, or gives a notice to terminate, a lease tenancy or licence; |
(o) | none of its Target Companies enters into any partnership or joint venture involving or being likely to involve expenditure by its Seller Group in excess of [***] per annum; |
(p) | none of its Target Companies makes any material amendment to any existing collective bargaining agreement; |
(q) | each of its Target Companies maintains in all material respects the standards of production that applied to its products in the six months up to the date of the Binding Offer Letter; |
(r) | none of its Target Companies settles or compromises any claim or disputes or waives a right in relation to litigation or arbitration proceedings (in each case, save in respect of the collection of debts arising in the ordinary course of business) which could reasonably be expected to result in a payment to or by a Target Company of [***] or more; |
(s) | no Target Company shall, and the Sellers shall procure that no Target Company shall, re-file or amend any Tax Return without the express written consent of the Purchaser, except where such re-filing or amendment (i) can reasonably be expected to result in a payment to or by its Target Companies (taken in aggregate only to the extent that similar matters are concerned) of [***] or less or (ii) is required to take into account the consequences of a Tax audit or reassessment or fix an omission or error; and |
(t) | no Target Company shall, and the Sellers shall procure that no Target Company shall, amend any policy in respect of Tax except where such amendment is required by applicable Law or to take into account the consequences of a Tax audit or reassessment in effect on or before Closing, in which case, and where such amending of policy in respect of Tax can reasonably be expected to result in a payment to or by its Target Companies (taken in aggregate only to the extent that similar matters are concerned) of [***] or more, the Target Company shall notify the Purchaser before making and applying any such amendment. |
6.2 The Purchaser shall not exercise any of its rights pursuant to this clause 6 (including the right to refuse to approve any particular transaction or action) in such a manner as could disrupt unreasonably the efficient operations of any Target Company.
6.3 Subject to applicable Law, each Seller shall use its reasonable endeavours to assist, and shall procure that each of its the Target Companies shall use its reasonable endeavours to assist, the Purchaser to prepare for a smooth transition of the Target Companies to the Purchaser Group.
6.4 To the extent that any Target Company has entered into any agreement which contains a clause pursuant to which the counterparty may exercise a right as a result of the Proposed Transactions the consequences of which are adverse to the relevant Target Company, the relevant Seller and the Purchaser shall cooperate with each other, to ensure that, at the Purchasers cost (subject to clause 6.5, if applicable), appropriate steps are taken before Closing to inform such counterparty of the Proposed Transactions and to seek a waiver of the counterpartys relevant right.
- 46 -
6.5 Notwithstanding anything to the contrary in this Agreement, the relevant Seller shall secure, at its sole cost, consents from any third parties that are necessary to effect the complete transfer of the FTC Assets, and for the Purchaser to operate the FTC Assets in a manner consistent with the purposes of the Consent Order, in each case in accordance with the terms of the Consent Order.
Purchaser Financing
6.6 Each Seller shall (so far as it is able, taking into account any restrictions in any joint venture or shareholders agreements or other similar documents in respect of any of its Non-Wholly-Owned Target Companies) ensure that each of its Target Companies and the relevant Holcim Designated Seller in relation to the Holcim US Assets shall use its reasonable efforts to, at the sole expense of the Purchaser, cause the directors, officers, employees, advisers and representatives of its Target Companies and the relevant Holcim Designated Seller in relation to the Holcim US Assets to provide such cooperation in connection with the arrangement of the debt financing required in connection with the Proposed Transactions (the Financing) as may be reasonably requested by the Purchaser upon reasonable notice and at reasonable times, locations and intervals, including:
(a) | participation of senior management in a reasonable number of meetings and presentations to prospective lenders and investors; |
(b) | furnishing, or using reasonable efforts to cause third parties to furnish, the Purchaser and its financing sources with financial information regarding the Target Companies and the Holcim US Assets as may be reasonably requested by the Purchaser, provided (for the avoidance of doubt) that any such financial information (including pro forma financial information) shall not include any information relating to the Purchaser or its Affiliates; |
(c) | assisting the Purchaser and its financing sources in the finalising of offering documents for the Financing and materials and financial and other information for further rating agency presentations; |
(d) | using reasonable efforts to obtain the assistance of its accountants to provide consents for the use of their reports in offering memoranda and other materials related to the Financing, |
provided, however, that nothing in this clause 6.6 shall require such cooperation to the extent it would:
(e) | interfere unreasonably with the business or operations of any of the Target Companies and/or the Holcim US Assets; |
(f) | require any of the Target Companies or the relevant Holcim Designated Seller in relation to the Holcim US Assets to take any action that would conflict with or violate any Target Companies or such Holcim Designated Sellers organisational documents or any applicable Law or result in the contravention of, or that would reasonably be expected to result in a violation or breach of, or default under, any contract to which any Target Company or such Holcim Designated Seller is a party; |
(g) | require any Target Company or the relevant Holcim Designated Seller in relation to the Holcim US Assets to enter into definitive credit documentation in relation to any financing or purchase agreement for the Financing prior to the Closing Date; or |
- 47 -
(h) | result in any officer or director of any Target Company or the relevant Holcim Designated Seller in relation to the Holcim US Assets incurring any personal liability with respect to any matters relating to the Financing. |
6.7 The Purchaser covenants with each Target Company and the relevant Holcim Designated Seller in relation to the Holcim US Assets, each Connected Person of the Target Companies and each Seller to pay to the relevant Target Company and the relevant Holcim Designated Seller in relation to the Holcim US Assets, Connected Person or Seller an amount equivalent to any and all liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred by them in connection with the arrangement of the Financing (including actions taken at the request of the Purchaser in accordance with clause 6.6) and any information (other than information furnished by or on behalf of any Target Company) utilised in connection therewith, in each case prior to the Closing Date, except to the extent such liabilities, losses, damages, claims, costs, expenses, interests, awards, judgments and penalties arise out of the wilful misconduct or fraud of the relevant Seller, Target Company or Connected Person.
6.8 The Purchaser shall promptly upon request by any member of a Seller Group or any Target Company, reimburse such member of a Seller Group or Target Company for out-of-pocket costs and expenses incurred by it in connection with its cooperation pursuant to clause 6.6.
7. CLOSING
7.1 Subject to clause 7.18, Closing shall take place at the Freshfields Bruckhaus Deringer LLP Brussels office, the Cleary Gottlieb Steen & Hamilton LLP Brussels office or such other place as the Parties may agree, on the Main Closing Date, being the last Business Day of the month in which the Unconditional Date and the Non-US Clearance Date falls or, if the later of the Unconditional Date and Non-US Clearance Date falls less than 5 Business Days before the last Business Day of that month, on the last Business Day of the following month), or such other date as the Parties may agree in writing provided, however, that:
(a) | if at 5.00 p.m. Central European Time on the day prior to the Long Stop Date the Unconditional Date has occurred, but the Clearance Date has not occurred (the Divestiture Trustee Trigger), Closing shall occur with respect to any Target Companies (subject to clause 7.1(b) with respect to the Holcim Sale Company based in Canada), in each case, in relation to which required Clearances (if any) have been obtained and the provisions of clause 7.14 shall apply with respect to all other Target Companies; |
(b) | in relation to the Holcim US Assets and the Holcim Sale Company based in Canada: |
(i) | if at 5.00 p.m. Central European Time on the later of the Unconditional Date and the Non-US Clearance Date (a) the US Unconditional Date has not occurred or (b) subject to clause 7.1(b)(ii) the US Unconditional Date has occurred but the US Clearance Date has not occurred the provisions of clauses 7.16 and 7.17 shall apply (the US Delayed Closing Trigger); save that (i) if the US Unconditional Date has not occurred but the US Clearance Date has occurred not less than 5 Business Days before the Main Closing Date, Closing shall occur only with regard to the Holcim Sale Company based in Canada on the Main Closing Date or (ii) if the US Unconditional Date and the US Clearance Date has occurred not less than 5 Business Days before the Main Closing Date, Closing shall occur with regard to the Holcim |
- 48 -
US Assets and the Holcim Sale Company based in Canada on the Main Closing Date; |
(ii) | if at 5.00 p.m. Central European Time on the day prior to the US Long Stop Date the US Unconditional Date has occurred, but the US Clearance Date has not occurred, (the US Divestiture Trustee Trigger), the provisions of clauses 7.14 and 7.15 shall apply with respect to the Holcim US Assets and the Holcim Sale Company based in Canada mutatis mutandis and any reference in clause 7.14, in any relevant definition and in any other relevant provision to the Long Stop Date shall be construed as a reference to the US Long Stop Date and any reference in clause 7.14 to the Divestiture Trustee Trigger shall be construed as a reference to the US Divestiture Trustee Trigger; and |
(iii) | if the US APA is terminated in accordance with its terms or rescinded (in which case the Holcim Price shall be reduced by the amount allocated to the Holcim US Assets in Schedule 12 to this Agreement), the Holcim US Assets shall be divested by the relevant Designated Seller in accordance with the Consent Order and, for the avoidance of doubt, the transfer of the Shares shall remain unaffected; or |
(c) | if in the opinion of the Sellers, acting reasonably, the Purchaser is required to obtain [***], and those Clearances have not been obtained by 5.00 p.m. [***] time on the day prior to Closing, then the provisions of [***] shall apply in respect of the Shares in the Sale Companies in [***] and shall, to the extent that there is any inconsistency, prevail over all other provisions in this Agreement. |
7.2 At Closing each of the Sellers and the Purchaser shall deliver or perform (or ensure that there is delivered or performed) all those documents, items and actions respectively listed in relation to that Party or any of its Affiliates in this clause 7. If clause 7.14 applies under clause 7.1(a), then the Long Stop Date shall be the Closing Date for all relevant purposes hereunder.
Designated Sellers, Designated Purchasers and Local Agreements
7.3 Each Seller may designate additional or alternative wholly-owned (directly or indirectly) subsidiaries of such Seller as Designated Sellers in respect of any particular Set of Shares or, in respect of Holcim, the Holcim US Assets by written notice to the other Parties by no later than 10 Business Days prior to Closing, provided that any such designation shall not result in an increase or decrease of the liabilities of the Parties under this Agreement, nor grant any right against any Party to this Agreement, hereunder or otherwise.
7.4 The Purchaser may designate additional or alternative wholly-owned (directly or indirectly) subsidiaries of CRH as Designated Purchasers in respect of any particular Set of Shares or the Holcim US Assets, except for the Lafarge Gips Share and the Lafarge Zement Share (as defined in the German Local Agreement), by written notice to the other Parties by no later than 60 days from the date of this Agreement, provided that any such designation shall not result in an increase or decrease of the liabilities of the Parties under this Agreement, nor grant any right against any Party to this Agreement, hereunder or otherwise.
7.5 The Parties acknowledge that:
- 49 -
(a) | separate local sale and purchase agreements (Local Agreements) shall be entered into by the relevant Share Seller and Share Purchaser in each jurisdiction for which a Local Agreement is indicated as a Local Closing Deliverable; and |
(b) | the US APA shall be entered into by Holcim, CRH, the relevant Designated Seller and the relevant Designated Purchaser in respect of the Holcim US Assets. |
7.6 Each Local Agreement shall be in all material respects in the form of the Agreed Form of the local share sale agreement for the relevant jurisdiction, and the US APA shall be in the Agreed Form, and each shall include the price allocated to the relevant Set of Shares or the Holcim US Assets (as the case may be) pursuant to clauses 3.4 or 3.5 as applicable.
Seller Obligations
7.7 On the Closing Date, each Seller shall deliver or ensure that there is delivered to the Purchaser (or made available to the Purchasers reasonable satisfaction):
(a) | a copy of the necessary corporate approvals required for entry into this Agreement and the Ancillary Agreements; |
(b) | a copy of each Ancillary Agreement to which it is a Party, duly executed by it; |
(c) | a copy of its Tax Consolidation Exit Agreements, duly executed by it, its Affiliates, and/or its Target Companies, as applicable, the provisions of which shall (without prejudice to the ability of the Purchaser to make a Claim against the Sellers under this Agreement) prevail in any case where the provisions of this Agreement conflict with the provisions of the Tax Consolidation Exit Agreements; |
(d) | in respect of each of its Sale Companies, the resignation, in a form reasonably acceptable to the Purchaser, of each director of such Sale Company appointed by such Seller or the relevant Share Seller as may be notified by the Purchaser within 60 days after the date of this Agreement but in any case not later than 10 Business Days prior to Closing; |
(e) | deliver (or ensure that there is delivered to the Purchaser) each of the Local Closing Deliverables applicable to it; |
(f) | evidence of the satisfaction of each of the Conditions applicable to it; and |
(g) | evidence of the satisfaction of the closing deliverables applicable to its relevant Designated Seller under the US APA. |
Purchaser Obligations
7.8 On the Closing Date, the Purchaser shall:
(a) | deliver (or ensure that there is delivered to each Seller): |
(i) | a copy of each Ancillary Agreement to which it is a Party, duly executed by it; |
(ii) | evidence of the satisfaction of each of the Conditions applicable to it and a copy of all corresponding decisions from each relevant Governmental Entity; and |
- 50 -
(iii) | a copy of the necessary corporate approvals required for entry into this Agreement and the Ancillary Agreements; |
(b) | pay to Holcim the Holcim Price as adjusted in accordance with clause 4.1; |
(c) | pay to Lafarge the Lafarge Price as adjusted in accordance with clause 4.1; |
(d) | deliver (or ensure that there is delivered to each Seller) each of the Local Closing Deliverables applicable to it; and |
(e) | evidence of the satisfaction of the closing deliverables applicable to its relevant Designated Purchaser under the US APA. |
Inter-Company Debt, Guarantees and other Third Party Assurances
7.9 At Closing, each Seller and the Purchaser shall carry out their respective obligations under clause 8 and under clause 15 required to be performed at Closing.
General
7.10 Each Seller and the Purchaser shall negotiate in good faith with a view to agreeing before the Closing Date the final form of any Transaction Document which is not in Agreed Form at the date of the Binding Offer Letter. On execution of any such Transaction Document, the term sheet in the Agreed Form corresponding to that Transaction Document shall terminate and be replaced in whole by the relevant Transaction Document. Save in respect of the Configuration Rights Agreement, if not so agreed by the Closing Date, any outstanding Transaction Document shall be deemed to take the form of the term sheet in the Agreed Form corresponding to that Transaction Document, and where there is no such term sheet the Transaction Document shall be in the form reasonably specified by the Sellers provided it is consistent with the terms of this Agreement. Schedule 20 sets out a list of all Transaction Documents, including which Transaction Documents are in Agreed Form and which Transaction Documents are not yet in Agreed Form. The Parties acknowledge and agree that the Holcim Supply Term Sheet shall have no effect.
7.11 If any document listed in this clause 7 is required to be notarised, the Parties (or their relevant Affiliates) shall execute such document at a time and in the location notified by the Sellers to the Purchaser at least 2 Business Days before Closing where a notary with the required qualification will be present.
7.12 All documents and items delivered at Closing pursuant to this clause 7 shall be held by the recipient to the order of the person delivering the same until such time as Closing shall be deemed to have taken place. Simultaneously with:
(a) | delivery of all documents and all items required to be delivered at Closing (or waiver of its delivery by the person entitled to receive the relevant document or item); |
(b) | receipt of an electronic funds transfer to the Holcim Bank Account in immediately available funds of the Holcim Price; and |
(c) | receipt of an electronic funds transfer to the Lafarge Bank Account in immediately available funds of the Lafarge Price, |
the documents and items delivered in accordance with this clause 7 shall cease to be held to the order of the person delivering them and Closing shall be deemed to have taken place.
- 51 -
7.13 If a Seller or the Purchaser fails to comply with any obligation in this clause 7, the Purchaser (if the defaulting party is a Seller) or the Sellers (if the defaulting party is the Purchaser) shall not be entitled to terminate this Agreement but shall be entitled (in addition to and without prejudice to all other rights and remedies available) by written notice to the other Parties:
(a) | to require Closing to take place so far as practicable having regard to the defaults which have occurred; or |
(b) | to set a new date for Closing (being not more than 20 Business Days after the original date for Closing) in which case the provisions of this clause 7 shall apply to Closing as so deferred but on the basis that such deferral may only occur once. |
Divestiture following Divestiture Trustee Trigger
7.14 If the Divestiture Trustee Trigger occurs:
(a) | the Purchaser shall on the Long Stop Date pay the Lafarge Secured Price to the Lafarge Security Account and the Holcim Secured Price to the Holcim Security Account, and the Sellers and Purchaser shall execute the Security Documents and take such other steps as may be required to perfect the Security over the Security Accounts created by the Security Documents. For the purposes hereof, the Lafarge Secured Price and the Holcim Secured Price shall be the relevant portion of the Lafarge Estimated Price and the relevant portion of the Holcim Estimated Price, respectively, determined as set forth in clause above; |
(b) | the Purchaser and the Sellers shall determine the Final Price as set forth in clauses 4.2 to 4.15 and (i) the Purchaser shall pay the final adjustment due by it pursuant to clauses 4.16 to 4.19 to the Lafarge Security Account and/or Holcim Security Account, as applicable, or (ii) the Purchaser shall be restituted the final adjustment owed to it pursuant to clauses 4.16 to 4.19 from the Lafarge Security Account and/or Holcim Security Account; |
(c) | the Divestiture Trustee shall immediately after the Long Stop Date be granted by the Sellers the exclusive mandate to sell the Target Companies and/or the Holcim US Assets in respect of which the relevant Clearance has not been obtained to one or several third parties (including, where possible, the Purchaser if it has then received the relevant Clearances) at no minimum price in accordance with the divestiture trustee mandate(s) given by the Sellers and approved by (a) CADE, (b) the Canadian Competition Bureau, (c) the CPC, (d) the European Commission and (e) the US Federal Trade Commission, as required, which shall be based on the Standard Models for Trustee Mandate (to the extent applicable to a divestiture trustee) provided in the Best Practice Guidelines and a draft of which is set out in Schedule 26 (the Divestiture Trustee Mandate(s) and each a Divestiture Trustee Mandate); and |
(d) | the Divestiture Trustee shall exercise its functions in accordance with the Divestiture Trustee Mandate(s), and all costs and expenses incurred by the Divestiture Trustee in relation to such exercise of its functions shall be borne by the Purchaser. |
(e) | following a Disposal by the Divestiture Trustee pursuant to a Divestiture Trustee Mandate to a purchaser other than the Purchaser (or any member of the Purchaser Group) and receipt by Holcim of the Holcim Disposal Proceeds and/or by Lafarge of the Lafarge Disposal Proceeds (as the case may be) in respect of such Disposal: |
- 52 -
(i) | Holcim may withdraw from the Holcim Security Account an amount equal to the amount by which the Holcim Secured Price Allocation in respect of the relevant Disposal exceeds the Holcim Disposal Proceeds in respect of such Disposal or, as the case may be, Holcim shall pay to the Purchaser an amount equal to the amount by which the Holcim Disposal Proceeds in respect of the relevant Disposal exceeds the Holcim Secured Price Allocation in respect of such Disposal; and |
(ii) | Lafarge may withdraw from the Lafarge Security Account an amount equal to the amount by which the Lafarge Secured Price Allocation in respect of the relevant Disposal exceeds the Lafarge Disposal Proceeds in respect of such Disposal or, as the case may be, Lafarge shall pay to the Purchaser an amount equal to the amount by which the Lafarge Disposal Proceeds in respect of the relevant Disposal exceeds the Lafarge Secured Price Allocation in respect of such Disposal, |
in each case together with any Security Account Interest accrued in respect of such amounts and without the Purchasers consent;
7.15 The Security Documents shall provide as follows in respect of the amounts that the Sellers and the Purchaser covenant to pay under clause 7.14:
(a) | the amount secured under the Security Documents in favour of the Purchaser shall be the amount from time to time equal to: |
(i) | the Secured Price; less |
(ii) | the aggregate Secured Price Allocations for all Disposals in respect of which Holcim or Lafarge has made a withdrawal pursuant to clause 7.14(e); |
(b) | Holcim and Lafarge shall each be entitled to access its Security Account in accordance with the terms of clause 7.14(e); |
(c) | following a withdrawal by Holcim in accordance with clause 7.14(e)(i), the Security over the Holcim Security Account in respect of that amount shall be released, discharged and that amount shall be paid to the Purchaser, and following such a withdrawal by Holcim from the Holcim Security Account, in respect of the final Disposal of Holcim Target Companies (or the assets thereof) or the Holcim US Assets (as the case may be), the Security over the Holcim Security Account shall be released, discharged in full and that amount shall be paid to the Purchaser; |
(d) | following a withdrawal by Lafarge in accordance with clause 7.14(e)(ii) the Security over the Lafarge Security Account in respect of that amount shall be released and discharged and that amount shall be paid to the Purchaser, and following such a withdrawal by Lafarge from the Lafarge Security Account, in respect of the final Disposal of Lafarge Target Companies (or the assets thereof), the Security over the Lafarge Security Account shall be released, discharged in full and that amount shall be paid to the Purchaser; |
(e) | following a Disposal by the Divestiture Trustee pursuant to a Divestiture Trustee Mandate to the Purchaser (or any member of the Purchaser Group), the Security over (as applicable): |
- 53 -
(i) | the Holcim Security Account in respect of the amount of the Holcim Secured Price Allocation relating to such Disposal; and/or |
(ii) | the Lafarge Security Account in respect of the amount of the Lafarge Secured Price Allocation relating to such Disposal, |
shall be immediately released to the Purchaser and discharged; and
(f) | any interest or profit generated on the Security Accounts (subject to any deduction of tax at source or any bank or other charges properly charged to the Security Accounts) (the Security Account Interest) shall accrue to and form part of the relevant Security Account and, save as expressly provided in clause 7.14(e), shall be for the account of Holcim (in the case of the Holcim Security Account) or for the account of Lafarge (in the case of the Lafarge Security Account). |
US Delayed Closing Trigger
7.16 If after the US Delayed Closing Trigger but before the US Long Stop Date, both the US Unconditional Date and the US Clearance Date have occurred, Closing shall occur with regard to the Holcim US Assets and (if Closing with respect to the Holcim Sale Company based in Canada has not already occurred) the Holcim Sale Company based in Canada on the earlier of (a) subject to clause 7.18 , the soonest practicable Business Day (being not less than 5 Business Days) following such date or (b) the US Long Stop Date (such earlier date the US Delayed Closing Date):
(a) | the Purchaser shall pay the amount of the Holcim Estimated Price in respect of the Holcim US Assets and, if applicable, the Holcim Sale Company based in Canada in CAD and/or EUR to Holcim in accordance with clause 21; and |
(b) | the Purchaser and Holcim shall determine the Final Price of the Holcim US Assets and, as applicable, the Holcim Sale Company based in Canada in accordance with clauses 4.2 to 4.15 and promptly thereafter (i) the Purchaser shall pay the final adjustment due by it pursuant to clauses 4.16 to 4.19 to Holcim, or (ii) the Purchaser shall be repaid the amount owed to it following the final adjustment pursuant to clauses 4.16 to 4.19, as the case may be, in accordance with clause 21. |
7.17 If after the US Delayed Closing Trigger but before the US Long Stop Date, the US Unconditional Date has not occurred but the US Clearance Date has occurred, Closing shall occur only with regard to the Holcim Sale Company based in Canada and clause 7.16 shall apply mutatis mutandis only with respect to the Holcim Sale Company based in Canada.
7.18 The Purchaser and the Sellers can agree, in writing, to reduce the 5 Business Day period referred to in clauses 7.1, 7.1(b)(i) and 7.16 to a minimum of 1 Business Day (such agreement shall not be unreasonably withheld).
8. INTER-COMPANY TRADING AMOUNTS AND INTER-COMPANY NON-TRADING
AMOUNTS
Inter-Company Trading Amounts
8.1 In relation to Inter-Company Trading Amounts:
- 54 -
(a) | the Purchaser shall procure that any Inter-Company Trading Amounts which are owed by any Target Company is paid to the relevant member of its Seller Group in the ordinary course, and such payments shall be made in accordance with clause 21.1; and |
(b) | each Seller shall procure that any Inter-Company Trading Amounts which are owed by any member of its Seller Group is paid to the relevant Target Company in the ordinary course, and such payments shall be made in accordance with clause 21.1. |
Inter-Company Non-Trading Amounts
8.2 Not less than 3 Business Days before the Closing Date, each Seller shall notify the Purchaser of the Estimated Inter-Company Non-Trading Payables and the Estimated Inter-Company Non-Trading Receivables in respect of its Target Companies, as at the Closing Date, in each case specifying the relevant debtor, creditor and currency in respect of each Inter-Company Non-Trading Receivable and Inter-Company Non-Trading Payable.
8.3 On Closing:
(a) | the Purchaser shall procure that each relevant Target Company repays to the relevant member of its Seller Group the amount in the applicable currency of any Estimated Inter-Company Non-Trading Payables and shall acknowledge on behalf of each relevant Target Company the payment of the Estimated Inter-Company Non-Trading Receivables in accordance with clause 8.3(b); and |
(b) | each Seller shall procure that each relevant member of its Seller Group repays to the relevant Target Company the amount in the applicable currency of any Estimated Inter-Company Non-Trading Receivables and shall acknowledge on behalf of each relevant member of its Seller Group the payment of the Estimated Inter-Company Non-Trading Payables in accordance with clause 8.3(a), |
in each case as notified in accordance with clause 8.2 and the Inter-Company Non-Trading Amounts shall be treated as discharged to the extent of that payment.
8.4 Any payment pursuant to clause 8.3 shall be deemed to be a payment first, to the extent possible, of all interest accrued on the relevant Inter-Company Non-Trading Amount and thereafter of the relevant principal amount.
Final repayment of Inter-Company Non-Trading Amounts
8.5 When the Closing Statements have been finally agreed or determined in accordance with clauses 4.6 to 4.14 (inclusive), the following payments shall be made in respect of any Inter-Company Non-Trading Payable:
(a) | if any Inter-Company Non-Trading Payable is greater than the applicable Estimated Inter-Company Non-Trading Payable or any Inter-Company Non-Trading Receivable is less than the applicable Estimated Inter-Company Non-Trading Receivable, then the Purchaser shall procure that each relevant Target Company repays to the relevant member of the corresponding Seller Group the amount in the applicable currency equal to the difference and shall acknowledge on behalf of each relevant Target Company the payment of the amount paid to that Target Company in accordance with clause 8.5(b); and |
- 55 -
(b) | if any Inter-Company Non-Trading Payable is less than the applicable Estimated Inter-Company Non-Trading Payable or any Inter-Company Non-Trading Receivable is greater than the Estimated Inter-Company Non-Trading Receivable, then the relevant Seller shall procure that each relevant member of its Seller Group repays to the relevant Target Company the amount in the applicable currency equal to the difference and shall acknowledge on behalf of each relevant member of its Seller Group the payment of the amount paid to that member of its Seller Group in accordance with clause 8.5(a). |
Any amount payable under this clause 8.5 shall be paid with interest, in the applicable currency, on such amount for the period from (but excluding) the Closing Date to (but including) the due date for payment calculated on a daily basis. The rate of interest shall be the rate applicable to the relevant Inter-Company Non-Trading Amount under the terms on which it was outstanding at Closing.
8.6 Any payments to be made pursuant to clause 8.5 shall be made within 5 Business Days after the date on which the relevant Closing Statement is agreed or determined in accordance with clauses 4.6 to 4.14 (inclusive).
9. SELLER WARRANTIES
9.1 Each Seller severally warrants to the Purchaser as at the date of the Binding Offer Letter and as at the Closing Date (except where a reference is made to a specific date, in which case the Warranty is made as of such date) that each of the Warranties is true, accurate and not misleading, save in respect of those Title Warranties set out in clauses 9.9 to 9.12 which shall be warranted as at the Closing Date only.
9.2 For the purposes of this clause 9, with respect to the warranties contained in clauses, 9.22 and 9.19 (Compliance with Laws), 9.24 and 9.25 (Litigation), 9.30 (Contracts), 9.31 (Environmental Matters), 9.33 to 9.35 (Real Property), 9.37 (Labour Matters), 9.38 to 9.40 (Insolvency), 9.41 (Information Technology), 9.42 (Pensions) and 9.43 (Insurance) the reference to a Target Company shall also be deemed to refer to the relevant Designated Seller(s) of the Holcim US Assets with respect, but limited, to the relevant Holcim US Assets and any relevant definition or other provision shall be construed accordingly.
Organisation
9.3 That Seller, each of its Designated Sellers and each of its Target Companies is a corporation duly incorporated or formed, as applicable, and validly existing under the Laws of its jurisdiction of incorporation or formation and in any jurisdiction where validly existing is not defined, not subject to any administrative, winding up or similar order and there are no Insolvency Proceedings concerning that Seller, any of its Designated Sellers or any of its Target Companies.
9.4 That Seller, each of its Designated Sellers and each of its Target Companies has all requisite corporate power and authority to own its assets and to carry on its business as and where it is now being conducted.
Authorisation; Enforceability
9.5 That Seller and each of its Designated Sellers have the corporate power and authority to execute this Agreement and the other Transaction Documents, to which it is a party, and to
- 56 -
perform its obligations hereunder and thereunder and to consummate the Proposed Transactions.
9.6 The execution of this Agreement and the applicable Transaction Documents by that Seller and each of its Designated Sellers and the performance by each of them of its obligations hereunder and thereunder have been duly authorised by all necessary corporate action.
9.7 This Agreement has been, and upon their execution the applicable Transaction Documents will have been, duly executed and delivered by that Seller and its Designated Sellers and (assuming due authorisation, execution and delivery by the Purchaser and, where applicable, the Designated Purchasers) this Agreement constitutes, and upon their execution the applicable Transaction Documents will constitute, a legal, valid and binding obligation of that Seller and its Designated Sellers enforceable against them in accordance with their respective terms.
No Approvals or Conflicts
9.8 The execution, delivery and performance by that Seller and each of its Designated Sellers of this Agreement and the Transaction Documents to which it is a party and the consummation by that Seller and each of its Designated Sellers of the Proposed Transactions do not and will not: (i) in any material respect violate or conflict with or result in a material breach by that Seller or any of its Designated Sellers of its organisational documents; (ii) in any material respect violate or conflict with or result in a material breach of, or constitute a material default by that Seller or any of its Share Sellers (or create an event which, with notice or lapse of time or both, would constitute a material default) or give rise to any right of termination, cancellation or acceleration under any note, bond, mortgage, indenture, deed of trust, license, franchise, permit, lease, contract, agreement or other instrument to which that Seller or any of its Share Sellers may be bound; (iii) in any material respect violate or result in a material breach of any Law applicable to that Seller or any of its Designated Sellers; or (iv) except for the Conditions and Clearances, require any order, consent, approval or authorisation of, or notice to, or declaration, filing, application, qualification or registration with, any Governmental Entity.
Equity Interests of the Target Companies
9.9 Part B and Part C of each of the Holcim Local Schedules and the Lafarge Local Schedules contain (or, as the case may be, refer to a document in the Data Room which contains) a true, complete and accurate statement of the: (i) jurisdiction of incorporation, formation or organisation, as applicable; and (ii) the number of authorised, issued and outstanding shares (and the holders of such shares) of each Holcim Target Company and Lafarge Target Company respectively.
9.10 Part D of each of the Holcim Local Schedules and the Lafarge Local Schedules contains (or, as the case may be, refer to a document in the Data Room which contains) a true, complete and accurate statement of the: (i) jurisdiction of incorporation, formation or organisation, as applicable; and (ii) the number of authorised, issued and outstanding shares owned by the relevant Target Company in each person in which a Non-Controlling Interest is held.
9.11 There are no other authorised, issued or outstanding equity interest of any of its Target Companies and no outstanding options, warrants rights or any other agreements relating to the sale, issuance or voting of any equity interest of any of its Target Companies,
- 57 -
or any securities or other instruments convertible into, exchangeable for or evidencing the right to purchase any equity interest of any of its Target Companies.
9.12 All shares in each of its Target Companies and Non-Controlling Interests are owned free and clear of any Encumbrances and have been validly issued, fully paid and, where applicable, non-assessable and, save for any interest in another Target Company or any Non-Controlling Interest, none of its Target Companies owns any equity interest in any other person.
Accounts and Finance Arrangements
9.13 The Transaction Perimeter Financial Information:
(a) | has been prepared [***] and in accordance with the accounting policies, statements and practices stated in Note 1 to the Transaction Perimeter Financial Information on a consistent basis with the Interim Financial Statements; and |
(b) | having regard to the purpose for which it was prepared and reviewed, and the fact that it has not been audited nor prepared in the context of a statutory closing process, does not [***] misstate (i) the assets and liabilities of the Target Companies to which they relate as at the Financial Information Date or (ii) the income or cash flow of the Target Companies to which it relates in respect of the period from 1 January 2014 until the Financial Information Date. |
9.14 The Interim Financial Statements:
(a) | have been prepared [***] from the accounting records of each of the relevant Target Companies to which they relate in accordance with IFRS as they would have been prepared for the purpose of the financial reporting of the group consolidation of Holcim or, as the case may be, Lafarge; and |
(b) | having regard to the purpose for which they were prepared, as stated in paragraph (a) above, the fact that they have not been audited and the standard normally applied in the preparation of group interim financial reporting information for internal purposes, give [***] view of (i) the assets and liabilities of the companies to which they relate as at the Financial Information Date and (ii) the income and cash flow of the companies to which they relate in respect of the period from 1 January 2014 until the Financial Information Date; |
provided that:
(c) | the Sellers shall have no liability under this clause 9.14 if and to the extent that the relevant accounting item was accounted for in accordance with IFRS in the Transaction Perimeter Financial Information; and |
(d) | no statement is made or implied in this clause 9.14 in relation to any entities other than the Target Companies or in relation to any business, assets or liabilities of a Target Company that will not be a business, asset or liability of a Target Company following completion of all the steps set out in the relevant Local Steps Plans. |
9.15 In the period from the Financial Information Date up to the date of the Binding Offer Letter, so far as the Sellers are aware, the business and activities of each Target Company have been carried on materially in the ordinary and usual course.
- 58 -
9.16 The [***] of (i) the Target Companies, and (ii) the Target Companies as defined in the Put and Call Options Agreement in respect of the Philippines entered into between, inter alia, Lafarge Holdings (Philippines), Inc. and CRH on or about the date of the Binding Offer Letter, taken as a whole for the twelve-month period to 31 December 2014, calculated in accordance with the Accounting Principles, was in excess of [***]
9.17 The financial information provided in respect of Lafarge Ciments Kercim in document 10.2.2.1 in the Global exchange in the Data Room and document 3.2.2.1 in the L-France exchange in the Data Room was prepared [***];
9.18 The financial information provided in respect of the Trident Plant in document 1.2.2.2 in the 27H US Trident exchange in the Data Room was prepared [***];
9.19 The financial information referred in paragraph (b) of the definition of Transaction Perimeter Financial Information (relating to the Lafarge Continental Europe Divested Businesses) updated as at Closing, but without including cash flow statements, income statements nor notes besides the basis of preparation, and to be provided to the Purchaser together with the Lafarge Closing Statement, will reflect the addition to the Transaction Perimeter of Lafarge Ciments Kercim, with the corresponding adjustments being made [***] and on a basis consistent with document 10.2.2.1 in the Global exchange in the Data Room and document 3.2.2.1 in the L-France exchange in the Data Room;
9.20 The financial information referred in paragraph (d) of the definition of Transaction Perimeter Financial Information updated as at Closing, but without including cash flow statements, income statements nor notes besides the basis of preparation, and to be provided to the Purchaser together with the Lafarge Closing Statement, will reflect the subtraction of the Cauldon and Cookstown cement plants from the Transaction Perimeter, with the corresponding adjustments being made [***] and on a basis consistent with section 12 of document 2.1.4 in the Global exchange in the Data Room; and
9.21 The financial information referred in paragraph (c) of the definition of Transaction Perimeter Financial Information (relating to the Holcim Canadian Business Proposed for Divestment) updated as at Closing, but without including cash flow statements, income statements nor notes besides the basis of preparation, and to be provided to the Purchaser together with the Holcim Closing Statement, will reflect the addition to the Transaction Perimeter of the Trident Plant and the subtraction of the Holcim US Terminals at Grandville and Elmira from the Transaction Perimeter, with the corresponding adjustments being made [***] and on a basis consistent with document 1.2.2.2 in the 27 - H US Trident exchange in the Data Room.
Compliance with Law; Governmental Authorisations, Licences, Permits, Authorisations and Consents
9.22 Except as would not result in the relevant Target Company(ies) incurring liability in aggregate, when taken together with any liability incurred as a result of the matters referred to in clause 9.31, in excess of [***]:
(a) | each Target Company is in compliance in all material respects and has not received any written notice alleging that it is not in compliance in all material respects with any Law (including for the avoidance of doubt any Anti-Bribery Law and all Laws relating to competition and anti-trust) applicable to the conduct of its business; |
(b) | each Target Company has obtained all licences, permits, authorisations and consents required for the proper carrying on of its business and all licences, permits, |
- 59 -
authorisations and consents are valid and subsisting (in each case other than in respect of Intellectual Property Rights); and |
(c) | no Target Company is in material breach of any licences, permits, authorisations or consents and, so far as the Sellers are aware, no circumstances exist which may result in any of them being revoked or not renewed, in whole or in part (in each case other than in respect of Intellectual Property Rights). |
9.23 Each Seller has in place in respect of its Target Companies compliance policies in respect of applicable Anti-Bribery Law. No written notice has been received and, to the knowledge of the Sellers, there is no threatened or pending investigation, inquiry, prosecution or proceeding, which has been notified in writing to the relevant Target Company, either involving any Target Company, any persons who at present are, or who at any time within the [***] were, a Senior Manager of any of the Target Companies (provided that such investigation, inquiry, prosecution or proceeding is in respect of their capacity as Senior Manager of the relevant Target Company), under any Anti-Bribery Law.
Litigation
9.24 There are no suits, actions, arbitrations, tribunals, disciplinary, enforcements, investigation or other proceedings (Proceedings) pending or, so far as the Seller is aware, threatened in writing against any of its Target Companies and, so far as the Seller is aware, no fact or circumstance exists which is likely to or could give rise to any Proceedings, in each case where the initiator of such Proceedings claims or is likely to claim an amount in excess of [***].
9.25 There is no outstanding or pending judgment, sentence, order, decree, arbitral award or decision of any court, tribunal, arbitrator, administrator, or any Governmental Entity (Administrative Proceedings) against any Target Company where the initiator of such Administrative Proceedings claims or is likely to claim an amount in excess of [***].
Tax Matters
9.26 All Tax Returns required to be filed [***] prior to the Closing Date by or on behalf of its Target Companies (either separately or as members of a group of corporations) have been timely filed or will be timely filed before the Closing Date (in each case, subject to permitted extensions applicable to such filing) and are true, complete and accurate in all material respects.
9.27 All Taxes due or owing prior to Closing by any of the Target Companies have been paid (or will be paid) within the prescribed period or any extension thereof other than Taxes that are being contested in good faith.
9.28 None of the Target Companies are involved in any material current dispute with or investigation by any Tax Authority or have in the [***] been the subject of any material dispute with or investigation by any Tax Authority.
Contracts
9.29 Each Material Contract to which one of its Target Companies is a party is in full force and effect, and is a valid and binding agreement of such Target Company which is a party thereto and is enforceable against such Target Company in accordance with its terms. So far as that Seller is aware, no condition exists or event has occurred that (whether with or without notice or lapse of time or both) would constitute a default by: (i) any of its Target Companies
- 60 -
under any Material Contract to which it is a party; or (ii) any other party to any Material Contract to which one of its Target Companies is a party, in each case, except for defaults that would not reasonably be expected to be material.
9.30 Save for those contracts listed in Schedule 19, the Data Room contains copies of all Material Contracts which can be terminated by the counterparty and/or entitle the counterparty to a payment as a result of, or in connection with, the consummation of the Proposed Transactions.
Environmental Matters
9.31 Except as would not result in the relevant Target Company(ies) incurring liability in aggregate, when taken together with any liability incurred as a result of the matters referred to in clause 9.22, in excess of [***]:
(a) | each of its Target Companies is and has been for the period of [***] to the date of the Binding Offer Letter in compliance in all material respects with all Environmental Laws; |
(b) | each of its Target Companies has obtained and maintained in full force and effect the Environmental Consents required under applicable Law in relation to the business of the Target Companies and its processes and activities and is and has been for the period of [***] to the date of the Binding Offer Letter in compliance in all material respects with all the terms and conditions attached to them; and |
(c) | no Target Company (i) has received any written notice that remains outstanding of any civil, criminal or administrative action, claim, investigation or other proceedings or suit from any Governmental Entity or third party alleging that it is in material violation of any Environmental Law or Environmental Consents or (ii) is engaged in any litigation or arbitration proceedings or, the subject of any investigations by any Governmental Entity under Environmental Law or, so far as the Seller is aware, has been threatened in writing with any litigation or arbitration proceedings under Environmental Law. |
9.32 The Target Companies will have European Union Allowances (EUAs) allocated to their respective cement plants within the European Union Emissions Trading Scheme (EUETS) at the Closing Date as follows:
(a) | if the Closing Date is before the retirement date for 2014 EUAs and after the receipt of 2015 EUAs, the Target Companies will have both 2014 and 2015 allocations for such cement plants that were operating under the EUETS during 2014; |
(b) | if the Closing Date is after the retirement date for 2014 EUAs, the Target Companies will have 2015 allocations for such cement plants that were operating under the EUETS during 2014; |
(c) | if the Closing Date is before the retirement date for 2015 EUAs and after the receipt of 2016 EUAs then the Target Companies will have both 2015 and 2016 allocations for such cement plants that were operating under the EUETS during 2015; |
(d) | for the Quebec CAP system, the Joliette cement plant will have all unretired allocations; and |
- 61 -
(e) | in the event of the introduction of a CAP system in Ontario, the Mississauga cement plant will have all unretired allocations. |
Real Property
9.33 Its Target Companies have good and marketable title to the Material Real Estate that they own, free and clear of any Encumbrances, except for Permitted Encumbrances.
9.34 There are no leases, subleases, licenses, concessions, or other written agreements, granting to any third party the right of use or occupancy of any portion of the Material Real Estate owned by its Target Companies and no option or other right exists to purchase, lease or otherwise use or occupy any portion of the Real Estate owned by its Target Companies.
9.35 So far as that Seller is aware, no Target Company has received a written notice from any Governmental Entity or any third party that it is not in compliance with Laws in respect of any Material Real Estate that it owns, except as would not reasonably be expected to be material to its operations.
9.36 The Material Real Estate which is not owned by the Target Companies is used and/or occupied by them pursuant to a valid and enforceable title.
Labour Matters
9.37 Except where the failure to be in compliance would not result in the relevant Target Company incurring a liability in excess of [***], each of its Target Companies is in compliance in all material respects with all Laws and collective bargaining agreements applicable to it respecting employment and employment practices, terms and conditions of employment and wages and hours.
Insolvency
9.38 No order has been made or petition presented or resolution passed for the winding up or dissolution of any Target Company or for the appointment of a liquidator, receiver, receiver and manager or examiner to any Target Company.
9.39 No receiver or receiver and manager has been appointed by any person over any Target Company, or over the whole or substantially the whole of the business of any Target Company, nor, so far as the Sellers are aware, have any circumstances arisen which would allow for the appointment of a receiver or receiver and manager in respect of any Target Company, or the whole or substantially the whole of the business of any Target Company, nor has any Target Company requested the appointment of a receiver or receiver and manager.
9.40 No Target Company is insolvent or unable to pay its debts or likely to become insolvent or unable to pay its debts as they fall due.
Information Technology
9.41 There have not, since [***] prior to the date of the Binding Offer Letter, been any failures or breakdowns of any IT Systems which have caused either a disruption or interruption of a material nature to the business of any Target Company.
- 62 -
Pensions
9.42 Except as would not result in the relevant Target Company incurring a liability in excess of [***], in respect of each Benefit Plan: (i) it has been administered in accordance with its terms; (ii) it is in compliance, in all material respects, with the applicable provisions of all Laws; (iii) all reports, returns and similar documents with respect to each Benefit Plans required to be filed with any Governmental Entity or distributed to any Benefit Plan participant have been duly and timely filed or distributed and, so far as the Sellers are aware, all reports, returns and similar documents actually filed or distributed were true, complete and correct; and (iv) there are currently no investigations by any Governmental Entity, termination proceedings or other claims by any person (except routine claims for benefits payable under the Benefit Plans) or proceedings against or involving any Benefit Plan or asserting any rights to or claims for benefits under any Benefit Plan that could give rise to any material liability, and, so far as the Seller is aware, there are not any facts or circumstances that could give rise to any such liability in the event of any such investigation, claim or proceeding.
Insurance
9.43 In respect of the Policies that are disclosed in the Data Room: (i) all premiums have been paid in accordance with the terms of such Policies; (ii) such insurances are in full force and effect; (iii) there are no outstanding claims in excess of [***]; and (iv) so far as the Sellers are aware, no facts or matters have occurred that are likely to give rise to a claim in excess of [***].
Holcim US Assets
9.44 The Holcim US Assets described in Section 3.1(a), (c) and (d) of the US APA are in the possession or under the control of the relevant Holcim Designated Seller(s). The Holcim Designated Seller(s) has the right to transfer each of the Holcim US Assets free from any Encumbrance, other than Permitted Encumbrances, in accordance with the terms of the US APA.
10. INDEMNITIES
General
10.1 Without prejudice to the further limitations set out in this clause 10, for the avoidance of doubt the indemnities given in this clause 10 shall be subject to the limitations applicable in respect of Indemnity Claims as provided for in clause 11.
10.2 For the purposes of clauses 10.10 and 10.11, the reference to a Target Company shall also be deemed to refer to the relevant Designated Purchaser of the Holcim US Assets with respect, but limited, to the relevant Holcim US Assets and any relevant definition or other provision shall be construed accordingly.
Antitrust Indemnity
Antitrust Indemnity
10.3 Each Seller shall indemnify the Purchaser in respect of any Loss relating to an Infringement (the Antitrust Indemnity).
Limitations on liability
- 63 -
10.4 No Seller shall be liable for any claim by the Purchaser under clause 10.3 unless that Seller receives from the Purchaser written notice by the date set out and otherwise in accordance with clause 11.2(b).
Handling of Antitrust Damages
10.5 The Parties are in agreement that all investigations and proceedings relating to any Infringement which could give rise to the payment of Antitrust Damages shall be handled principally by the Sellers. The Purchaser undertakes to, and shall ensure that each relevant Target Company shall actively cooperate with the Sellers in all such investigations and proceedings on a continuous and unlimited basis with a view to mitigating and limiting the amount of any Antitrust Damages payable. In particular, and without limitation to the generality of the foregoing, the Purchaser shall fully cooperate, and shall ensure that each relevant Target Company fully cooperates, with the Sellers and provides the Sellers with all information needed in order to support its defence strategy. This includes in particular information needed by the Sellers in order to reply to requests for information by the competent antitrust authorities and/or competent courts.
10.6 The Purchaser shall promptly notify, and shall ensure that each relevant Target Company promptly notifies, the Sellers of any new information they become aware of relating to the relevant Infringement or the Antitrust Damages. The Purchaser shall in particular notify, and shall ensure that each relevant Target Company notifies the Sellers of any new claim by a third party for, or circumstances which give or may give rise to a claim by a third party for, Antitrust Damages, specifying in detail all underlying facts thereto (to the extent they are not already known to the Sellers) and the amount or estimated amount of the fines which may be imposed upon them or the damages and other costs payable or claimed or threatened to be payable or claimed.
10.7 No acknowledgement, admission, compromise or settlement or consent decree in relation to or in connection with any Infringement or the payment of any Antitrust Damages shall be made by or on behalf of any Target Company without prior written consent of the Sellers.
10.8 Provided that it is unavoidable that instead of the Sellers the Purchaser itself undertakes important procedural decisions, the Purchaser shall consult the Sellers ahead of these procedural decisions and shall provide the Sellers with the opportunity of a prior review of all submissions to the competent antitrust authorities and/or competent courts. For the avoidance of doubt, any procedural decision which might influence the amount of Antitrust Damages is deemed to be important within the meaning of this clause 10.8. The Sellers shall have the right to veto in writing any important procedural decision or submission to the competent antitrust authorities and/or competent courts, if such procedural decision or submission, in the Sellers view, might increase the Antitrust Damages.
10.9 For the avoidance of doubt and without prejudice to clause 11.11, no Seller shall be liable for any Antitrust Indemnity Claim to the extent that it would not have arisen but for the failure of the Purchaser to comply with any of its obligations under clauses 10.4 to 10.9.
Environmental indemnity
10.10 The Sellers shall indemnify the Purchaser against any Loss actually incurred by any relevant Target Company in connection with any Indemnified Issue (the Environmental Indemnity).
Other indemnities
- 64 -
10.11 The Sellers indemnify the Purchaser, in each case in relation to its Target Companies, from and against Loss in connection with:
(a) | [***] |
(b) | [***]. |
11. LIMITATIONS ON LIABILITY
In the event of any conflict or inconsistency between the provisions of the Deed of Tax Covenant and this clause 11 the provisions of the Deed of Tax Covenant shall prevail. The exclusions, limitations and other provisions applicable to Tax Warranty Claims in the Deed of Tax Covenant shall apply from the date of this Agreement as if they were incorporated herein.
11.1 Loss. Only the Purchaser shall be entitled to Claim for any Loss arising in connection with this Agreement or the US APA which is suffered by the Purchaser or any of its Affiliates (including, for the avoidance of doubt, Target Companies which become Affiliates of the Purchaser) and, where the Loss is suffered by a Non-Wholly-Owned Target Company, only for the Target Percentage of any such Loss.
11.2 Time Limits. No Seller shall be liable for any Warranty Claim, Tax Deed Claim or Indemnity Claim unless that Seller receives from the Purchaser written notice ([***] of the Purchaser or any Designated Purchaser becoming aware of such Claim, provided that a failure to deliver such a notice [***] shall not prevent a Tax Deed Claim being made) containing specific details of the Claim to the extent reasonably available and including the Purchasers estimate of the amount of the Warranty Claim, Tax Deed Claim or Indemnity Claim to the extent it is reasonably possible for the Purchaser to so estimate:
(a) | prior to 30 June 2017, in the case of a Warranty Claim other than an Antitrust Warranty Claim, Tax Warranty Claim or Environmental Warranty Claim; |
(b) | prior to the date that is 5 years after the Closing Date, in the case of an Environmental Claim or an Antitrust Claim (provided that, in relation to an Environmental Claim that relates to Contamination, a Trigger Event has occurred with respect to the Contamination in relation to which the Purchaser seeks to claim and notice of such Trigger Event has been given in accordance with this clause 11.2); |
(c) | prior to 3 years, in the case of an Indemnity Claim other than an Antitrust Indemnity Claim or Environmental Indemnity Claim; |
(d) | prior to the date that is 6 years after the Closing Date, in the case of a Tax Claim. |
11.3 Thresholds for Claims. No Seller shall be liable for any single Warranty Claim or Tax Deed Claim:
(a) | unless the amount sought pursuant to that single Warranty Claim or Tax Deed Claim (as the case may be) in accordance with the terms of this Agreement [***]; or |
- 65 -
(b) | unless the aggregate amount of the liability of that Seller for all Warranty Claims and Tax Deed Claims not excluded by paragraph [***] |
11.4 Maximum limit for all Claims.
(a) | Subject to clause 11.4(b): |
(i) | the aggregate amount of the liability of each Seller for all Tax Deed Claims, Warranty Claims other than Title Claims and for all Indemnity Claims other than Antitrust Indemnity Claims shall not exceed: [***] and |
(ii) | the aggregate amount of the liability of each Seller for Antitrust Indemnity Claims shall not exceed: [***] |
(b) | Notwithstanding any other provisions of this Agreement or the US APA, the aggregate amount of the liability of each Seller under or in connection with this Agreement and the US APA shall not exceed an amount equal to [***]. |
11.5 Warranty Claim to be withdrawn unless litigation commenced. Any Warranty Claim shall (if it has not been previously satisfied, settled or withdrawn) be deemed to have been withdrawn [***] after the notice is given pursuant to clause 11.2, unless legal proceedings (including for the avoidance of doubt, arbitration proceedings pursuant to clause 38 of this Agreement) in respect of it have been commenced by being both issued and served. No new Warranty Claim may be made in respect of the facts, matters, events or circumstances giving rise to any such withdrawn Warranty Claim.
11.6 Matters disclosed. No Seller shall be liable for any Warranty Claim if and to the extent that the fact, matter, event or circumstance giving rise to such Warranty Claim:
(a) | is Fairly Disclosed in this Agreement or any other Transaction Document; |
(b) | is Fairly Disclosed in Schedule 27, in relation to any Antitrust Warranty Claim, and the Parties hereby agree and acknowledge that the Purchaser shall only be entitled to make a Claim in respect of the matters to which the definition of Infringement relates pursuant to the Antitrust Indemnity and not under the Warranties; or |
(c) | is Fairly Disclosed in the Data Room (as evidenced by the copies of the Data Room referred to in paragraphs (a)(a)(iii), (b)(b)(iii), (c)(c)(iii) and (d)(iii) of the definition of Data Room). |
For the avoidance of doubt, this clause 11.6 shall not apply in respect of any Indemnity Claim, Tax Deed Claim or Title Claim and paragraphs (a) and (c) of this clause 11.6 shall not apply to any Antitrust Warranty Claim.
- 66 -
11.7 Matters provided for. No Seller shall be liable for any Warranty Claim or Indemnity Claim if and to the extent that the fact, matter, event or circumstance giving rise to the Warranty Claim or Indemnity Claim is accounted for as a liability, provision or reserve in or otherwise taken into account in the calculation of Working Capital or Debt in the Closing Statements, provided that, in relation to those items which are generally (but not specifically) accounted for as a liability, provision or reserve in or otherwise taken into in account in the calculation of Working Capital or Debt in the Closing Statements (the General Items), the above limitation will apply in relation to the relevant specific items set out in the relevant Closing Statement which are expressed to relate to the relevant General Item.
11.8 Effective Nature of the Loss. The Purchaser and any member of the Purchaser Group shall only be entitled to make a Warranty Claim or Indemnity Claim for any Loss to the extent and only to the extent such Loss has effectively been sustained by the Purchaser or any member of the Purchaser Group (including the Target Companies), it being specified that:
(a) | any Tax assessment resulting in any reduction of Tax losses or Tax credits shall not constitute an effective Loss sustained by the Purchaser or any member of the Purchaser Group; |
(b) | any deficiency assessed by the Tax Authorities the effect of which is to shift a Tax Liability from one fiscal year to another or to modify the jurisdiction in which a Tax Liability is due may give rise to a Warranty Claim or Indemnity Claim only insofar as (i) Purchaser or any member of the Purchaser Group is required to pay a penalty or interest charge in relation thereto, or (ii) Purchaser or any member of the Purchaser Group is subject to increased Tax thereon as a result of an increase in applicable or effective Tax rates; |
(c) | any deficiency assessed with regard to a Tax which is recoverable (for example, but without limitation, input VAT) shall give rise to a Warranty Claim or Indemnity Claim only insofar as the Purchaser or any member of the Purchaser Group is required to pay a penalty or interest charge in relation thereto; |
(d) | any payment due in respect of a Warranty Claim or Indemnity Claim shall be calculated by taking into account the effect of any Tax savings actually received by the Purchaser or any member of the Purchaser Group and/or any increase in the amount of Tax losses available to them for carry-forward or carry-back and resulting from the deductibility of the relevant loss for Tax purposes; and |
(e) | any payment due in respect of a Warranty Claim or Indemnity Claim shall be based on the Loss suffered by the Purchaser or any member of the Purchaser Group and, consistent with paragraph (c)(ii) of the definition of Loss, shall be computed [***] |
11.9 Contingent liabilities. If any Warranty Claim, Tax Deed Claim or Indemnity Claim is based upon a liability which is contingent only, no Seller shall be liable to make any payment unless and until such contingent liability gives rise to an obligation to make a payment but the Purchaser has the right under clause 11.1 to give notice of that Warranty Claim, Tax Deed Claim or Indemnity Claim before such time, in which case such Warranty Claim, Tax Deed Claim or Indemnity Claim shall not be subject to clause 11.2.
11.10 No liability for Warranty Claims or Indemnity Claims arising from acts or omissions of Purchaser. No Seller shall be liable for any Warranty Claim or Indemnity Claim (other than an Environmental Indemnity Claim) to the extent that it would not have arisen but for, or
- 67 -
has been increased or not reduced as a result of, any voluntary act (including, without limitation, any decision to cease operating a plant, terminal or quarry), omission or transaction (including, without limitation, a voluntary disclaimer of any Relief) or any change in accounting or Tax methods (including consolidation methods) or policies (save for any such change that is required in order to comply with any applicable Law in force as at the Closing Date) carried out:
(a) | by the Purchaser or any member of the Purchaser Group (including any Target Company) (or its respective directors, employees or agents or successors in title); or |
(b) | by any member of the relevant Seller Group or any of its Target Companies at the direction or request of the Purchaser or any member of the Purchaser Group. |
11.11 Purchasers failure to comply with its obligations. No Seller shall be liable for any Warranty Claim or Indemnity Claim to the extent that it would not have arisen but for the failure of the Purchaser to comply with any of its obligations under this Agreement or the US APA.
11.12 Insured Claims. No Seller shall be liable in respect of any Warranty Claim or Indemnity Claim to the extent that the amount of such Warranty Claim or Indemnity Claim is recovered or recoverable (net of any Tax suffered on the proceeds) under a policy of insurance that covers a Target Company (or would have covered such Target Company if the policies of insurance effected by or for the benefit of such Target Company had been maintained after Closing on no less favourable terms than those existing at the date of the Binding Offer Letter).
11.13 Purchasers duty to mitigate. Without prejudice to (i) the common law duty of the Purchaser to mitigate any Loss which it may suffer as a result of any matter giving rise to a Claim, or (ii) the Sellers right to claim for breach of contract in respect of clause 5 of the Deed of Tax Covenant or clause 11.20 hereof, the Purchaser shall procure that all reasonable steps are taken to avoid or mitigate any Loss or damage which it may suffer in consequence of any breach by a Seller of the terms of this Agreement or the US APA.
11.14 Recovery from third party after payment from Seller. Where a Seller has made a payment to the Purchaser in relation to any Warranty Claim, Tax Deed Claim or Indemnity Claim and the Purchaser or any member of the Purchaser Group (including any Target Company) receives or is entitled to recover (whether by insurance, payment, discount, credit, relief or otherwise) from a third party a payment or Relief which indemnifies or compensates the Purchaser or any member of the Purchaser Group (in whole or in part) in respect of the liability or Loss which is the subject of a Warranty Claim, Tax Deed Claim or Indemnity Claim, the Purchaser or relevant member of the Purchaser Group shall: (i) promptly notify that Seller of the fact and provide such information as that Seller may reasonably require; (ii) take all reasonable steps or proceedings that the Seller may reasonably require to enforce such right; and (iii) pay to that Seller as soon as practicable after receipt an amount equal to the amount recovered from the third party (or, in the case of a Relief, the amount the Purchaser or member of the Purchaser Group will save by virtue of the Relief) (in each case net of Tax and less all reasonably incurred costs of recovery by the Purchaser in recovering that sum).
11.15 Net financial benefit. No Seller shall be liable to satisfy any Warranty Claim or Indemnity Claim to the extent of any corresponding saving by or net quantifiable financial benefit to the Purchaser or any member of the Purchaser Group arising from the matter(s) giving rise to such Warranty Claim or Indemnity Claim, including the amount (if any) by which any Tax for which the Purchaser or any member of the Purchaser Group would
- 68 -
otherwise have been accountable or liable to be assessed is actually reduced or extinguished as a result of the matter(s) giving rise to the Warranty Claim or Indemnity Claim.
11.16 No liability for legislation or changes in rates of Tax. No Seller shall be liable for any Warranty Claim, Tax Deed Claim or Indemnity Claim if and to the extent it is attributable to or the amount of such Warranty Claim, Tax Deed Claim or Indemnity Claim is increased as a result of any: (i) legislation not in force at the date of Closing; (ii) change of Law (or any change in interpretation), regulation, directive, requirement or administrative practice (including the published practice of any Tax Authority) after the date of Closing; or (iii) change in the rates of Tax in force at the date of Closing (including if such changes have a retroactive effect), provided in each case that the relevant change was not announced prior to the date of Closing.
11.17 No double recovery. The Purchaser shall not be entitled to recover damages or obtain payment, reimbursement, restitution or indemnity more than once in respect of any one Loss, and for this purpose recovery by a Designated Purchaser, including from a third party, shall be deemed to be a recovery by the Purchaser.
11.18 Waiver of right of set off. The Purchaser waives and relinquishes any right of set off or counterclaim, deduction or retention which the Purchaser might otherwise have in respect of any Claim against or out of any payments which the Purchaser may be obliged to make (or procure to be made) to a Seller pursuant to this Agreement or otherwise. The Sellers waive and relinquish any right of set off or counterclaim, deduction or retention which the Sellers might otherwise have in respect of any Claim against or out of any payments which either Seller may be obliged to make (or procure to be made) to the Purchaser pursuant to this Agreement or otherwise.
11.19 Seller to have opportunity to remedy breaches. If a breach of this Agreement or the US APA is capable of remedy, the Purchaser shall only be entitled to compensation if it gives the relevant Seller written notice of the breach and the breach is not remedied within [***] after the date on which such notice is served on the relevant Seller. Without prejudice to its duty to mitigate any Loss, the Purchaser shall (or shall procure that any relevant member of the Purchaser Group shall) provide (at the expense of the relevant Seller) all reasonable assistance to the relevant Seller to remedy any such breach.
11.20 Conduct of Third Party Claims.
(a) | Subject to clause 11.20(b), if the Purchaser or any Designated Purchaser becomes aware of any claim or potential claim by a third party, including any Tax Authority or any other Governmental Entity (a Third Party Claim), that might result in a Warranty Claim, Tax Deed Claim or Indemnity Claim being made by the Purchaser, the Purchaser shall: |
(i) | promptly (and in any event within [***] of it or a Designated Purchaser becoming aware of it, or when an action is required before a certain date subject to rights forfeiture, as soon as reasonably practicable before such date and in any case early enough to enable the relevant Seller to participate in the proceeding) give notice of the Third Party Claim to the relevant Seller and ensure that the relevant Seller and its Representatives are given all reasonable information and facilities to investigate it; |
(ii) | not (and ensure that each member of the Purchaser Group shall not) admit liability or make any agreement or compromise in relation to the Third Party Claim without prior written approval of the relevant Seller; |
- 69 -
(iii) | keep the relevant Seller reasonably informed of the progress of, and any material developments in relation to, the Third Party Claim, consult in good faith with the relevant Seller with respect to the Third Party Claim, and consider in good faith any reasonable request of the relevant Seller to avoid, resist, dispute, appeal, compromise or defend the Third Party Claim; and |
(iv) | if requested by the relevant Seller and such disclosure by the Purchaser is permitted by any applicable Law, provide the relevant Seller (at such Sellers expense) with copies of any material correspondence or other documents relating to the Third Party Claim (subject to legal professional privilege and any obligations of confidence that are binding on the Purchaser or any member of the Purchaser Group and each member of the Purchaser Group). |
(b) | Without prejudice to clause 11.20(a), in the case of a Third Party Claim that might result in a Warranty Claim, Tax Deed Claim or Indemnity Claim being made by the Purchaser, from such date as both Sellers: |
(i) | to the extent any liability actually arises under this Agreement as a result of a Third Party Claim, accept the right of the Purchaser or the relevant Target Company to be compensated by the Sellers in respect of the Third Party Claim pursuant to the terms of this Agreement (but at all times subject to the limitations on liability set out herein); or |
(ii) | fail to provide written approval pursuant to clause 11.20(a)(ii) within [***] after written request from the Purchaser for such approval in respect of the Third Party Claim (in which case Sellers will be deemed to have agreed to compensate the Purchaser or the relevant Target Company in respect of the subject matter of the Third Party Claim pursuant to the terms of this Agreement (but at all times subject to the limitations on liability set out herein)), |
the Purchaser shall (subject to the Purchaser or the relevant member of the Purchaser Group being indemnified by the relevant Seller against all reasonable out of pocket costs and expenses incurred in respect of the Third Party Claim) ensure that it and each member of the Purchaser Group shall: |
(iii) | take such action as the relevant Seller may reasonably request to avoid, resist, dispute, appeal, compromise or defend the Third Party Claim; |
(iv) | allow the relevant Seller to conduct of all proceedings and/or negotiations arising in connection with the Third Party Claim; and |
(v) | provide such information and assistance as the relevant Seller may reasonably require in connection with the preparation for and conduct of any proceedings and/or negotiations relating to the Third Party Claim, |
provided, however, that in the case of an Antitrust Warranty Claim, the Purchaser may, within [***] following the occurrence of any of paragraph (b)(i) or (b)(ii) above, elect not to apply the provisions of this paragraph (b), in which case the provisions of paragraph (a) (other than paragraph (a)(a)(ii)) shall apply and the Sellers shall remain free to oppose the right of the Purchaser or the relevant Target Company to be compensated by the Sellers in respect of the Third Party Claim pursuant to the terms of this Agreement.
- 70 -
(c) | The Sellers agree that, in respect of any Third Party Claim that might result in a Warranty Claim or Indemnity Claim being made by the Purchaser against both (but not one only) of them, they shall take any and all actions and decisions required by or under this clause 11.20 as if they were a single person. |
11.21 Reduction in price for the Shares and Holcim US Assets. Each Seller is entering into the obligations under this Agreement on its own behalf and as agent on behalf of the Designated Sellers. Accordingly, any payment made by any Seller in respect of a Claim, a Tax Deed Claim or any other claim under this Agreement, under the Deed of Tax Covenant or under the US APA shall be treated for all purposes as a payment by the relevant Designated Seller and shall, to the maximum extent possible, be deemed to be a reduction in the price paid to that relevant Designated Seller in respect of the relevant Set of Shares or the Holcim US Assets (as applicable).
11.22 Due date for payment of Claims. Any payment due by a Seller to the Purchaser in respect of any Warranty Claim, Tax Deed Claim or Indemnity Claim shall be payable [***] after, as the case may be, including, for the avoidance of doubt, its acceptance on the amount due to the Purchaser in this respect:
(a) | the notification by the Seller to the Purchaser of its acceptance of the Warranty Claim, Tax Deed Claim or Indemnity Claim (as the case may be); |
(b) | the date when the amount of the Sellers liability shall have been finally determined pursuant to an amicable settlement between either: (i) the Purchaser and the Seller in the case of a Warranty Claim, Tax Deed Claim or Indemnity Claim (as the case may be) not based on a Third Party Claim; or (ii) the Purchaser or its relevant Affiliate and the relevant third party in the case of a Warranty Claim, Tax Deed Claim or Indemnity Claim (as the case may be) based on a Third Party Claim (provided clause 11.20 has been complied with); |
(c) | the definitive and enforceable decision of the arbitral tribunal competent under clause 38 deciding that such payment was due pursuant to the terms of this Agreement; or |
(d) | if earlier, the due date for the payment of any Tax to which any Tax Claim relates, provided that: |
(i) | where the obligation to pay such Tax is contested by the relevant Seller, the Purchaser shall be obliged, if possible and upon request of the relevant Seller, to file for a postponement of the payment of Tax provided that, if the date on which Tax to which this paragraph applies must be paid to a Tax Authority is deferred following application to the appropriate authority, the date for payment by the relevant Seller shall be the earlier of [***] before the date on which the Tax must be paid to the relevant Tax Authority (notwithstanding any initial deferral but taking into account the impact on the payment date of any action requested by the Sellers) and such date when the amount of Tax is finally and conclusively determined. For this purpose, an amount of Tax shall be deemed to be finally determined when, in respect of such amount, an assessment has been imposed or a decision of court is given against which no appeal is possible or no appeal is made within the prescribed time limit or any binding agreement, whether by compromise or not, is reached with the competent Tax Authority; and |
(ii) | where the relevant Seller has made any payment to the Purchaser in relation to such Tax Claim and the Purchaser or any Target Company has afterwards |
- 71 -
received a refund from any Tax Authority in respect of such contested Taxation, an amount equal to the Relevant Percentage (as defined in the Deed of Tax Covenant) of such refund shall be paid by the Purchaser to the relevant Seller within [***] of such receipt. |
11.23 Purchaser and Sellers to bring any and all claims.
(a) | Notwithstanding anything to the contrary herein or in any Transaction Document with the exception of the remedies of injunction, specific performance, and other equitable relief where damages alone may not be adequate remedy: |
(i) | the Purchaser undertakes that none of its Connected Persons (including any Designated Purchaser) shall make, bring or support any claim, counter-claim or third party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, in any way relating to this Agreement or any Transaction Document or any of the transactions contemplated by this Agreement or any Transaction Document against a Seller or any of its Connected Persons; |
(ii) | each of the Sellers undertakes that none of its Connected Persons (including any Designated Seller) shall make, bring or support any claim, counter-claim or third party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, in any way relating to this Agreement or any Transaction Document or any of the transactions contemplated by this Agreement or any Transaction Document against the Purchaser or any of its Connected Persons; and |
(iii) | any and all claims in any way relating to this Agreement or any Transaction Document or any of the transactions contemplated by this Agreement or any Transaction Document shall be made: |
(A) | in the case of any claims by or on behalf of the Purchaser or any of its Affiliates, exclusively by the Purchaser against the Seller(s), and in particular no claim shall be made directly against any Designated Seller; and |
(B) | in the case of any claims by or on behalf of a Seller or any of its Affiliates, exclusively by that Seller against the Purchaser, and in particular no claim shall be made directly against any Designated Purchaser, |
in each case in accordance with the dispute resolution provisions in this Agreement.
(b) | For the purposes of this clause, whichever of the Sellers or the Purchaser is bringing a claim (whether as agent or otherwise) in accordance with paragraph (a) is termed the Claimant Party and the other of them is termed the Defendant Party. The Parties agree that: |
(i) | the Defendant Party shall not raise any defence or objection to any such claim on the basis that it is made in the name of the Claimant Party acting as agent and/or made against the Defendant Party acting as agent pursuant to the provisions of this clause and shall be deemed to have waived the right to raise and to be estopped from raising any such defence or objection; |
- 72 -
(ii) | where a claim cannot, as a matter of Law, be made by the Claimant Party in its own name as agent for a relevant Affiliate pursuant to this clause, any such claim may and shall be assigned by the Affiliate to the Claimant Party (provided that the liability of the person claimed against shall be no greater and no less than such liability would have been if the assignment had not occurred); |
(iii) | the Claimant Party covenants with the Defendant Party to pay to the Defendant Party an amount equivalent to any and all costs suffered or incurred by the Defendant Party or any of its Affiliates as a result of an Affiliate of the Claimant Party making any claim other than in accordance with this clause and the Claimant Party shall procure that any such claim made by an Affiliate of the Claimant Party is discontinued and withdrawn with immediate effect; and |
(iv) | where a claim is made by the Claimant Party against the Defendant Party and the claim results in a payment being required to be made to the Claimant Party, the payment shall be made by the Defendant Party (as principal and/or, if applicable, as agent for its relevant Affiliate(s)) to the Claimant Party (as principal and/or, if applicable, as agent for its relevant Affiliate(s)). |
Specific limitations on Environmental Claims
[***] | THE FOLLOWING 2 PAGES HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
- 73 -
12. PURCHASER WARRANTIES
12.1 The Purchaser warrants to each Seller as at the date of the Binding Offer Letter and the Closing Date that each of the warranties set out in this clause 12 is true, accurate and not misleading.
12.2 Incorporation. The Purchaser and each Designated Purchaser is validly incorporated, in existence and duly registered under the Laws of its jurisdiction and has full power to conduct its business.
- 76 -
12.3 Authorisations. The Purchaser and each Designated Purchaser has obtained all corporate authorisations and (other than to the extent relevant to the Conditions and the Clearances) all other governmental, statutory, regulatory or other consents, licences and authorisations required to empower it to enter into and perform its obligations under this Agreement and the other Transaction Documents to which it is a party where failure to obtain them would adversely affect to a material extent its ability to enter into and perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
12.4 No breach. Entry into and performance by each member of the Purchaser Group of this Agreement and/or any Transaction Document to which it is a party will not: (i) breach any provision of its memorandum and articles of association, by-laws or equivalent constitutional documents; or (ii) (subject, where applicable, to fulfilment of the Conditions and Clearances) result in a breach of any Laws or regulations in its jurisdiction of incorporation or of any order, decree or judgment of any court or any governmental or regulatory authority, where (in either case) the breach would adversely affect to a material extent its ability to enter into or perform its obligations under this Agreement and/or any Transaction Document to which it is a party.
12.5 No insolvency. Neither the Purchaser nor any Designated Purchaser is insolvent or bankrupt under the Laws of its jurisdiction of incorporation, unable to pay its debts as they fall due or has proposed or is liable to any arrangement (whether by court process or otherwise) under which its creditors (or any group of them) would receive less than the amounts due to them. There are no Insolvency Proceedings in respect of the Purchaser or any Designated Purchaser and no events have occurred which would justify such Insolvency Proceedings being commenced. No steps have been taken to enforce any Encumbrance over any assets of the Purchaser or any Designated Purchaser and no event has occurred to give the right to enforce such Encumbrance.
12.6 Conditions and Clearances. The Purchaser is not aware of any fact, matter or circumstances that will, or is likely to, prevent or materially delay the fulfilment of any of the Conditions or the obtaining of any of the Clearances. The Purchaser is not aware of any Clearances other than the Antitrust Clearances, the Purchaser Competition Approvals, the [***], the clearance required under the Investment Canada Act, the clearance required from the Brazil National Department of Mineral Production and the clearance required from the Romanian Environmental Protection Agency.
12.7 Purchaser Financing Agreement. The Purchaser (or any member(s) of the Purchaser Group): (i) has as at the date of the Binding Offer Letter and will have at Closing committed loan facilities under the Purchaser Financing Agreement, and (ii) will at Closing have available cash, which together will at Closing unconditionally provide in immediately available funds the necessary cash resources to pay the Holcim Price and the Lafarge Price and meet its other obligations under this Agreement and the US APA. The Purchaser Financing Agreement involves no material pre-conditions and the Purchaser or any member of the Purchaser Group will be able to satisfy all conditions of drawdown to such agreements at or prior to Closing. The Purchaser has made available to the Sellers accurate and complete copies of the Purchaser Financing Agreement (redacted to exclude any sensitive information relating to fees or other financial terms).
12.8 Disclosure to Sellers. There are no contracts, agreements, arrangements or other understandings (whether reduced to writing or not), in relation to the Proposed Transactions, between:
(a) | the Purchaser or any of its Representatives on the one hand and providers of debt or equity finance (or any of their Representatives) on the other hand; or |
- 77 -
(b) | the Purchaser or any of its Representatives or providers of debt finance (or any of their Representatives) on the one hand, and any third party on the other hand: |
(i) | involving any payment of money or other benefits, or the giving of any indemnity or other assurance, in connection with the Proposed Transaction; |
(ii) | otherwise concerning the Proposed Transactions; or |
(iii) | which are conditional upon the Proposed Transactions, |
in each case, other than those which have been disclosed in writing to the Sellers.
12.9 No default under Purchaser Financing Agreement. No default or draw stop event under the Purchaser Financing Agreement has occurred nor is the Purchaser aware of any event or circumstance which could reasonably be expected to constitute such a default or draw stop event which in each case would enable the relevant lenders to refuse to provide funds under the Purchaser Financing Agreement.
12.10 Purchaser awareness. Prior to its execution of this Agreement, the Purchaser has had the opportunity to conduct a due diligence review of the Target Companies and the Holcim US Assets and has had access to confidential documents, data and other materials pertaining thereto.
12.11 Anti-Bribery. Each member of the Purchaser Group has in place compliance policies in respect of applicable Anti-Bribery Law.
12.12 No further sale. The Purchaser warrants that as at the date of the Binding Offer Letter:
(a) | it has complied with the confidentiality agreement in respect of the Proposed Transactions entered into between the Purchaser and the Sellers dated 19 September 2014; and |
(b) | it has no intention to sell, on or after the Closing Date, all or some of the Shares or all or some of the assets of the Target Companies or any of the Holcim US Assets. |
13. TRANSFER TAXES AND TAX CONSOLIDATION EXIT AGREEMENTS
The provisions of this clause 13 shall come into effect at Closing.
Payment of Transfer Taxes
13.1 Subject to the provisions of clause 13.2, the Purchaser shall bear the cost of all Transfer Taxes in all jurisdictions where they are payable by the Purchaser or a Designated Purchaser in relation to the transfer of the Shares or otherwise arising as a result of this Agreement, any other Transaction Document or the Proposed Transactions, and shall be responsible for arranging the payment of any such Transfer Taxes, including fulfilling any administrative or reporting obligation imposed by the relevant jurisdiction in connection with such payment. Other than in the case of United Kingdom stamp duty, the Purchaser shall deliver to the Sellers, within 5 Business Days following the date any such Transfer Tax becomes due, reasonable evidence that such Transfer Tax has been duly and timely paid to the relevant Tax Authority. The Purchaser covenants with each Seller to pay to the relevant Seller an amount equivalent to any Loss suffered by such Seller or any member of its Seller Group as a result of the Purchaser failing to comply with its obligations under this clause 13.1.
- 78 -
13.2 Each of Holcim and Lafarge shall bear (or cause its Designated Sellers to bear) the cost of any Transfer Taxes that may be due in Switzerland in relation to the transfer of the Holcim Sale Companies Shares, Lafarge Sale Companies Shares or, in relation to Holcim, the Holcim US Assets respectively, and shall be responsible for arranging the payment of any such Swiss Transfer Taxes, including fulfilling any administrative or reporting obligation imposed by the relevant jurisdiction in connection with such payment. The Sellers shall bear the costs of all Transfer Taxes in all jurisdictions where they relate to a clawback of any relief, exemption or concession previously granted to the Sellers or any Target Company or Target Sub-Group (to the extent that such clawback directly results from the Proposed Transaction), and shall be responsible for arranging the payment of any such Transfer Taxes, including fulfilling any administrative or reporting obligation imposed by the relevant jurisdiction in connection with such payment. The Sellers shall deliver to the Purchaser, within 5 Business Days following the date any such Transfer Tax becomes due, reasonable evidence that such Transfer Tax has been duly and timely paid to the relevant Tax Authority. Each Seller covenants with the Purchaser to pay to the Purchaser an amount equivalent to any Loss suffered by the Purchaser or any member of its Purchaser Group as a result of the relevant Seller failing to comply with its obligations under this clause 13.2.
Tax Consolidation Exit Agreements
13.3 Each of the Sellers and the Purchaser undertakes to comply and cause the Share Sellers, Share Purchasers, Target Companies and their Affiliates, as applicable, to comply with the provisions of the Tax Consolidation Exit Agreements.
14. INSURANCE
14.1 From the date of this Agreement until the Closing Date, each Seller shall procure that relevant members of its Seller Group and its Target Companies shall continue in force all policies of insurance maintained by them in respect of its Target Companies, their businesses (including in respect of the Material Real Estate of its Target Companies, except for such Material Real Estate that is leased and where there is an obligation on the landlord to insure) and, in the case of Holcim, the Holcim US Assets.
14.2 Upon Closing, all insurance cover arranged by each Seller (or its Seller Group) in relation to its Target Companies, their businesses (whether under policies maintained with third party insurers or other members of its Seller Group) and, in the case of Holcim, the Holcim US Assets shall cease (other than in relation to insured events taking place before Closing). Each Seller shall procure that after Closing, each Target Company continues to have access to and is entitled to notify or make claims under such policies after Closing in respect of events that arose before Closing. No member of the Purchaser Group shall make any claim under any such policies in relation to insured events arising after Closing. The Sellers shall use all reasonable endeavours after the Closing to procure that (i) the Sellers and any member of either Seller Group provide the Purchaser with such information and co-operate as the Target Companies require in order to deal with the management of claims made or notified under such policies and (ii) monies due under such policies to any Target Company in respect of claims (notified or made either before or after Closing in respect of events that arose before Closing) after taking into account any deductible under the policies and less any taxation suffered on the proceeds are paid to the relevant Target Company. If any such payment is received by a Seller or a member of the Sellers Group rather than the relevant Target Company, the Sellers shall procure that the Seller or member of the Sellers Group shall transmit such payment to the relevant Target Company (subject to the deductions referred to in this clause 14.2), as soon as reasonably practicable after receipt. Each Seller shall be entitled to make arrangements with its insurers to reflect this clause.
- 79 -
15. GUARANTEES AND OTHER THIRD PARTY ASSURANCES
15.1 The Purchaser:
(a) | shall use all reasonable endeavours to ensure that at Closing; and |
(b) | in any case shall ensure that within 30 Business Days following Closing, |
each Seller and each member of its Seller Group is released in full from all Third Party Assurances listed in paragraph 1 of Part G of each of the Local Schedules given by it in respect of obligations of its Target Companies. In addition, the Purchaser shall use all reasonable endeavours to ensure that, as soon as reasonably practicable after becoming aware of any other Third Party Assurance in respect of any obligations of any Target Company, the relevant Seller and each member of its Seller Group is released in full from such Third Party Assurance. Pending release of any Third Party Assurance referred to in this clause 15.1, the Purchaser covenants to pay the relevant Seller an amount equal to any and all Losses incurred by such Seller or any of its Affiliates arising after Closing under or by reason of that Third Party Assurance.
15.2 Each Seller shall ensure that at Closing each of its Target Companies is released in full from all Third Party Assurances listed in paragraph 2 of Part G of each of the Local Schedules given by it in respect of obligations of any member of its Seller Group. In addition, each Seller shall use all reasonable endeavours to ensure that, as soon as reasonably practicable after becoming aware of any other Third Party Assurance in respect of any obligations of any member of its Seller Group, each of its Target Companies is released in full from such Third Party Assurance. Pending release of any Third Party Assurance referred to in this clause 15.2, each Seller covenants to pay the Purchaser an amount equal to any and all Losses incurred by the Purchaser or any of its Affiliates arising after Closing under or by reason of any such Third Party Assurance given by any of its Target Companies.
16. CHANGES OF NAME
16.1 The Purchaser shall procure that:
(a) | as soon as reasonably practicable after the Closing Date and in any event no later than [***] (to the extent practicable in accordance with applicable Law), the name of any Target Company which consists of or incorporates the word Holcim or Lafarge is changed to a name which does not include that word or any name which, in the reasonable opinion of Holcim or Lafarge (as applicable), is substantially or confusingly similar; and |
(b) | as soon as reasonably practicable after the Closing Date and in any event no later than the end of the relevant Phase-Out Period, the Target Companies and the Designated Purchaser of the Holcim US Assets shall: |
(i) | cease to use any Corporate Marks or any mark, name or logo which, in the reasonable opinion of Holcim or Lafarge (as applicable), is substantially or confusingly similar to any of them; and |
(ii) | remove or cover any Corporate Mark on all signs, billboards, advertising materials, telephone listings, labels, stationery, office forms, trucks, packaging or other properties or materials of the Target Companies or comprising the Holcim US Assets. |
- 80 -
For the purpose of this clause 16.1, Phase-Out Period shall mean:
(iii) | in respect of trucks and silos, a period of [***] after the Closing Date; |
(iv) | in respect of signage, a period of [***] after the Closing Date; |
(v) | in respect of stock, until depletion of the stock and, in any event, by no later than a period of [***] after the Closing Date; and |
(vi) | in respect of any other matters, a period of [***] after the Closing Date. |
16.2 The Purchaser:
(a) | agrees to notify the Sellers promptly of any infringement or improper use by any third party of any Corporate Mark of which the Purchaser becomes aware, and permit the relevant Seller to have sole discretion and control with regards to any proceedings related to such infringement or improper use, and the Purchaser shall in no circumstances make any admissions or settle any action in connection with such infringement or improper use; |
(b) | agrees to ensure that any use of the Corporate Marks shall be subject to standards of quality and specifications that conform to those quality standards and operational specifications currently used by the relevant Seller and shall otherwise conform with all applicable Laws; and |
(c) | covenants to pay to the relevant Seller (or, as applicable, to its Representatives, successors or assigns) an amount equal to any and all Losses arising out of or relating to the Purchasers use of the Corporate Marks where such use (i) is in breach of the obligations set out in paragraphs 16.1(a) and 16.1(b) above, or (ii) in the relevant Sellers reasonable opinion is intentionally misleading. |
17. INFORMATION, RECORDS AND ASSISTANCE POST-CLOSING
17.1 During the period of 5 years after the Closing Date each member of the Purchaser Group shall:
(a) | maintain the books, accounts, customer lists and all other records held by it after Closing to the extent that they relate to the Target Companies or the Holcim US Assets and to the period up to Closing (the Records); and |
(b) | following receipt of a written request from a Seller, provide the relevant Seller (at that Sellers cost) with reasonable access during normal working hours on Business Days to (and the right to take copies of) the Records to the extent that they relate to that Sellers Target Companies or, in the case of Holcim, the Holcim US Assets, subject always to the provisions of clause 23 and applicable Law. |
17.2 For a period of 6 years after the Closing Date or for such longer period as any Claim or Third Party Claim remains outstanding, each member of the Purchaser Group shall (at the relevant Sellers expense) also give such assistance to each Seller and any member of its Seller Group as the relevant Seller may reasonably request in relation to any third party proceedings by or against any member of its Seller Group so far as they relate to its Target Companies or, in the case of Holcim, the Holcim US Assets, including proceedings relating to employees claims or Tax.
- 81 -
18. POST-CLOSING COVENANTS
18.1 Each Seller undertakes that it shall not, and shall procure that no member of its Seller Group shall, at any time for a period of [***] from the Closing Date, offer to employ or seek to entice away a Senior Manager from any of its Target Companies. The Purchaser undertakes that it shall not, and shall procure that no member of the Purchaser Group (including the Target Companies) shall, at any time for a period of [***] from the Closing Date, offer to employ or seek to entice away any Senior Manager from the Seller Groups.
18.2 Nothing in clause 18.1 shall prohibit the solicitation or the employment or engagement by a Party or any of its Affiliates of any Senior Manager (or any replacement for any Senior Manager):
(a) | required by Law; |
(b) | resulting from any general public advertisement placed by or on behalf of a Party or any of its Affiliates that is not directed at such person; |
(c) | following the expiration of a [***] period after the voluntary resignation by such person from the relevant Target Company or Seller Group member without solicitation that would otherwise be prohibited under clause 18.1; or |
(d) | following the expiration of a [***] period after the termination of such persons employment or engagement by the relevant Target Company or Seller Group member. |
18.3 For a period of not less than 1 year from the Closing Date, the Purchaser will, and will cause the Target Companies and the Designated Purchasers to, provide each Transferred Employee salary or wages, opportunities for commissions, bonuses, incentive compensation (excluding actual equity securities of the Sellers or their Affiliates) and employee benefits on at least as favourable terms in the aggregate as those currently applicable to such Transferred Employee. The Sellers undertake to provide all information requested by the Purchaser in good time before Closing for the purposes of enabling the Purchaser to comply with its obligations under this clause 18.
18.4 To the extent that the employment relationship of a Transferred Employee does not transfer by operation of applicable Law, as of the Closing Date, the Purchaser will, or will cause a Target Company or Designated Purchaser to, offer each of such Transferred Employees an employment position that is suitable and appropriate for such employees level of qualification and substantially equivalent to his or her employment role and purpose as at the Closing Date.
18.5 To the extent applicable to the Transferred Employees, the Purchaser shall assume each collective bargaining agreement or similar agreement with employee representatives to which the relevant Target Company or Designated Seller is a party, and shall thereafter be solely responsible for all duties, obligations and liabilities related thereto arising after the Closing Date, but only to the extent applicable to the Transferred Employees.
18.6 For a period of not less than 1 year from the Closing Date, the Purchaser undertakes not to engage in, or permit, a plant closing nor any mass layoff, collective redundancy program or comparable plan or action with respect to any of the Target Companies or any of the Affected Employees (as defined in the US APA) who agree to employment with Purchaser (as defined in the US APA). This undertaking shall not apply to the closing of any plant, any mass lay off or collective redundancy program which any member of either Seller
- 82 -
Group or any Target Company had disclosed to a works council and/or publicly announced prior to the Closing Date.
18.7 The Purchaser undertakes to take, as soon as reasonably practicable and in any case within 30 Business Days following Closing, any and all actions required in any relevant jurisdiction, including but not limited to the updating of applicable records of Governmental Entities, to fully effect each of the director resignations referred to in clause 7.7(d). The Sellers shall provide to the Purchaser and the members of the Purchaser Group all reasonably required assistance in order for the Purchaser to be able to comply with its obligations under this clause 18.7.
18.8 Where by operation of applicable Law, as of the Closing Date, a Transferred Employee cannot be retained in a Benefit Plan of a Target Company or, in the case of employees whose employment is transferred to the Designated Purchaser of the Holcim US Assets in connection with or by reason of the US APA, is not eligible to participate in such Purchasers Benefit Plan (as defined in the US APA), the Purchaser will calculate any transfer payment required in relation to that Transferred Employee on an accrued benefit obligation basis determined by the actuarial adviser to the Benefit Plan or, if greater, the minimum amount required to comply with applicable Laws.
18.9 Lafarge undertakes that it will (i) at the first written request of the Purchaser, in a timely manner, exercise and enforce all and any rights of indemnification available to [***] under the [***] and the associated escrow agreement and (ii) account to the Purchaser upon receipt by [***], in an amount equal to any monies recovered by [***] as a result of such exercise and enforcement (or which would have been recovered by [***] if, at the time of being required by the Purchaser to exercise and enforce such rights, it continued to own the shares acquired pursuant to the [***]).
Anti-embarrassment
18.10 The purpose of clauses 18.10 to 18.12 (inclusive) is to ensure that, if a direct or indirect sale or transfer (including by way of a co-investment or of an initial public offering) of any of the Target Companies and/or a part of the business of any of them (other than any of the Target Companies referred to in Schedule 9) or of any of the Holcim US Assets to a person not being another member of the Purchaser Group other than a disposal pursuant to clause 7.14 (a Third Party Disposal) takes place at any time after the Closing but prior to the date that is 18 months following Closing (the No Disposal Period), Holcim and Lafarge shall be entitled to an increase in the Holcim Price and the Lafarge Price respectively under this Agreement.
18.11 The Purchaser undertakes to each of the Sellers that, if a Third Party Disposal occurs at any time during the No Disposal Period, the Purchaser shall pay the Additional Consideration to the relevant Seller(s), and such Additional Consideration shall increase the Holcim Price and/or the Lafarge Price, as the case may be, accordingly. For the purpose of this clause 18.11, Additional Consideration means, in relation to a Third Party Disposal, an amount equal to 50 per cent. of the amount by which the consideration due by the relevant buyer(s) in respect of the relevant Third Party Disposal or, in the case of a co-investment in a Target Company or part of the business thereof, the value of the relevant part of the Target Company or the part of the business underlying such co-investment (the Third Party Consideration) exceeds that part of the Holcim Price or the Lafarge Price, as the case may be, allocated to the relevant Target Company(ies), the relevant part of the business thereof or the relevant Holcim US Assets under this Agreement. For the purposes of such calculation, the part of the Holcim Price or Lafarge Price (as the case may be) allocated to the business of a
- 83 -
Target Company or to the Holcim US Assets shall be determined on the basis of the proportion of the 2014 EBITDA generated by such business or the Holcim US Assets relative to the aggregate 2014 EBITDA of the relevant Target Company or Designated Seller (as applicable). In the event that the Third Party Consideration takes, in whole or in part, a form other than cash, the above calculation shall be effected on the basis of the cash equivalent value of such Third Party Consideration as agreed among the Parties or, failing such agreement, as determined by an independent expert of international repute pursuant to the procedures set out in clauses 4.3 to 4.14 applied mutatis mutandis to such determination of cash equivalent value.
18.12 The Purchaser shall pay the Additional Consideration to the Sellers by no later than 5 Business Days after receipt by the relevant member of the Purchaser Group of the Third Party Consideration. For the avoidance of doubt, in the event that the Third Party Consideration is paid in more than one payment, the Purchasers obligation under this clause 18.12 shall apply in respect of each of such payment.
18.13 [***]
[***]
[***]
[***]
[***]
[***]
[***], [***]
[***]
[***]
[***]
- 84 -
[***] |
[***].
19. US DELAYED CLOSING DATE
19.1 If the US Delayed Closing Trigger occurs, then in those circumstances:
(i) | the US Assets Closing will take place on the applicable US Delayed Closing Date; and |
(ii) | the Closing of the Holcim Sale Company based in Canada will take place, on the Main Closing Date or the applicable US Delayed Closing Date as determined by clause 7.1(b), clause 7.16 and clause 7.17. |
19.2 If the US Delayed Closing Trigger occurs, then in those circumstances:
(i) | the provisions of this Agreement (and, in particular, the provisions of clause 4 and clause 7.14) with respect to the determination of the Estimated Price, the Estimated Cash, the Estimated Debt, the Estimated Working Capital and the Estimated working Capital Adjustment, the Closing Date, the Final Price, the Lafarge Secured Price and the Holcim Secured Price shall apply and operate independently and separately with respect to the Main Closing Date and each applicable US Closing Date; |
(ii) | the Holcim Estimated Price shall be divided in accordance with the allocations in Schedule 12 to reflect the fact that Closing of the Holcim US Assets and potentially also the Holcim Sale Company based in Canada will not occur on the Main Closing Date but rather on the applicable US Delayed Closing Date; and |
(iii) | the Reference Working Capital shall also be divided in accordance with the allocations set out in the definition of Reference Working Capital to reflect the fact that Closing of the Holcim US Assets and potentially also the Holcim Sale Company based in Canada will not occur on the Main Closing Date but rather on the applicable US Delayed Closing Date. |
20. NO RIGHTS OF RESCISSION OR TERMINATION
The Purchaser shall not be entitled to rescind or terminate this Agreement in any circumstances whatsoever (whether before or after Closing). This shall not exclude any liability for (or remedy in respect of) fraudulent misrepresentation.
- 85 -
21. PAYMENTS
21.1 Notwithstanding anything to the contrary in this Agreement:
(a) | any payment to be made pursuant to this Agreement by the Purchaser can also be made by the relevant Designated Purchaser, as may be agreed by the Purchaser and the Sellers, in which case the Purchaser shall procure the completion by the relevant Designated Purchaser of any such payment; |
(b) | any payment to be made pursuant to this Agreement by any of the Sellers can also be made by the relevant Designated Seller, as may be agreed by the Purchaser and the Sellers, in which case the relevant Seller shall procure the completion by the relevant Designated Seller of any such payment; |
(c) | any payment to be made pursuant to this Agreement to any of the Sellers can also be made to the relevant Designated Seller, as may be agreed by the Purchaser and the Sellers; and |
(d) | any payment to be made pursuant to this Agreement to the Purchaser can also be made to the relevant Designated Purchaser, as may be agreed by the Purchaser and the Sellers. |
21.2 The Sellers shall procure that the Purchaser does not incur, when repaying any Inter-Company Trading Amount and Inter-Company Non-Trading Receivables pursuant to clause 8, any penalty, early repayment fee or other similar exceptional payment due as a result of payment occurring on Closing rather than on such amounts normal due term.
21.3 Any payment to be made pursuant to this Agreement by the Purchaser (or any member of the Purchaser Group) shall be made to the Holcim Bank Account (or, as applicable, the bank account of the relevant Holcim Designated Seller as notified by Holcim in writing at least 3 Business Days before the date on which the relevant payment is to occur) or, if applicable, the Holcim Security Account (in respect of any payments to be made to Holcim) or the Lafarge Bank Account (or, as applicable, the bank account of the relevant Lafarge Designated Seller as notified by Lafarge in writing at least 3 Business Days before the date on which the relevant payment is to occur) or, if applicable, the Lafarge Security Account (in respect of any payments to be made to Lafarge). Each Seller agrees to pay each member of its Group that part of each payment to which it is entitled. Any payment to be made pursuant to this Agreement by a Seller shall be made to the Purchasers Bank Account (or, as applicable, the bank account of the relevant Designated Purchaser as notified by the Purchaser in writing at least 3 Business Days before the date on which the relevant payment is to occur)]. The Purchaser agrees to pay each member of the Purchaser Group that part of each payment to which it is entitled.
21.4 Payment under this Agreement shall be in immediately available funds by electronic transfer on the due date for payment. Receipt of the amount due shall be an effective discharge of the relevant payment obligation. Any payment made in satisfaction of a liability arising under a Seller Obligation or a Purchaser Obligation shall adjust the Holcim Price or the Lafarge Price (as applicable) to the extent of such payment. Any payment made in satisfaction of a liability arising under a Seller Obligation or a Purchaser Obligation shall adjust the Holcim Price of the Lafarge Price (as applicable) to the extent of such payment.
21.5 All sums payable by a member of the Purchaser Group under this Agreement (including in respect of any Purchaser Obligation) or by a Seller under this Agreement (including in respect of any Seller Obligation) shall be paid free and clear of all deductions or
- 86 -
withholdings whatsoever and, to the extent not paid on the due date for payment, shall accrue Default Interest from (but including) the due date to (but excluding) the date of actual payment.
21.6 If any deduction or withholding is required by Law from any such payment then, the Parties shall pay such additional amount as will, after such deduction or withholding has been made, leave the relevant other Parties with the full amount which would have been received by them had no such deduction or withholding been required to be made, it being provided however that no such gross-up obligation shall apply in relation to:
(a) | the Brazilian withholding tax that would have to be deducted by the Purchaser from the consideration for Brazilian shares sold by the members of the Seller Groups pursuant to this Agreement, on behalf of Taxes incumbent on any member of the Seller Group; or |
(b) | the Canadian withholding tax that would have to be deducted by the Purchaser from the consideration for Canadian shares sold by the members of the Seller Groups pursuant to this Agreement, on behalf of Taxes incumbent on any member of the Seller Group. |
21.7 For the avoidance of doubt if, notwithstanding such payment being treated by the parties as a reduction of the Price as provided in clause 11.21, any Tax Authority charges to Tax any sum paid to the Purchaser under this Agreement or under the Deed of Tax Covenant, the sum so payable shall not be increased by such amount as would ensure that, after payment of the Tax so charged, the Purchaser would receive and retain a sum equal to the amount that would otherwise be payable under this Agreement or the Deed of Tax Covenant.
21.8 The Parties shall take such reasonable steps as requested by another Party (the Requesting Party), at the cost of the Requesting Party, to minimise any deduction or withholding referenced in clause 21.6 above or Tax charged as referenced in clause 21.7 above.
21.9 Any sum payable by one party to another under or pursuant to this Agreement is exclusive of any applicable VAT. If any VAT is or becomes chargeable on any supply made by any party under or pursuant to this Agreement for which the party making the supply is required to account, the recipient of the supply shall, subject to the receipt of a valid VAT invoice, pay to the party making the supply (in addition to, and at the same time as, any other consideration for that supply) an amount equal to such VAT.
21.10 Any amount to be converted from one currency into another currency for the purposes of this Agreement shall be converted into an equivalent amount at the Conversion Rate prevailing at the Relevant Date.
22. ANNOUNCEMENTS
On the date of the execution of this Agreement and on the Closing Date, in each case at a time agreed by the Parties, the Parties shall issue the relevant Press Release. Unless agreed otherwise, no Party nor any of its Affiliates shall make any other announcement or issue any circular in connection with the Proposed Transaction, the existence or subject matter of this Agreement or any other Transaction Document unless the announcement or circular is required by Law, by any stock exchange or any regulatory or supervisory body or authority of competent jurisdiction, whether or not the requirement has the force of law. If this exception applies, the Party who is (or whose Affiliate is) making the announcement or issuing the
- 87 -
circular shall use all reasonable endeavours to consult with the other Parties in advance as to its form, content and timing.
23. CONFIDENTIALITY
23.1 For the purposes of this clause 23:
(a) | Confidential Information means: |
(i) | (in relation to the obligations of the Purchaser) any information received or held by the Purchaser (or any of its Representatives) relating to either Seller, or their Seller Groups or, prior to Closing, any of the Target Companies or the Holcim US Assets; |
(ii) | (in relation to the obligations of the Sellers) any information received or held by a Seller (or any of its Representatives) relating to the Purchaser or the Purchaser Group or, following Closing, any of its Target Companies or the Holcim US Assets; and |
(iii) | information relating to the provisions of, and negotiations leading to, this Agreement and the other Transaction Documents, |
and includes written information and information transferred or obtained orally, visually, electronically or by any other means;
(b) | Representatives means, in relation to a Party, its respective Affiliates and the directors, officers, employees, agents, advisers, accountants and consultants of that Party and/or of its respective Affiliates. |
23.2 Each of the Sellers and the Purchaser shall (and shall ensure that each of its Representatives shall) maintain Confidential Information in confidence and not disclose Confidential Information to any person except: (i) as this clause 23 permits; or (ii) as the other Parties approve in writing.
23.3 Clause 23.2 shall not prevent disclosure by a Party or its Representatives to the extent it can demonstrate that:
(a) | disclosure is required by Law or properly required by any stock exchange or any regulatory, governmental or antitrust body (including any Tax Authority) having applicable jurisdiction whether or not the requirement has the force of law (provided that the disclosing Party shall first inform the other Parties of its intention to disclose such information and take into account the reasonable comments of the other Parties); |
(b) | save in respect of Confidential Information held by the Sellers or the Seller Groups relating exclusively to the commercial strategy, pricing and performance projections (but not the accounts, historic performance, or financial impact in the context of Seller Group performance) of the Target Companies prior to Closing, disclosure is of Confidential Information which was lawfully in the possession of that Party or any of its Representatives (in either case as evidenced by written records) without any obligation of secrecy prior to its being received or held; |
(c) | disclosure is of Confidential Information which has previously become publicly available other than through that Partys fault (or that of its Representatives); |
- 88 -
(d) | disclosure is to its debt providers in connection with the Proposed Transactions and such debt providers confidentiality obligations to such Party are of a substantially similar standard to clause 23; or |
(e) | disclosure is required for the purpose of any arbitral or judicial proceedings arising out of this Agreement (or any other Transaction Document). |
23.4 Each of the Sellers and the Purchaser undertakes that it (and its Affiliates) shall only disclose Confidential Information to Representatives if it is reasonably required for purposes connected with this Agreement and the Proposed Transactions and only if the Representatives are informed of the confidential nature of the Confidential Information.
23.5 If this Agreement terminates, the Purchaser shall, as soon as reasonably practicable on request by a Seller:
(a) | return to that Seller all written documents and other materials relating to that Seller, any of its Target Companies, the Holcim US Assets or this Agreement (including any Confidential Information) which that Seller (or its Representatives) has provided to the Purchaser (or its Representatives); |
(b) | destroy all information or other documents substantially derived from such Confidential Information; and |
(c) | so far as it is practicable to do so, expunge such Confidential Information from any computer, word processor or other device, |
provided that the Purchaser shall be entitled to retain a single copy of each of the above solely for record keeping purposes which shall at all times be subject to obligations contained in this clause 23 notwithstanding the termination of this Agreement.
23.6 This clause 23 shall supersede and replace the provisions of the confidentiality agreement entered into between the Sellers and CRH, which shall no longer be of any force and effect, other than in respect of rights and obligations accruing under that confidentiality agreement prior to its termination.
24. ASSIGNMENT
24.1 Except as provided in this clause 24 or unless the Sellers and the Purchaser specifically agree in writing, no person shall, directly or indirectly, assign, transfer, charge or otherwise deal with all or any of its rights under this Agreement or under the Deed of Tax Covenant nor grant, declare, create or dispose of any right or interest in it. Any purported assignment in contravention of this clause 24 shall be void.
24.2 At any time during the No Disposal Period, the benefit of the Warranties, Indemnities and the Deed of Tax Covenant may be assigned (in whole or in part) by the Purchaser to any person, provided that:
(a) | the Purchaser shall notify such assignment to each Seller by no later than the date that is 10 Business Days before the date of such assignment; and |
(b) | the provisions of clause 11.23 shall, for the avoidance of doubt, still apply in respect of the enforcement of any Claims. |
- 89 -
24.3 If an assignment is made in accordance with this clause 24, the liabilities of the members of the Seller Group to the Purchaser Group under this Agreement shall be no greater than such liabilities would have been if the assignment had not occurred.
25. FURTHER ASSURANCES
Each of the Sellers and the Purchaser shall (at their own cost), for a period of 6 months from the Closing Date, execute (or procure the execution of) such further documents as may be required by Law or are agreed by the Parties (such agreement not to be unreasonably withheld or delayed) to be necessary to implement and give effect to this Agreement.
26. WRONG POCKETS
26.1 Capitalised terms used in this clause 26 but not defined in this Agreement shall have the meanings given to them in the Holcim IP Licence or the Lafarge IP Licence, as the case may be.
26.2 Subject to the Holcim IP Licence and the Lafarge IP Licence, if at any time until the date that is 9 months after Closing:
(a) | the Purchaser or any Target Company, or any of their respective Affiliates, holds an Excluded Asset or receives any amount in respect of that Excluded Asset, then the Purchaser shall, or the Purchaser shall procure that the relevant Target Company or Affiliate shall, as promptly as reasonably practicable, remit, or cause to be remitted, at no cost, such amount or Excluded Asset to the appropriate Seller, or its relevant Affiliate, as the case may be; |
(b) | the Purchaser or any of its Affiliates is required to make (and effectively makes) any payment in respect of an Excluded Asset, the relevant Seller shall, as promptly as reasonably practicable, remit an amount equal to the amount of such payment to the Purchaser or its relevant Affiliate, as the case may be; |
(c) | a Seller or any member of the Seller Group, holds an Included Asset or receives any amount in respect of that Included Asset, then that Seller shall, or that Seller shall procure that the relevant member of its Seller Group shall, as promptly as reasonably practicable, remit, or cause to be remitted, at no cost, such amount or Included Asset to the appropriate Target Company; or |
(d) | a Seller or any member of the Seller Group, is required to make (and effectively makes) any payment in respect of an Included Asset, the Purchaser shall, as promptly as reasonably practicable, remit an amount equal to the amount of such payment to the relevant Seller or its relevant Affiliate, as the case may be. |
27. HOLCIM SUPPLY AGREEMENTS AND OTHER HOLCIM SUPPLY ARRANGEMENTS
27.1 The Purchaser Group shall review the Holcim Supply Agreements within one (1) month of the Closing Date. To the extent that the Purchaser Group requests reasonable amendments to the Holcim Supply Agreements within one (1) month of the Closing Date, Holcim shall consider those requests in good faith, and any accepted amendments shall be incorporated into the Holcim Supply Agreements, as soon as reasonably practicable and in any event by no later than twenty (20) Business Days after such amendment to the Holcim Supply Agreements is accepted.
- 90 -
27.2 If Holcim or the Purchaser identifies, within twenty (20) Business Days after the Closing Date that either:
(a) | a member of the Holcim Group was supplying goods to a Holcim Target Company; or |
(b) | a supply arrangement from the Holcim Group existed for goods relevant to the Holcim US Assets, |
in each case, other than the type of goods that are supplied under a Holcim Supply Agreement, then if and to the extent that such arrangements were in place as at the date of the Binding Offer Letter, Holcim and the Purchaser shall, as soon as reasonably practicable, procure the entry into an agreement pursuant to which a member of the Holcim Group shall, for a period of up to [***] (or, solely in respect of supply [***] in Brazil, up to [***]) after the Closing Date, supply those goods to the applicable Holcim Target Company or to the Holcim US Assets, as applicable, on terms similar to the material terms on which those goods were supplied to that Holcim Target Company or in relation to the Holcim US Assets during the [***] prior to the date of the Binding Offer Letter, or on such other terms as may be agreed between the Purchaser and Holcim.
28. COSTS
Subject to clause 13.1 and except as otherwise provided in this Agreement (or any other Transaction Document), each of the Sellers and the Purchaser shall be responsible for its own costs, charges and other expenses (including those of its Affiliates) incurred in connection with the Proposed Transactions.
29. NOTICES
29.1 Any notice in connection with this Agreement shall be in writing in English and delivered by hand, fax, registered post or courier using an internationally recognised courier company. A notice shall be effective upon receipt and shall be deemed to have been received: (i) at the time of delivery, if delivered by hand, registered post or courier; or (ii) at the time of transmission if delivered by fax provided that in either case, where delivery occurs outside Working Hours, notice shall be deemed to have been received at the start of Working Hours on the next following Business Day.
29.2 The addresses and fax numbers of the Parties for the purpose of clause 29.1 are:
Holcim
Address: | Hagenholzstrasse 85, CH-8050 Zurich, Switzerland | |
Fax: | [***] | |
For the attention of: | [***] Group Chief Legal and Compliance Officer | |
With a copy to: |
[***] | [***] | |
Freshfields Bruckhaus Deringer LLP | Freshfields Bruckhaus Deringer LLP | |
2 rue Paul Cézanne | 2 rue Paul Cézanne | |
75008 Paris, France | 75008 Paris, France | |
Email: [***] | Email: [***] | |
Fax: [***] | Fax: [***] |
- 91 -
Lafarge | ||
Address: | 61, rue des Belles Feuilles, 75016 Paris, France | |
Fax: | [***] | |
For the attention of: | [***], Group General Counsel and Corporate | |
Secretary and [***], Group Deputy General Counsel |
With a copy to: | ||
[***] Cleary Gottlieb Steen and Hamilton LLP |
[***] Cleary Gottlieb Steen and Hamilton LLP | |
12 rue de Tilsitt | 12 rue de Tilsitt | |
75008 Paris, France | 75008 Paris, France | |
Email: [***] | Email: [***] | |
Fax: [***] | Fax: [***] |
Purchaser | ||
Address: | Belgard Castle, Belgard Road, Clondalkin, Dublin 22, | |
Ireland | ||
Fax: | [***] | |
With a copy via email to: | [***] | |
For the attention of: | [***] | |
With a copy to: |
[***] Arthur Cox |
[***] Arthur Cox | |
Earlsfort Centre | Earlsfort Centre | |
Earlsfort Terrace | Earlsfort Terrace | |
Dublin 2, Ireland | Dublin 2, Ireland | |
Email: [***] | Email: [***] | |
Fax: [***] | Fax: [***] |
CRH | ||
Address: | 42 Fitzwilliam Square, Dublin 2, Ireland | |
Fax: | [***] | |
With a copy via email to: | [***] | |
For the attention of: | [***] | |
With a copy to: |
[***] Arthur Cox |
[***] Arthur Cox | |
Earlsfort Centre | Earlsfort Centre | |
Earlsfort Terrace | Earlsfort Terrace | |
Dublin 2, Ireland | Dublin 2, Ireland | |
Email: [***] | Email: [***] | |
Fax: [***] | Fax: [***] | |
German Local Purchaser |
Address: | Theodorstraße 297, 40472 Düsseldorf, Germany |
- 92 -
Fax: | [***] | |
With a copy via email to: | [***] | |
For the attention of: | [***] |
With a copy to:
[***]
Theodorstraße 297
40472 Düsseldorf
Germany
Fax: [***]
29.3 A copy of any notice under this Agreement must be sent simultaneously by the Party giving such notice to each other Party to this Agreement. The notice shall be deemed to have been received for the purposes of clause 29.1 on the date on which the last recipient receives such notice (determined in accordance with clause 29.1).
30. CONFLICT WITH OTHER AGREEMENTS
30.1 If there is any conflict between the terms of this Agreement and any other agreement, this Agreement shall prevail (as between the Parties to this Agreement and as between any members of each Seller Group and any members of the Purchaser Group) unless: (i) such other agreement expressly states that it overrides this Agreement in the relevant respect; and (ii) the Sellers and the Purchaser are either also parties to that other agreement or otherwise expressly agree in writing that such other agreement shall override this Agreement in that respect.
30.2 Without prejudice to clause 30.1, the Purchaser undertakes that no claim shall be made by any member of the Purchaser Group under any of the Local Agreements.
31. WHOLE AGREEMENT
31.1 This Agreement and the other Transaction Documents together set out the whole agreement between the Parties in respect of the Proposed Transactions and supersede and extinguish any prior agreement, understandings, undertakings, arrangements, representations and warranties (whether oral or written) relating to the Proposed Transactions. It is agreed that:
(a) | no Party in entering into this Agreement or the other Transaction Documents relies on or shall have any remedy in respect of, any prior drafts or prior agreements, understandings, undertakings, arrangements, representations and warranties (of any nature whatsoever, of any person whether party to this Agreement or not and whether written or oral) in relation to the Proposed Transactions; |
(b) | no Party (or any of its Connected Persons) shall have any claim or remedy in respect of any statement, representation, warranty or undertaking made by or on behalf of any other Party (or any of its Connected Persons) in relation to the Proposed Transactions which is not expressly set out in this Agreement or any other Transaction Document and no Party (or any of its Connected Persons) shall have any claim or remedy in respect of innocent or negligent misrepresentation or negligent misstatement based on any statement in this Agreement; |
- 93 -
(c) | any terms or conditions implied by Law in any jurisdiction in relation to the Proposed Transactions are excluded to the fullest extent permitted by Law or, if incapable of exclusion, any right, or remedies in relation to them are irrevocably waived; |
(d) | the only right or remedy of a Party in relation to any provision of this Agreement or any other Transaction Document and any of the transactions contemplated herein or therein shall be for breach of this Agreement or the relevant Transaction Document; and |
(e) | except for any liability in respect of a breach of this Agreement or any other Transaction Document, no Party (or any of its Connected Persons) shall owe any duty of care or have any liability in tort or otherwise to any other Party (or its respective Connected Persons) in relation to the Proposed Transactions, |
provided that this clause shall not exclude any liability for (or remedy in respect of) fraudulent misrepresentation or wilful misconduct.
31.2 Each Party agrees to the terms of this clause 31 on its own behalf and on behalf of each of its Connected Persons.
No Other Representation or Warranty
31.3 Except for the Warranties, neither Seller nor any member of a Seller Group or any of the Target Companies makes any express or implied representation or warranty to the Purchaser or any member of the Purchaser Group. The Purchaser acknowledges and agrees that, except as provided under the Warranties, no other statement, promise or forecast made by or on behalf of a Seller or any member of a Seller Group or the Target Companies may form the basis of any claim by the Purchaser or any other member of the Purchaser Group under or in connection with this Agreement or any Transaction Document. In particular, neither Seller nor any member of a Seller Group or any of the Target Companies makes any representation or warranty as to the accuracy of any forecasts, estimates, projections, statements of intent or opinion provided to the Purchaser or any of its Connected Persons on or before the date of the Binding Offer Letter (including any documents in the Data Room). Nothing in this clause shall exclude any liability for (or remedy in respect of) any fraudulent misrepresentation or wilful misconduct by the Sellers or any members of the Sellers Groups.
No Recourse against Directors
31.4 Except in the case of fraud or wilful misconduct, the Purchaser shall not, and shall cause its Connected Persons not to, make any claim against any former or current manager, officer, director or employee of the Target Companies (including those resigning on the Closing Date) with respect to any decisions adopted by any of the Target Companies prior to the Closing Date or otherwise seek the liability of any such person in connection with their having held such position.
32. WAIVERS, RIGHTS AND REMEDIES
32.1 Except as expressly provided in this Agreement, no failure or delay by any Party in exercising any right or remedy relating to this Agreement or any of the Transaction Documents shall affect or operate as a waiver or variation of that right or remedy or preclude its exercise at any subsequent time. No single or partial exercise of any such right or remedy shall preclude any further exercise of it or the exercise of any other remedy.
- 94 -
32.2 The Parties acknowledge to other that each of them may be irreparably harmed by any breach by it or any of its Designated Sellers and/or Designated Purchasers (as applicable) of this Agreement, and that damages alone may not necessarily be an adequate remedy. The Parties acknowledge to each other that, without affecting any other rights or remedies, if a breach of this Agreement by it or any of its Designated Sellers and/or Designated Purchasers (as applicable) occurs or is threatened, the remedies of injunction, specific performance and other equitable relief, or any combination of these remedies, shall be available and no proof of special damages will be necessary to enforce this Agreement and, if any of such remedies is sought in relation to any threatened or actual breach of the terms of this Agreement, the Parties hereby irrevocably waive any rights they may have to oppose that remedy on the grounds that damages would be an adequate alternative.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts, and by each Party on separate counterparts. Each counterpart is an original, but all counterparts shall together constitute one and the same instrument. Delivery of a counterpart of this Agreement by e-mail attachment or telecopy shall be an effective mode of delivery.
34. VARIATIONS
No amendment of this Agreement (or of any other Transaction Document) shall be valid unless it is in writing and duly executed by or on behalf of each of the Parties.
Notwithstanding anything contrary in this Agreement, no material amendment to this Agreement relating to the FTC Assets shall be valid unless appropriate consents from the US Federal Trade Commission have been obtained.
35. INVALIDITY
Each of the provisions of this Agreement and the other Transaction Documents is severable. If any such provision is held to be or becomes invalid or unenforceable in any respect under the Law of any jurisdiction, it shall have no effect in that respect and the Parties shall use all reasonable endeavours to replace it in that respect with a valid and enforceable substitute provision the effect of which is as close to its intended effect as possible.
36. NO THIRD PARTY ENFORCEMENT RIGHTS
No person other than each Seller and the Purchaser shall have any right to enforce any provision of this Agreement under any Law of any jurisdiction, whether under any statutory provision or otherwise.
37. NO PARTNERSHIP
This Agreement shall not operate as to create a partnership or joint venture of any kind between the Parties or constitute any Party as the agent to another Party.
38. GOVERNING LAW AND ARBITRATION
38.1 This Agreement and any non-contractual obligations arising out of or in connection with this Agreement shall be governed by, and interpreted in accordance with, English law.
- 95 -
38.2 Any dispute arising in connection with this Agreement shall be submitted exclusively to a three-arbitrator arbitration administered in accordance with the Arbitration Rules of the International Chamber of Commerce. The seat of the arbitration shall be Amsterdam, the Netherlands and the proceedings shall be conducted in the English language.
38.3 The arbitral tribunal shall have the power to order the consolidation of any arbitration proceedings (prior to the commencement of the oral phase in the first filed of such proceedings) commenced under this Agreement or under any of the Transaction Documents in respect of disputes, controversies or claims which raise similar issues of law or fact having regard to good, swift and efficient administration of justice as determined by the arbitral tribunal. Until the arbitral tribunal has been constituted, the Purchaser and/or the Sellers may be joined as an additional party to an arbitration under this Agreement or under any of the Transaction Documents.
- 96 -
On behalf of HOLCIM LTD | ||
[***] | ||
By: [***] | ||
Head Corp. Finance & Treasury and M&A |
On behalf of HOLCIM LTD | ||
[***] | ||
By: | [***] | |
Attorney-in-fact |
[Signature page to the amended and restated agreement for the sale and purchase agreement of the
Project Cities Shares and Holcim US Assets]
On behalf of LAFARGE S.A. | ||
[***] | ||
By [***] | ||
Group General Counsel | ||
& Corporate Secretary |
[Signature page to the amended and restated agreement for the sale and purchase agreement of the
Project Cities Shares and Holcim US Assets]
On behalf of CRH PLC | ||
[***] | ||
By: | [***] | |
[***] |
[Signature page to the amended and restated agreement for the sale and purchase agreement of the
Project Cities Shares and Holcim US Assets]
On behalf of CRH INTERNATIONAL | ||
[***] | ||
By: | [***] | |
[***] |
[Signature page to the amended and restated agreement for the sale and purchase agreement of the
Project Cities Shares and Holcim US Assets]
On behalf of CRH FÜNFTE VERMÖGENSVERWALTUNGS GMBH | ||
[***] | ||
By: [***] | ||
[***] |
[Signature page to the amended and restated agreement for the sale and purchase agreement of the
Project Cities Shares and Holcim US Assets]
Exhibit 7
RATIO OF EARNINGS TO FIXED CHARGES
CRH GAAP | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||||
IFRS | IFRS | IFRS | IFRS | IFRS | ||||||||||||||||||
Earnings: |
||||||||||||||||||||||
Pre-tax income pre-Minority Interests |
eurom | 1,033 | 761 | (215 | ) | 646 | 698 | |||||||||||||||
Add back Share of JV Interest |
eurom | 0 | 0 | 0 | 0 | 6 | ||||||||||||||||
Deduct Share of Equity Investee PBIT - JVs |
eurom | 0 | 0 | 0 | 0 | (60 | ) | |||||||||||||||
Deduct Share of Equity Investee PAT - Associates |
eurom | (44 | ) | (55 | ) | 44 | 84 | (42 | ) | |||||||||||||
Deduct Share of Equity Investee Loss on Asset Sale |
eurom | 0 | 0 | 0 | 0 | (2 | ) | |||||||||||||||
Add back Fixed Charges |
eurom | 541 | 475 | 480 | 471 | 464 | ||||||||||||||||
Distributed Income of Equity Investees |
eurom | 53 | 30 | 33 | 35 | 53 | ||||||||||||||||
Deduct Interest Capitalised |
eurom | 0 | 0 | 0 | 0 | (8 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
eurom | 1,583 | 1,211 | 342 | 1,236 | 1,109 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Fixed charges: |
||||||||||||||||||||||
Interest expensed |
eurom | 334 | 308 | 323 | 327 | 328 | ||||||||||||||||
Interest capitalised |
eurom | 0 | 0 | 0 | 0 | 8 | ||||||||||||||||
Estimated Interest element rental expense |
eurom | 207 | 167 | 157 | 144 | 128 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
eurom | 541 | 475 | 480 | 471 | 464 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ratio of earnings to fixed charges |
CRH GAAP | 2.9 | 2.6 | 0.7 | 2.6 | 2.4 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Exhibit 4.2
EXECUTION VERSION
THE USE OF THE FOLLOWING NOTATION IN THIS EXHIBIT INDICATES THAT THE CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION: [***]
Date: 3 August 2015
LAFARGE HOLDINGS (PHILIPPINES), INC.
CALUMBOYAN HOLDINGS, INC.
ROUND ROYAL, INC.
SOUTHWESTERN CEMENT VENTURES, INC.
CRH INTERNATIONAL
and
CRH PLC
AMENDED AND RESTATED
PUT AND CALL OPTIONS AGREEMENT
PROJECT CITIES SHARES
(PHILIPPINES)
EXECUTION VERSION
CONTENTS
Clause | Page | |||||
1. |
DEFINITIONS AND INTERPRETATION | 2 | ||||
2. |
PUT OPTION AND CALL OPTION OVER THE SUBJECT SHARES | 20 | ||||
3. |
PRICE | 21 | ||||
4. |
PRICE ADJUSTMENT | 22 | ||||
5. |
CONDITIONS PRECEDENTS | 26 | ||||
6. |
PRE-CLOSING UNDERTAKINGS | 32 | ||||
7. |
CLOSING | 36 | ||||
8. |
INTER-COMPANY TRADING AMOUNTS AND INTER COMPANY NON-TRADING | |||||
AMOUNTS | 38 | |||||
9. |
SELLERS WARRANTIES | 40 | ||||
10. |
LIMITATIONS ON LIABILITY | 45 | ||||
11. |
SELLER INDEMNITY | 56 | ||||
12. |
PURCHASER WARRANTIES | 57 | ||||
13. |
TRANSFER TAXES | 59 | ||||
14. |
INSURANCE | 59 | ||||
15. |
CHANGES OF NAME | 60 | ||||
16. |
INFORMATION, RECORDS AND ASSISTANCE POST-CLOSING | 61 | ||||
17. |
POST-CLOSING COVENANTS | 61 | ||||
18. |
NO RIGHTS OF RESCISSION OR TERMINATION | 63 | ||||
19. |
PAYMENTS | 64 | ||||
20. |
ANNOUNCEMENTS | 65 | ||||
21. |
CONFIDENTIALITY | 65 | ||||
22. |
ASSIGNMENT | 67 | ||||
23. |
FURTHER ASSURANCES | 67 | ||||
24. |
WRONG POCKETS | 67 | ||||
25. |
SUPPLY AGREEMENTS | 68 | ||||
26. |
COSTS | 68 | ||||
27. |
NOTICES | 68 | ||||
28. |
CONFLICT WITH OTHER AGREEMENTS | 70 | ||||
29. |
WHOLE AGREEMENT | 70 | ||||
30. |
WAIVERS, RIGHTS AND REMEDIES | 71 | ||||
31. |
COUNTERPARTS | 72 | ||||
32. |
VARIATIONS | 72 | ||||
33. |
INVALIDITY | 72 | ||||
34. |
NO THIRD PARTY ENFORCEMENT RIGHTS | 72 | ||||
35. |
NO PARTNERSHIP | 72 | ||||
36. |
GOVERNING LAW AND ARBITRATION | 72 | ||||
(The following schedules to the agreement have been omitted in reliance upon Rule 601(b)(2) of Regulation S-K. The Registrant hereby undertakes to furnish such schedules to the Commission supplementally upon request.) | ||||||
SCHEDULE 1 |
74 | |||||
SCHEDULE 2 CARVE-OUTS |
83 | |||||
SCHEDULE 3 STAR TERMINAL |
84 | |||||
SCHEDULE 4 PINAGTULAYAN PROPERTY |
85 |
SCHEDULE |
5 ADD-ONS | 86 | ||||
SCHEDULE |
6 ACCOUNTING PRINCIPLES | 88 | ||||
SCHEDULE |
7 SAMPLE CALCULATIONS OF ACCOUNTING ITEMS | 90 | ||||
SCHEDULE |
8 ADHESION LETTER FROM THE LOCAL PURCHASER(S) | 94 | ||||
SCHEDULE |
9 PRICE ALLOCATION | 96 | ||||
SCHEDULE |
10 MATERIAL CONTRACTS | 97 | ||||
SCHEDULE |
11 IRREVOCABLE PROXY | 104 | ||||
SCHEDULE |
12 | 106 |
PUT AND CALL OPTIONS AGREEMENT
dated 3 August 2015
BETWEEN:
LAFARGE HOLDINGS (PHILIPPINES), INC. of Net Lima, Unit 10-A, The Metropolis, 5th Avenue Corner 26th Street, E-Square Crescent Park West, Bonifacio Global City, Taguig City, Philippines (LHPI);
CALUMBOYAN HOLDINGS, INC. of 14th Floor Net Cube Center, 3rd Avenue Corner 30th Street, E-Square Crescent Park West, Bonifacio Global City, Taguig City, Philippines (CHI);
ROUND ROYAL, INC. of 10th Floor, Pacific Star Building, Sen. Gil J. Puyat Avenue Corner Makati Avenue, Makati City, Philippines (RRI);
SOUTHWESTERN CEMENT VENTURES, INC. of 10th Floor, Pacific Star Building, Sen. Gil J. Puyat Avenue Corner Makati Avenue, Makati City, Philippines (SWCVI);
CRH INTERNATIONAL of Belgard Castle, Clondalkin, Co. Dublin, Ireland (the Foreign Purchaser); and
CRH PLC, of 42 Fitzwilliam Square, Dublin 2, Ireland (CRH).
(LHPI, CHI, RRI and SWCVI are individually referred to herein as a Seller and collectively, as the Sellers. The Foreign Purchaser and the Local Purchaser (as defined hereinafter) are individually referred to herein as a Purchaser and collectively, as the Purchasers. The Sellers, Foreign Purchaser, Local Purchaser, and CRH are, subject to clause 1.7, also individually referred to herein as a Party and, collectively, as the Parties.)
WHEREAS:
(A) The Target Companies are corporations duly organized and existing under and by virtue of the laws of the Philippines. Lafarge Republic, Inc. (LRI) is a publicly listed corporation with the Philippine Stock Exchange (PSE);
(B) At the date hereof, LHPI owns 2,269,703,951 shares in LRI, CHI owns 951,207,837 shares in LRI, RRI owns 390,463,203 shares in LRI and SWCVI owns 1,563,345,571 shares in LRI as shown in Part B of Schedule 1. On the Closing Date, LHPI shall own 2,269,703,954 shares in LRI, CHI shall own 951,207,839 shares in LRI, RRI shall own 390,463,203 shares in LRI and SWCVI shall own 1,563,345,572 shares in LRI (together, the LRI Subject Shares) representing, respectively, 38.97%, 16.33%, 6.70% and 26.84% of the share capital of LRI, as shown in Part A of Schedule 1;
(C) At the date hereof, LHPI owns 43,997 shares in LCSPI and CHI owns 32,997 shares in LCSPI as shown in Part B of Schedule 1. On the Closing Date, LHPI shall own 44,000 shares in LCSPI and CHI shall own 33,000 shares in LCSPI (together, the LCSPI Subject Shares) representing respectively 40% and 30% of the share capital of LCSPI as shown on Part A of Schedule 1;
(D) At the date hereof, CHI owns 26,039,995 shares in LCLC as shown in Part B of Schedule 1. On the Closing Date, CHI shall own 26,040,000 shares in LCLC (the LCLC Subject Shares) representing the entirety of the share capital of LCLC as shown in Part A of Schedule 1;
(E) On 31 January 2015, Holcim, Lafarge, the Foreign Purchaser and CRH entered into an agreement (the Global SPA) pursuant to which Holcim and Lafarge have agreed to sell, and the Foreign Purchaser has agreed to purchase, certain assets and/or businesses of Holcim or Lafarge and/or their respective Affiliates in Brazil, Canada, France (including La Réunion), Germany, Hungary, Romania, Serbia, Slovakia and the United Kingdom;
(F) This Agreement amends and restates the put and call options agreement entered into between the Parties on 31 January 2015.
IT IS AGREED:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this Agreement, the following words and expressions shall have the following meanings:
Accounting Principles has the meaning given in clause 4.4;
Add-ons means the sale, contribution and/or transfer by any means to LRI of the Add-on Assets;
Add-on Assets means the assets listed in Schedule 5 Part A;
Add-on Transferred Employees means the employees to be transferred from LRAI to LRI in connection with the Add-ons as listed in Schedule 5 Part B;
Additional Consideration has the meaning given in clause 17.10;
Adhesion Date means the date of the Adhesion Letter executed by the Local Purchaser;
Adhesion Letter means the adhesion letter in the form set out in Schedule 8;
Affiliate means:
(a) | in relation to any person, any other person that directly or indirectly Controls, or is under common Control with, or is Controlled by such person, it being specified that when used in relation to a fund, portfolio companies held or managed by or on behalf of such fund shall not be deemed to be an Affiliate; and |
(b) | for the avoidance of doubt and in addition to the above, (i) in relation to CHI and until Closing, LCLC, and (ii) in relation to LHPI and until Closing, LRI and LCSPI; |
Agreed Form means, in relation to a document, the form of that document as initialled, or otherwise identified in a manner agreed by the Parties, on 31 January 2015 for the purpose of identification by or on behalf of the Sellers and the relevant Purchaser(s) (in each case with such amendments as are expressly permitted by this Agreement or otherwise as may be agreed in writing by the Sellers and the Purchasers);
- 2 -
Alsons Cement Corporation means the corporation formerly known as Alsons Cement Corporation, but which has been renamed Holcim Philippines Manufacturing Corporation;
Ancillary Agreements means the Deed of Tax Covenant and the Supply Agreements;
Anti-Bribery Law means (i) the UK Bribery Act 2010, (ii) the US Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations issued thereunder, and (iii) any other applicable Law that relates to bribery or corruption, in each case as amended or replaced from time to time;
Benefit Plan means each employee pension benefit plan and each long term employee benefit plan (including Jubilee plans, early retirement plans, retirement indemnity plans and deferred compensation plans) currently maintained or contributed to, or required to be maintained or contributed to, by any Group Company for the benefit of any present or former officers or employees of any Group Company;
Business Day means:
(a) | for all purposes other than the date of Closing, a day other than a Saturday or Sunday or public holiday in England or in the Philippines on which banks are open in London, Makati City, Taguig City and Pasig City for general commercial business; and |
(b) | for purposes of the date of Closing, a day other than a Saturday or Sunday or public holiday in any jurisdiction in which the Sellers and the Purchasers and a Group Company is incorporated on which banks are open in each such jurisdiction for general commercial business; |
Carve-outs means the sale, contribution and/or transfer by any means to HPI or HMDC or one or several of their Affiliates of those assets listed in Schedule 2 and the Carve-outs Transferred Employees;
Carve-out Transferred Employees means those employees who are employed by LRI and LCSPI but whose professional time is dedicated in all material respects to the Carve-out assets listed in Schedule 2 Part A as at 31 January 2015 or as otherwise enumerated by the Sellers in Schedule 2 Part B;
Cash means, as at the Closing Date, the aggregate of the cash and cash equivalents and short term financial assets items as defined for purposes of the preparation of the Transaction Perimeter Financial Information, including, for the avoidance of doubt, Inter-Company Non-Trading Receivables of the relevant Group Companies on a combined basis consistent with the Transaction Perimeter Financial Information, a sample calculation of which is set out in Schedule 7;
CHI Disposal Proceeds means the consideration receivable by the Divestiture Third Party Bank on behalf of CHI for any divestment of its Target Company pursuant to a Divestiture Third Party Bank Mandate, after deducting any reasonable expenses which are incurred by the Divestiture Third Party Bank or any of the Target Companies in which it owns an interest;
Claim means any claim under or for breach of this Agreement (including any claim under clause 14) or the Deed of Tax Covenant;
Claimant Party has the meaning given in clause 10.23(b);
- 3 -
Clearance Date means the date on which the last of the Clearances occurs;
Clearances means any consents, approvals or actions of any Governmental Entity required to consummate the Proposed Transactions;
Closing means completion of the sale and purchase of the Subject Shares in accordance with the provisions of this Agreement;
Closing Date has the meaning given in clause 7.1;
Closing Deliverables means any of the items to be delivered at Closing as set out in Part D of Schedule 1;
Closing Process means the process set out in Part E of Schedule 1;
Closing Statement has the meaning given in clause 4.6;
Closing Statement Notice has the meaning given in clause 4.8;
Conditions means the conditions to Closing set out in clause 5.1, and Condition means any of them;
Confidential Information has the meaning given in clause 21.1;
Connected Persons means (in relation to a Party) the officers, employees, agents and advisers of that Party or any of its Affiliates including, on the part of the Purchasers after the Closing Date, the Group Companies;
Contamination means (i) the presence of Hazardous Substances in the soil or groundwater at or under any Real Estate at or prior to the Closing Date and (ii) the presence of Hazardous Substances prior to, at or after Completion to the extent resulting from migration through soil or groundwater of Hazardous Substances identified in (i) above from any Real Estate;
Contamination Losses means any Losses relating to Contamination;
Contamination Proceeding means the receipt after the Closing Date by any relevant Group Company of a formal written notice from any Environmental Authority or a formal written notice from any other person (except any member of a Purchaser Group, any Relevant Person and/or any person associated or affiliated with any member of a Purchaser Group) of the commencement of or an intention to commence, civil, regulatory or criminal proceedings in respect of Contamination;
Control, including with its correlative meanings, Controlled by and under common Control with, means, when used in respect of a person, the power and authority to manage such person, whether directly or indirectly, through the holding of equity interests, through a contract or otherwise; it being specified that when used in respect of a fund, Control, including with its correlative meanings, Controlled by and under common Control with, means the power to advise or manage such fund;
Conversion Rate means the close spot mid-trade composite (London) rate for a transaction between the two currencies in question as quoted on Bloomberg at 11:00 am GMT on the date immediately preceding the Relevant Date or, if no such rate is quoted on that date, on the preceding date on which such rates are quoted;
- 4 -
Current Assets means, as at the Closing Date for each relevant Group Company, the aggregate of the items entitled accounts receivables, inventories and prepaid expenses and other current assets as defined for purposes of the preparation of the Transaction Perimeter Financial Information and calculated in accordance with the same principles, provided that, for the avoidance of doubt Cash is not included in Current Assets, a sample calculation of which is set out in Schedule 7;
Current Liabilities means, as at the Closing Date for each relevant Group Company, the aggregate of the items entitled trade account payables, current income tax liabilities and other current liabilities as defined for purposes of the preparation of the Transaction Perimeter Financial Information and calculated in accordance with the same principles, provided that, for the avoidance of doubt, Debts are not included in Current Liabilities, a sample calculation of which is set out in Schedule 7;
Data Room means the data room comprising (a) the documents and information made available to the Foreign Purchaser (i) from 12 November 2014 until 27 January 2015 (the Initial Disclosure) (ii) from 27 January until 31 January 2015 (the Additional Disclosure), and (iii) from 26 June 2015 until 26 July 2015 (the LII/LMI Disclosure); (b) the questions submitted by the Foreign Purchaser and its advisers via that data room and responses to those questions provided on behalf of the Sellers and their advisers (the Initial Q&A) as supplemented, with respect to LII and LMI (the LII/LMI Q&A):
(a) | which has been copied, with respect to the Initial Disclosure, onto three (3) exact copies in the form of three (3) identical hard drives (and/or CD-ROMs) produced by Intralinks, of which: |
(i) | one copy will be retained by LHPI, on behalf of the Sellers; and |
(ii) | two copies will be delivered jointly by the Parties to an escrow agent pursuant to an escrow agreement, in Agreed Form, |
it being confirmed that promptly after 31 January 2015, Intralinks issued a certificate relating to the preparation and contents of the Data Room relating to the Initial Disclosure;
(b) | which has been copied, with respect to the Q&A, onto three (3) exact copies in the form of three (3) identical hard drives (and/or CD-ROMs) produced by Intralinks, of which: |
(i) | one copy will be retained by LHPI, on behalf of the Sellers; and |
(ii) | two copies will be delivered jointly by the Parties to an escrow agent pursuant to an escrow agreement, in Agreed Form, |
it being confirmed that promptly after 31 January 2015, Intralinks issued a certificate relating to the preparation and contents of the Data Room relating to the Q&A;
(c) | which has been copied, with respect to the Additional Disclosure, onto three (3) exact copies in the form of three (3) identical hard drives (and/or CD-ROMs) produced by Intralinks, of which; |
(i) | one copy will be retained by LHPI, on behalf of the Sellers; and |
- 5 -
(ii) | two copies will be delivered jointly by the Parties to an escrow agent pursuant to an escrow agreement, in Agreed Form, |
it being confirmed that promptly after 31 January 2015, Intralinks issued a certificate relating to the preparation and contents of the Data Room relating to the Additional Disclosure;
(d) | which is in the process of being copied, with respect to the LII/LMI Disclosure, onto three (3) exact copies in the form of three (3) identical hard drives (and/or CD-ROMs) produced by Intralinks, of which; |
(i) | one copy will be retained by LHPI, on behalf of the Sellers; and |
(ii) | two copies will be delivered jointly by the Parties to an escrow agent pursuant to an escrow agreement, in Agreed Form, |
it being specified that as soon as practicable after the date of this Agreement, Intralinks shall issue a certificate relating to the preparation and contents of the Data Room relating to the LII/LMI Disclosure;
(e) | which is in the process of being copied, with respect to the LII/LMI Q&A, onto three (3) exact copies in the form of three (3) identical hard drives (and/or CD-ROMs) produced by Intralinks, of which; |
(i) | one copy will be retained by LHPI, on behalf of the Sellers; and |
(ii) | two copies will be delivered jointly by the Parties to an escrow agent pursuant to an escrow agreement, in Agreed Form, |
it being specified that as soon as practicable after the date of this Agreement, Intralinks shall issue a certificate relating to the preparation and contents of the Data Room relating to the LII/LMI Q&A;
Debt means, as at the Closing Date, the aggregate of the long term financial liabilities and the current financial liabilities items as defined for purposes of the preparation of the Transaction Perimeter Financial Information, including, for the avoidance of doubt, Inter-Company Non-Trading Payables of the relevant Group Companies on a combined basis consistent with the Transaction Perimeter Financial Information, a sample calculation of which is set out in Schedule 7;
Deed of Tax Covenant means the Deed of Tax Covenant in the Agreed Form to be entered into on the Closing Date among the Sellers and the Purchasers;
Default Interest means interest at [***];
Defendant Party has the meaning given in clause 10.23(b);
Designated Purchasers means any bodies corporate that are 100% jointly owned directly or indirectly by CRH and the Local Purchaser that have been established as a Designated Purchaser of any Subject Shares pursuant to clause 7.2, and Designated Purchaser means any one of them;
- 6 -
Designated Purchaser (Foreign) means a Designated Purchaser the majority of the shares of which are held, directly or indirectly, by CRH;
Designated Purchaser (Local) means a Designated Purchaser the majority of the shares of which are held, directly or indirectly, by the Local Purchaser;
Disposal means any sale by the Divestiture Third Party Bank of the Group Companies in accordance with clause 5.21;
Disposal Proceeds means the consideration receivable by the Divestiture Third Party Bank on behalf of the Sellers for any divestment of a Group Company pursuant to the Divestiture Third Party Bank Mandate, after deducting any reasonable expenses which are incurred by the Divestiture Third Party Bank or any of the Group Companies with respect to that Disposal;
Divestiture Third Party Bank means one or several financial institutions of international standing carrying on some or all of its or their respective activities in the Philippines, and appointed by the Sellers and who has/have received from the Sellers the exclusive Divestiture Third Party Bank Mandate(s);
Divestiture Third Party Bank Mandate(s) has the meaning given in clause 5.21(c);
Divestiture Third Party Bank Trigger has the meaning given in clause 5.20;
Encumbrance means any interest or equity of any person (including any right to acquire, option or right of pre-emption or conversion) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention, easement, covenant, or any other security agreement or arrangement, or any agreement to create any of the above, in each case excluding any licence of Intellectual Property Rights;
Environment means all or any of the following media, namely air (including the air within buildings or other natural or man-made structures above or below ground), water, land and soil;
Environmental Authority means any Governmental Entity with enforcement powers to require Remedial Action;
Environmental Claim means any Environmental Warranty Claim;
Environmental Consents means any material permit, licence, authorisation, approval or consent required under Environmental Laws for the carrying on of the business of the relevant Group Companies at Closing;
Environmental Laws means all Laws to the extent they relate to Environmental Matters;
Environmental Losses means any Losses relating to Contamination or other Environmental Matters;
Environmental Matters means all matters relating to the pollution or protection of the Environment;
Environmental Proceeding means the receipt after the Closing Date by any Group Company of a formal written notice from any Environmental Authority or a formal written notice from any other person (except any member of the Purchaser Groups, any Relevant Person and/or any person associated or affiliated with any member of the Purchaser Groups) of the
- 7 -
commencement of or an intention to commence, civil, regulatory or criminal proceedings in respect of Environmental Matters;
Environmental Warranty Claim means any Claim under or for breach of the Warranties set out in clause 9.25;
Estimated Cash means LHPIs (acting on behalf of the Sellers) estimate of what the Cash (including the Estimated Inter-Company Non-Trading Receivables) attributable to the relevant Sellers Group Companies will be as at the Closing Date;
Estimated Debt means LHPIs (acting on behalf of the Sellers) estimate of what the Debt (including the Estimated Inter-Company Non-Trading Payables) attributable to the relevant Sellers Group Companies will be as at the Closing Date;
Estimated Inter-Company Non-Trading Payables means LHPIs (acting on behalf of the Sellers) estimate of what the Inter-Company Non-Trading Payables attributable to the relevant Sellers Group Companies will be as at the Closing Date;
Estimated Inter-Company Non-Trading Receivables means LHPIs (acting on behalf of the Sellers) estimate of what the Inter-Company Non-Trading Receivables attributable to the relevant Sellers Group Companies will be as at the Closing Date;
Estimated Price has the meaning given in clause 4.1;
Estimated Working Capital means LHPIs (acting on behalf of the Sellers) estimate of what the Working Capital attributable to the relevant Sellers Group Companies will be as at the Closing Date;
Estimated Working Capital Adjustment means, in respect only of the Group Companies of the relevant Seller, that Sellers estimate of Working Capital Adjustment;
EURIBOR means the Euro interbank offered rate per annum for deposits in EUR for a period of three months which is quoted on Bloomberg at 11.00 a.m. GMT on the Relevant Date;
Excluded Assets means:
(a) | an asset which, at or before Closing, constituted part of or was used principally or wholly in respect of the business of a Seller or its Affiliates (for the avoidance of doubt, excluding the business of any Group Company); |
(b) | all Intellectual Property Rights licensed by Lafarge to a Group Company immediately prior to Closing pursuant to the Lafarge Licenses and Services Agreements; and |
(c) | all Intellectual Property Rights other than those Intellectual Property Rights comprised in the Included Assets; |
Exercise Date means the date on which the Put Option or the Call Option is exercised in accordance with this Agreement;
Fairly Disclosed means, in respect of any fact, matter or circumstance, fairly disclosed in a manner such that a prudent buyer would be reasonably likely to identify the nature and extent of the matter disclosed taking into consideration the fact that:
- 8 -
(a) | the Foreign Purchaser undertakes the same business as, and is a competitor of, the Group Companies; and |
(b) | the documents contained in the Data Room were accessible continuously for inspection by the Foreign Purchaser (acting on behalf of the Purchasers) and its advisors: |
(i) | between 12 November 2014 and 27 January 2015 with respect to the Initial Disclosure (as defined in the definition of Data Room); |
(ii) | between 27 January 2015 and 31 January 2015 with respect to the Additional Disclosure (as defined in the definition of Data Room); and |
(iii) | between 26 June 2015 and 26 July 2015 with respect to the LLI/LMI Disclosure as defined in the definition of Data Room, |
Financial Information Date means 30 September 2014;
Firm has the meaning given in clause 4.11;
Foreign Purchaser Financing Agreement means the term facilities agreement dated on or about 31 January 2015 between CRH Finance Limited and CRH Belgard Limited as Original Borrowers, CRH plc as Guarantor, CRH Finance Limited as CRH Agent, Bank of America Merrill Lynch International Limited, J.P. Morgan Limited and UBS Limited as the Arrangers, Bank of America Merrill Lynch International Limited as Agent and Bank of America, N.A., JPMorgan Chase Bank, N.A., London Branch and UBS AG, London Branch as Original Lenders;
General Items has the meaning given in clause 10.7;
Global SPA has the meaning set forth in paragraph E of the Preamble;
Governmental Entity means any supra-national, national, state, municipal or local government (including any subdivision, court, tribunal, administrative agency or commission or other authority thereof) or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority, including the European Union;
Group Companies means collectively, (i) LRI (ii) the Subsidiary Companies, (iii) LCLC, and (iv) LCSPI and Group Company means any of them;
Hazardous Substances means any substance or material (whether liquid, solid or gas) which in the particular circumstances in which it is present is an actual or likely cause of significant harm or damage to or adverse interference with the Environment;
Holcim means Holcim Ltd.;
HMDC means Holcim Mining and Development Corporation;
HPI means Holcim Philippines, Inc.;
IFRS means the International Financial Reporting Standards;
- 9 -
Implementing Agreements means the deeds of assignment to be entered into on Closing by the Designated Purchasers in respect of the Subject Shares as specified in paragraphs 1.c., 2.c. and 3.c. of Part D of Schedule 1;
Included Assets means the unregistered Intellectual Property Rights (other than copyright in software) used exclusively by a Group Company in the 12 months prior to Closing;
Indemnity Reference Date means 30 January 2001, the date of the deed of absolute sale in which LRI acquired the [***] Shares from [***];
Insolvency Proceedings means proceedings under any applicable insolvency, reorganisation or similar Laws in any jurisdiction;
Intellectual Property Rights means patents (including supplementary protection certificates), trademarks, service marks, registered designs, utility models, design rights, topography rights, copyrights (including copyright in computer programs), database rights, rights in inventions, rights in know-how, business or trade names, get-up, domain names, and all other intellectual property and neighbouring rights and rights of a similar or corresponding character (including all associated goodwill), enforceable anywhere in the world (whether or not the same are registered or capable of registration) and all applications for, or for the protection of, any of the foregoing;
Inter-Company Non-Trading Amounts means any Inter-Company Non-Trading Payables and any Inter-Company Non-Trading Receivables;
Inter-Company Non-Trading Payables means, as at the Closing Date and in relation to each Group Company, all current and non-current financing payables and loans due by it to any member of its Seller Group as disclosed in the Transaction Perimeter Financial Information as part of the line items Long-term financial liabilities and/or current financial liabilities;
Inter-Company Non-Trading Receivables means, as at the Closing Date and in relation to each Group Company, any short and long term financial assets and receivables due to it by any member of its Seller Group as disclosed in the Transaction Perimeter Financial Information;
Inter-Company Trading Amounts means all amounts owed, outstanding or accrued in the ordinary course of trading, including any VAT arising on such amounts, as between any Group Company and any member of its Seller Group as at Closing in respect of inter-company trading activities and the provision of services, facilities and benefits between them; for the avoidance of doubt, Inter-Company Trading Amounts:
(a) | includes, where applicable, amounts owed in respect of salaries or other employee benefits (including payroll taxes thereon but excluding any bonuses and related taxes), insurance (including health and motor insurance), pension and retirement benefit payments, management training or management services (pursuant to the Lafarge Licenses and Services Agreements or otherwise) provided between them up to Closing, and any other inter-company payables and receivables that are not Inter-Company Non-Trading Amounts; but |
(b) | excludes amounts due in respect of matters which would in the ordinary course of business of the relevant Group Companies remain outstanding or otherwise have the characteristics of an intra-group loan, and also excludes any amounts in respect of tax or any surrender; |
- 10 -
Interest means [***];
Interim Financial Statements means the unaudited consolidated interim income statements, balance sheets and cash flow statements of all of the Group Companies and their respective subsidiaries as set out in document 4.14 in the Global exchange in the Data Room prepared as at the Financial Information Date for the purpose of the financial reporting of the group consolidation as at the same date or relating to the same period;
Investigative Works means inspection, investigation, sampling or monitoring;
Irrevocable Proxy means an irrevocable proxy in the form set out at Schedule 11, properly executed in favour of LRI in accordance with applicable Law by [***];
IT Systems means the material information and communications technologies used by the Group Companies;
Knowledge of Seller means, [***]
Lafarge means Lafarge S.A.;
Lafarge Corporate Marks has the meaning given in the Lafarge IP Term Sheet;
Lafarge Group means Lafarge and its Affiliates from time to time;
Lafarge IP Term Sheet means the term sheet in the Agreed Form which sets out the principles according to which Lafarge and its Affiliates, on the one hand, and the Purchasers and their Affiliates (including, after Closing, the Group Companies), on the other hand, will own and use certain Intellectual Property Rights;
Lafarge Licenses and Services Agreements means the master brand agreement entered into between Lafarge and LRI, dated 9 December 2011, and the intellectual property license agreement entered into between Lafarge and LRI, dated 9 December 2011;
Law means, with respect to any person, any binding supranational, federal, state, national or local statute, law, ordinance, rule, regulation, order, writ, injunction, directive, judgment or, decree, or other requirement of any Governmental Entity applicable to such person or any of its Affiliates or any of their respective properties, assets, officers, directors, employees, consultants or agents (in connection with such officers, directors, employees, consultants or agents activities on behalf of such person or any of its Affiliates);
LCLC means Luzon Continental Land Corporation;
LCLC Subject Shares has the meaning given in paragraph D of the Preamble;
LCSPI means Lafarge Cement Services Philippines, Inc.;
LCSPI Subject Shares has the meaning given in paragraph C of the Preamble;
- 11 -
LHPI Disposal Proceeds means the consideration receivable by the Divestiture Third Party Bank on behalf of LHPI for any divestment of its Group Company pursuant to a Divestiture Third Party Bank Mandate, after deducting any reasonable expenses which are incurred by the Divestiture Third Party Bank or any of the Group Company in which it owns an interest;
LII means Lafarge Iligan, Inc.;
[***] Shares means the [***] Shares and the [***] Shares in [***] representing [***] of the share capital of [***] beneficially owned by LRI, but registered in the name of [***] in the stock and transfer book of [***], and which LRI is entitled to be registered as the legal owner of and which forms part of the [***] Shares.
[***] Shares Indemnity means the indemnities contained in clause 11 in favour of the Purchasers from the Sellers;
[***] Shares means the [***] Shares and the [***] Shares in [***] representing [***] of the share capital of [***], which includes the [***] Shares;
LMI means Lafarge Mindanao, Inc.;
LMI Minority Shareholders means the common shareholders of LMI, other than LRI;
LMI Target Shares means the shares in LMI held by LRI as set out in Part B of Schedule 1;
LMI Tender Offer means the tender offer to be conducted by the Designated Purchaser (Local) in accordance with applicable Law for the LMI shares held by LMI Minority Shareholders;
Local Purchaser means a Philippine national as defined by the Republic Act No. 7042, as amended from time to time, having validly adhered to this Agreement in the form set out in Schedule 8;
Local Purchaser Condition has the meaning given in clause 5.1(a);
Long Stop Date means the earlier of (i) the day which is 6 months following the Exercise Date or (ii) 31 December 2015, unless otherwise agreed in writing, but in any case no earlier than 31 August 2015;
Loss means in respect of any Claim, [***];
LRAI means Lafarge Republic Aggregates, Inc.;
LRI means Lafarge Republic, Inc.;
LRI Minority Shareholders means the common shareholders of LRI, other than the Sellers;
- 12 -
LRI Subject Shares has the meaning given in paragraph B of the Preamble;
LRI Tender Offer means the tender offer to be conducted by the Designated Purchaser (Local) in accordance with applicable Law for the LRI shares held by LRI Minority Shareholders;
Material Contract means any of the following contracts to which any Group Company is a party or by which any Group Company was bound at 31 January 2015:
(a) | written contracts with key customers and suppliers as identified in Schedule 10; |
(b) | any long-term partnership or joint venture agreement relating to a company or business producing annual EBITDA in excess of [***] (on the basis of the latest available annual financial statements); and |
(c) | any contract under which the relevant Group Company has outstanding payment obligations or has outstanding rights to receive payments, in each case over the remainder of the current term of the contract, in excess of [***] |
Material Real Estate means any real property occupied by a Group Company:
(a) | on which is located a cement plant operated by the relevant Group Company or a quarry that supplies such a cement plant; |
(b) | which is recorded in the books of the relevant Group Company for a book value greater than [***]; or |
(c) | in the case of LII and LMI, which is recorded in the books of either company for a book value greater than [***]; |
Merger means the intended merger of the businesses of Holcim and Lafarge announced on 7 April 2014, such merger to be implemented by a tender offer by Holcim for the shares of Lafarge;
No Disposal Period has the meaning given in clause 17.9;
Non-Wholly-Owned Target Company means any Target Company the entire issued share capital of which is not wholly-owned by either another Target Company or any member of a Seller Group;
Permitted Encumbrances means:
(a) | Encumbrances arising in the ordinary course of business or by operation of Law including Encumbrances for Taxes and other governmental charges; |
(b) | survey exceptions, easement and other customary charges or Encumbrances on title to real property if such Encumbrance would not reasonably be expected to be material to any of the Group Companies; and |
(c) | Encumbrances that will be released at or prior to Closing; |
Phase-Out Period has the meaning given in clause 15.1;
Philippine | Competition Act means Philippine Republic Act No. 10667; |
- 13 -
Pinagtulayan Property means such parcels of land owned by LCLC and located in Pinagtulayan in Bulacan as identified in Schedule 4;
Policies means all policies of insurance maintained by the Group Companies or by any of the Sellers (or its Seller Group) in relation to its Group Companies and their businesses (whether under policies maintained with third party insurers or other members of its Seller Group);
Press Release means the press announcements to be made (i) immediately following execution of this Agreement and (ii) immediately following Closing, in each case in a form to be agreed by the Parties;
Price of the Subject Shares has the meaning given in clause 3.1;
Proposed Transactions means the transactions contemplated by the Transaction Documents;
PSE means the Philippine Stock Exchange, Inc.
Purchaser Group means, in respect of any Purchaser, such Purchaser and its Affiliates from time to time including, but not limited to, the relevant Designated Purchasers and references to Purchaser Groups means the Purchaser Groups of the Purchasers;
Purchaser Obligation means any representation, warranty or covenant to pay given by a Purchaser to the Sellers or obligation of a Purchaser to pay damages to the Sellers for a breach of any of its obligations, in each case under this Agreement;
Purchasers Bank Accounts means the respective bank accounts of each of the Purchasers, details of which the Purchasers shall notify to the Sellers in writing no later than three Business Days prior to the Closing Date (and/or such other account(s) as the Sellers and the Purchasers may agree in writing);
Real Estate means any real property owned or occupied by a Group Company;
Records has the meaning given in clause 16.1;
Reference Working Capital means [***];
Relevant Date means the date on which a payment or an assessment is to be made, and for the following purposes shall mean:
(a) | for the purposes of converting PHP into EUR for the calculation of Estimated Cash, Estimated Working Capital and Estimated Debt in the Estimated Price, the date on which LHPI (acting on behalf of the Sellers) shall notify to the Foreign Purchaser (acting on behalf of the Purchasers) the Estimated Price pursuant to clause 4.1; |
(b) | for the purposes of converting PHP into EUR for the calculation of Cash, Working Capital and Debt in the Sellers Final Price, the Closing Date; |
(c) | for the purpose of clause 6.1, 31 January 2015 with respect to the Foreign Purchaser, and on the Adhesion Date for the Local Purchaser; |
(d) | for the purposes of converting PHP into EUR to determine whether the amount of any Loss exceeds a relevant threshold set out in clause 9 in respect of any Warranty (including for the purposes of the Warranties in clauses 9.16, 9.18, 9.19, 9.25, 9.30, |
- 14 -
9.35 and 9.36), the date on which the relevant Claim is notified to the Sellers pursuant to clause 10.2; and
(e) | for the purposes of converting PHP into EUR for the calculation of the amount of any Loss that is the subject of a Claim under this Agreement, the date on which the relevant Claim is made; |
Relevant Person means any Purchaser, its Affiliates or any of its or their directors, officers, employees or successors in title;
Relief includes, unless the context otherwise requires, any allowance, credit, rebate, deduction, exemption or set off in respect of any Tax or relevant to the computation of any income, profits or gains for the purposes of any Tax, or any saving, refund, or repayment of Tax (including any interest, fines and penalties in respect of Tax);
Remedial Action means those measures necessary to remove, remedy, abate, contain, control, treat or ameliorate Contamination or the impacts of the Contamination;
Representatives has the meaning given in 21.1;
RRI Disposal Proceeds means the consideration receivable by the Divestiture Third Party Bank on behalf of RRI for any divestment of its Group Company pursuant to a Divestiture Third Party Bank Mandate, after deducting any reasonable expenses which are incurred by the Divestiture Third Party Bank or any of the Group Companies in which it owns an interest;
Schedules means Schedules 1 to 10;
SEC means the Philippine Securities and Exchange Commission;
Security means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect;
Security Account means the interest-bearing account:
(a) | in EUR opened by LHPI in the name of the Sellers with a bank of international repute not located in the United Kingdom; |
(b) | which is identified in a letter between LHPI (acting on behalf of the Sellers) and the Foreign Purchaser as being the Security Account; |
(c) | which are subject to Security in favour of the Foreign Purchaser which Security is in the form of the Security Documents; and |
(d) | from which no withdrawals may be made by any person except as contemplated by this Agreement or as otherwise agreed in writing by the Parties to this Agreement; |
Security Account Interest has the meaning given in clause 5.22(d);
Security Documents mean charges dated on or about the date on which the Divestiture Third Party Bank Trigger occurs between the Foreign Purchaser and LHPI (acting on behalf of the Sellers), and in form and substance reasonably satisfactory to LHPI (acting on behalf of the Sellers) and the Foreign Purchaser, pursuant to which LHPI (acting on behalf of the Sellers) agrees, inter alia, to grant certain rights over its Security Account in favour of the Foreign Purchaser, as security for its undertakings under clause 5.21(f);
- 15 -
Seller Group means, in respect of any Seller, such Seller and its Affiliates from time to time;
Seller Obligation means, in respect of each Seller, any warranty or covenant to pay given by that Seller to the Purchasers or obligation of that Seller to pay damages to the Purchasers for a breach of any of its obligations, in each case under this Agreement;
Sellers Final Price means the Estimated Price as adjusted in accordance with clauses 4.16 to 4.19;
Settlement has the meaning given in clause 5.1(d);
Sellers Bank Accounts means the respective bank accounts of each of the Sellers, details of which the Sellers shall notify to the Purchasers in writing no later than three Business Days prior to the Closing Date (and/or such other account(s) as Sellers and the Purchasers may agree in writing), provided that with respect to payments to be made by a Purchaser or Designated Purchaser for its purchase of the Subject Shares, such joint bank account must be in a bank located in the Philippines;
Sellers Secured Price means the amount to be deposited into the Security Account on the date on which the Divestiture Third Party Bank Trigger occurs;
Senior Manager means any employee engaged by a Group Company or a member of a Seller Group (as applicable) who is a member of the executive committee (or equivalent) of a Group Company or any member of a Seller Group (as applicable);
Star Terminal means the assets (land and improvements) identified in Schedule 3, liabilities, agreements and contracts owned by LRI directly connected with the operation of the cement terminal located at the Harbour Centre in the city of Manila, Philippines acquired by LRI in December 2013;
Subject Shares means the LRI Subject Shares, the LCLC Subject Shares or the LCSPI Subject Shares;
Subsidiary Companies means LII and LMI, the subsidiary companies of LRI, and Subsidiary Company means any of them;
Supply Agreements means the supply agreements between any member(s) of a Seller Group and any member(s) of a Purchaser Group (including the Group Companies) to be negotiated in good faith prior to Closing or as otherwise agreed between the relevant member(s) of a Seller Group and the relevant member(s) of a Purchaser Group and executed prior to Closing insofar as these supply agreements relate to any of the Group Companies (including the relevant supplies identified in Schedule 21 to the Global SPA);
Surcharges means [***].
Surviving Provisions means clauses 1 (Definitions and Interpretation), 20 (Announcements), 21 (Confidentiality), 22 (Assignment), 26 (Costs), 27 (Notices), 28 (Conflict with other Agreements), 29 (Whole Agreement), 30 (Waivers, Rights and Remedies), 32 (Variations), 33 (Invalidity), 34 (No Third Party Enforcement Rights), and 36 (Governing Law and Arbitration);
- 16 -
SWCVI Disposal Proceeds means the consideration receivable by the Divestiture Third Party Bank on behalf of SWCVI for any divestment of its Group Company pursuant to a Divestiture Third Party Bank Mandate, after deducting any reasonable expenses which are incurred by the Divestiture Third Party Bank or any of the Group Companies in which it owns an interest;
Target Companies means LRI, LCLC, and LCSPI, and Target Company means any of them;
Target Company Warranty Claim means any Claim relating to LRI, LCLC or LCSPI under or for breach of the Warranties but shall not include any Claim if or to the extent that it relates to LMI or LII;
Target Percentage means, in respect of any Non-Wholly-Owned Subsidiary, the percentage of the issued share capital of that Non-Wholly-Owned Subsidiary that is directly held by either another Target Company or any member of either Seller Group;
Tax or Taxes has the meaning set out in the Deed of Tax Covenant;
Tax Authority means, with respect to any Tax, the Governmental Entity in charge of imposing and/or collecting any Tax;
Tax Claim means a Tax Warranty Claim or a Tax Deed Claim;
Tax Deed Claim means a claim under or for breach of the Deed of Tax Covenant;
Tax Liability means a liability of any Group Company to make or suffer an actual payment of Tax;
Tax Returns means all returns, reports (including elections, declarations, disclosures, schedules, estimates and information returns) and other information filed or required to be filed with any Tax Authority relating to Taxes;
Tax Warranties means the warranties set out in clause 9.20 to 9.22 (inclusive);
Tax Warranty Claim means a claim under or for breach of any Tax Warranties;
Tender Offers means the LRI Tender Offer and the LMI Tender Offer;
Third Party Claim has the meaning given in clause 10.20;
Third-Party Consideration has the meaning given in clause 17.10;
Third-Party Disposal has the meaning given in clause 17.9;
Title Claim means a claim for a breach of any of the Title Warranties;
Title Warranties means the warranties set out in clauses 9.8 to 9.12 (inclusive);
Total Estimated Price shall be an amount equal to the Estimated Price calculated without subtracting the amount attributable to the LRI Minority Shareholders, but otherwise calculated in accordance with the sample calculations set out in Schedule 7;
Total Final Price shall be an amount equal to the Sellers Final Price calculated without subtracting the amount attributable to the LRI Minority Shareholders, but otherwise calculated in accordance with the sample calculations set out in Schedule 7;
- 17 -
Transaction Documents means this Agreement, the Implementing Agreements and the Ancillary Agreements;
Transaction Perimeter Financial Information means:
(a) | the combined statements of income, statements of financial position, cash flow statements and selected notes of the Philippines Group as set out, and more fully described, in document 4.14 in the Global exchange in the Data Room; |
(b) | the combined statements of income, statements of financial position, cash flow statements and selected notes of LII as set out, and more fully described, in document 3.2.1.2 in the Philippines Carve Out exchange in the Data Room; and |
(c) | the combined statements of income, statements of financial position, cash flow statements and selected notes of LMI as set out, and more fully described, in document 3.2.1.3 in the Philippines Carve Out exchange in the Data Room; |
Transfer Tax or Transfer Taxes means any stamp duty, registration duty or other transfer or transaction duty or tax (including interest, fines and penalties);
Transferred Employees means the employees (i) of any of the Group Companies as at the Closing Date or (ii) whose employment is transferred to a Purchaser or a Designated Purchaser in connection with or by reason of this Agreement pursuant to applicable Law or (iii) those employees who are employed by a member of a Seller Group other than a Group Company but whose professional time is dedicated in all material respects to the Group Companies as at 31 January 2015;
Transitional Services Agreement means the transitional services agreement between any member(s) of a Seller Group and any member(s) of a Purchaser Group (including the Group Companies and the Designated Purchasers) to be negotiated in good faith prior to Closing as otherwise agreed between the relevant member(s) of a Seller Group and the relevant member(s) of a Purchaser Group and executed at Closing insofar as this transitional services agreement relates to any of the Group Companies;
Trigger Event means in relation to an Environmental Warranty Claim that relates to [***]
VAT means value added tax and any similar sales or turnover tax;
Warranties means the warranties set out in clauses 9.1 to 9.36 (inclusive), including the Tax Warranties;
Warranty Claim means any claim under or for breach of the Warranties; and
Working Capital means, as at the Closing Date, the aggregate of the Current Assets less the aggregate of the Current Liabilities of the Group Companies on a combined basis consistent with the Transaction Perimeter Financial Information less the agreed adjustments to the Working Capital set out in Schedule 7, and a sample calculation of which is set out in Schedule 7;
Working Capital Adjustment means, in respect only of the Group Companies of the relevant Seller, the amount of the difference between the Working Capital and the Reference Working
- 18 -
Capital, calculated in accordance with clause 4, and, if the Working Capital is greater than the Reference Working Capital, such amount shall be expressed as a positive number (or, if the Working Capital is less than the Reference Working Capital, such amount shall be expressed as a negative number); and
Working Hours means 9.30am to 5.30pm in the relevant location on a Business Day.
1.2 Interpretation. In this Agreement, unless the context otherwise requires:
(a) | references to a person include any individual, firm, body corporate (wherever incorporated), government, state, any Governmental Entity or agency of a state or any joint venture, association, partnership, works council or employee representative body (whether or not having separate legal personality); |
(b) | references to Purchasers shall pertain to each of the Foreign Purchaser and the Local Purchaser; |
(c) | headings do not affect the interpretation of this Agreement; the singular shall include the plural and vice versa; and references to one gender include all genders; |
(d) | references to any English legal term or concept shall, in respect of any jurisdiction other than England, be construed as references to the term or concept which most nearly corresponds to it in that jurisdiction; |
(e) | references to compliance (or, as the case may be, non-compliance) with any Law, including any Environmental Law, in all material respects or in any material respect (or any similar expression) shall be construed with reference to industry standards and practices in the relevant market and to practice within the relevant Group Companies; and |
(f) | any phrase introduced by the terms including, include, in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms. |
1.3 | Currency. In this Agreement: |
(a) | references to Euro, EUR or are references to the lawful currency from time to time of the member states of the European Union; |
(b) | references to PHP are references to the lawful currency from time to time of the Republic of the Philippines. |
1.4 No contra-preferentum. This Agreement has been negotiated and reviewed by the Parties and their respective counsel and professional advisers. Accordingly, in interpreting this Agreement, no regard shall be had to which Party or its counsel drafted any provision being interpreted.
1.5 Calculation of time. In this Agreement:
(a) | where a period expressed in days, weeks, months or years is to be calculated from the moment at which an event occurs or an action takes place, the day during which that event occurs or that action takes place shall not be counted as falling within the period in question; and |
- 19 -
(b) | a period expressed in weeks, months or years shall end with the expiry of whichever day in the last week, month or year (as applicable) of such period is the same day of the week (in the case of weeks), or falls on the same date (in the case of months or years), as the day on which the event or action from which the period is to be calculated occurred or took place. If, for a given period expressed in months, the last day of such period does not fall during the last month expressed to be in such period, such period shall end on the last day of that month. |
1.6 Schedules. The Schedules comprise schedules to this Agreement and form part of this Agreement.
1.7 Guarantors. CRH is a party to this Agreement and the Deed of Tax Covenant only for the purposes of the guarantee of the Foreign Purchasers obligations set out in clause 2.9, and shall be deemed a Party only in the context of that provision.
2. PUT OPTION AND CALL OPTION OVER THE SUBJECT SHARES
2.1 Subject to the Local Purchaser Condition having been fulfilled or waived in accordance with this Agreement on or prior to 15 August 2015, from 31 January 2015, the Sellers grant to the Purchasers (directly and through the Designated Purchasers) the exclusive right and option to purchase in accordance with this Agreement all the Subject Shares, free and clear of all Encumbrances, in the proportion set out in Schedule 1 Part A and shown opposite their name (the Call Option) and the Purchasers grant to the Sellers the right and option to require the Purchasers (directly and through the Designated Purchasers) to acquire in accordance with this Agreement all the Subject Shares, free and clear of all Encumbrances, in the proportion set out in Schedule 1 Part A and shown opposite their name (the Put Option).
2.2 The Foreign Purchaser shall, at its own cost, use its best endeavours to ensure that the Local Purchaser Condition set out in clause 5.1(a) is fulfilled as soon as is reasonably practicable after 31 January 2015.
2.3 The exercise of the Put Option or the Call Option shall occur within 5 Business Days following the date on which the Local Purchaser Condition is fulfilled or waived in accordance with this Agreement.
2.4 The Put Option and the Call Option may only be exercised once and must be exercised simultaneously in respect of all (and not only part) of the Subject Shares. The Put Option and Call Option may be exercised by either LHPI (on behalf of the Sellers) or the Foreign Purchaser (on behalf of the Purchasers) by giving notice in writing to the other party(ies) to the relevant option. Upon exercise of the Call Option or the Put Option, the Sellers shall sell, and the Purchasers (directly and through the Designated Purchasers) shall purchase all the Subject Shares as set out in Schedule 1, with full title guarantee and on the terms and subject to the further Conditions, set out in this Agreement.
General
2.5 Any undertaking or agreement given by a Seller under this Agreement (including any Seller Obligation) is given, and any undertaking or agreement given by a Purchaser under this Agreement (including any Purchaser Obligation) is received, by LHPI as principal with respect to itself and, where applicable, as agent of the Sellers. Each Seller hereby appoints LHPI as its agent for purposes of, on its behalf, taking any action and for any other purposes
- 20 -
required in the context of the execution of this Agreement and all other Transaction Documents and of the performance and enforcement of any obligation thereunder.
2.6 Any undertaking or agreement given by a Purchaser under this Agreement (including any Purchaser Obligation) is given, and any undertaking or agreement given by a Seller under this Agreement (including any Seller Obligation) is received, by the Foreign Purchaser as principal with respect to itself and, where applicable, as agent for the Local Purchaser and/or the Designated Purchasers. The Local Purchaser hereby appoints the Foreign Purchaser as its agent for purposes of, on its behalf, taking any action and for any other purposes required in the context of the execution of this Agreement and all other Transaction Documents and of the performance and enforcement of any obligation thereunder.
2.7 The obligations of each Seller under this Agreement are joint and several, except in respect of the Title Warranties and except in connection with Claims relating to the Title Warranties, where the obligations of each Seller shall be several (not joint nor joint and several) and therefore limited to the Subject Shares to be sold by such Seller pursuant to this Agreement. Thus, each Seller shall be liable jointly with the others in respect of any Claim brought against any Seller hereunder for any breach of Warranties (except Title Warranties), undertakings, indemnities, covenants, agreements and/or obligations given by another Seller (and provided that the Warranties, undertakings, indemnities, covenants, agreements and/or obligations forming the basis of such Claim relate to a Target Company in which such Seller owns Subject Shares or to a Subsidiary Company of such Target Company).
Without prejudice to the preceding paragraph, a Seller assumes no responsibility or liability whatsoever in respect of Warranties, undertakings, covenants, agreements and/or obligations relating to a Group Company in which it is not a shareholder directly or indirectly.
2.8 CRH shall irrevocably and unconditionally guarantee, as primary obligor, all of the obligations of the Foreign Purchaser under this Agreement or any other Transaction Document.
2.9 The Foreign Purchaser shall irrevocably and unconditionally guarantee, as primary obligor, all of the obligations of the Local Purchaser and any Designated Purchasers under this Agreement or any other Transaction Document including in respect of any Claim brought by a Seller against the Local Purchaser, it being understood that the Foreign Purchaser shall be subrogated in the rights of the Seller against the Local Purchaser with respect to any amount paid in accordance with this clause.
3. PRICE
Price of the Subject Shares
3.1 The price for the Subject Shares shall be based on the enterprise value referred to in Schedule 1 Part F and as set forth in Schedule 9 (the Price of the Subject Shares).
3.2 The Price of the Subject Shares will be adjusted:
(a) | before Closing, in accordance with the provisions of clause 4.1, to determine the Estimated Price; and |
(b) | after Closing, in accordance with the provisions of clause 4.2, to determine the relevant Sellers Final Price. |
- 21 -
Price Allocation
3.3 The Price of the Subject Shares of each relevant Target Company shall be allocated to each Seller as set out in Schedule 9.
4. PRICE ADJUSTMENT
Estimated Price
4.1 By no later than 3 August 2015, LHPI (acting on behalf of the Sellers) shall, after having consulted with the Foreign Purchaser, notify to the Foreign Purchaser (acting on behalf of the Purchasers) the amount in Euro () (the Estimated Price) being the Price of the Subject Shares in respect of each Seller provided for in clause 3.1 and calculated as set out in Schedule 9:
(a) | minus the Estimated Debt; |
(b) | plus the Estimated Cash; and |
(c) | plus the Estimated Working Capital Adjustment (which, for the avoidance of doubt, can be a positive or negative number). |
The notice referred to in this clause 4.1 shall contain the Closing Statement, the allocation as set out in Schedule 9 and shall also identify the Sellers Estimated Price attributable to the LMI Target Shares.
On the Closing Date, the Purchasers shall pay the Estimated Price to the Sellers in accordance with clause 7.5(b) .
Sellers Final Price
4.2 The Sellers Final Price shall be calculated after the Closing Date on the basis set out in clauses 4.3 to 4.19 (inclusive) and allocated as set out in Schedule 9. Any payments required to be made under clauses 4.3 to 4.19 (inclusive) shall be treated as adjusting the Estimated Price to provide the Sellers Final Price, and shall be paid in Euro. The Sellers Final Price shall (subject to any further adjustment, if applicable, pursuant to clause 19) be adopted for all Tax reporting purposes.
Adjustments: Preliminary
4.3 In preparing the Closing Statement, the items and amounts to be included in the calculation of Debt (including Inter-Company Non-Trading Payables), Cash (including Inter-Company Non-Trading Receivables) and Working Capital for the purposes of the Closing Statement shall be identified by applying the relevant definition (subject, where applicable, to this clause 4.3 and clauses 4.4 and 4.5).
4.4 In applying the provisions of clause 4.3, this clause 4.4 and clause 4.5 and determining which items and amounts are to be included in the Closing Statement, the accounting principles, policies, treatments, practices and categorisations set out in Schedule 6 shall apply (the Accounting Principles).
4.5 If any insured event occurs after 31 January 2015 but before Closing in relation to any asset of a Group Company which needs to be replaced or restored in order for the relevant business to continue to be conducted in the ordinary course, then, to the extent that a member
- 22 -
of the relevant Seller Group recovers any proceeds or is entitled to a receivable under a policy but the relevant asset is not replaced or restored before Closing, any such proceeds shall for the purposes of the relevant Closing Statement be deducted from Cash and any such receivable shall not be included in Working Capital and, accordingly, shall not, in each case, be included in the Closing Statement, unless the asset that has been the subject of the insured event is to be accounted for in the Working Capital.
Adjustments: Closing Statement
4.6 LHPI (acting on behalf of the Sellers) shall, or shall procure that LHPIs accountants shall, after the Closing Date prepare a draft statement, showing the Debt (including Inter-Company Non-Trading Payables), Cash (including Inter-Company Non-Trading Receivables) and Working Capital and the Working Capital Adjustment relating to the Group Companies, separately identifying the amount of each such item attributable to LRI and the amount of each such item attributable to LMI (the Closing Statement), and the resulting proposed Price of the Subject Shares.
4.7 Such Closing Statement shall be in the form set out in Schedule 7 and incorporate separate statements in the form set out in Schedule 7 showing the calculation of the Working Capital and the Working Capital Adjustment, Cash and Debt. LHPI (acting on behalf of the Sellers) shall deliver the Closing Statement to the Foreign Purchaser (acting on behalf of the Purchasers) within 45 Business Days of Closing.
4.8 The Foreign Purchaser (acting on behalf of the Purchasers) shall notify LHPI (acting on behalf of the Sellers) in writing (such notice being the Closing Statement Notice) within 30 Business Days after receipt of the Closing Statement to confirm whether or not the Purchasers accept the draft Closing Statement for the purposes of this Agreement. If the Purchasers do not accept the draft Closing Statement, the Closing Statement Notice shall set out in detail the Purchasers reasons for such non-acceptance and specify the adjustments which, in the Purchasers opinion, should be made to the draft Closing Statement in order for it to comply with the requirements of this Agreement. Except for the matters specifically set out in the Closing Statement Notice, the Foreign Purchaser (acting on behalf of the Purchasers) shall be deemed to have agreed to the draft Closing Statement in full.
4.9 If the Foreign Purchaser (acting on behalf of the Purchasers) serves a Closing Statement Notice in accordance with clause 4.8, stating in the Closing Statement Notice that the Purchasers do not accept the Closing Statement, LHPI (acting on behalf of the Sellers) and the Foreign Purchaser (acting on behalf of the Purchasers) shall use all reasonable efforts to meet and discuss the objections of the Purchasers and to agree on the adjustments (if any) required to be made to the draft Closing Statement, in each case within 10 Business Days after receipt by LHPI of the Closing Statement Notice.
4.10 If the Foreign Purchaser (acting on behalf of the Purchasers) is satisfied with the draft Closing Statement (either as originally submitted or after adjustments agreed between the Sellers and the Purchasers pursuant to clause 4.9) or if the Foreign Purchaser (acting on behalf of the Purchasers) fails to give a valid Closing Statement Notice within the 30 Business Day period referred to in clause 4.8, then the draft Closing Statements (incorporating any agreed adjustments) shall constitute the Closing Statement for the purposes of this Agreement.
4.11 If LHPI (acting on behalf of the Sellers) and the Foreign Purchaser (acting on behalf of the Purchasers) do not reach agreement within 10 Business Days after receipt by LHPI (on behalf of the Sellers) of the Closing Statement Notice, then the matters in dispute may be referred (on the application of LHPI (acting on behalf of the Sellers) or the Foreign Purchaser (acting on behalf of the Purchasers)) for determination by such independent firm of chartered
- 23 -
accountants of international standing (a) as the Sellers and the Purchasers shall agree or, (b) failing agreement or if such firm is unable or unwilling to act within five (5) Business Days after the end of the above 10 Business Day period, appointed by the President for the time being of the Institute of Chartered Accountants in England and Wales (the Firm). The Firm shall be requested to make its decision within 60 Business Days (or such later date as LHPI (acting on behalf of the Sellers), the Foreign Purchaser (acting on behalf of the Purchasers) and the Firm agree in writing) of confirmation and acknowledgement by the Firm of its appointment. The following provisions shall apply once the Firm has been appointed:
(a) | LHPI (acting on behalf of the Sellers) and the Foreign Purchaser (acting on behalf of the Purchasers) shall each prepare a written statement within 15 Business Days after the Firms appointment on the matters in dispute which (together with the relevant supporting documents) shall be submitted to the Firm for determination and copied at the same time to LHPI (acting on behalf of the Sellers) or the Foreign Purchaser (acting on behalf of the Purchasers) as appropriate; |
(b) | following delivery of their respective submissions, the Foreign Purchaser (acting on behalf of the Purchasers) and LHPI (acting on behalf of the Sellers) shall each have the opportunity to comment once only on the others submission by written comment delivered to the Firm not later than 15 Business Days after receipt of the others submission and, thereafter, LHPI (acting on behalf of the Sellers) and the Foreign Purchaser (acting on behalf of the Purchasers) shall not be entitled to make further statements or submissions except insofar as the Firm so requests (in which case it shall, on each occasion, give LHPI (acting on behalf of the Sellers) or the Foreign Purchaser (acting on behalf of the Purchasers) (unless otherwise directed) 15 Business Days to respond to any statements or submission so made); |
(c) | in giving its determination, the Firm shall state what adjustments (if any) are necessary, solely for the purposes of this Agreement, to the draft Closing Statement, in respect only of the matters in dispute, in order to comply with the requirements of this Agreement and to determine finally the Closing Statement, provided that such determination shall not result in an adjustment that is higher than the higher figure submitted by the Foreign Purchaser (acting on behalf of the Purchasers) or LHPI (acting on behalf of the Sellers) and shall not result in an adjustment that is lower than the lower figure submitted by the Foreign Purchaser (acting on behalf of the Purchasers) or LHPI (acting on behalf of the Sellers); |
(d) | the Firm shall act as an expert (and not as an arbitrator) in making its determination which shall, in the absence of manifest error, be final and binding on the Parties and, without prejudice to any other rights which they may respectively have under this Agreement, the Parties expressly waive, to the extent permitted by law, any rights of recourse they may otherwise have to challenge it; and |
(e) | in making its determination, the Firm shall apply the Accounting Principles and the definitions provided under this Agreement. |
4.12 The Sellers and the Purchasers shall each be responsible for their own costs in connection with the preparation, review and agreement or determination of the Closing Statements. The fees and expenses of the Firm shall be borne equally between the Sellers on the one hand and the Purchasers on the other, or in such other proportions as the Firm shall determine.
4.13 To enable the Sellers to exercise their rights and meet their obligations under this clause 4, the Purchasers shall provide to LHPI (acting on behalf of the Sellers) and LHPIs
- 24 -
accountants full access to the books and records, employees and premises of the Group Companies and, where relevant, of the relevant Designated Purchaser for the period from Closing to the date that each draft Closing Statement is agreed or determined. If the Foreign Purchaser (acting on behalf of the Purchasers) serves a Closing Statement Notice stating that the Purchasers do not accept the Closing Statement, it shall ensure that LHPI (acting on behalf of the Sellers) and LHPIs accountants shall be given reasonable access to the Purchasers accountants and Purchasers accountants working papers relating to the adjustments proposed in the Closing Statement Notice and any other submissions by or on behalf of the Foreign Purchaser in relation to the Closing Statement. The Foreign Purchaser (acting on behalf of the Purchasers) shall co-operate fully with LHPI (acting on behalf of the Sellers) and shall permit LHPI and/or LHPIs accountants to take copies (including electronic copies) of the relevant books and records and shall provide all assistance reasonably requested by LHPI (acting on behalf of the Sellers) to facilitate the preparation of the Closing Statement.
4.14 When the Closing Statement has been agreed or determined in accordance with the preceding clauses, then the amounts shown in the Closing Statement as Cash, Debt and Working Capital and the Working Capital Adjustment for each Group Company shall be final and binding for the purposes of this Agreement.
4.15 The Foreign Purchaser (acting on behalf of the Purchasers) and LHPI (acting on behalf of the Sellers) agree that they shall each engage the separate teams within PwC that have advised them in connection with this Agreement to assist with the processes specified in this clause 4 in order to ensure:
(a) | consistency between the Transaction Perimeter Financial Information, the Estimated Price and the finally agreed or determined (as the case may be) Closing Statement; and |
(b) | transparency in relation to the calculation of the Estimated Price, and the finally agreed or determined (as the case may be) Closing Statement. |
Adjustments: Financial Adjustments
4.16 When the Closing Statement has been finally agreed or determined in accordance with clauses 4.6 to 4.14 (inclusive), the following adjustments shall be made to the Estimated Price in respect of each Sellers interest in the relevant Group Companies:
(a) | in relation to Debt: |
(i) | if the Debt relating to the Group Companies of the relevant Seller is less than the corresponding Estimated Debt, then the Purchasers shall owe an amount equal to the difference to the relevant Sellers; or |
(ii) | if the Debt relating to the Group Companies of the relevant Seller is greater than the corresponding Estimated Debt, then the relevant Sellers shall owe an amount equal to the difference to the Purchasers; |
(b) | in relation to Cash: |
(i) | if the Cash relating to the Group Companies of the relevant Seller is greater than the corresponding Estimated Cash, then the Purchasers shall owe an amount equal to the difference to the relevant Sellers; or |
- 25 -
(ii) | if the Cash relating to the Group Companies of the relevant Seller is less than the corresponding Estimated Cash, then the relevant Sellers shall owe an amount equal to the difference to the Purchasers; and |
(c) | in relation to the Working Capital Adjustment: |
(i) | if the Working Capital Adjustment relating to the relevant Sellers Group Companies is a greater amount than the corresponding Estimated Working Capital Adjustment, then the Purchasers shall owe an amount equal to the difference to the relevant Seller; or |
(ii) | if the Working Capital Adjustment relating to the relevant Sellers Group Companies is a lesser amount than the corresponding Estimated Working Capital Adjustment, then the relevant Sellers shall owe an amount equal to the difference to the Purchasers. |
Adjustments: General
4.17 Any amount payable pursuant to clause 4.16 shall be increased by an amount equivalent to interest on such amount at a rate of [***] for the period from (but excluding) the Closing Date to (and including) the due date for payment of such amount, calculated on a daily basis.
4.18 Each Seller and Purchaser agrees that, once the Closing Statement has been agreed or determined in accordance with the provisions of clauses 4.6 to 4.14 (inclusive), the sums which each is respectively obliged to pay pursuant to clause 4.16 shall be aggregated and netted off against each other.
4.19 Whichever of the relevant Seller or Purchaser is then left with any payment obligation under clause 4.16 shall make the applicable payment(s) within 5 Business Days after the date on which the Closing Statement is agreed or so determined. Any such payment shall be made in accordance with the provisions of clause 19 of this Agreement.
5. CONDITIONS PRECEDENTS
5.1 Certain obligations of the Parties under this Agreement shall be, as indicated in this Agreement, conditional on certain or all of the following conditions having been fulfilled or waived in accordance with this Agreement (the Conditions):
(a) | the Foreign Purchaser having identified one or several Local Purchaser(s) and such Local Purchaser(s) having validly adhered to this Agreement in the form set out in Schedule 8 (the Local Purchaser Condition); |
(b) | the Put Option or Call Option having been exercised in accordance with this Agreement; |
(c) | the agreement between Lafarge and Holcim dated 7 July 2014 with respect to the Merger not having been terminated pursuant to articles 6.2 to 6.4 thereof; |
(d) | successful completion (being evidenced by the settlement (règlement-livraison)) of the tender offer by Holcim for the shares of Lafarge in accordance with the General Regulations of the AMF and the Rules of Euronext Paris (the Settlement); |
- 26 -
(e) | the completion of the Carve-outs as evidenced (i) with respect to Lafarge Republic Aggregates, Inc., the Star Terminal and the Pinagtulayan Property, by the effective payment by HPI or HMDC or any of their Affiliates of the corresponding purchase price, and (ii) with respect to the Carve-outs Transferred Employees, by a statement from the Sellers that such employees have been transferred to HPI or HMDC or any of their Affiliates; |
(f) | the completion of the Add-ons as evidenced (i) with respect to the Add-on Assets, by the effective payment by LRI of the corresponding purchase price, and (ii) with respect to the Add-on Transferred Employees, by a statement from the Sellers that such employees have been transferred to LRI; and |
(g) | the occurrence of the Main Closing Date under and as defined in the Global SPA. |
Tender Offer for LRI and LMI by the Purchasers
5.2 No earlier than on the date when all of the Conditions shall have been waived or fulfilled, the Purchasers shall procure that the Designated Purchaser (Local) shall launch the Tender Offers, at a price per share which the Purchasers and their advisors shall have independently determined, and shall use their best efforts to complete the Tender Offers as promptly as permitted by applicable Law. The Purchasers undertake to pay the LRI Minority Shareholders who tendered their shares during the LRI Tender Offer the same amount that would have been paid to the Sellers for any upward price adjustment under clause 4.16 and the Purchasers agree to bear the cost of any Surcharges or Interest in relation to such upward price adjustment.
5.3 The Purchasers shall also conduct the LMI Tender Offer for the LMI Minority Shareholders in accordance with applicable Law. The Purchasers undertake to use reasonable endeavours to conduct the LMI Tender Offer pursuant to the timetable attached hereto as Schedule 12. The Sellers shall, and shall procure that LRI shall, extend such assistance and furnish such documents as may be reasonably requested by the Purchasers to meet the timetable attached as Schedule 12.
5.4 No Taxes, costs or expenses in connection with the LRI Tender Offer or the LMI Tender Offer shall be borne by the Sellers.
Other Purchasers Obligations
5.5 Each of the Purchasers shall, at its own cost, use all reasonable endeavours to obtain all required consents, approvals or actions of any Governmental Entity required by it to consummate the Proposed Transactions promptly after 31 January 2015.
5.6 Each of the Purchasers shall have primary responsibility for obtaining all such consents, approvals or actions and shall take all steps necessary for that purpose (including making pre-notification contacts, appropriate submissions, notifications and filings as appropriate in light of normal practice, in consultation with, and where necessary and to the extent reasonable with the assistance and cooperation of each Seller (to the extent not already done) within 15 Business Days after 31 January 2015 or, where the requirement to take such action only arises after that date, as soon as practicable thereafter). The Purchasers shall, unless expressly prohibited by a Governmental Entity and in respect of clause 5.6(e) only, where permitted by the Governmental Entity, for this purpose:
(a) | provide all information and take all other measures or actions that are required by any such Governmental Entity (including for the purpose of obtaining the Clearances) and |
- 27 -
comply as promptly as practicable with any reasonable requests for additional information requested by any Governmental Entity; |
(b) | promptly notify LHPI (acting on behalf of the Sellers) (and provide copies or, in the case of non-written communications, details) of any communications from any such Governmental Entity relating to any such consent, approval or action; |
(c) | except for communications that are administrative or procedural in nature, communicate with any such Governmental Entity only after prior consultation with LHPI (acting on behalf of the Sellers) and/or its advisers (taking into account their reasonable comments and requests) and provide LHPI (acting on behalf of the Sellers) (and/or its advisers) with copies of all such submissions, notifications, filings and other communications in the form submitted or sent; |
(d) | (without limiting paragraph (c) above) provide LHPI (acting on behalf of the Sellers) (or its advisers) with a final draft of all submissions, notifications, filings and other communications to any Governmental Entity at such time as will allow each Seller (or its advisers) a reasonable opportunity to provide comments and for the Purchasers to take account of any reasonable comments of LHPI (acting on behalf of the Sellers) (or its advisers) on such drafts prior to their submission; |
(e) | allow persons nominated by LHPI (acting on behalf of the Sellers) to attend all meetings (and participate in all telephone or other conversations, except any conversations that are administrative or procedural in nature) with the Governmental Entity and to make oral submissions at the meetings (or in telephone or other conversations); and |
(f) | regularly review with LHPI (acting on behalf of the Sellers) the progress of any notifications or filings (including, where necessary, seeking to identify appropriate commitments to address any concerns identified by any Governmental Entity) and discussing with each Seller the scope, timing and tactics of any such commitments with a view to obtaining clearance from the Governmental Entity at the earliest reasonable opportunity, |
save that for these purposes the Purchasers shall only be required to provide information of a commercially sensitive nature to LHPIs counsel on a counsel-to-counsel basis and shall not be required to take any action that would constitute a breach of Law, regulation or contract.
5.7 LHPI (acting on behalf of the Sellers) shall provide the Purchasers and any Governmental Entity with any necessary information and documents reasonably required for the purpose of making any submissions, notifications and filings to any such Governmental Entity, and shall make any notifications that may be required of the Sellers by such Governmental Entity in order to obtain any relevant consents or approvals, save that each Seller shall only be required to provide information of a commercially sensitive nature to the Purchasers counsel on a counsel-to-counsel basis and shall not be required to take any action that would constitute a breach of Law, regulation or contract.
5.8 The Purchasers shall not make any filing with any Governmental Entity which is not required without obtaining the prior written consent of LHPI (acting on behalf of the Sellers) to the making of it and to its form and content.
5.9 If it becomes apparent that any Governmental Entity referred to in this clause 5 indicates that it will only provide any consents or approvals that are necessary to satisfy the obligations set out in this clause 5 and/or obtain the Clearances subject to certain conditions
- 28 -
being satisfied or undertakings being made, or if it becomes apparent that any Governmental Entity referred to in this clause 5 will not provide any Clearance on or before the Long Stop Date, the Purchasers shall:
(a) | structure its acquisition of the Target Companies so as to comply with the applicable requirements for obtaining the Clearances or offer (and not withdraw) such undertakings to such Governmental Entity as may be deemed necessary by the Sellers to secure such Governmental Entitys consent or clearance without undue delay and in any event without the need for an in-depth review by such Governmental Entity. For the avoidance of doubt, such undertakings may include any condition, obligation, undertaking or modification relating in any manner whatsoever to: (i) any undertaking, or any business, activities or assets of any undertaking, that is Controlled by any member of a Purchaser Group; or (ii) any Target Company, or any business, activities or assets of any Target Company; |
(b) | if such Governmental Entity makes clear that the offer made under clause 5.9(a) above is not sufficient, the Purchasers shall make such further or better offers (and not withdraw such offers) to restructure or divest any or all undertakings, businesses, activities or assets as necessary to satisfy such Governmental Entity, including by way of an up-front buyer or fix-it first remedy, as appropriate; and |
(c) | (where the Purchasers cannot structure its acquisition of the Target Companies so as to obtain the Clearances on or before the Long Stop Date) structure its acquisition of the Target Companies in such a way as to allow for Closing to occur without obtaining any such Clearance. |
5.10 In seeking the approval of any Governmental Entity required in connection with the Proposed Transactions, neither Purchaser nor any Representative of a Purchaser has engaged or will engage in any conduct in breach of any applicable Anti-Bribery Law. Each Purchaser shall promptly notify LHPI (acting on behalf of the Sellers) of any solicitation, demand or other request for anything of value, by or on behalf of any official, employee or representative of, or any other person acting in an official capacity for or on behalf of any Governmental Entity, relating to the Proposed Transactions including any approval referred to in this clause 5.
5.11 In the period between the date on which the Philippine Competition Act comes into effect and Closing the Sellers shall procure that the Group Companies shall:
(a) | co-operate with the Purchasers to identify those areas where the Group Companies would not be likely be in compliance with the Philippine Competition Act; and |
(b) | to the extent agreed with the Purchasers, use reasonable endeavours to adopt possible courses of action in order to address any identified areas which may not be in compliance with the Philippine Competition Act. |
Carve-outs/ Add-ons
5.12 Between 31 January 2015 and the Closing Date, the Sellers shall use their best endeavours to implement or, as the case may be, continue the implementation of, the Carve-outs and Add-ons. If, in the reasonable opinion of the Sellers it is preferable to implement the Carve-outs and Add-ons in an alternative manner, the Sellers may implement the Carve-outs and Add-ons in such alternative manner, provided that such alternative is economically equivalent for the Purchasers.
- 29 -
5.13 As from 31 January 2015, LHPI (acting on behalf of the Sellers) shall keep the Foreign Purchaser (acting on behalf of the Purchasers) reasonably informed of the progress of the Carve-outs and Add-ons and shall provide the Foreign Purchaser (acting on behalf of the Purchasers) with draft documents for its review and comment in good time prior to execution and shall provide all executed documents evidencing such Carve-outs and Add-ons to the Foreign Purchaser (acting on behalf of the Purchasers) as they become available. The Foreign Purchaser (acting on behalf of the Purchasers) may offer suggestions on the draft documents relating to the Carve-outs and Add-ons but LHPI (acting on behalf of the Sellers) is not obliged to accept any such suggestions.
5.14 If at any time until the date that is 9 months after Closing:
(a) | a Seller or any of its Affiliates holds any asset (including any transferrable permit) that should have been transferred to the relevant Group Company in respect of the Add-ons, or receives any amount in respect of any such asset, then that Seller shall (or, in the case of a transferrable permit, shall use reasonable endeavours to), as promptly as reasonably practicable, remit, or cause to be remitted, at no cost, such amount or asset to the Purchasers or their relevant Affiliate, as the case may be; |
(b) | the Purchasers or any Group Company or any of their respective Affiliates holds any asset (including any transferrable permit) that should not have been transferred to the relevant Group Company in respect of the Carve-outs, or receives any amount in respect of any such asset, then the Purchasers shall (or, in the case of a transferrable permit, shall use reasonable endeavours to), or the Purchasers shall procure that the relevant Group Company or Affiliate shall (or, in the case of a transferrable permit, shall use reasonable endeavours to), as promptly as reasonably practicable, remit, or cause to be remitted, at no cost, such amount or asset to the Sellers or their relevant Affiliate, as the case may be; |
(c) | a Seller or any of its Affiliates is required to make (and effectively makes) any payment in respect of any asset that should have been transferred to the relevant Group Company in respect of the Add-ons, the Purchasers shall, as promptly as reasonably practicable, remit an amount equal to the amount of such payment to that Seller or its relevant Affiliate, as the case may be; or |
(d) | a Purchaser or any of its Affiliates is required to make (and effectively makes) any payment in respect of any asset that should have not been transferred to the relevant Group Company, the relevant Seller shall, as promptly as reasonably practicable, remit an amount equal to the amount of such payment to that Purchaser or its relevant Affiliate, as the case may be. |
5.15 LHPI (acting on behalf of the Sellers) shall provide such assistance to each Purchaser as the Foreign Purchaser (acting on behalf of the Purchasers) reasonably requires for the purpose of clause 5.14 and covenants with each Purchaser and each of its Affiliates to pay to the relevant Purchaser or to the relevant Affiliates of such Purchaser an amount equal to any and all Loss suffered or incurred by them in relation to the transfer or as a result of holding the relevant interest for the period from Closing until it is so transferred.
5.16 The Foreign Purchaser (acting on behalf of the Purchasers) shall provide such assistance to each Seller as LHPI (acting on behalf of the Sellers) reasonably requires for the purpose of clause 5.14 and covenants with each Seller and each of its Affiliates to pay to the relevant Seller or to the relevant Affiliates of such Seller an amount equal to any and all Losses suffered or incurred by them in relation to the transfer or as a result of holding the relevant interest for the period from Closing until it is so transferred.
- 30 -
5.17 The Purchasers and the Sellers shall ensure that their relevant Affiliates shall comply with the terms of any agreement entered into by such Affiliates for the purposes of implementing any of the Carve-outs and/or Add-ons.
General
5.18 Each of the Conditions may only be waived by the written agreement of LHPI (acting on behalf of the Sellers) and the Foreign Purchaser (acting on behalf of the Purchasers).
5.19 LHPI (acting on behalf of the Sellers) and the Foreign Purchaser (acting on behalf of the Purchasers) shall notify each other promptly upon becoming aware that any of the Conditions have been fulfilled.
5.20 If the Local Purchaser Condition is incapable of being satisfied on or prior to 15 August 2015 (the Divestiture Third Party Bank Trigger), the provisions of clause 5.21 shall apply. If any of the Conditions (other than the Local Purchaser Condition) has not been fulfilled or waived on the Long Stop Date, this Agreement shall automatically terminate (other than the Surviving Provisions); in any such event, no Party shall have any claim under this Agreement of any nature whatsoever against any other Party except for a Claim by a Party in respect of any rights and liabilities which have accrued before termination or under any of the Surviving Provisions.
Divestiture Third Party Bank Trigger
5.21 If the Divestiture Third Party Bank Trigger occurs:
(a) | the Foreign Purchaser shall on the date on which the Divestiture Third Party Bank Trigger occurs pay the Sellers Secured Price to the Security Account, and LHPI (acting on behalf of the Sellers) and the Foreign Purchaser shall execute the Security Documents and take such other steps as may be required to perfect the Security over the Security Accounts created by the Security Documents. For the purposes hereof, the Sellers Secured Price shall be the Estimated Price determined as set forth in clause 4, save that references to the Closing Date in clause 4 shall be replaced with the date of the Divestiture Third Party Bank Trigger; |
(b) | the Foreign Purchaser and the Sellers shall determine the Sellers Final Price as set forth in clauses 4.2 to 4.15 and (i) the Foreign Purchaser shall pay the final adjustment due by it pursuant to clauses 4.17 to 4.19 to the Security Account, or (ii) the Foreign Purchaser shall be restituted the final adjustment owed to it pursuant to clauses 4.16 to 4.19 from the Security Account, save that references to the Closing Date in clause 4 shall be replaced with the date of the Divestiture Third Party Bank Trigger; |
(c) | the Divestiture Third Party Bank shall immediately after the Divestiture Third Party Bank Trigger be granted by the Sellers the exclusive mandate to sell the Group Companies as promptly as reasonably possible to maximize the sale price to one or several third parties that are qualified, under applicable Laws, to own all the Subject Shares (the Divestiture Third Party Bank Mandate). The sale of the Subject Shares, by the Divestiture Third Party Bank, shall be conditional upon the Conditions set out in clauses 5.1(e), 5.1(f), and 5.1(g) having been fulfilled or waived in accordance with this Agreement; |
(d) | the Sellers, the Foreign Purchaser and the Divestiture Third Party Bank shall meet, when necessary, to be informed about the divestiture process relating to the Subject |
- 31 -
Shares. Neither the Foreign Purchaser nor any of the Sellers shall be allowed to give specific instructions to the Divestiture Third Party Bank whose mandate shall be as described in paragraph (c) above; |
(e) | all costs and expenses incurred by the Divestiture Third Party Bank in relation to the exercise of its functions shall be borne by the Foreign Purchaser; and |
(f) | following a Disposal by the Divestiture Third Party Bank and receipt by LHPI of the LHPI Disposal Proceeds, by CHI of the CHI Disposal Proceeds, by RRI of the RRI Disposal Proceeds and by SWCVI of the SWCVI Disposal Proceeds in respect of such Disposal, LHPI (acting on behalf of the Sellers) may withdraw from the Security Account an amount equal to the amount by which the Sellers Secured Price exceeds the Disposal Proceeds or, as the case may be, LHPI (acting on behalf of the Sellers) shall pay to the Foreign Purchaser an amount equal to 50 per cent. of the amount by which the Disposal Proceeds exceeds the Sellers Secured Price, in each case together with any Security Account Interest accrued in respect of such amounts and without the Foreign Purchasers consent. |
5.22 The Security Documents shall provide as follows in respect of the amounts that the Sellers and the Foreign Purchaser covenant to pay under clause 5.21:
(a) | the amount secured under the Security Documents in favour of the Foreign Purchaser shall be the amount from time to time equal to: |
(i) | the Sellers Secured Price; less |
(ii) | any withdrawal made pursuant to clause 5.21(f); |
(b) | LHPI shall be entitled to access the Security Account on behalf of the Sellers in accordance with the terms of clause 5.21(f); |
(c) | following a withdrawal by LHPI (on behalf of the Sellers) in accordance with clause 5.21(f), the Security over the Security Account in respect of the amount which relates to such Disposal shall be released, discharged and that amount shall be paid to the Foreign Purchaser, and following such a withdrawal by LHPI (on behalf of the Sellers) from the Security Account, in respect of the final Disposal of the Subject Shares, the Security over the LHPI Security Account shall be released, discharged in full and that amount shall be paid to the Foreign Purchaser; |
(d) | any interest or profit generated on the Security Accounts (subject to any deduction of tax at source or any bank or other charges properly charged to the Security Accounts) (the Security Account Interest) shall accrue to and form part of the relevant Security Account and, save as expressly provided in clause 5.21(f), shall be for the account of the Sellers. |
6. PRE-CLOSING UNDERTAKINGS
6.1 From 31 January 2015 until Closing, each Seller shall (unless otherwise required or permitted by the terms of any Transaction Document), by applicable Law, or by any Governmental Entity or as part of the Carve-outs or Add-ons or in connection with the implementation of the Merger or as Fairly Disclosed in folders 5.1.24, 10.3.2 and 10.3.3 of the Global exchange of Data Room or as may be approved by the Foreign Purchaser (who shall be entitled to act for the Purchasers for such purpose), such approval not to be
- 32 -
unreasonably withheld or delayed) ensure (so far as it is able) that the business of the Group Companies in which it owns an interest is carried on in all material respects only in the ordinary course of business and that:
(a) | subject to clause 21 and to applicable Law, the Purchasers representatives shall be allowed such access as is reasonably requested, upon reasonable notice and at reasonable times, locations and intervals, to (i) the books and records of such Group Companies (including all statutory and minute books) and (ii) the premises used by, and management of, such Group Companies; |
(b) | no such Group Company declares or pays any dividend or other distribution (whether in cash, stock or in kind) or reduces its paid-up share capital, save to another Group Company; |
(c) | no such Group Company issues or agrees to issue or allots any share capital (except to another Group Company); |
(d) | no such Group Company modifies its by-laws or other equivalent organisational document; |
(e) | no such Group Companies makes any change in the accounting methods or practices other than in the ordinary course of business (other than such changes required by applicable local accounting principles); |
(f) | all transactions between any such Group Company and any member of its Seller Group (other than another Group Company) take place (i) pursuant to the terms of existing agreements between Group Companies and such member of its Seller Group as disclosed in the Data Room, or (ii) in a manner and on terms consistent with previous practice in the 12 months prior to 31 January 2015; |
(g) | no such Group Company sells or acquires, or agrees to sell or acquire, any business that is material to it; |
(h) | no such Group Company: (i) employs or agrees to employ any new persons, full or part time, in a Senior Manager capacity (other than to fill a vacancy) or (ii) make changes (other than those required by Law) in terms of employment (including pension fund commitments) in each case in circumstances which increases in aggregate the level of staff costs of all its Group Companies by more than [***] per cent. per annum; |
(i) | no such Group Company incurs capital expenditure in a total aggregate amount in excess of [***] per cent. of the total aggregate amount of capital expenditure for the relevant period set forth in the relevant Group Companys budget; |
(j) | no such Group Company creates any Encumbrance over the Subject Shares or the shares or assets of any of its Group Companies other than a Permitted Encumbrance; |
(k) | no Group Company which, individually or with its respective Affiliates, generated more than [***] of that Sellers [***] ceases or proposes to cease to carry on its business or be wound up or enter into receivership, or any form of management or administration over its assets; |
(l) | no such Group Company permits any of its insurances to lapse or do anything which would make any policy of insurance void, null or voidable; |
- 33 -
(m) | no such Group Company enters into or gives or permits or suffers to subsist any guarantee of or indemnity or contract of suretyship for or otherwise commits itself in respect of the due payment of money or the performance of any contract, engagement or obligation of any other person or body which if called upon or otherwise exercised by the relevant counterparty would result in a cost to the Group Companies of [***] or more; |
(n) | in relation to any Material Real Estate of its Group Companies, no such Group Company terminates, or gives a notice to terminate, a lease tenancy or licence; |
(o) | no such Group Company enters into any partnership or joint venture involving or being likely to involve expenditure by its Seller Group in excess of [***] per annum; |
(p) | no such Group Company makes any material amendment to any existing collective bargaining agreement; |
(q) | each such Group Company maintains in all material respects the standards of production that applied to its products in the six months up to 31 January 2015; |
(r) | no such Group Company settles or compromises any claim or disputes or waives a right in relation to litigation or arbitration proceedings (in each case, save in respect of the collection of debts arising in the ordinary course of business) which could reasonably be expected to result in a payment to or by a Group Company of [***] or more; |
(s) | no Group Company shall, and the Sellers shall procure that no Group Company shall, re-file or amend any Tax Return without the express written consent of the Purchasers, except where such re-filing or amendment (i) can reasonably be expected to result in a payment to or by all Group Companies (taken in aggregate only to the extent that similar matters are concerned) of [***] or less or (ii) is required to take into account the consequences of a Tax audit or reassessment or fix an omission or error; and |
(t) | no Group Company shall, and the Sellers shall procure that no Group Company shall, amend any policy in respect of Tax except where such amendment is required by applicable Law or to take into account the consequences of a Tax audit or reassessment in effect on or before Closing, in which case, and where such amending of policy in respect of Tax can reasonably be expected to result in a payment to or by all Group Companies (taken in aggregate only to the extent that similar matters are concerned) of [***] or more, the Group Company shall notify the Purchasers before making and applying any such amendment. |
6.2 The Foreign Purchaser (acting on behalf of the Purchasers) shall not exercise any of its rights pursuant to this clause 6 (including the right to refuse to approve any particular transaction or action) in such a manner as could disrupt unreasonably the efficient operations of the Group Companies.
6.3 Subject to applicable Law, each Seller shall use its reasonable endeavours to assist, and shall procure that each of its Group Companies shall use its reasonable endeavours to assist, the Purchasers to prepare for a smooth transition of the Group Companies to each of their respective Purchaser Groups.
- 34 -
6.4 To the extent that any Group Company has entered into any agreement which contains a clause pursuant to which the counterparty may exercise a right as a result of the Proposed Transactions the consequences of which are adverse to the relevant Group Company, the relevant Sellers and the Purchasers shall cooperate with each other, to ensure that, at the Purchasers cost, appropriate steps are taken before Closing to inform such counterparty of the Proposed Transactions and to seek a waiver of the counterpartys relevant right.
Purchasers Financing
6.5 Each Seller shall (so far as it is able, taking into account any restrictions in any joint venture or shareholders agreements or other similar documents in respect of any of its Non-Wholly-Owned Target Companies) ensure that each of its Group Companies shall use its reasonable efforts to, at the sole expense of the relevant Purchaser(s), cause the directors, officers, employees, advisers and representatives of its Group Companies to provide such cooperation in connection with the arrangement of the debt financing required in connection with the Proposed Transactions (the Financing) as may be reasonably requested by a Purchaser upon reasonable notice and at reasonable times, locations and intervals, including:
(a) | participation of senior management in a reasonable number of meetings and presentations to prospective lenders and investors; |
(b) | furnishing, or using reasonable efforts to cause third parties to furnish, that Purchaser and its financing sources with financial information regarding the Group Companies as may be reasonably requested by that Purchaser, provided (for the avoidance of doubt) that any such financial information (including pro forma financial information) shall not include any information relating to that Purchaser or its Affiliates; |
(c) | assisting the Purchasers and their financing sources in the finalising of offering documents for the Financing and materials and financial and other information for further rating agency presentations; |
(d) | using reasonable efforts to obtain the assistance of its accountants to provide consents for the use of their reports in offering memoranda and other materials related to the Financing, |
provided, however, that nothing in this clause 6.5 shall require such cooperation to the extent it would:
(e) | interfere unreasonably with the business or operations of any of the Group Companies; |
(f) | require any of the Group Companies to take any action that would conflict with or violate any Group Companies organisational documents or any applicable Law or result in the contravention of, or that would reasonably be expected to result in a violation or breach of, or default under, any contract to which any Group Company is a party; |
(g) | require any Group Company to enter into definitive credit documentation in relation to any financing or purchase agreement for the Financing prior to the Closing Date; or |
(h) | result in any officer or director of any Group Company incurring any personal liability with respect to any matters relating to the Financing. |
- 35 -
6.6 Each of the Purchasers covenants with each Group Company, each Connected Person of the Group Companies and each Seller to pay to the relevant Group Company, Connected Person or Seller an amount equivalent to any and all liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred by them in connection with the arrangement of the Financing (including actions taken at the request of that Purchaser in accordance with clause 6.5) and any information (other than information furnished by or on behalf of any Group Company) utilised in connection therewith, in each case prior to the Closing Date, except to the extent such liabilities, losses, damages, claims, costs, expenses, interests, awards, judgments and penalties arise out of the wilful misconduct or fraud of the relevant Seller, Group Company or Connected Person.
6.7 The relevant Purchaser shall promptly upon request by any member of a Seller Group or any Group Company, reimburse such member of a Seller Group or Group Company for out-of-pocket costs and expenses incurred by it in connection with its cooperation pursuant to clause 6.5.
7. CLOSING
7.1 Closing shall take place at the Freshfields Bruckhaus Deringer LLP Brussels office, the Cleary Gottlieb Steen & Hamilton LLP Brussels office or such other place as the Parties may agree on the Closing Date, being:
(a) | the Business Day on which the settlement of the LRI Tender Offer occurs such that the payment to the LRI Minority Shareholders has been made or been made available; or |
(b) | if the Parties are granted by the SEC an exemptive relief from the requirement that the LRI Tender Offer and Closing take place simultaneously, within 8 Business Days after the exemptive relief is granted (or such other date as the Parties may agree). |
7.2 At Closing, each of the Sellers and each of the Purchasers shall deliver or perform (or ensure that there is delivered or performed) all those documents, items and actions respectively listed in relation to that Party or any of its Affiliates in this clause 7 and in the Closing Deliverables. The Purchasers shall jointly designate one or more Designated Purchasers to whom specified Subject Shares shall be transferred by the Sellers on Closing by written notice to the other Parties by no later than 10 Business Days prior to the Closing Date, provided that (i) any such designation shall not result in an increase or decrease of the liabilities of the Parties under this Agreement, nor grant any right against any Party to this Agreement, hereunder or otherwise; and (ii) the Purchasers shall designate a Designated Purchaser (Local) to be the transferee of the LRI Subject Shares and the LCLC Subject Shares.
7.3 The LRI Subject Shares shall be sold by way of a special block sale at the PSE. The Parties shall exert all reasonable efforts to obtain any approvals required from the PSE for the special block sale. Each Party shall bear its own fees, charges and expenses in connection with the special block sale, including brokers fees.
Sellers Obligations
7.4 On the Closing Date, each Seller shall deliver or ensure that there is delivered to the Purchasers (or made available to its or their reasonable satisfaction):
(a) | a copy of the necessary corporate approvals required for entry into this Agreement and any Ancillary Agreement; |
- 36 -
(b) | a copy of each Ancillary Agreement to which it is a Party, duly executed by it; |
(c) | in respect of each of the Group Companies in which it owns an interest, the resignation, in a form reasonably acceptable to the Purchasers, of each director of such Group Company appointed by such Seller as may be notified by the Purchasers within 60 days after 31 January 2015 but in any case not later than 10 Business Days prior to Closing in accordance with the Closing Process; |
(d) | each of the Closing Deliverables applicable to it; |
(e) | evidence of the satisfaction of each of the Conditions applicable to it; and |
(f) | a copy of the Irrevocably Proxy. |
Purchasers Obligations
7.5 At Closing, the Purchasers shall:
(a) | deliver or ensure that there is delivered to the relevant Seller(s) (or made available to its or their reasonable satisfaction): |
(i) | a copy of each Ancillary Agreement to which any member(s) of a Purchaser Group is a Party, duly executed by it; |
(ii) | a copy of all decisions from each relevant Governmental Entity; and |
(iii) | a copy of the necessary corporate approvals required for entry into this Agreement and the Ancillary Agreement; |
(b) | pay the Estimated Price to the Sellers Bank Accounts; and |
(c) | deliver (or ensure that there is delivered to the relevant Seller(s)) each of the Closing Deliverables applicable to it. |
Inter-Company Debt
7.6 At Closing, each Seller and each Purchaser shall carry out their respective obligations under clause 8.
General
7.7 LHPI (acting on behalf of the Sellers) and the Foreign Purchaser (acting on behalf of the Purchasers) shall negotiate in good faith with a view to agreeing before the Closing Date the final form of any Transaction Document which is not in Agreed Form as at the date of this Agreement. On execution of any such Transaction Document, the term sheet in the Agreed Form corresponding to that Transaction Document shall terminate and be replaced in whole by the relevant Transaction Document. If not so agreed by the Closing Date, any outstanding Transaction Document shall be deemed to take the form of the term sheet in the Agreed Form corresponding to that Transaction Document, and where there is no such term sheet the Transaction Document shall be in the form reasonably specified by the Sellers provided it is consistent with the terms of this Agreement.
7.8 If any document listed in this clause 7 is required to be notarised, the Parties (or their relevant Affiliates) shall execute such document at a time and in the location notified by LHPI (acting on behalf of the Sellers) to the Foreign Purchaser (acting on behalf of the Purchasers)
- 37 -
at least 2 Business Days before Closing where a notary with the required qualification will be present.
7.9 All documents and items delivered at Closing pursuant to this clause 7 shall be held by the recipient to the order of the person delivering the same until such time as Closing shall be deemed to have taken place. Simultaneously with:
(a) | delivery of all documents and all items required to be delivered at Closing (or waiver of its delivery by the person entitled to receive the relevant document or item); and |
(b) | receipt of an electronic funds transfer to the Sellers Bank Accounts in immediately available funds of the Price of the Subject Shares, |
the documents and items delivered in accordance with this clause 7 and the Closing Deliverables shall cease to be held to the order of the person delivering them and Closing shall be deemed to have taken place.
7.10 If a Seller or a Purchaser fails to comply with any of their respective obligations in this clause 7, the Purchasers (if the defaulting party is a Seller) or the Sellers (if the defaulting party is a Purchaser) shall not be entitled to terminate this Agreement but shall be entitled (in addition to and without prejudice to all other rights and remedies available) by written notice to the other Parties:
(a) | to require Closing to take place so far as practicable having regard to the defaults which have occurred; or |
(b) | to set a new date for Closing (being not more than 20 Business Days after the original date for Closing) in which case the provisions of this clause 7 shall apply to Closing as so deferred but on the basis that such deferral may only occur once. |
8. INTER-COMPANY TRADING AMOUNTS AND INTER COMPANY NON-TRADING
AMOUNTS
Inter-Company Trading Amounts
8.1 In relation to Inter-Company Trading Amounts:
(a) | the Purchasers shall procure that any Inter-Company Trading Amounts which are owed by any Group Company is paid to the relevant member of its Seller Group in the ordinary course, and such payments shall be made in accordance with clause 19; and |
(b) | each Seller shall procure that any Inter-Company Trading Amounts which are owed by any member of its Seller Group is paid to the relevant Group Company in the ordinary course, and such payments shall be made in accordance with clause 19. |
Inter-Company Non-Trading Amount
8.2 Not less than 3 Business Days before the Closing Date, each Seller shall notify the Purchasers of the Estimated Inter-Company Non-Trading Payables and the Estimated Inter-Company Non-Trading Receivables in respect of its Group Companies, as at the Closing Date, in each case specifying the relevant debtor, creditor and currency in respect of each Inter-Company Non-Trading Receivable and Inter-Company Non-Trading Payable.
- 38 -
8.3 On Closing:
(a) | the Purchasers shall procure that each relevant Group Company repays to the relevant member of its Seller Group the amount in the applicable currency of any Estimated Inter-Company Non-Trading Payables and shall acknowledge on behalf of each relevant Group Company the payment of the Estimated Inter-Company Non-Trading Receivables in accordance with clause 8.3(b); and |
(b) | each Seller shall procure that each relevant member of its Seller Group repays to the relevant Group Company the amount in the applicable currency of any Estimated Inter-Company Non-Trading Receivables and shall acknowledge on behalf of each relevant member of its Seller Group the payment of the Estimated Inter-Company Non-Trading Payables in accordance with clause 8.3(a), |
in each case as notified in accordance with clause 8.2 and the Inter-Company Non-Trading Amount shall be treated as discharged to the extent of that payment.
8.4 Any payment pursuant to clause 8.3 shall be deemed to be a payment first, to the extent possible, of all interest accrued on the relevant Inter-Company Non-Trading Amount and thereafter of the relevant principal amount.
Final repayment of Inter-Company Non-Trading Amounts
8.5 When the Closing Statements have been finally agreed or determined in accordance with clauses 4.6 to 4.14 (inclusive), the following payments shall be made in respect of any Inter-Company Non-Trading Payable:
(a) | if any Inter-Company Non-Trading Payable is greater than the applicable Estimated Inter-Company Non-Trading Payable or any Inter-Company Non-Trading Receivable is less than the applicable Estimated Inter-Company Non-Trading Receivable, then the Purchasers shall procure that each relevant Group Company repays to the relevant member of the corresponding Seller Group the amount in the applicable currency equal to the difference and shall acknowledge on behalf of each relevant Group Company the payment of the amount paid to that Group Company in accordance with clause 8.5(b); and |
(b) | if any Inter-Company Non-Trading Payable is less than the applicable Estimated Inter-Company Non-Trading Payable or any Inter-Company Non-Trading Receivable is greater than the Estimated Inter-Company Non-Trading Receivable, then the relevant Seller shall procure that each relevant member of the Seller Group repays to the relevant Group Company the amount in the applicable currency equal to the difference and shall acknowledge on behalf of each relevant member of the Seller Group the payment of the amount paid to that member of its Seller Group in accordance with clause 8.5(a). |
Any amount payable under this clause 8.5 shall be paid with interest, in the applicable currency, on such amount for the period from (but excluding) the Closing Date to (but including) the due date for payment calculated on a daily basis. The rate of interest shall be the rate applicable to the relevant Inter-Company Non-Trading Amount under the terms on which it was outstanding at Closing.
8.6 Any payments to be made pursuant to clause 8.5 shall be made within 5 Business Days after the date on which the relevant Closing Statement is agreed or determined in accordance with clauses 4.6 to 4.14 (inclusive).
- 39 -
9. SELLERS WARRANTIES
9.1 Each Seller severally warrants to the Purchasers as at the Closing Date and (i) in the case of the Target Companies, as at 31 January 2015; and (ii) in the case of the Subsidiary Companies, as at the date of this Agreement (except where a reference is made to a specific date in which case the Warranty is made as of such date), that each of the Warranties is true, accurate and not misleading, save (a) in respect of those Title Warranties set out in clauses 9.8 to 9.11 which shall be warranted as at the Closing Date only, and (b) that in respect of clause 9.16(a), the compliance with the Philippine Competition Act shall only be warranted (i) in the case of the Target Companies, as at 31 January 2015; and (ii) in the case of the Subsidiary Companies, as at the date of this Agreement.
Organisation
9.2 That Seller and each Group Company in which it owns an interest is a corporation duly incorporated or formed, as applicable, and validly existing under the Laws of its jurisdiction of incorporation or formation and in any jurisdiction where validly existing is not defined, not subject to any administrative, winding up or similar order and there are no Insolvency Proceedings concerning such Seller or any of the Group Companies in which it owns an interest.
9.3 That Seller and each Group Company in which it owns an interest has all requisite corporate power and authority to own its assets and to carry on its business as and where it is now being conducted.
Authorisation; Enforceability
9.4 That Seller has the corporate power and authority to execute this Agreement and the other Transaction Documents to which it is a party, and to perform its obligations hereunder and thereunder and to consummate the Proposed Transactions;
9.5 The execution of this Agreement and the applicable Transaction Documents by that Seller and the performance by it of its obligations hereunder and thereunder have been duly authorised by all necessary corporate action; and
9.6 This Agreement has been, and upon their execution the applicable Transaction Documents will have been, duly executed and delivered by that Seller and (assuming due authorisation, execution and delivery by the Purchasers and, where applicable, the Designated Purchaser(s)) this Agreement constitutes, and upon their execution the applicable Transaction Documents will constitute, a legal, valid and binding obligation of such Seller enforceable against it in accordance with their respective terms.
No Approvals or Conflicts
9.7 The execution, delivery and performance by that Seller of this Agreement and the Transaction Documents to which it is a party and the consummation by that Seller of the Proposed Transactions do not and will not: (i) in any material respect violate or conflict with or result in a material breach by that Seller of its organisational documents; (ii) in any material respect violate or conflict with or result in a material breach of, or constitute a material default by that Seller (or create an event which, with notice or lapse of time or both, would constitute a material default) or give rise to any right of termination, cancellation or acceleration under any note, bond, mortgage, indenture, deed of trust, license, franchise, permit, lease, contract, agreement or other instrument to which that Seller may be bound; (iii) in any material respect violate or result in a material breach of any Law applicable to that Seller; or (iv) except for the Conditions and Clearances, require any order, consent, approval
- 40 -
or authorisation of, or notice to, or declaration, filing, application, qualification or registration with, any Governmental Entity.
Equity Interests of the Target Companies
9.8 Each Seller, with respect to each Target Company in which it owns an interest, warrants that Part B of Schedule 1 contains a true, complete and accurate statement of the: (i) jurisdiction of incorporation, formation or organisation, as applicable; and (ii) the number of authorised, issued and outstanding shares of that Target Company.
9.9 Each Seller warrants that it is the legal and beneficial owner of the shares of the Target Companies shown opposite its name in Part B of Schedule 1 and that there is no restriction on the transfer of such shares to the Purchasers. Each Seller warrants that such shares are owned free and clear of any Encumbrances and have been validly issued, fully paid and, where applicable, non-assessable and, no Target Company (except LRI) owns any equity interest in any other person.
9.10 Each Seller warrants that it will be at the Closing Date the legal and beneficial owner of the Subject Shares shown opposite its name in Part A of Schedule 1 and that there is no restriction on the transfer of the Subject Shares to the Designated Purchasers. Each Seller warrants that its Subject Shares are owned free and clear of any Encumbrances and have been validly issued, fully paid and, where applicable, are non-assessable and, no Group Company (except LRI) owns any equity interest in any other person.
9.11 Each Seller, with respect to each Target Company in which it owns an interest, warrants that there are no other authorised, issued or outstanding equity interests and no outstanding options, warrants, rights or any other agreements relating to the sale, issuance or voting of any equity interest, or any securities or other instruments convertible into, exchangeable for or evidencing the right to purchase any equity interest, of that Target Company.
Equity Interests of the Subsidiary Companies
9.12 Each Seller warrants that LRI is the legal and beneficial owner of the shares of the Subsidiary Companies (except as otherwise indicated in the said Part B of Schedule 1) and that there is no restriction on the transfer of such shares to the Purchasers. Each Seller warrants that such shares are owned free and clear of any Encumbrances and have been validly issued, fully paid and, where applicable, non-assessable and, no Subsidiary Company owns any equity interest in any other person.
Accounts and Finance Arrangements
9.13 The Transaction Perimeter Financial Information:
(a) | has been prepared [***] and in accordance with the accounting policies, statements and practices stated in Note 1 to the Transaction Perimeter Financial Information on a consistent basis with the Interim Financial Statements; and |
(b) | having regard to the purpose for which it was prepared and reviewed, and the fact that it has not been audited nor prepared in the context of a statutory closing process, does not [***] misstate (i) the assets and liabilities of the Group Companies to which they relate as at the Financial Information Date or (ii) the income or cash flow of the Group Companies to which it relates in respect of the period to which that Transaction Perimeter Financial Information relates. |
- 41 -
9.14 The Interim Financial Statements:
(a) | have been prepared [***] from the accounting records of each of the relevant Group Companies to which they relate in accordance with IFRS as they would have been prepared for the purpose of the financial reporting of the group consolidation; and |
(b) | having regard to the purpose for which they were prepared, as stated in paragraph (a) above, the fact that they have not been audited and the standard normally applied in the preparation of group interim financial reporting information for internal purposes, give [***] view of (i) the assets and liabilities of the companies to which they relate as at the Financial Information Date and (ii) the income and cash flow of the companies to which they relate in respect of the period from 1 January 2014 until the Financial Information Date; |
provided that:
(a) | the Sellers shall have no liability under this clause 9.14 if and to the extent that the relevant accounting item was accounted for in accordance with IFRS in the Transaction Perimeter Financial Information; and |
(b) | no statement is made or implied in this clause 9.14 in relation to any entities other than the Group Companies or in relation to any business, assets or liabilities of a Group Company that will not be a business, asset or liability of a Group Company following completion of the Carve-Outs and Add-Ons. |
9.15 In the period from the Financial Information Date up to 31 January 2015, so far as the Sellers are aware, the business and activities of each Group Company have been carried on materially in the ordinary and usual course.
Compliance with Law; Governmental Authorisations, Licences, Permits, Authorisations and Consents
9.16 Except as would not result in the relevant Group Company(ies) incurring liability in aggregate, when taken together with any liability incurred as a result of the matters referred to in clause 9.25, in excess of [***]
(a) | each Group Company is in compliance in all material respects and has not received any written notice alleging that it is not in compliance in all material respects with any Law (including for the avoidance of doubt any Anti-Bribery Law and all Laws relating to competition and anti-trust) applicable to the conduct of its business; |
(b) | each Group Company has obtained all licences, permits, authorisations and consents required for the proper carrying on of its business and all licences, permits, authorisations and consents are valid and subsisting (in each case other than in respect of Intellectual Property Rights); and |
(c) | no Group Company is in material breach of any licences, permits, authorisations or consents and, so far as the Sellers are aware, no circumstances exist which may result in any of them being revoked or not renewed, in whole or in part (in each case other than in respect of Intellectual Property Rights). |
9.17 Each Seller has in place in respect of its Group Companies compliance policies in respect of applicable Anti-Bribery Law. No written notice has been received and, to the
- 42 -
knowledge of that Seller, there is no threatened or pending investigation, inquiry, prosecution or proceeding, which has been notified in writing to the relevant Group Company, either involving any Group Company, any persons who at present are, or who at any time within the [***] were, a Senior Manager of any of the Group Companies (provided that such investigation, inquiry, prosecution or proceeding is in respect of their capacity as Senior Manager of the relevant Group Company), under any Anti-Bribery Law.
Litigation
9.18 There are no suits, actions, arbitrations, tribunals, disciplinary, enforcements, investigation or other proceedings (Proceedings) pending or, so far as that Seller is aware, threatened in writing against any of its Group Companies and, so far as that Seller is aware, no fact or circumstance exists which is likely to or could give rise to any Proceedings, in each case where the initiator of such Proceedings claims or is likely to claim an amount in excess of [***].
9.19 There is no outstanding or pending judgment, sentence, order, decree, arbitral award or decision of any court, tribunal, arbitrator, administrator, or any Governmental Entity (Administrative Proceedings) against any Group Company where the initiator of such Administrative Proceedings claims or is likely to claim an amount in excess of [***].
Tax Matters
9.20 All Tax Returns required to be filed [***] prior to the Closing Date by or on behalf of its Group Companies (either separately or as members of a group of corporations) have been timely filed or will be timely filed before the Closing Date (in each case, subject to permitted extensions applicable to such filing) and are true, complete and accurate in all material respects.
9.21 All Taxes due or owing prior to Closing by any of the Group Companies have been paid (or will be paid) within the prescribed period or any extension thereof other than Taxes that are being contested in good faith.
9.22 None of the Group Companies are involved in any material current dispute with or investigation by any Tax Authority or have in the [***] been the subject of any material dispute with or investigation by any Tax Authority.
Contracts
9.23 Each Material Contract to which one of the Group Companies in which it owns an interest is a party is in full force and effect, and is a valid and binding agreement of such Group Company which is a party thereto and is enforceable against such Group Company in accordance with its terms. So far as that Seller is aware, no condition exists or event has occurred that (whether with or without notice or lapse of time or both) would constitute a default by: (i) any of its Group Companies under any Material Contract to which it is a party; or (ii) any other party to any Material Contract to which one of its Group Companies is a party, in each case, except for defaults that would not reasonably be expected to be material.
9.24 The Data Room contains copies of all Material Contracts which can be terminated by the counterparty and/or entitle the counterparty to a payment as a result of, or in connection with, the consummation of the Proposed Transactions.
- 43 -
Environmental Matters
9.25 Except as would not result in the relevant Group Company(ies) incurring liability in aggregate, when taken together with any liability incurred as a result of the matters referred to in clause 9.16, in excess of [***]
(a) | each of its Group Companies is and has been for the period of [***] to 31 January 2015 in compliance in all material respects with all Environmental Laws; |
(b) | each of its Group Companies has obtained and maintained in full force and effect the Environmental Consents required under applicable Law in relation to the business of the Group Companies and its processes and activities and is and has been for the period of [***] to 31 January 2015 in compliance in all material respects with all the terms and conditions attached to them; and |
(c) | no Group Company (i) received any written notice that remains outstanding of any civil, criminal or administrative action, claim, investigation or other proceedings or suit from any Governmental Entity or third party alleging that it is in material violation of any Environmental Law or Environmental Consents or (ii) is engaged in any litigation or arbitration proceedings or, the subject of any investigations by any Governmental Entity under Environmental Law or, so far as the Seller is aware, has been threatened in writing with any litigation or arbitration proceedings under Environmental Law. |
Real Property
9.26 The Group Companies have good and marketable title to the Material Real Estate that they own, free and clear of any Encumbrances, except for Permitted Encumbrances.
9.27 There are no leases, subleases, licenses, concessions, or other written agreements, granting to any third party the right of use or occupancy of any portion of the Material Real Estate owned by its Group Companies and no option or other right exists to purchase, lease or otherwise use or occupy any portion of the Material Real Estate owned by its Group Companies.
9.28 So far as that Seller is aware, no Group Company has received a written notice from any Governmental Entity or any third party that it is not in compliance with Laws in respect of any Material Real Estate that it owns, except as would not reasonably be expected to be material to its operations.
9.29 The Material Real Estate which is not owned by the Group Companies is used and/or occupied by them pursuant to a valid and enforceable title.
Labour Matters
9.30 Except where the failure to be in compliance would not result in the relevant Group Company incurring a liability in excess of [***], each of its Group Companies is in compliance in all material respects with all Laws and collective bargaining agreements applicable to it respecting employment and employment practices, terms and conditions of employment and wages and hours.
Insolvency
9.31 No order has been made or petition presented or resolution passed for the winding up or dissolution of any Group Company or for the appointment of a liquidator, receiver, receiver and manager or examiner to any Group Company.
- 44 -
9.32 No receiver or receiver and manager has been appointed by any person over any Group Company, or over the whole or substantially the whole of the business of any Group Company, nor, so far as the Sellers are aware, have any circumstances arisen which would allow for the appointment of a receiver or receiver and manager in respect of any Group Company, or the whole or substantially the whole of the business of any Group Company, nor has any Group Company requested the appointment of a receiver or receiver and manager.
9.33 No Group Company is insolvent or unable to pay its debts or likely to become insolvent or unable to pay its debts as they fall due.
Information Technology
9.34 There have not, since [***] prior to 31 January 2015, been any failures or breakdowns of any IT Systems which have caused either a disruption or interruption of a material nature to the business of any Group Company.
Pensions
9.35 Except as would not result in the relevant Group Company incurring a liability in excess of [***] in respect of each Benefit Plan: (i) it has been administered in accordance with its terms; (ii) it is in compliance, in all material respects, with the applicable provisions of all Laws; (iii) all reports, returns and similar documents with respect to each Benefit Plans required to be filed with any Governmental Entity or distributed to any Benefit Plan participant have been duly and timely filed or distributed and, so far as the Sellers are aware, all reports, returns and similar documents actually filed or distributed were true, complete and correct; and (iv) there are currently no investigations by any Governmental Entity, termination proceedings or other claims by any person (except routine claims for benefits payable under the Benefit Plans) or proceedings against or involving any Benefit Plan or asserting any rights to or claims for benefits under any Benefit Plan that could give rise to any material liability, and, so far as that Seller is aware, there are not any facts or circumstances that could give rise to any such liability in the event of any such investigation, claim or proceeding.
Insurance
9.36 In respect of the Policies that are disclosed in the Data Room: (i) all premiums have been paid in accordance with the terms of such Policies; (ii) such insurances are in full force and effect; (iii) there are no outstanding claims in excess of [***] and (iv) so far as the Sellers are aware, no facts or matters have occurred that are likely to give rise to a claim in excess of [***]
10. LIMITATIONS ON LIABILITY
In the event of any conflict or inconsistency between the provisions of the Deed of Tax Covenant and this clause 10, the provisions of the Deed of Tax Covenant shall prevail. The exclusions, limitations and other provisions applicable to Tax Warranty Claims in the Deed of Tax Covenant shall apply from 31 January 2015 as if they were incorporated herein.
10.1 Loss. Only the Purchasers shall be entitled to Claim for any Loss arising in connection with this Agreement which is suffered by a Purchaser or any member of its Purchaser Group (including, for the avoidance of doubt, Group Companies which become Affiliates of a Purchaser) and, where the Loss is suffered by a Non-Wholly Owned Target Company, only for the Target Percentage of any such Loss.
- 45 -
10.2 Time Limits. No Seller shall be liable for any Warranty Claim or Tax Deed Claim unless that Seller receives from any Purchaser written notice (within [***] of any Purchaser or Designated Purchaser becoming aware of such Claim, provided that a failure to deliver such a notice [***] shall not prevent a Tax Deed Claim being made) containing specific details of the Claim to the extent reasonably available and including that Purchasers estimate of the amount of the Warranty Claim, Tax Deed Claim to the extent it is reasonably possible for that Purchaser to so estimate:
(a) | prior to 30 June 2017, in the case of a Warranty Claim other than a Tax Warranty Claim or Environmental Warranty Claim; |
(b) | prior to the date that is 4 years after the Closing Date, in the case of an Environmental Warranty Claim (provided that, in relation to an Environmental Claim that relates to Contamination, a Trigger Event has occurred with respect to the Contamination in relation to which a Purchaser seeks to claim and notice of such Trigger Event has been given in accordance with this clause 10.2); |
(c) | prior to the date that is 6 years after the Closing Date, in the case of a Tax Claim. |
10.3 Thresholds for Claims. No Seller shall be liable for any single Warranty Claim or Tax Deed Claim:
(a) | unless the amount sought pursuant to that single Warranty Claim or Tax Deed Claim (as the case may be) in accordance with the terms of this Agreement [***] or |
(b) | unless the aggregate amount of the liability of that Seller for all Warranty Claims and Tax Deed Claims not excluded by paragraph [***]. |
10.4 Maximum limit for all Claims.
(a) | Subject to clause 10.4(b), the aggregate amount of the liability of each Seller for all Tax Deed Claims or Warranty Claims other than Title Claims and the [***] Shares Indemnity shall not exceed [***]; |
(b) | Notwithstanding any other provisions of this Agreement, the aggregate amount of the liability of each Seller under or in connection with this Agreement shall not exceed [***]. |
10.5 Warranty Claim to be withdrawn unless litigation commenced. Any Warranty Claim, shall (if it has not been previously satisfied, settled or withdrawn) be deemed to have been withdrawn [***] after the notice is given pursuant to clause 10.2, unless legal proceedings (including for the avoidance of doubt, arbitration proceedings pursuant to clause 36 of this Agreement) in respect of it have been commenced, by being both issued and served. No new Warranty Claim may be made in respect of the facts, matters, events or circumstances giving rise to any such withdrawn Warranty Claim.
10.6 Matters disclosed. No Seller shall be liable for any Warranty Claim if and to the extent that the fact, matter, event or circumstance giving rise to such Warranty Claim:
- 46 -
(a) | is Fairly Disclosed in this Agreement or any other Transaction Document; or |
(b) | is Fairly Disclosed in the Data Room (as evidenced by the copies of the Data Room referred to in paragraphs (a)(ii), b(ii) and (c)(ii) of the definition of Data Room). |
For the avoidance of doubt this clause 10.6 shall not apply in respect of any Tax Deed Claim or Title Claim.
No item contained in the LII/LMI Disclosure or the LII/LMI Q&A shall be deemed to be Fairly Disclosed or otherwise disclosed in relation to any Target Company Warranty Claim and the Parties acknowledge that the LII/LMI Disclosure and the LII/LMI Q&A was not available to the Purchasers on 31 January 2015, the date on which this Agreement was originally entered into as it related to the Target Companies.
10.7 Matters provided for. No Seller shall be liable for any Warranty Claim if and to the extent that the fact, matter, event or circumstance giving rise to the Warranty Claim is accounted for as a liability, provision or reserve in or otherwise taken into account in the calculation of Working Capital or Debt in the Closing Statement, provided that, in relation to those items which are generally (but not specifically) accounted for as a liability, provision or reserve in or otherwise taken into account in the calculation of Working Capital or Debt in the Closing Statement (the General Items), the above limitation will apply in relation to the relevant specific items set out in the Closing Statement which are expressed to relate to the relevant General Item.
10.8 Effective Nature of the Loss. A Purchaser and any member of its Purchaser Group shall only be entitled to make a Warranty Claim for any Loss to the extent and only to the extent such Loss has effectively been sustained by that Purchaser or any member of its Purchaser Group (including the Group Companies), it being specified that:
(a) | any Tax assessment resulting in any reduction of Tax losses or Tax credits shall not constitute an effective Loss sustained by any Purchaser or any member of its Purchaser Group; |
(b) | any deficiency assessed by the Tax Authorities the effect of which is to shift a Tax Liability from one fiscal year to another or to modify the jurisdiction in which a Tax Liability is due may give rise to a Warranty Claim only insofar as (i) that Purchaser or any member of its Purchaser Group is required to pay a penalty or interest charge in relation thereto, or (ii) that Purchaser or any member of its Purchaser Group is subject to increased Tax thereon as a result of an increase in applicable or effective Tax rates; |
(c) | any deficiency assessed with regard to a Tax which is recoverable (for example, but without limitation, input VAT) shall give rise to a Warranty Claim only insofar as that Purchaser or any member of its Purchaser Group is required to pay a penalty or interest charge in relation thereto; |
(d) | any payment due in respect of a Warranty Claim shall be calculated by taking into account the effect of any Tax savings actually received by that Purchaser or any member of its Purchaser Group and/or any increase in the amount of Tax losses available to them for carry-forward or carry-back and resulting from the deductibility of the relevant loss for Tax purposes; and |
(e) | any payment due in respect of a Warranty Claim shall be based on the Loss suffered by that Purchaser or any member of its Purchaser Group and, consistent with paragraph (c)(ii) of the definition of Loss, shall be computed [***] |
- 47 -
[***];
10.9 Contingent liabilities. If any Warranty Claim or Tax Deed Claim is based upon a liability which is contingent only, no Seller shall be liable to make any payment unless and until such contingent liability gives rise to an obligation to make a payment but each Purchaser has the right under clause 10.1 to give notice of that Warranty Claim or Tax Deed Claim before such time, in which case such Warranty Claim or Tax Deed Claim shall not be subject to clause 10.2.
10.10 No liability for Warranty Claims arising from acts or omissions of a Purchaser. No Seller shall be liable for any Warranty Claim to the extent that it would not have arisen but for, or has been increased or not reduced as a result of, any voluntary act (including, without limitation, any decision to cease operating a plant, terminal or quarry), omission or transaction (including, without limitation, a voluntary disclaimer of any Relief) or any change in accounting or Tax methods (including consolidation methods) or policies (save for any such change that is required in order to comply with any applicable Law in force as at the Closing Date) carried out:
(a) | by a Purchaser or any member of its Purchaser Group (including any Group Company) (or their respective directors, employees or agents or successors in title); or |
(b) | by any member of the relevant Seller Group or any of its Group Companies at the direction or request of a Purchaser or any member of its Purchaser Group. |
10.11 Purchasers failure to comply with its obligations. No Seller shall be liable for any Warranty Claim to the extent that it would not have arisen but for the failure of a Purchaser to comply with any of its obligations under this Agreement.
10.12 Insured Claims. No Seller shall be liable in respect of any Warranty Claim to the extent that the amount of such Warranty Claim is recovered or recoverable (net of any Tax suffered on the proceeds) under a policy of insurance that covers a Group Company (or would have covered such Group Company if the policies of insurance effected by or for the benefit of such Group Company had been maintained after Closing on no less favourable terms than those existing as at 31 January 2015.
10.13 Purchasers duty to mitigate. Without prejudice to (i) the common law duty of the Purchasers to mitigate any Loss which it may suffer as a result of any matter giving rise to a Claim, or (ii) the Sellers right to claim for breach of contract in respect of Clause 5 of the Deed of Tax Covenant or clause 10.20 hereof , the Purchasers shall procure that all reasonable steps are taken to avoid or mitigate any Loss or damage which it may suffer in consequence of any breach by a Seller of the terms of this Agreement.
10.14 Recovery from third party after payment from Seller. Where a Seller has made a payment to a Purchaser in relation to any Warranty Claim or Tax Deed Claim and that Purchaser or any member of its Purchaser Group (including any Group Company) receives or is entitled to recover (whether by insurance, payment, discount, credit, relief or otherwise) from a third party a payment or Relief which indemnifies or compensates that Purchaser or any member of its Purchaser Group (in whole or in part) in respect of the liability or Loss which is the subject of a Warranty Claim or Tax Deed Claim, that Purchaser or relevant member of its Purchaser Group shall: (i) promptly notify that Seller of the fact and provide such information as that Seller may reasonably require; (ii) take all reasonable steps or proceedings that the Seller may reasonably require to enforce such right; and (iii) pay to that
- 48 -
Seller as soon as practicable after receipt of an amount equal to the amount recovered from the third party (or, in the case of a Relief, the amount that Purchaser or any member of its Purchaser Group will save by virtue of the Relief) (in each case net of Tax and less all reasonably incurred costs of recovery by that Purchaser in recovering that sum).
10.15 Net financial benefit. No Seller shall be liable to satisfy any Warranty Claim to the extent of any corresponding saving by or net quantifiable financial benefit to a Purchaser or any member of its Purchaser Group arising from the matter(s) giving rise to such Warranty Claim, including the amount (if any) by which any Tax for which that Purchaser or any member of its Purchaser Group would otherwise have been accountable or liable to be assessed is actually reduced or extinguished as a result of the matter(s) giving rise to the Warranty Claim.
10.16 No liability for legislation or changes in rates of Tax. No Seller shall be liable for any Warranty Claim or Tax Deed Claim if and to the extent it is attributable to or the amount of such Warranty Claim or Tax Deed Claim is increased as a result of any: (i) legislation not in force at the Closing Date; (ii) change of Law (or any change in interpretation), regulation, directive, requirement or administrative practice (including the published practice of any Tax Authority) after the Closing Date; or (iii) change in the rates of Tax in force at the Closing Date (including if such changes have a retroactive effect) provided in each case that the relevant change was not announced prior to the Closing Date.
10.17 No double recovery. No Purchaser or any member of its Purchaser Group shall be entitled to recover damages or obtain payment, reimbursement, restitution or indemnity more than once in respect of any one Loss or cost, and for this purpose any recovery by a Designated Purchaser, including from a third party, shall be deemed to be a recovery by that Purchaser. For the avoidance of doubt, any claim under the Title Warranties for the [***] Shares shall bar any Claim under the [***] Share Indemnity under clause 11.
10.18 Waiver of right of set off. The Purchasers and each member of their respective Purchaser Group waive and relinquish any right of set off or counterclaim, deduction or retention which they might otherwise have in respect of any Claim against or out of any payments which they may be obliged to make (or procure to be made) to a Seller pursuant to this Agreement or otherwise. The Sellers waive and relinquish any right of set off or counterclaim, deduction or retention which the Sellers might otherwise have in respect of any Claim against or out of any payments which either Seller may be obliged to make (or procure to be made) to a Purchaser or a member of a Purchaser Group pursuant to this Agreement or otherwise.
10.19 Sellers to have opportunity to remedy breaches. If a breach of this Agreement is capable of remedy, a Purchaser or a member of a Purchaser Group shall only be entitled to compensation if it gives the relevant Seller written notice of the breach and the breach is not remedied within [***] after the date on which such notice is served on the relevant Seller. Without prejudice to their duty to mitigate any Loss, the Purchasers shall (or shall procure that any relevant member of their respective Purchaser Group shall) provide (at the expense of the relevant Seller) all reasonable assistance to the relevant Seller to remedy any such breach.
10.20 Conduct of Third Party Claims.
(a) | Subject to clause 10.20(b), if a Purchaser or any Designated Purchaser becomes aware of any claim or potential claim by a third party, including any Tax Authority or any other Governmental Entity (a Third Party Claim), that might result in a Warranty Claim or Tax Deed Claim being made by that Purchaser, that Purchaser shall: |
- 49 -
(i) | promptly (and in any event within [***] of it or a Designated Purchaser becoming aware of it, or when an action is required before a certain date subject to rights forfeiture, as soon as reasonably practicable before such date and in any case early enough to enable the relevant Seller to participate in the proceeding) give notice of the Third Party Claim to the relevant Seller and ensure that the relevant Seller and its Representatives are given all reasonable information and facilities to investigate it; |
(ii) | not (and ensure that each member of its Purchaser Group shall not) admit liability or make any agreement or compromise in relation to the Third Party Claim without prior written approval of the relevant Seller; |
(iii) | keep the relevant Seller reasonably informed of the progress of, and any material developments in relation to, the Third Party Claim, consult in good faith with the relevant Seller with respect to the Third Party Claim, and consider in good faith any reasonable request of the relevant Seller to avoid, resist, dispute, appeal, compromise or defend the Third Party Claim; and |
(iv) | if requested by the relevant Seller and such disclosure by the Purchaser is permitted by any applicable Law, provide the relevant Seller (at such Sellers expense) with copies of any material correspondence or other documents relating to the Third Party Claim (subject to legal professional privilege and any obligations of confidence that are binding on the Purchaser or any member of its Purchaser Group and each member of its Purchaser Group). |
(b) | Without prejudice to clause 10.20(a), in the case of a Third Party Claim that might result in a Warranty Claim or Tax Deed Claim being made by a Purchaser, from such date as the Sellers: |
(i) | to the extent any liability actually arises under this Agreement as a result of a Third Party Claim, accept the right of the Purchaser or the relevant Group Company to be compensated by the Sellers in respect of the Third Party Claim pursuant to the terms of this Agreement (but at all times subject to the limitations on liability set out herein); or |
(ii) | fail to provide written approval pursuant to clause 10.20(a)(ii) within [***] after written request from the Purchaser for such approval in respect of the Third Party Claim (in which case the Sellers will be deemed to have agreed to compensate the Purchaser or the relevant Group Company in respect of the subject matter of the Third Party Claim pursuant to the terms of this Agreement (but at all times subject to the limitations on liability set out herein)), |
such Purchaser shall (subject to the Purchaser or the relevant member of its Purchaser Group being indemnified by the relevant Seller against all reasonable out of pocket costs and expenses incurred in respect of the Third Party Claim) ensure that it and each member of its Purchaser Group shall:
(iii) | take such action as the relevant Seller may reasonably request to avoid, resist, dispute, appeal, compromise or defend the Third Party Claim; |
(iv) | allow the relevant Seller to conduct all proceedings and/or negotiations arising in connection with the Third Party Claim; and |
- 50 -
(v) | provide such information and assistance as the relevant Seller may reasonably require in connection with the preparation for and conduct of any proceedings and/or negotiations relating to the Third Party Claim. |
(c) | The Sellers agree that, in respect of any Third Party Claim that might result in a Warranty Claim being made by a Purchaser against all (but not one only) of them, they shall take any and all actions and decisions required by or under this clause 10.20 as if they were a single person. |
10.21 Reduction in price for the Subject Shares. Each Seller is entering into the obligations under this Agreement on its own behalf. Accordingly, any payment made by any Seller in respect of a Claim, a Tax Deed Claim or any other claim under this Agreement or under the Deed of Tax Covenant shall, to the maximum extent possible, be deemed to be a reduction in the price paid to that relevant Seller in respect of the relevant Subject Shares.
10.22 Due date for payment of Claims. Any payment due by a Seller to the Purchasers or a member of a Purchaser Group in respect of any Warranty Claim or Tax Deed Claim shall be payable [***] after, as the case may be, including, for the avoidance of doubt, its acceptance of the amount due to the Purchasers in this respect:
(a) | the notification by the relevant Seller to the relevant Purchaser of its acceptance of the Warranty Claim or Tax Deed Claim (as the case may be); |
(b) | the date when the amount of such Sellers liability shall have been finally determined pursuant to an amicable settlement between either: (i) the relevant Purchaser and the Seller in the case of a Warranty Claim or Tax Deed Claim (as the case may be) not based on a Third Party Claim; or (ii) the relevant Purchaser and the relevant third party in the case of a Warranty Claim or Tax Deed Claim (as the case may be) based on a Third Party Claim (provided clause 10.20 has been complied with); |
(c) | the definitive and enforceable decision of the arbitral tribunal competent under clause 36 deciding that such payment was due pursuant to the terms of this Agreement; or |
(d) | if earlier, the due date for the payment of any Tax to which any Tax Claim relates, provided that: |
(i) | where the obligation to pay such Tax is contested by the relevant Seller, the relevant Purchaser shall be obliged, if possible and upon request of the relevant Seller, to file for a postponement of the payment of Tax provided that, if the date on which Tax to which this paragraph applies must be paid to a Tax Authority is deferred following application to the appropriate authority, the date for payment by the relevant Seller shall be the earlier of [***] before the date on which the Tax must be paid to the relevant Tax Authority (notwithstanding any initial deferral but taking into account the impact on the payment date of any action requested by the Sellers) and such date when the amount of Tax is finally and conclusively determined. For this purpose, an amount of Tax shall be deemed to be finally determined when, in respect of such amount, an assessment has been imposed or a decision of court is given against which no appeal is possible or no appeal is made within the prescribed time limit or any binding agreement, whether by compromise or not, is reached with the competent Tax Authority; and |
(ii) | where the relevant Seller has made any payment to a Purchaser in relation to such Tax Claim and that Purchaser or any Group Company in which it owns |
- 51 -
an interest has afterwards received a refund from any Tax Authority in respect of such contested Taxation, an amount equal to the Relevant Percentage (as defined in the Deed of Tax Covenant) of such refund shall be paid by that Purchaser to the relevant Seller within [***] of such receipt. |
10.23 Purchasers and Sellers to bring any and all claims.
(a) | Notwithstanding anything to the contrary herein or in any Transaction Document with the exception of the remedies of injunction, specific performance, and other equitable relief where damages alone may not be adequate remedy: |
(i) | each of the Purchasers undertakes that none of its Connected Persons (including the Designated Purchasers) shall make, bring or support any claim, counter-claim or third-party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, in any way relating to this Agreement or any Transaction Document or any of the transactions contemplated by this Agreement or any Transaction Document against a Seller or any of its Connected Persons; |
(ii) | each of the Sellers undertakes that none of its Connected Persons shall make, bring or support any claim, counter-claim or third-party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, in any way relating to this Agreement or any Transaction Document or any of the transactions contemplated by this Agreement or any Transaction Document against a Purchaser or any of its Connected Persons(including the Designated Purchasers); and |
(iii) | any and all Claims in any way relating to this Agreement or any Transaction Document or any of the transactions contemplated by this Agreement or any Transaction Document shall be made: |
(A) | in the case of any Claim by or on behalf of a Purchaser, any Designated Purchaser or any of their Affiliates, exclusively by the Foreign Purchaser (acting as authorised representative of the Purchasers and the Designated Purchasers or any of their Affiliates for such purpose) against LHPI (acting as authorised representative of the Sellers for such purpose); and |
(B) | in the case of any Claims by or on behalf of a Seller, exclusively by LHPI (acting as authorized representative of the Sellers for such purpose) against the Foreign Purchaser (acting as authorized representative of the Purchasers and the Designated Purchasers or any of their Affiliates for such purpose), |
in each case in accordance with the dispute resolution provisions in this Agreement.
(b) | For the purposes of this clause, whichever of LHPI or the Foreign Purchaser is bringing a Claim (whether as agent or otherwise) in accordance with paragraph (a) is termed the Claimant Party and the other of them is termed the Defendant Party. The Parties agree that: |
- 52 -
(i) | the Defendant Party shall not raise any defence or objection to any such Claim on the basis that it is made in the name of the Claimant Party acting as agent and/or made against the Defendant Party acting as agent pursuant to the provisions of this clause and shall be deemed to have waived the right to raise and to be estopped from raising any such defence or objection; |
(ii) | where a Claim cannot, as a matter of Law, be made by the Claimant Party in its own name as agent for a relevant Affiliate, Designated Purchaser, Local Purchaser or the other Party pursuant to this clause, any such Claim may and shall be assigned by the relevant Affiliate, Designated Purchaser, Local Purchaser or the other Party to the Claimant Party (provided that the liability of the person claimed against shall be no greater and no less than such liability would have been if the assignment had not occurred); |
(iii) | the Claimant Party covenants with the Defendant Party to pay to the Defendant Party an amount equivalent to any and all costs suffered or incurred by the Defendant Party or any of its Affiliates as a result of an Affiliate of the Claimant Party, or a Party (or an Affiliate of a Party) other than LHPI or the Foreign Purchaser, making any Claim other than in accordance with this clause and the Claimant Party shall procure that any such Claim made by an Affiliate of the Claimant Party, or a Party (or an Affiliate of a Party) other than LHPI or the Foreign Purchaser, is discontinued and withdrawn with immediate effect; and |
(iv) | where a Claim is made by the Claimant Party against the Defendant Party and the Claim results in a payment being required to be made to the Claimant Party, the payment shall be made by the Defendant Party (as principal and/or, if applicable, as agent for its relevant Affiliate(s)) or the relevant other Party(ies) to the Claimant Party (as principal and/or, if applicable, as agent for its relevant Affiliate(s) or the relevant other Party(ies)). |
Specific limitations on Environmental Claims
[***] | THE FOLLOWING 2 PAGES HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
- 53 -
11. SELLER INDEMNITY
11.1 Confirmation
Each Seller confirms and undertakes to the Purchasers that LRI is the person entitled to be registered as the owner of the [***] Shares.
11.2 Indemnity
(a) | Each Seller hereby undertakes to indemnify the Purchasers and each Group Company in respect of any Loss that the Purchasers and/or any Group Company may suffer or incur arising out of, or directly or indirectly in connection with: |
(i) | any defect in the legal and/or beneficial ownership in the [***] Shares; |
(ii) | the exercise or failure to exercise (as the case may be) of any right or rights attaching to the [***] Shares, including, but not limited to, all voting rights and right to receive any dividend, |
where such liability arises or relates to any period on and from the Indemnity Reference Date to any period before, on or after Closing; and
(iii) | the documentary stamp tax owed by LRI to the BIR arising on the transfer or purported transfer of the [***] Shares from [***] to LRI where such liability arises prior to Closing. |
(b) | For the avoidance of doubt, the obligations of the Sellers under Clause 11.2(a) shall not be affected by the knowledge of the Purchasers or any Group Company (or their respective officers, employees, agents or advisers) or by any documents and/or information in the Data Room relating to the [***] Shares or otherwise. |
(c) | Notwithstanding clause 10.4 and subject to clause 11.2(e), the maximum aggregate liability of the Sellers for all [***] Share Indemnity Claim shall be limited to an amount equal to [***]. Any claim under the [***] Share Indemnity under this clause 11 shall bar any Claim under the Title Warranties in respect of the same subject matter. |
- 56 -
(d) | Save as provided in clause 11.2(c), none of the limitations set out in clause 10 shall apply in respect of the liability of the Sellers pursuant to this clause. |
(e) | Nothing in this clause 11 shall exclude any liability for (or remedy in respect of) any fraudulent misrepresentation or wilful misconduct by the Sellers or any members of the Sellers Groups. |
(f) | Upon the issuance of the CAR by the BIR authorizing the recording of the transfer of the [***] Shares from [***] to LRI and receipt of the CAR by the Purchasers, the Purchasers shall not have any claim under this clause 11 provided that this will not affect any rights and liabilities which have accrued before the issuance of the CAR. |
12. PURCHASER WARRANTIES
12.1 The Foreign Purchaser warrants to each Seller as at 31 January 2015 and the Local Purchaser warrants to each Seller as at the Adhesion Date and the Purchasers warrants to each Seller as at the Closing Date that each of the warranties, to the extent applicable to it, set out in this clause 12 is true, accurate and not misleading.
12.2 Incorporation. Each Purchaser is and, as at the Closing Date each Designated Purchaser will be, validly incorporated, in existence and duly registered under the Laws of its jurisdiction and has full power to conduct its business.
12.3 Authorisations. Each Purchaser has and, as at the Closing Date each Designated Purchaser will have, obtained all corporate authorisations and (other than to the extent relevant to the Conditions and the Clearances) all other governmental, statutory, regulatory or other consents, licences and authorisations required to empower it to enter into and perform its obligations under this Agreement or the other Transaction Documents to which it is a party where failure to obtain them would adversely affect to a material extent its ability to enter into and perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
12.4 No breach. Entry into and performance by each member of the Purchasers Groups of this Agreement and/or any Transaction Document to which it is a party will not: (i) breach any provision of its memorandum and articles of association, by-laws or equivalent constitutional documents; or (ii) (subject, where applicable, to fulfilment of the Conditions and Clearances) result in a breach of any Laws or regulations in its jurisdiction of incorporation or of any order, decree or judgment of any court or any governmental or regulatory authority, where (in either case) the breach would adversely affect to a material extent its ability to enter into or perform its obligations under this Agreement and/or any Transaction Document to which it is a party.
12.5 No insolvency. Neither Purchaser nor any Designated Purchaser is insolvent or bankrupt under the Laws of its jurisdiction of incorporation, unable to pay its debts as they fall due or has proposed or is liable to any arrangement (whether by court process or otherwise) under which its creditors (or any group of them) would receive less than the amounts due to them. There are no Insolvency Proceedings in respect of either of the Purchasers or any Designated Purchaser and no events have occurred which would justify such Insolvency Proceedings being commenced. No steps have been taken to enforce any Encumbrance over any assets of either of the Purchasers or any Designated Purchaser and no event has occurred to give the right to enforce such Encumbrance.
- 57 -
12.6 Conditions and Clearances. Neither Purchaser is aware of any fact, matter or circumstances that will, or is likely to, prevent or materially delay the fulfilment of any of the Conditions or the obtaining of any of the Clearances.
12.7 Foreign Purchaser Financing Agreements. The Foreign Purchaser (or any member(s) of the Foreign Purchaser Group): (i) had as at 31 January 2015 and will have at Closing committed loan facilities under the Foreign Purchaser Financing Agreements, and (ii) will at Closing have available cash, which together will at Closing unconditionally provide in immediately available funds the necessary cash resources to pay the Price of the Subject Shares and meet its other obligations under this Agreement. The Foreign Purchaser Financing Agreements involve no material pre-conditions and the Foreign Purchaser or any member of the Foreign Purchaser Group will be able to satisfy all conditions of drawdown to such agreements at or prior to Closing. The Foreign Purchaser has made available to the Sellers accurate and complete copies of the Foreign Purchaser Financing Agreements (redacted to exclude any sensitive information relating to fees or other financial terms).
12.8 Disclosure to Sellers. There are no contracts, agreements, arrangements or other understandings (whether reduced to writing or not), in relation to the Proposed Transactions, between:
(a) | the Foreign Purchaser or any of its Representatives on the one hand and providers of debt or equity finance (or any of their Representatives) on the other hand; or |
(b) | the Foreign Purchaser or any of its Representatives or providers of debt finance (or any of their Representatives) on the one hand, and any third party on the other hand: |
(i) | involving any payment of money or other benefits, or the giving of any indemnity or other assurance, in connection with the Proposed Transaction; |
(ii) | otherwise concerning the Proposed Transaction; or |
(iii) | which are conditional upon the Proposed Transaction, |
in each case, other than those which have been disclosed in writing to the Sellers.
12.9 No default under Purchasers Financing Agreements. No default or draw stop event under any of the Foreign Purchaser Financing Agreements has occurred nor is the Foreign Purchaser aware of any event or circumstance which could reasonably be expected to constitute such a default or draw stop event which in each case would enable the relevant lenders to refuse to provide funds under the Foreign Purchaser Financing Agreements.
12.10 Purchaser awareness. Prior to its execution of this Agreement, the Foreign Purchaser has had the opportunity to conduct a due diligence review of the Group Companies and has had access to confidential documents, data and other materials pertaining thereto.
12.11 Anti-Bribery. Each member of the Purchasers respective Purchaser Group has in place compliance policies in respect of applicable Anti-Bribery Law.
12.12 No further sale. The Foreign Purchaser warrants that as at 31 January 2015:
(a) | it has complied with the confidentiality agreement in respect of the Proposed Transactions entered into between the Purchaser and Lafarge and Holcim dated 19 September 2014; and |
- 58 -
(b) | it has no intention to sell, on or after the Closing Date, all or some of the Subject Shares or all or some of the assets of the Group Companies, to any person that is not a member of any of the Purchasers respective Purchaser Group. |
13. TRANSFER TAXES
The provisions of this clause 13 shall come into effect at Closing.
Payment of Transfer Taxes
13.1 Subject to the provisions of clause 13.2, the Purchasers shall bear the cost of all Transfer Taxes in all jurisdictions where they are payable by the Purchasers or Designated Purchasers either in relation to the transfer of the Subject Shares or otherwise arising as a result of this Agreement, any other Transaction Document or the Proposed Transactions (which, for the avoidance of doubt, shall not include the stock transaction tax or capital gains tax (if any) payable by the Sellers in the Philippines in relation to the transfer of the Subject Shares), and shall be responsible for arranging the payment of any such Transfer Taxes, including fulfilling any administrative or reporting obligation imposed by the relevant jurisdiction in connection with such payment. The Purchasers shall deliver to the Sellers, within 5 Business Days following the date any such Transfer Tax becomes due, reasonable evidence that such Transfer Tax has been duly and timely paid to the relevant Tax Authority. The Purchasers covenant with each Seller to pay to the relevant Seller an amount equivalent to any Loss suffered by such Seller or any member of its Seller Group as a result of the Purchasers failing to comply with their obligations under this clause 13.1.
13.2 The Sellers shall bear the cost of all Transfer Taxes in all jurisdictions where they relate to a clawback of any relief, exemption or concession previously granted to the Sellers or any Group Company (to the extent that such clawback directly results from the Proposed Transaction), and shall be responsible for arranging the payment of any such Transfer Taxes, including fulfilling any administrative or reporting obligation imposed by the relevant jurisdiction in connection with such payment. The Sellers shall deliver to the Purchasers, within 5 Business Days following the date any such Transfer Tax becomes due, reasonable evidence that such Transfer Tax has been duly and timely paid to the relevant Tax Authority. Each Seller covenants with each Purchaser to pay to each Purchaser an amount equivalent to any Loss suffered by each Purchaser or any member of its Purchaser Group as a result of the relevant Seller failing to comply with its obligations under this clause 13.2.
13.3 The Sellers shall, within 25 Business Days of payment of all Transfer Taxes in relation to the transfer of the LCLC Subject Shares and the LCSPI Subject Shares, deliver to the Purchasers the tax clearance and Certificate Authorizing Registration issued by the appropriate Revenue District Office of the Bureau of Internal Revenue.
13.4 Any and all stock transaction tax and capital gains tax that may be imposed on or in connection with the sale of the Subject Shares shall be for the account of the Sellers. The Sellers shall deliver to the Purchasers within 5 Business Days following the date such Taxes becomes due evidence that such Taxes have been duly and timely paid to the relevant Tax Authority.
14. INSURANCE
14.1 From 31 January 2015 until the Closing Date, each Seller shall procure that relevant members of its Seller Group and its Group Companies shall continue in force all policies of insurance maintained by them in respect of its Group Companies and their businesses
- 59 -
(including in respect of the Material Real Estate of its Group Companies, except for such Material Real Estate that is leased and where there is an obligation on the landlord to insure).
14.2 Upon Closing, all insurance cover arranged by each Seller (or its Seller Group) in relation to its Group Companies and their businesses (whether under policies maintained with third party insurers or other members of its Seller Group) shall cease (other than in relation to insured events taking place before Closing). Each Seller shall procure that after Closing, each Group Company continues to have access to and is entitled to notify or make claims under such policies after Closing in respect of events that arose before Closing. No member of any Purchaser Group shall make any claim under any such policies in relation to insured events arising after Closing. The Sellers shall use all reasonable endeavours after the Closing to procure that (i) the Sellers and any member of either Seller Group provide the Purchasers with such information and co-operate as the Group Companies require in order to deal with the management of claims made or notified under such policies and (ii) monies due under such policies to any Group Company in respect of claims (notified or made either before or after Closing in respect of events that arose before Closing) after taking into account any deductible under the policies and less any taxation suffered on the proceeds are paid to the relevant Group Company. If any such payment is received by a Seller or a member of the Sellers Group rather than the relevant Group Company, the Sellers shall procure that the Seller or member of the Sellers Group shall transmit such payment to the relevant Group Company (subject to the deductions referred to in this clause 14.2), as soon as reasonably practicable after receipt. Each Seller shall be entitled to make arrangements with its insurers to reflect this clause.
15. CHANGES OF NAME
15.1 The Purchasers shall procure that:
(a) | as soon as reasonably practicable after the Closing Date and in any event no later than [***] afterwards in the case of LRI and LMI and [***] afterwards in the case of LCSPI and LII (in each case, to the extent practicable in accordance with applicable Law), the name of any Group Company which consists of or incorporates the word Lafarge is changed to a name which does not include that word or any name which, in the reasonable opinion of LHPI, is substantially or confusingly similar; and |
(b) | save as otherwise agreed on behalf of certain of the Parties, as soon as reasonably practicable after the Closing Date and in any event no later than the end of the relevant Phase-Out Period, the Group Companies shall: |
(i) | cease to use any Lafarge Corporate Marks or any mark, name or logo which, in the reasonable opinion of LHPI, is substantially or confusingly similar to any of them; and |
(ii) | remove or cover any Lafarge Corporate Mark on all signs, billboards, advertising materials, telephone listings, labels, stationery, office forms, trucks, packaging or other properties or materials of the Group Companies. |
For the purpose of this clause 15.1, Phase-Out Period shall mean:
(iii) | in respect of trucks and silos, a period of [***] after the Closing Date; |
(iv) | in respect of signage, a period of [***] after the Closing Date; |
- 60 -
(v) | in respect of stock, until depletion of the stock and, in any event, by no later than a period of [***] after the Closing Date; and |
(vi) | in respect of any other matters, a period of [***] after the Closing Date. |
15.2 The Purchasers:
(a) | agree to notify the Sellers promptly of any infringement or improper use by any third party of any Corporate Mark of which any of the Purchasers becomes aware, and permit the relevant Seller to have sole discretion and control with regards to any proceedings related to such infringement or improper use, and no Purchaser shall in any circumstances make any admissions or settle any action in connection with such infringement or improper use; |
(b) | agree to ensure that any use of the Corporate Marks shall be subject to standards of quality and specifications that conform to those quality standards and operational specifications currently used by the relevant Seller and shall otherwise conform with all applicable Laws; and |
(c) | covenant to pay to the relevant Seller (or, as applicable, to its Representatives, successors or assigns) an amount equal to any and all Losses arising out of or relating to the use by any of the Purchasers of the Corporate Marks where such use (i) is in breach of the obligations set out in sub-paragraphs (a) and (b) above, or (ii) in the relevant Sellers reasonable opinion is intentionally misleading. |
16. INFORMATION, RECORDS AND ASSISTANCE POST-CLOSING
16.1 During the period of 5 years after the Closing Date each member of the Purchasers Groups shall:
(a) | maintain the books, accounts, customer lists and all other records held by it after Closing to the extent that they relate to the Group Companies and to the period up to Closing (the Records); and |
(b) | following receipt of a written request from a Seller, provide the relevant Seller (at that Sellers cost) with reasonable access during normal working hours on Business Days to (and the right to take copies of) the Records to the extent that they relate to that Sellers Group Companies, subject always to the provisions of clause 21.1 and applicable Law. |
16.2 For a period of 6 years after the Closing Date or for such longer period as any Claim or Third Party Claim remains outstanding, each member of the Purchasers Groups shall (at the relevant Sellers expense) also give such assistance to each Seller and any member of its Seller Group as the relevant Seller may reasonably request in relation to any third party proceedings by or against any member of its Seller Group so far as they relate to its Group Companies, including proceedings relating to employees claims or Tax.
17. POST-CLOSING COVENANTS
17.1 Each Seller undertakes that it shall not, and shall procure that no member of its Seller Group shall, at any time for a period of [***] from the Closing Date, offer to employ or seek to entice away a Senior Manager from any of the Group Companies in which it owns an interest directly or indirectly. Each of the Purchasers undertakes that it shall not, and shall
- 61 -
procure that no member of its Purchaser Group (including the Group Companies) shall, at any time for a period of [***] from the Closing Date, offer to employ or seek to entice away any Senior Manager from the Sellers Groups.
17.2 Nothing in clause 17.1 shall prohibit the solicitation or the employment or engagement by a Party or any of its Affiliates of any Senior Manager (or any replacement for any Senior Manager):
(a) | required by Law; |
(b) | resulting from any general public advertisement placed by or on behalf of a Party or any of its Affiliates that is not directed at such person; |
(c) | following the expiration of a [***] period after the voluntary resignation by such person from the relevant Group Company or Seller Group member without solicitation that would otherwise be prohibited under clause 17.1; or |
(d) | following the expiration of a [***] period after the termination of such persons employment or engagement by the relevant Group Company or Seller Group member. |
17.3 For a period of not less than 1 year from the Closing Date, the Purchasers will, and will cause the Group Companies and the Designated Purchasers to, provide each Transferred Employee salary or wages, opportunities for commissions, bonuses, incentive compensation (excluding actual equity securities of the Sellers or their Affiliates) and employee benefits on at least as favourable terms in the aggregate as those currently applicable to such Transferred Employee. The Sellers undertake to provide all information requested by the Purchasers in good time before Closing for the purposes of enabling the Purchasers to comply with its obligations under this clause 17.
17.4 To the extent that the employment relationship of a Transferred Employee does not transfer by operation of applicable Law, as of the Closing Date, the Purchasers will, or will cause a Group Company or Designated Purchaser to, offer each of such Transferred Employees an employment position that is suitable and appropriate for such employees level of qualification and substantially equivalent to his or her employment role and purpose as at the Closing Date.
17.5 To the extent applicable to the Transferred Employees, the Purchasers shall assume each collective bargaining agreement or similar agreement with employee representatives to which the relevant Group Company is a party, and shall thereafter be solely responsible for all duties, obligations and liabilities related thereto arising after the Closing Date, but only to the extent applicable to the Transferred Employees.
17.6 For a period of not less than 1 year from the Closing Date, the Purchasers undertake not to engage in, or permit, a plant closing nor any mass layoff, collective redundancy program or comparable plan or action with respect to any of the Group Companies. This undertaking shall not apply to the closing of any plant, any mass lay off or collective redundancy program which any member of either Seller Group or any Group Company had disclosed to a works council and/or publicly announced prior to the Closing Date.
17.7 The Purchasers undertake to take, as soon as reasonably practicable and in any case within 30 Business Days following Closing, any and all actions required in any relevant jurisdiction, including but not limited to the updating of applicable records of Governmental Entities, to fully effect each of the director resignations referred to in clause 7.4(c). The
- 62 -
Sellers shall provide to the Purchasers and the members of any Purchaser Group all reasonably required assistance in order for any Purchaser to be able to comply with its obligations under this clause 17.7.
17.8 Where by operation of applicable Law, as of the Closing Date, a Transferred Employee cannot be retained in a Benefit Plan of a Group Company, the Purchasers will calculate any transfer payment required in relation to that Transferred Employee on an accrued benefit obligation basis determined by the actuarial adviser to the Benefit Plan or, if greater, the minimum amount required to comply with applicable Laws.
Anti-embarrassment
17.9 The purpose of clauses 17.9 to 17.11 (inclusive) is to ensure that, if a direct or indirect sale or transfer (including by way of a co-investment or of an initial public offering) of any of the Group Companies and/or a part of the business or assets of any of them to a person not being another member of a Purchaser Group other than a disposal pursuant to clause 5.21 (a Third-Party Disposal) takes place at any time after the Closing Date but prior to the date that is 18 months following Closing (the No Disposal Period), the Sellers shall be entitled to an increase in the Price of the Subject Shares under this Agreement.
17.10 Each of the Purchasers undertakes to each of the Sellers that, if a Third-Party Disposal occurs at any time during the No Disposal Period, that Purchaser shall pay the Additional Consideration to the relevant Seller(s), and such Additional Consideration shall increase the Price of the Subject Shares accordingly. For the purpose of this clause 17.10, Additional Consideration means, in relation to a Third-Party Disposal, an amount equal to 50 per cent. of the amount by which the consideration due by the relevant buyer(s) in respect of the relevant Third-Party Disposal or, in the case of a co-investment in a Group Company or part of the business thereof, the value of the relevant part of the Group Company or the part of the business underlying such co-investment (the Third-Party Consideration) exceeds that part of the Price of the Subject Shares allocated to the relevant Group Company(ies) or the relevant part of the business thereof under this Agreement. For the purposes of such calculation, the part of the Price of the Subject Shares allocated to the business of a Group Company shall be determined on the basis of the proportion of the 2014 EBITDA generated by such business relative to the aggregate 2014 EBITDA of the relevant Group Company. In the event that the Third-Party Consideration takes, in whole or in part, a form other than cash, the above calculation shall be effected on the basis of the cash equivalent value of such Third-Party Consideration as agreed among the Parties or, failing such agreement, as determined by an independent expert of international repute pursuant to the procedures set out in clauses 4.3 to 4.14 applied mutatis mutandis to such determination of cash equivalent value.
17.11 The relevant Purchaser shall pay the Additional Consideration to the Sellers by no later than 5 Business Days after receipt by the relevant member of its Purchaser Group of the Third-Party Consideration. For the avoidance of doubt, in the event that the Third-Party Consideration is paid in more than one payment, that Purchasers obligation under this clause 17.11 shall apply in respect of each of such payment.
18. NO RIGHTS OF RESCISSION OR TERMINATION
No Purchaser shall be entitled to rescind or terminate this Agreement in any circumstances whatsoever (whether before or after Closing). This shall not exclude any liability for (or remedy in respect of) fraudulent misrepresentation.
- 63 -
19. PAYMENTS
19.1 Notwithstanding anything to the contrary in this Agreement:
(a) | any payment to be made pursuant to this Agreement by a Purchaser can also be made by the relevant Designated Purchaser, as may be agreed by the Purchasers and the Sellers, in which case the Purchasers shall procure the completion by the relevant Designated Purchaser of any such payment; and |
(b) | any payment to be made pursuant to this Agreement to a Purchaser can also be made to the relevant Designated Purchaser, as may be agreed by the Purchasers and the Sellers. |
19.2 The Sellers shall procure that the Purchasers do not incur, when repaying any Inter-Company Trading Amount and Inter-Company Non-Trading Receivables pursuant to clause 8, any penalty, early repayment fee or other similar exceptional payment due as a result of payment occurring on Closing rather than on such amounts normal due term.
19.3 Any payment to be made pursuant to this Agreement by the Purchasers (or any member of the Purchasers Groups) shall be made to the Sellers Bank Account or if applicable the Security Account. Any payment to be made pursuant to this Agreement by a Seller shall, following notification to both of the Purchasers, be made to the Purchasers Bank Accounts (or, as applicable, the bank account of the relevant Designated Purchaser as may be notified by the Purchasers in writing at least 3 Business Days before the date on which the relevant payment is to occur).
19.4 Payment under this Agreement shall be in immediately available funds by electronic transfer on the due date for payment. Receipt of the amount due shall be an effective discharge of the relevant payment obligation. Any payment made in satisfaction of a liability arising under a Seller Obligation or a Purchaser Obligation shall adjust the relevant Price of the Subject Shares to the extent of such payment.
19.5 All sums payable by a member of a Purchaser Group under this Agreement (including in respect of any Purchaser Obligation) or by a Seller under this Agreement (including in respect of any Seller Obligation) shall be paid free and clear of all deductions or withholdings whatsoever and, to the extent not paid on the due date for payment, shall accrue Default Interest from (but including) the due date to (but excluding) the date of actual payment.
19.6 If any deduction or withholding is required by Law from any such payment then, the Parties shall pay such additional amount as will, after such deduction or withholding has been made, leave the relevant other Parties with the full amount which would have been received by them had no such deduction or withholding been required to be made.
19.7 For the avoidance of doubt if, notwithstanding such payment being treated by the Parties as a reduction of the Price of the Subject Shares as provided in clause 10.21, any Tax Authority imposes Tax on any sum paid to a Purchaser under this Agreement or under the Deed of Tax Covenant, the sum so payable shall not be increased by such amount as would ensure that, after payment of the Tax so charged, that Purchaser would receive and retain a sum equal to the amount that would otherwise be payable under this Agreement or the Deed of Tax Covenant.
19.8 The Parties shall take such reasonable steps as requested by another Party (the Requesting Party), at the cost of the Requesting Party, to minimise any deduction or
- 64 -
withholding referenced in clause 19.6 above or Tax charged as referenced in clause 19.7 above.
19.9 Any sum payable by one Party to another under or pursuant to this Agreement is exclusive of any applicable VAT. If any VAT is or becomes chargeable on any supply made by any Party under or pursuant to this Agreement for which the Party making the supply is required to account, the recipient of the supply shall, subject to the receipt of a valid VAT invoice, pay to the Party making the supply (in addition to, and at the same time as, any other consideration for that supply) an amount equal to such VAT.
19.10 Any amount to be converted from one currency into another currency for the purposes of this Agreement shall be converted into an equivalent amount at the Conversion Rate prevailing at the Relevant Date.
20. ANNOUNCEMENTS
20.1 On the execution of this Agreement and on the Closing Date, in each case at a time agreed by the Parties, the Parties shall issue the relevant Press Release. Unless agreed otherwise, no Party nor any of its Affiliates shall make any other announcement or issue any circular in connection with the Proposed Transaction, the existence or subject matter of this Agreement or any other Transaction Document unless the announcement or circular is required by Law, by any stock exchange or any regulatory or supervisory body or authority of competent jurisdiction, whether or not the requirement has the force of law. If this exception applies, the Party who is (or whose Affiliate is) making the announcement or issuing the circular shall use all reasonable endeavours to consult with the other Parties in advance as to its form, content and timing.
21. CONFIDENTIALITY
21.1 For the purposes of this clause 21:
(a) | Confidential Information means: |
(i) | (in relation to the obligations of the Purchasers) any information received or held by a Purchaser (or any of its Representatives) relating to any Seller, or the Seller Groups or, prior to Closing, any of the Group Companies; |
(ii) | (in relation to the obligations of the Sellers) any information received or held by a Seller (or any of its Representatives) relating to the Purchasers or the Purchasers Groups or, following Closing, any of its Group Companies; and |
(iii) | information relating to the provisions of, and negotiations leading to, this Agreement and the other Transaction Documents, |
and includes written information and information transferred or obtained orally, visually, electronically or by any other means;
(b) | Representatives means, in relation to a Party, its respective Affiliates and the directors, officers, employees, agents, advisers, accountants and consultants of that Party and/or of its respective Affiliates. |
21.2 Each of the Sellers and each Purchaser shall (and shall ensure that each of its Representatives shall) maintain Confidential Information in confidence and not disclose
- 65 -
Confidential Information to any person except: (i) as this clause 21 permits; or (ii) as the other Parties approve in writing.
21.3 Clause 21.2 shall not prevent disclosure by a Party or its Representatives to the extent it can demonstrate that:
(a) | disclosure is required by Law or properly required by any stock exchange or any regulatory, governmental or antitrust body (including any Tax Authority) having applicable jurisdiction whether or not the requirement has the force of law (provided that the disclosing Party shall first inform the other Parties of its intention to disclose such information and take into account the reasonable comments of the other Parties); |
(b) | save in respect of Confidential Information held by the Sellers or the Sellers Groups relating exclusively to the commercial strategy, pricing and performance projections (but not the accounts, historic performance, or financial impact in the context of Seller Group performance) of the Group Companies prior to Closing, disclosure is of Confidential Information which was lawfully in the possession of that Party or any of its Representatives (in either case as evidenced by written records) without any obligation of secrecy prior to its being received or held; |
(c) | disclosure is of Confidential Information which has previously become publicly available other than through that Partys fault (or that of its Representatives); |
(d) | disclosure is to its debt providers in connection with the Proposed Transactions and such debt providers confidentiality obligations to such Party are of a substantially similar standard to clause 21; |
(e) | disclosure is required for the purpose of any arbitral or judicial proceedings arising out of this Agreement (or any other Transaction Document); or |
(f) | (with respect to the Foreign Purchaser only) disclosure to a potential local purchaser prior to such person/entity having validly adhered to this Agreement as the Local Purchaser by executing an Adhesion Letter in the form set out in Schedule 8, |
provided that nothing in this clause 21 shall prevent disclosure of Confidential Information by a Purchaser to a Designated Purchaser.
21.4 Each of the Sellers and each of the Purchasers undertakes that it (and its Affiliates) shall only disclose Confidential Information to its Representatives if it is reasonably required for purposes connected with this Agreement and the Proposed Transactions and only if the Representatives are informed of the confidential nature of the Confidential Information.
21.5 If this Agreement terminates, the Purchasers shall, as soon as reasonably practicable on request by a Seller:
(a) | return to that Seller all written documents and other materials relating to that Seller, any of its Group Companies or this Agreement (including any Confidential Information) which that Seller (or its Representatives) has provided to the Purchasers (or its Representatives); |
(b) | destroy all information or other documents substantially derived from such Confidential Information; and |
- 66 -
(c) | so far as it is practicable to do so, expunge such Confidential Information from any computer, word processor or other device, |
provided that each of the Purchasers shall be entitled to retain a single copy of each of the above solely for record keeping purposes which shall at all times be subject to obligations contained in this clause 21 notwithstanding the termination of this Agreement.
22. ASSIGNMENT
22.1 Except as provided in this clause 22 or unless the Sellers and the Purchasers specifically agree in writing, no person shall, directly or indirectly, assign, transfer, charge or otherwise deal with all or any of its rights under this Agreement or under the Deed of Tax Covenant nor grant, declare, create or dispose of any right or interest in it. Any purported assignment in contravention of this clause 22 shall be void.
22.2 At any time during the No Disposal Period only, the benefit of the Warranties and the Deed of Tax Covenant may be assigned (in whole or in part) by a Purchaser to any person, provided that:
(a) | that Purchaser shall notify such assignment to each Seller by no later than the date that is 10 Business Days before the date of such assignment; and |
(b) | the provisions of clause 10.20 shall, for the avoidance of doubt, still apply in respect of the enforcement of any Claims. |
22.3 If an assignment is made in accordance with this clause 22, the liabilities of the members of the Seller Group to the Purchaser Group under this Agreement shall be no greater than such liabilities would have been if the assignment had not occurred.
23. FURTHER ASSURANCES
23.1 Each of the Sellers and each of the Purchasers shall (at their own cost), for a period of 6 months from the Closing Date, execute (or procure the execution of) such further documents as may be required by Law or are agreed by the Parties (such agreement not to be unreasonably withheld or delayed) to be necessary to implement and give effect to this Agreement.
24. WRONG POCKETS
24.1 Save as otherwise agreed between certain of the Parties, if at any time until the date that is 9 months after Closing:
(a) | any of the Purchasers or any Group Company, or any of their respective Affiliates, holds an Excluded Asset or receives any amount in respect of that Excluded Asset, then that Purchaser shall, or that Purchaser shall procure that the relevant Group Company or Affiliate shall, as promptly as reasonably practicable, remit, or cause to be remitted, at no cost, such amount or Excluded Asset to the appropriate Seller, or its relevant Affiliate, as the case may be; |
(b) | any of the Purchasers or any of its Affiliates is required to make (and effectively makes) any payment in respect of an Excluded Asset, the relevant Seller shall, as promptly as reasonably practicable, remit an amount equal to the amount of such payment to that Purchaser or its relevant Affiliate, as the case may be; |
- 67 -
(c) | a Seller or any member of the Seller Group, holds an Included Asset or receives any amount in respect of that Included Asset, then that Seller shall, or that Seller shall procure that the relevant member of its Seller Group shall, as promptly as reasonably practicable, remit, or cause to be remitted, at no cost, such amount or Included Asset to the appropriate Group Company; or |
(d) | a Seller or any member of the Seller Group, is required to make (and effectively makes) any payment in respect of an Included Asset, the Purchaser shall, as promptly as reasonably practicable, remit an amount equal to the amount of such payment to the relevant Seller or its relevant Affiliate, as the case may be. |
25. SUPPLY AGREEMENTS
25.1 The Purchasers shall review the Supply Agreements within one (1) month of the Closing Date. To the extent that the Foreign Purchaser, acting on behalf of the Purchasers, requests reasonable amendments to the Supply Agreements within one (1) month of the Closing Date, the relevant member of the Seller Group shall consider those requests in good faith, and any accepted amendments shall be incorporated into the Supply Agreements, as soon as reasonably practicable and in any event no later than twenty (20) Business Days after such amendment to the Supply Agreements is requested.
25.2 If the Sellers or the Purchasers identify, within twenty (20) Business Days after the Closing Date that a member of the Seller Group was supplying goods to a Group Company other than the type of goods that are supplied under a Supply Agreement, then if, and to the extent, that such arrangements were in place in the [***] prior to 31 January 2015 the Sellers and the Purchasers shall, as soon as reasonably practicable, procure the entry into such supply agreement pursuant to which a member of the Seller Group shall, for a period of up to [***] after the Closing Date, supply those goods to the applicable Group Company on terms similar and/or equivalent to the material terms on which those goods were supplied to that Group Company during the [***] prior to 31 January 2015 or on such other commercially reasonable terms as may be agreed between the Foreign Purchaser, acting on behalf of the Purchasers, and the Sellers.
26. COSTS
26.1 Subject to clause 13 and except as otherwise provided in this Agreement (or any other Transaction Document), each of the Sellers and each of the Purchasers shall be responsible for its own costs, charges and other expenses (including those of their Affiliates) incurred in connection with the Proposed Transactions.
27. NOTICES
27.1 Any notice in connection with this Agreement shall be in writing in English and delivered by hand, fax, registered post or courier using an internationally recognised courier company. A notice shall be effective upon receipt and shall be deemed to have been received: (i) at the time of delivery, if delivered by hand, registered post or courier; or (ii) at the time of transmission if delivered by fax provided that in either case, where delivery occurs outside Working Hours, notice shall be deemed to have been received at the start of Working Hours on the next following Business Day.
27.2 The addresses and fax numbers of the Parties for the purpose of clause 27.1 are:
- 68 -
For the Sellers:
LHPI
Address: | Net Lima, Unit 10-A, The Metropolis, 5th Avenue Corner | |
26th Street, E-Square Crescent Park West, Bonifacio Global | ||
City, Taguig City, Philippines | ||
Fax: | [***] | |
For the attention of: | Corporate Secretary | |
With a copy to: |
[***] | [***] | |
Cleary Gottlieb Steen and Hamilton LLP | Cleary Gottlieb Steen and Hamilton LLP | |
12, rue de Tilsitt | 12, rue de Tilsitt | |
75008 Paris, France | 75008 Paris, France | |
Fax: [***] | Fax: [***] | |
Email: [***] | Email: [***] |
For the Purchasers: | ||
Foreign Purchaser | ||
Address: | Belgard Castle, Belgard Road, Clondalkin, Dublin 22, Ireland | |
Fax: | [***] | |
With a copy via email to: | [***] | |
For the attention of: | [***] |
With a copy to: | ||
[***] | [***] | |
Arthur Cox | Arthur Cox | |
Earlsfort Centre | Earlsfort Centre | |
Earlsfort Terrace | Earlsfort Terrace | |
Dublin 2, Ireland | Dublin 2, Ireland | |
Email: [***] | Email: [***] | |
Fax: [***] | Fax: [***] |
CRH | ||
Address: | 42 Fitzwilliam Square, Dublin 2, Ireland | |
Fax: | [***] | |
With a copy via email to: | [***] | |
For the attention of: | [***] |
With a copy to: | ||
[***] | [***] |
- 69 -
Arthur Cox | Arthur Cox | |
Earlsfort Centre | Earlsfort Centre | |
Earlsfort Terrace | Earlsfort Terrace | |
Dublin 2, Ireland | Dublin 2, Ireland | |
Email: [***] | Email: [***] | |
Fax: [***] | Fax: [***] |
27.3 A copy of any notice under this Agreement must be sent simultaneously by the Party giving such notice to each other Party to this Agreement. The notice shall be deemed to have been received for the purposes of clause 27.1 on the date on which the last recipient receives such notice (determined in accordance with clause 27.1).
28. CONFLICT WITH OTHER AGREEMENTS
28.1 If there is any conflict between the terms of this Agreement and any other agreement, this Agreement shall prevail (as between the Parties to this Agreement and as between any members of each Seller Group and any members of each Purchaser Group) unless: (i) such other agreement expressly states that it overrides this Agreement in the relevant respect; and (ii) the Sellers and the Purchasers are either also parties to that other agreement or otherwise expressly agree in writing that such other agreement shall override this Agreement in that respect.
28.2 Without prejudice to clause 28.1 the Purchasers undertake that no claim shall be made by any member of the Purchasers Groups under any of the Implementing Agreements.
29. WHOLE AGREEMENT
29.1 This Agreement and the other Transaction Documents together set out the whole agreement between the Parties in respect of the Proposed Transactions and supersede and extinguish any prior agreement, understandings, undertakings, arrangements, representations and warranties (whether oral or written) relating to the Proposed Transactions. It is agreed that:
(a) no Party in entering into this Agreement or the other Transaction Documents relies on or shall have any remedy in respect of, any prior drafts or prior agreements, understandings, undertakings, arrangements, representations and warranties (of any nature whatsoever, of any person whether party to this Agreement or not and whether written or oral) in relation to the Proposed Transactions;
(b) | no Party (or any of its Connected Persons) shall have any claim or remedy in respect of any statement, representation, warranty or undertaking made by or on behalf of any other Party (or any of its Connected Persons) in relation to the Proposed Transactions which is not expressly set out in this Agreement or any other Transaction Document and no Party (or any of its Connected Persons) shall have any claim or remedy in respect of innocent or negligent misrepresentation or negligent misstatement based on any statement in this Agreement; |
(c) | any terms or conditions implied by Law in any jurisdiction in relation to the Proposed Transactions are excluded to the fullest extent permitted by Law or, if incapable of exclusion, any right, or remedies in relation to them are irrevocably waived; |
(d) | the only right or remedy of a Party in relation to any provision of this Agreement or any other Transaction Document and any of the transactions contemplated herein or |
- 70 -
therein shall be for breach of this Agreement or the relevant Transaction Document; and
(e) | except for any liability in respect of a breach of this Agreement or any other Transaction Document, no Party (or any of its Connected Persons) shall owe any duty of care or have any liability in tort or otherwise to any other Party (or its respective Connected Persons) in relation to the Proposed Transactions, |
provided that this clause shall not exclude any liability for (or remedy in respect of) fraudulent misrepresentation or wilful misconduct.
29.2 Each Party agrees to the terms of this clause 29 on its own behalf and on behalf of each of its Connected Persons.
No Other Representation or Warranty
29.3 Except for the Warranties, no Seller nor any member of a Seller Group or any of the Group Companies makes any express or implied representation or warranty to any of the Purchasers or any member of the Purchasers Groups. Each of the Purchasers acknowledges and agrees that, except as provided under the Warranties, no other statement, promise or forecast made by or on behalf of a Seller or any member of a Seller Group or the Group Companies may form the basis of any claim by a Purchaser or any other member of its Purchaser Group under or in connection with this Agreement or any Transaction Document. In particular, no Seller nor any member of a Seller Group or any of the Group Companies makes any representation or warranty as to the accuracy of any forecasts, estimates, projections, statements of intent or opinion provided to the Purchasers or any of their Connected Persons on or before the date of this Agreement (including any documents in the Data Room). Nothing in this clause shall exclude any liability for (or remedy in respect of) any fraudulent misrepresentation or wilful misconduct by the Sellers or any members of the Sellers Groups.
No Recourse against Directors
29.4 Except in the case of fraud or wilful misconduct, a Purchaser shall not, and shall cause its Connected Persons not to, make any claim against any former or current manager, officer, director or employee of the Group Companies (including those resigning on the Closing Date) with respect to any decisions adopted by any of the Group Companies prior to the Closing Date or otherwise seek the liability of any such person in connection with their having held such position.
30. WAIVERS, RIGHTS AND REMEDIES
30.1 Except as expressly provided in this Agreement, no failure or delay by any Party in exercising any right or remedy relating to this Agreement or any of the Transaction Documents shall affect or operate as a waiver or variation of that right or remedy or preclude its exercise at any subsequent time. No single or partial exercise of any such right or remedy shall preclude any further exercise of it or the exercise of any other remedy.
30.2 The Parties acknowledge to the others that each of them may be irreparably harmed by any breach by it or any of the Designated Purchasers (as applicable) of this Agreement, and that damages alone may not necessarily be an adequate remedy. The Parties acknowledge to each other that, without affecting any other rights or remedies, if a breach of this Agreement by it or any of the Designated Purchasers (as applicable) occurs or is threatened, the remedies of injunction, specific performance and other equitable relief, or any
- 71 -
combination of these remedies, shall be available and no proof of special damages will be necessary to enforce this Agreement and, if any of such remedies is sought in relation to any threatened or actual breach of the terms of this Agreement, the Parties hereby irrevocably waive any rights they may have to oppose that remedy on the grounds that damages would be an adequate alternative.
31. COUNTERPARTS
This Agreement may be executed in any number of counterparts, and by each Party on separate counterparts. Each counterpart is an original, but all counterparts shall together constitute one and the same instrument. Delivery of a counterpart of this Agreement by e-mail attachment or telecopy shall be an effective mode of delivery.
32. VARIATIONS
No amendment of this Agreement (or of any other Transaction Document) shall be valid unless it is in writing and duly executed by or on behalf of each of the Parties.
33. INVALIDITY
Each of the provisions of this Agreement and the other Transaction Documents is severable. If any such provision is held to be or becomes invalid or unenforceable in any respect under the Law of any jurisdiction, it shall have no effect in that respect and the Parties shall use all reasonable endeavours to replace it in that respect with a valid and enforceable substitute provision the effect of which is as close to its intended effect as possible.
34. NO THIRD PARTY ENFORCEMENT RIGHTS
No person other than each Seller and each Purchaser shall have any right to enforce any provision of this Agreement under any Law of any jurisdiction, whether under any statutory provision or otherwise.
35. NO PARTNERSHIP
This Agreement shall not operate as to create a partnership or joint venture of any kind between the Parties or constitute any Party as the agent to another Party.
36. GOVERNING LAW AND ARBITRATION
36.1 This Agreement and any non-contractual obligations arising out of or in connection with this Agreement shall be governed by, and interpreted in accordance with, English law.
36.2 Any dispute arising in connection with this Agreement shall be submitted exclusively to a three-arbitrator arbitration administered in accordance with the Arbitration Rules of the International Chamber of Commerce. The seat of the arbitration shall be Amsterdam, the Netherlands and the proceedings shall be conducted in the English language.
36.3 The arbitral tribunal shall have the power to order the consolidation of any arbitration proceedings (prior to the commencement of the oral phase in the first filed of such proceedings) commenced under this Agreement or under any of the Transaction Documents in respect of disputes, controversies or claims which raise similar issues of law or fact having
- 72 -
regard to good, swift and efficient administration of justice as determined by the arbitral tribunal. Until the arbitral tribunal has been constituted, the Purchasers and/or the Sellers may be joined as an additional party to an arbitration under this Agreement or under any of the Transaction Documents.
- 73 -
SIGNATURE
This Agreement is signed by duly authorised representatives of the Parties:
SIGNED | ) | SIGNATURE: | [***] | |||
for and on behalf of | ) | [***] | ||||
LAFARGE HOLDINGS | ) | NAME: | [***] | |||
(PHILIPPINES), INC. | ) | [***] |
SIGNED | ) | SIGNATURE | [***] | |||
for and on behalf of | ) | [***] | ||||
CALUMBOYAN HOLDINGS, INC. | ) | NAME: | [***] | |||
) | SIGNATURE | [***] | ||||
) | [***] | |||||
) | NAME: | [***] |
[Signature page to Amended and Restated Put and Call Options Agreement]
SIGNED | ) | SIGNATURE | [***] | |||
for and on behalf of | ) | [***] | ||||
ROUND ROYAL, INC. | ) | NAME: | [***] | |||
) | SIGNATURE | [***] | ||||
) | [***] | |||||
) | NAME: | [***] |
[Signature page to Amended and Restated Put and Call Options Agreement]
SIGNED | ) | SIGNATURE | [***] | |||
for and on behalf of | ) | [***] | ||||
SOUTHWESTERN CEMENT VENTURES, INC. | ) | NAME: | [***] | |||
) | SIGNATURE | [***] | ||||
) | [***] | |||||
) | NAME: | [***] |
[Signature page to Amended and Restated Put and Call Options Agreement]
SIGNED | ) | SIGNATURE: | [***] | |||
for and on behalf of | ) | [***] | ||||
CRH INTERNATIONAL | ) | NAME: | [***] | |||
[Signature page to Amended and Restated Put and Call Options Agreement]
SIGNED | ) | [***] | ||||
for and on behalf of | ) | [***] | ||||
CRH PLC | ) | [***] | ||||
[Signature page to Amended and Restated Put and Call Options Agreement]
Exhibit 8
Principal Subsidiary Undertakings
as at 31 December 2015
Incorporated and operating in | % held | Products and services | ||||||
Europe Heavyside | ||||||||
Douterloigne N.V. | 100 | Concrete floor elements, pavers and blocks | ||||||
Ergon N.V. | 100 | Precast concrete and structural elements | ||||||
Oeterbeton N.V. | 100 | Precast concrete | ||||||
Prefaco N.V. | 100 | Precast concrete structural elements | ||||||
Belgium | Remacle S.A. | 100 | Precast concrete products | |||||
Schelfhout N.V. | 100 | Precast concrete wall elements | ||||||
Stradus Infra N.V. | 100 | Concrete paving and landscaping products | ||||||
Stradus Aqua N.V. | 100 | Concrete paving, sewerage and water treatment | ||||||
Marlux N.V. | 100 | Concrete paving and landscaping products | ||||||
VVM N.V. | 100 | Cement transport and trading, readymixed concrete, clinker grinding | ||||||
Britain & Northern Ireland | Northstone (NI) Limited (including Farrans Construction Limited and Ready Use Concrete) | 100 | Aggregates, readymixed concrete, mortar, coated macadam, rooftiles, building and civil engineering contracting | |||||
Premier Cement Limited |
100 |
Marketing and distribution of cement | ||||||
Denmark | Betongruppen RBR A/S | 100 | Concrete paving manufacturer | |||||
CRH Concrete A/S |
100 |
Structural concrete products | ||||||
Finland | Finnsementti Oy | 100 | Cement | |||||
Rudus Oy |
100 |
Aggregates, readymixed concrete and concrete products | ||||||
Lindustrielle du Béton S.A.* | 100 | Structural concrete products | ||||||
France | Stradal | 100 | Utility and infrastructural concrete products | |||||
Marlux | 100 | Concrete paving manufacturer | ||||||
Germany | EHL AG | 100 | Concrete paving and landscape walling products | |||||
Hungary | Ferrobeton Beton-és Vasbetonelem gyártó Zrt. | 100 | Precast concrete structural elements | |||||
Ireland |
Irish Cement Limited | 100 | Cement | |||||
Clogrennane Lime Limited |
100 |
Burnt and hydrated lime | ||||||
Roadstone Limited | 100 |
Aggregates, readymixed concrete, mortar, coated macadam, concrete blocks and pipes, asphalt, agricultural and chemical limestone and contract surfacing | ||||||
Exhibit 8
Principal Subsidiary Undertakings | continued
Incorporated and operating in | % held | Products and services | ||||||
Europe Heavyside | continued | ||||||||
Cementbouw B.V. | 100 | Cement transport and trading, readymixed concrete and aggregates | ||||||
Calduran Kalkzandsteen B.V. | 100 | Sand-lime bricks and building elements | ||||||
Netherlands | CRH Structural Concrete B.V. | 100 | Precast concrete structural elements | |||||
Dycore B.V. | 100 | Concrete flooring elements | ||||||
Struyk Verwo Groep B.V. | 100 | Concrete paving products | ||||||
Bosta Beton Sp. z o.o. | 90.30 | Readymixed concrete | ||||||
CRH Klinkier Sp. z o.o. | 100 | Clay brick manufacturer | ||||||
Drogomex Sp. z o.o.* | 99.94 | Asphalt and contract surfacing | ||||||
Poland | Grupa Ożarów S.A. | 100 | Cement | |||||
Grupa Silikaty Sp. z o.o. | 100 | Sand-lime bricks | ||||||
Masfalt Sp. z o.o.* | 100 | Asphalt and contract surfacing | ||||||
Polbruk S.A. | 100 | Readymixed concrete and concrete paving | ||||||
Trzuskawica S.A. | 99.95 | Production of lime and lime products | ||||||
Romania | Ferrobeton Romania SRL | 100 | Structural concrete products | |||||
Elpreco S.A. |
100 |
Architectural concrete products | ||||||
Slovakia | Premac, spol. s.r.o. | 100 | Concrete paving and floor elements | |||||
Spain | Beton Catalan S.A. | 100 | Readymixed concrete | |||||
Cementos Lemona S.A. |
98.75 |
Cement | ||||||
Switzerland | JURA-Holding AG | 100 | Cement, aggregates and readymixed concrete | |||||
LLC Cement* | 51 | Cement and clinker grinding | ||||||
Ukraine | PJSC Mykolaivcement | 99.27 | Cement | |||||
Podilsky Cement PJSC | 99.60 | Cement | ||||||
Exhibit 8
Principal Subsidiary Undertakings | continued
Incorporated and operating in | % held | Products and services | ||||||||
Europe Lightside | ||||||||||
Australia | Ancon Building Products Pty Ltd | 100 | Construction accessories | |||||||
Belgium | Plakabeton N.V. | 100 | Construction accessories | |||||||
Anchor Bay Construction Products* | 100 | Construction accessories | ||||||||
Ancon Limited | 100 | Construction accessories | ||||||||
Britain & Northern Ireland | CRH Fencing & Security Group (UK) Limited | 100 | Security fencing | |||||||
Cubis Industries Limited | 100 | Supplier of access chambers and ducting products | ||||||||
Security Windows Shutters Limited | 100 | Physical security, industrial and garage doors, roofing systems | ||||||||
France | Plaka Group France S.A.S. | 100 | Construction accessories | |||||||
Alulux GmbH* | 100 | Roller shutter and awning systems | ||||||||
ERHARDT Markisenbau GmbH* | 100 | Roller shutter and awning systems | ||||||||
Germany | Halfen GmbH | 100 | Construction accessories | |||||||
Heras-Adronit GmbH | 100 | Security fencing and access control | ||||||||
Tenbrink Rolladensysteme GmbH Co KG | 100 | Roller shutter and awning systems | ||||||||
Netherlands | Aluminium Verkoop Zuid B.V. | 100 | Roller shutter and awning systems | |||||||
Heras B.V. |
100 |
Security fencing and perimeter protection | ||||||||
Sweden | Heras Stängsel AB | 100 | Security fencing | |||||||
Switzerland | F.J. Aschwanden AG* | 100 | Construction accessories | |||||||
United States | Halfen USA Inc. | 100 | Construction accessories | |||||||
Exhibit 8
Principal Subsidiary Undertakings | continued
Incorporated and operating in | % held | Products and services | ||||||
Europe Distribution | ||||||||
Austria | Quester Baustoffhandel GmbH | 100 | Builders merchants | |||||
Creyns N.V. | 100 | Builders merchants | ||||||
Lambrechts N.V. | 100 | Builders merchants | ||||||
Halschoor N.V. | 100 | Builders merchants | ||||||
Belgium | Sax Sanitair N.V. | 100 | Sanitary ware, heating and plumbing | |||||
Schrauwen Sanitair en Verwarming N.V. | 100 | Sanitary ware, heating and plumbing | ||||||
Van Den Broeck BVBA | 100 | Builders merchants | ||||||
Van Neerbos België N.V. | 100 | DIY stores | ||||||
CRH Ile de France Distribution* | 100 | Builders merchants | ||||||
France | CRH TP Distribution | 100 | Builders merchants | |||||
CRH Normandie Distribution | 100 | Builders merchants | ||||||
Germany | BauKing AG | 100 | Builders merchants, DIY stores | |||||
Andreas Paulsen GmbH |
100 |
Sanitary ware, heating and plumbing | ||||||
CRH Bouwmaten B.V. | 100 | Cash & Carry building materials | ||||||
Netherlands | BMN | Bouwmaterialen Nederland | 100 | Builders merchants | |||||
Van Neerbos Bouwmarkten B.V. | 100 | DIY stores | ||||||
BR Bauhandel AG (trading as BauBedarf and Richner) | 100 | Builders merchants, sanitary ware and ceramic tiles | ||||||
Switzerland | Gétaz Romang Holding SA (trading as Gétaz Romang and Miauton) | 100 | Builders merchants | |||||
Regusci Reco S.A. (trading as Regusci and Reco) | 100 | Builders merchants | ||||||
Exhibit 8
Principal Subsidiary Undertakings | continued
Incorporated and operating in | % held | Products and services | ||||||
Americas Materials | ||||||||
Oldcastle Materials, Inc. | 100 | Holding company | ||||||
APAC Holdings, Inc. and Subsidiaries | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
Callanan Industries, Inc. | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
CPM Development Corporation | 100 | Aggregates, asphalt, readymixed concrete, prestressed concrete and related construction activities | ||||||
Dolomite Products Company, Inc. | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
Eugene Sand Construction, Inc. | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
Evans Construction Company | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
Michigan Paving and Materials Company | 100 | Aggregates, asphalt and related construction activities | ||||||
Mountain Enterprises, Inc. | 100 | Aggregates, asphalt and related construction activities | ||||||
OMG Midwest, Inc. | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
United States | Preferred Materials Inc. | 100 | Aggregates, asphalt, readymixed concrete, aggregates distribution and related construction activities | |||||
Oldcastle SW Group, Inc. | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
Pennsy Supply, Inc. | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
Pike Industries, Inc. | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
P.J. Keating Company | 100 | Aggregates, asphalt and related construction activities | ||||||
Staker & Parson Companies | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
The Shelly Company | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
Tilcon Connecticut, Inc. | 100 | Aggregates, asphalt, readymixed concrete and related construction activities | ||||||
Tilcon New York, Inc. | 100 | Aggregates, asphalt and related construction activities | ||||||
Trap Rock Industries, LLC* | 60 | Aggregates, asphalt and related construction activities | ||||||
West Virginia Paving, Inc. | 100 | Aggregates, asphalt and related construction activities | ||||||
Exhibit 8
Principal Subsidiary Undertakings | continued
Incorporated and operating in | % held | Products and services | ||||||
Americas Products & Distribution | ||||||||
Canada | Building Products | |||||||
Oldcastle BuildingEnvelope Canada, Inc. |
100 |
Custom fabricated and tempered glass products and curtain wall | ||||||
Oldcastle Building Products Canada, Inc. (trading as Décor Precast, Expocrete Concrete Products, Groupe Permacon, Oldcastle Enclosure Solutions and Transpavé) |
100 |
Masonry, paving and retaining walls, utility boxes and trenches | ||||||
Americas Products & Distribution, Inc. | 100 | Holding company | ||||||
CRH America, Inc. | 100 | Holding company | ||||||
Oldcastle, Inc. | 100 | Holding company | ||||||
Building Products | ||||||||
Anchor Block Company | 100 | Speciality masonry, hardscape and patio products | ||||||
C.R. Laurence Co., Inc. | 100 | Fabrication and distribution of custom hardware products for the glass industry | ||||||
Oldcastle Architectural, Inc. | 100 | Holding company | ||||||
Oldcastle Building Products, Inc. | 100 | Holding company | ||||||
Meadow Burke, LLC | 100 | Concrete accessories | ||||||
Oldcastle APG Northeast, Inc. (trading principally as Anchor Concrete Products and Trenwyth Industries) | 100 | Specialty masonry, hardscape and patio products | ||||||
United States | Oldcastle APG South, Inc. (trading principally as Adams Products, Georgia Masonry Supply, Northfield Block Company and Oldcastle Coastal) | 100 | Specialty masonry, hardscape and patio products | |||||
Oldcastle APG West, Inc. (trading principally as Amcor Masonry Products, Central Pre-Mix Concrete Products, Texas Masonry Products, Miller Rhino Materials, Sierra Building Products and Superlite Block) | 100 | Specialty masonry and stone products, hardscape and patio products | ||||||
Oldcastle BuildingEnvelopeTM, Inc. | 100 | Custom fabricated architectural glass | ||||||
Oldcastle Lawn & Garden, Inc. | 100 | Patio products, bagged stone, mulch and stone | ||||||
Oldcastle Precast, Inc. | 100 | Precast concrete products, concrete pipe, prestressed plank and structural elements | ||||||
Distribution | ||||||||
Oldcastle Distribution, Inc. | 100 | Holding company | ||||||
Allied Building Products Corp. | 100 | Distribution of roofing, siding and related products, wallboard, metal studs, acoustical tile and grid | ||||||
Exhibit 8
Principal Subsidiary Undertakings | continued
Incorporated and operating in | % held | Products and services | ||||||
LH Assets | ||||||||
CRH Brasil Participações Ltda | 100 | Holding company | ||||||
Brazil | CRH Sudeste Indústria de Cimentos S.A. | 99.74 | Cement | |||||
CRH Cantagalo Indústria de Cimentos S.A. | 100 | Cement | ||||||
Canada | Blackbird Infrastructure 407 CRH GP Inc. | 100 | Holding company | |||||
CRH Canada Group Inc. |
100 |
Aggregates, asphalt, cement and readymixed concrete | ||||||
La Reunion (France) | Teralta Ciments Reunion S.A.* | 100 | Cement | |||||
Teralta Granulats Betons Reunion S.A.S.* |
100 |
Aggregates, readymixed concrete | ||||||
France | Eqiom | 99.99 | Aggregates, cement and readymixed concrete | |||||
Germany | Opterra GmbH | 100 | Cement | |||||
Hungary | CRH Magyarország Kft. | 100 | Cement and readymixed concrete | |||||
Philippines(i) | Republic Cement & Building Materials, Inc. | 40 | Cement | |||||
Luzon Continental Land Corporation |
40 |
Cement and building products | ||||||
Romania | CRH Ciment (Romania) S.A. | 98.62 | Cement | |||||
CRH Agregate Betoane S.A. |
98.62 |
Readymixed concrete | ||||||
Serbia | CRH (Srbija) doo Popovac | 100 | Cement | |||||
Slovakia | CRH (Slovensko) a.s. | 99.70 | Cement and readymixed concrete | |||||
Britain & Northern Ireland |
Tarmac Trading Limited | 100 | Aggregates, asphalt, cement, readymixed concrete and contracting | |||||
Tarmac Aggregates Limited |
100 |
Aggregates, asphalt, readymixed concrete and contracting | ||||||
Tarmac Building Products Limited |
100 |
Building products | ||||||
Tarmac Cement and Lime Limited |
100 |
Cement and lime | ||||||
(i) | 55% economic interest in the combined Philippines business (see note 31 to the Consolidated Financial Statements of the Annual Report on Form 20-F). |
Exhibit 8
Principal Equity Accounted Investments
as at 31 December 2015
Incorporated and operating in | % held | Products and services | ||||||
Europe Heavyside | ||||||||
China | Jilin Yatai Group Building Materials Investment Company Limited* | 26 | Cement | |||||
India | My Home Industries Limited | 50 | Cement | |||||
Ireland | Kemek Limited* | 50 | Commercial explosives | |||||
Europe Distribution | ||||||||
France | Samse S.A.* | 21.13 | Builders merchants and DIY stores | |||||
Netherlands | Bouwmaterialenhandel de Schelde B.V. | 50 | DIY stores | |||||
Intergamma B.V. | 48.57 | DIY franchisor | ||||||
Portugal | Modelo Distribuição de Materials de Construção S.A.* | 50 | DIY stores | |||||
Americas Materials | ||||||||
American Cement Company, LLC* | 50 | Cement | ||||||
Southside Materials, LLC* | 50 | Aggregates | ||||||
Cadillac Asphalt, LLC* | 50 | Asphalt | ||||||
United States | Piedmont Asphalt, LLC* | 50 | Asphalt | |||||
American Asphalt of West Virginia, LLC* | 50 | Asphalt and related construction activities | ||||||
HMA Concrete, LLC* | 50 | Readymixed concrete | ||||||
Buckeye Ready Mix, LLC* | 45 | Readymixed concrete | ||||||
* | Audited by firms other than Ernst & Young. |
Exhibit 12
CERTIFICATIONS
I, A. Manifold, certify that:
(1) | I have reviewed this annual report on Form 20-F of CRH plc; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
(4) | The companys other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
(5) | The companys other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: 16 March 2016 | ||
Signature: | /s/ A. Manifold | |
A. Manifold | ||
Title: | Director and Chief Executive |
CERTIFICATIONS
I, M. Carton, certify that:
(1) | I have reviewed this annual report on Form 20-F of CRH plc; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
(4) | The companys other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
(5) | The companys other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: 16 March 2016 | ||
Signature: | /s/ M. Carton | |
M. Carton | ||
Title: | Director |
CERTIFICATIONS
I, S. Murphy, certify that:
(1) | I have reviewed this annual report on Form 20-F of CRH plc; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
(4) | The companys other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
(5) | The companys other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: 16 March 2016 | ||
Signature: | /s/ S. Murphy | |
S. Murphy | ||
Title: | Finance Director |
Exhibit 13
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of CRH plc (the Company) on Form 20-F for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, A. Manifold, Director and Chief Executive of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Signature: | /s/ A. Manifold | |
A. Manifold | ||
Director and Chief Executive | ||
16 March 2016 |
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of CRH plc (the Company) on Form 20-F for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, M. Carton, Director of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Signature: | /s/ M. Carton | |
M. Carton | ||
Director | ||
16 March 2016 |
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of CRH plc (the Company) on Form 20-F for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, S. Murphy, Finance Director of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Signature: | /s/ S. Murphy | |
S. Murphy | ||
Finance Director | ||
16 March 2016 |
Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements on Form S-8 pertaining to the:
1. | Oldcastle Precast, Inc. Profit Sharing Retirement Plan 401(K) and Profit Sharing Plan for Employees of Oldcastle Materials Group - Albany (Registration No. 333-6040) |
2. | Allied Building Products Corp. Savings and Investment Plan (Registration No. 333-10430) |
3. | Betco Block & Products, Inc. Profit Sharing Plan and Trust (Registration No. 333-13308) |
4. | Oldcastle Glass, Inc. Qualified 401(k) Plan (Registration No. 333-13308) |
5. | Oldcastle Architectural Products Group 401(k) and Profit Sharing Plan (Registration No. 333-13308) |
6. | Oldcastle Architectural, Inc. Union Employees 401(k) Plan, Pike Industries, Inc. Profit Sharing and Deferred Income Plan, Oldcastle Southwest 401(k) Retirement Plan, Hallett Construction Company 401(k) Retirement Plan, Pennsy Supply, Inc. 401(k) and Profit Sharing Plan, CPM Development Corporation Profit Sharing Retirement Plan (Registration No. 333-103656) |
7. | CRH plc 2000 Share Option Scheme (Registration No. 333-90808) |
8. | Oldcastle Materials, Inc. Retirement Savings Plan and Oldcastle Precast, Inc. Profit Sharing Retirement Plan and Trust (Registration No. 333-165870) |
9. | CRH plc 2006 Performance Share Plan (Registration No. 333-173246) |
10. | CRH plc 2010 Share Option Scheme (Registration No. 333-173246) |
11. | CRH plc 2014 Performance Share Plan (Registration No. 333-202772) |
and to the incorporation by reference in the Registration Statement on Form F-3 (Registration No. 333-190026) pertaining to CRH America, Inc., CRH Finance America, Inc. and CRH public limited company; of our reports dated 15 March 2016, with respect to the consolidated financial statements of CRH plc and the effectiveness of internal control over financial reporting of CRH plc, included in this Annual Report (Form 20-F) of CRH plc for the year ended 31 December 2015.
/s/ ERNST & YOUNG
Dublin, Ireland
15 March 2016
Exhibit 15.2
The following Exhibit includes shareholder information relating to the Groups Corporate
Governance practices and has been filed as an Exhibit to the Annual Report on Form 20-F.
Governance Appendix
Section 1 Frequently asked questions
Section 2 Operation of the Boards Committees
Section 3 Shareholder meetings and constitution
Appendix Corporate Governance Practices
2 |
3 |
Corporate Governance Practices | continued
4 |
5 |
Corporate Governance Practices | continued
* | In accordance with Section 167(7) of the Companies Act 2014. |
6 |
Typical Audit Committee Calendar
|
Table 5
|
Meeting | Activity | Attendees by invitation (in addition to the Finance Director and the Head of Internal Audit) | ||||
February |
|
Consideration of the financial statements (including the report from the external auditors on Integrated Audit Results and Communications)
|
Chief Executive, Group Chairman and executives responsible for the relevant areas | |||
| Approval of external audit fee
|
|||||
| Annual review of external auditor independence
|
|||||
| Annual assessment of risk management and internal control systems
|
|||||
| Approval of Internal Audit workplan
|
|||||
| Review of reports on the operation of the CRH Code of Business Conduct, the Competition/Anti-trust Compliance Code and the arrangements in place to enable employees to raise concerns, in confidence, in relation to possible wrongdoing in financial reporting or other matters
|
|||||
| Enterprise Risk Management Review
|
|||||
March |
|
Review of Annual Report on Form 20-F
|
Senior finance personnel | |||
April |
|
Review of Trading Statement**
|
Group Chairman and Chief Executive | |||
June |
|
Meeting with Chief Financial Officer, CRH Europe
|
Senior Europe finance personnel | |||
|
Cyber Security Update
|
|||||
July |
|
Preliminary consideration of interim results
|
Chief Executive and executives responsible for the relevant areas | |||
| Approval of the external audit plan
|
|||||
| Updates on accounting & auditing developments
|
|||||
| Update on Internal Audit work/activities
|
|||||
| Enterprise Risk Management Update
|
|||||
| Compliance Update
|
|||||
August |
|
Review of interim results announcement
|
Group Chairman and Chief Executive | |||
September |
|
Meeting with the Chief Financial Officer, CRH Americas
|
Senior Americas finance personnel | |||
| Preliminary review of goodwill impairment and sensitivity analysis
|
|||||
| Cyber Security Update
|
|||||
November |
|
Review of Trading Statement**
|
Group Chairman and Chief Executive | |||
December |
|
Review of outcome of goodwill impairment and sensitivity analysis
|
Executives responsible for the relevant area | |||
| Update on Internal Audit work/activities
|
|||||
| Enterprise Risk Management Update
|
|||||
| Approval of non-audit fees provided by external auditors
|
|||||
| Review of the Committees performance and Terms of Reference
|
|||||
| Review of Companys compliance arrangements and structures
|
** | A Committee of the Group Chairman, Audit Committee Chairman, Chief Executive and Finance Director are authorised from time to time to review and approve the release of Trading Statements. |
7 |
Corporate Governance Practices | continued
8 |
9 |
Corporate Governance Practices | continued
10 |
Exhibit 99.1
Disclosure of Mine Safety and Health Administration (MSHA) Safety Data
CRH is committed to the health and safety of its employees and to providing an incident free workplace. The Group maintains a comprehensive health and safety programme that includes extensive training for all employees and contractors, site inspections, emergency response preparedness, crisis communications training, incident investigation, regulatory compliance training and process auditing.
CRHs US aggregate quarry and mine operations are subject to Mine Safety and Health Administration (MSHA) regulation under the Federal Mine Safety and Health Act of 1977 (the Mine Act). MSHA inspects our mines on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. Whenever MSHA issues a citation or order, it also generally proposes a civil penalty, or fine, related to the alleged violation.
During the year ended 31 December 2015, none of our mining operations received an order under section 104(b), written notice from MSHA of a flagrant violation under section 110(b)(2), notice of pattern of violations under section 104(e) or potential to have pattern under section 104(e) of the Mine Act. For the year ended 31 December 2015, we experienced one non-mining related fatality at our Auburn mine (ID Number 4501237). MSHA was properly notified and an inspector issued a 103(k) order, which was terminated the same day. No other orders or citations were issued in connection with this event.
The information in the table below reflects citations and orders MSHA issued to CRH during the year ended 31 December 2015, as reflected in our records. The data in our system may not match or reconcile with the data MSHA maintains on its public website. In evaluating this information, consideration should also be given to factors such as: (i) the number of citations and orders may vary depending on the size and operation of the mine; (ii) the number of citations issued may vary from inspector to inspector and mine to mine; and (iii) citations and orders may be contested and appealed, and in that process, may be reduced in severity and amount, and may be dismissed.
Mine ID Number (1) |
Mine or Operating Name (2) | Section 104 Significant and Substantial Citations (3) |
Section 104(b) |
Section 104(d) Citations and Orders (5) |
Section 107(a) Orders (6) |
Received (7) |
Received Section
|
Proposed MSHA Assesments (Dollar value in thousands) (9) |
Pending Legal Actions (10) |
Legal Actions Intiated During Period |
Legal Actions Resolved During Period | |||||||||||
0300040 | Valley Springs Quarry | 2 | 0 | 0 | 0 | no | no | 0.983 | 0 | 0 | 0 | |||||||||||
0300379 | Arkhola Dredge & Plant | 1 | 0 | 0 | 0 | no | no | 0.745 | 0 | 0 | 0 | |||||||||||
0300429 | Jenny Lind Quarry & Plant | 0 | 0 | 0 | 0 | no | no | 0.500 | 0 | 0 | 0 | |||||||||||
0300437 | Avoca Quarry & Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0301462 | Preston Quarry & Plant | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
0301583 | Sharps Quarry & Plant | 4 | 0 | 0 | 0 | no | no | 0.816 | 0 | 0 | 0 | |||||||||||
0301807 | Hindsville Quarry & Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0301895 | North Harrison Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0301899 | Portable #1 Plant 1200 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0301921 | Portable #2 Plant 1400 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0301930 | North Custer Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0301974 | Midland Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 |
0302014 | Bonanza Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2302138 | Branson Quarry | 1 | 0 | 0 | 0 | no | no | 0.250 | 0 | 0 | 0 | |||||||||||
2302183 | Bella Vista Quarry & Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2302315 | Anderson Quarry | 1 | 0 | 0 | 0 | no | no | 0.599 | 0 | 0 | 0 | |||||||||||
2302320 | Lanagan Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3400025 | Nowata (Bellco #1) | 1 | 0 | 0 | 0 | no | no | 0.150 | 0 | 0 | 0 | |||||||||||
3400040 | Pawhuska Quarry (Bellco #4) | 4 | 0 | 0 | 0 | no | no | 2.156 | 0 | 0 | 0 | |||||||||||
3400050 | East Quarry | 5 | 0 | 0 | 0 | no | no | 5.708 | 0 | 0 | 0 | |||||||||||
3400052 | Bartlesville Quarry (Bellco #6) | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3400394 | Muskogee Dredge | 4 | 0 | 0 | 0 | no | no | 1.499 | 0 | 0 | 0 | |||||||||||
3400407 | Dewey Quarry (Bellco #3) | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3400410 | Claremore Quarry (Bellco #2) | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3400893 | J-6 Quarry | 0 | 0 | 0 | 0 | no | no | 0.394 | 0 | 0 | 0 | |||||||||||
3401036 | Oologah Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3401130 | Arkhola-Roberts Quarry | 3 | 0 | 0 | 0 | no | no | 1.778 | 0 | 0 | 0 | |||||||||||
3401761 | Okay Materials | 0 | 0 | 0 | 0 | no | no | 0.400 | 0 | 0 | 0 | |||||||||||
3401940 | Spiro Quarry | 0 | 0 | 0 | 0 | no | no | 0.317 | 0 | 0 | 0 | |||||||||||
3402065 | Fisher Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1400823 | Louisburg Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401524 | Shawnee Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401578 | Bonner Springs Quarry | 5 | 0 | 0 | 0 | no | no | 1.914 | 2 | 2 | 0 | |||||||||||
1401636 | Gardner | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401642 | Olathe Lone Elm Quarry | 1 | 0 | 0 | 0 | no | no | 1.061 | 0 | 0 | 0 | |||||||||||
1401704 | Olathe Quarry | 0 | 0 | 0 | 0 | no | no | 0.527 | 0 | 0 | 1 | |||||||||||
2301148 | Harrisonville Quarry | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
2301689 | D R Crushing | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2301930 | Fast Pack 0116 | 4 | 0 | 0 | 0 | no | no | 1.150 | 1 | 1 | 2 | |||||||||||
2301961 | Eagle #I Portable Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2302072 | Gallatin Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2302157 | Brickeys Stone | 2 | 0 | 0 | 0 | no | no | 0.674 | 0 | 0 | 0 | |||||||||||
2302173 | Bates City | 0 | 0 | 0 | 0 | no | no | 0.300 | 0 | 0 | 0 | |||||||||||
2302399 | Portable Plant #3 | 0 | 0 | 0 | 0 | no | no | 0.300 | 1 | 1 | 0 | |||||||||||
5.81E+08 | Portable Plant #1 KCN | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0301948 | White Oaks Sand & Gravel | 0 | 0 | 0 | 0 | no | no | 0.600 | 0 | 0 | 0 | |||||||||||
2200122 | Bowlin Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2200219 | Blackhawk Pit and Plant Mine Name | 1 | 0 | 0 | 0 | no | no | 1.215 | 0 | 0 | 0 | |||||||||||
2200493 | Vossburg Pit | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
2200717 | Scribner Pit | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
2200784 | Tremont Pit | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
4003099 | Crump Gravel Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
Portable Plant #2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | ||||||||||||
2300043 | Defiance Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2300097 | Boonville Quarry | 1 | 0 | 0 | 0 | no | no | 0.840 | 0 | 0 | 0 |
2300099 | Marshall Quarry | 0 | 0 | 0 | 0 | no | no | 0.300 | 0 | 0 | 0 | |||||||||||
2300762 | Sedalia Quarry | 0 | 0 | 0 | 0 | no | no | 0.417 | 0 | 0 | 0 | |||||||||||
2301253 | Marshall Junction Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2301420 | D Y L Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2301915 | Portable Plant #1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2301917 | Tightwad Plant | 0 | 0 | 0 | 0 | no | no | 0.316 | 0 | 0 | 0 | |||||||||||
2301961 | Eagle #1 Portable Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2301967 | Linn Creek Quarry | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
2302015 | Portable Plant #3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2302109 | Prestage Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2302173 | Bates City Quarry | 0 | 0 | 0 | 0 | no | no | 0.300 | 0 | 0 | 0 | |||||||||||
2302286 | Wright City Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2302303 | Bagnell 13 Quarry | 0 | 0 | 0 | 0 | no | no | 0.600 | 0 | 0 | 0 | |||||||||||
2302381 | Portable Plant #4 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2302404 | Pettis Plant 1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1400501 | Hutchinson Sand Plant | 0 | 0 | 0 | 0 | no | no | 0.562 | 0 | 0 | 0 | |||||||||||
1400660 | Hays Pit No A-2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1400699 | Quartzite Quarry | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
1401207 | Fulton Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401255 | Hays Pit No A-1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401276 | Hays Pit No A-3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401334 | Hartford Quarry | 3 | 0 | 0 | 0 | no | no | 1.605 | 0 | 0 | 0 | |||||||||||
1401346 | Kraus Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401377 | Wichita Sand Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401425 | Bieker Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401441 | Dodge City Sand Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401468 | Fall River Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401486 | Hays Portable Plant #1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401638 | Hays Branch Portable Plant #2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401638 | Hays Portable Plant #2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401649 | Hays Portable Plant #3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401669 | Leiker Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1401684 | Heavy Highway Portable #1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3503807 | Kenstone Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3500556 | Valley Concrete & Gravel Prtbl Crusher | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3500631 | Ellendale Portable Crusher | 0 | 0 | 0 | 0 | no | no | 0.317 | 0 | 0 | 0 | |||||||||||
3503044 | Bethel Heights Portable Crusher | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3503426 | Hermiston | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4500560 | Park Road Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4500572 | Matheson Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4500631 | Toppenish Facility | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4500730 | Pasco Facility | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4501118 | Crestline Facility | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 |
4502709 | Sullivan Road Facility | 0 | 0 | 0 | 0 | no | no | 0.138 | 0 | 0 | 0 | |||||||||||
4503588 | CDC Portable Recycler Crusher | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4503042 | Rock Island Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4503253 | CWC Portable Crusher | 0 | 0 | 0 | 0 | no | no | 0.454 | 0 | 0 | 0 | |||||||||||
4503391 | CWC Portable Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4503452 | CWC Prtbl Fabtech/Tidco | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
4503554 | CWC Prtbl Powerscreen | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4503623 | CWC Prtbl Crusher WP/Kolberg | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1900469 | Pittsfield Sand & Gravel Inc | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000013 | South Bethlehem | 0 | 0 | 0 | 0 | no | no | 0.300 | 0 | 0 | 0 | |||||||||||
3000014 | Kingston Plant #3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000025 | Pattersonville Plant #61 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000043 | Cropseyville Plant #5 | 2 | 0 | 0 | 0 | no | no | 1.161 | 0 | 2 | 3 | |||||||||||
3000100 | Bridgeville Plant #70 | 1 | 0 | 0 | 0 | no | no | 0.117 | 0 | 0 | 0 | |||||||||||
3000101 | Fosterdale Plant #73 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000110 | Oxbow Pit 41 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000113 | Madison Mine | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000985 | Valente Sand & Gravel | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3002253 | Maybrook Materials Plant #80 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3002312 | Ogdensburg Stone & Asphalt | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3002496 | Callanan Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3002654 | Dyer Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3002684 | Tilleys Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3002697 | Schroon Lake Operation | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3002954 | Cropseyville Plant 8 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3002983 | Schodack Pit - Plant 58 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3003029 | Ravena Plant #2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3003452 | East Kingston | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
1100176 | J-Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1300186 | Geode Shop | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
1300766 | Spring Sand Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1301514 | J-Plant (Portable) | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302050 | Plant No 2 (X-Plant) | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302056 | Plant No 3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302151 | Geode Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302248 | Stripping Crew #3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302360 | Burlington Shop | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302370 | A-Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302389 | Hawkeye Quarry Shop | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000022 | Brockport Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000032 | Leroy Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000033 | Penfield Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000034 | Gates Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 |
3000035 | Walworth Plant | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
3000214 | Bath Plant | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
3001130 | Newark Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3001141 | Ogden Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3001254 | Manchester Plant | 1 | 0 | 0 | 0 | no | no | 0.463 | 0 | 0 | 0 | |||||||||||
3002754 | Howard Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3002764 | Mendon Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3002910 | Avon Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3003840 | Palmyra Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3300181 | Wynadot Dolomite - Carey Plant | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
3500484 | ESG Eugene Facility | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
3501064 | ESG Coburg Facility | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3502705 | ESG Corvallis Facility | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
3502705 | ESG Corvallis Facility | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
1300620 | Emmetsburg Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1300645 | PWP #3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1300919 | PWP #6 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1300921 | Vandalia Rd Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1300999 | PCP #3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1301000 | Lake View Shop | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1301019 | Ames Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1301050 | PCP #5 | 0 | 0 | 0 | 0 | no | no | 0.208 | 0 | 1 | 1 | |||||||||||
1301053 | PWP #2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1301202 | North Des Moines Plant | 1 | 0 | 0 | 0 | no | no | 0.176 | 0 | 0 | 0 | |||||||||||
1301706 | Booneville Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1301825 | Stripping #1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302045 | PCP #6 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302145 | PWP #1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302176 | PWP #4 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302189 | Stripping #2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302190 | PRP #5 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302293 | PSP #1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302294 | Portable Screen Plant #2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302300 | PCP #4 | 0 | 0 | 0 | 0 | no | no | 0.108 | 0 | 0 | 0 | |||||||||||
1302306 | Pleasant Hill | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302322 | PSP #6 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302323 | PSP #7 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302331 | PSP #8 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302336 | PWP #8 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1302342 | OMG Midwest Shop | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
1302394 | Lake View Boyer | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
1302397 | Portable Stripping | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2501231 | Graske Pit #6 | 0 | 0 | 0 | 0 | no | no | 0.200 | 3 | 2 | 0 | |||||||||||
2501231 | Mallard Sand and Gravel | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 |
2501271 | KMG Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3100014 | Oldcastle Industrial Minerals | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3100015 | Tubbmill Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3100400 | Waynesville Quarry | 0 | 0 | 0 | 0 | no | no | 0.427 | 0 | 0 | 0 | |||||||||||
3100557 | Dillsboro Quarry | 1 | 0 | 0 | 0 | no | no | 1.092 | 0 | 0 | 0 | |||||||||||
3102039 | Mission Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3102061 | Hayesville Quarry | 1 | 0 | 0 | 0 | no | no | 0.363 | 0 | 0 | 0 | |||||||||||
3102138 | Cherokee Co Quarry | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
3102164 | Massey Branch Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4001946 | Harrison Sand Company | 2 | 0 | 0 | 0 | no | no | 0.726 | 0 | 0 | 0 | |||||||||||
3900014 | Rapid City Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3900180 | Hot Springs Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3901246 | Centennial Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3901550 | P.Q. 47866 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3901554 | P.Q. 3144 (Fast Pack) | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4501237 | Auburn Facility | 3 | 0 | 0 | 0 | no | no | 5.615 | 0 | 0 | 0 | |||||||||||
4503032 | IAC Portable Crusher | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4503684 | IAC Portable Screen Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2402078 | Portable Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4801734 | Scale Number Two | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4801735 | Scale Number One | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1000343 | Kathleen Facility | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1001884 | ICA Portable Crusher | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1001912 | Wyoming Facility | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3503325 | KP Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3503370 | KP Portable Crusher | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3503633 | KP Portable Screen | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4801141 | Evans No 1 Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4801189 | Evans Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4801547 | Small Crusher #1330 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0503178 | CO Crusher | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0503510 | Portable WP | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0504356 | Crusher #4 | 0 | 0 | 0 | 0 | no | no | 0.300 | 0 | 0 | 0 | |||||||||||
0504484 | FCM Crusher #3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0504832 | San Antonio Crusher | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2901073 | NM Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2901258 | NM Crusher | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 1 | |||||||||||
2902262 | FCM Crusher 2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2902306 | FCM Washplant #2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1001326 | 133 Crusher H-K Portable | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 1 | |||||||||||
1001892 | 134 Crusher H-K Portable Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1002107 | 132 Wash Screen | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1002142 | HK Classifier | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
1002213 | 130 Portable RAP Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 |
1002222 | 1700 Trac Screening Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0501050 | WP1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0504484 | Crusher #3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0504585 | WP2 | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
0504624 | SP2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0504656 | CR4 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0504739 | Fast Pack 1 CR5 | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
0504740 | Fast Pack 1 CR6 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0504741 | Fast Pack 1 SP3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0504834 | Fast Pack 3 SP4 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0504835 | Fast Pack 2 CR7 | 0 | 0 | 0 | 0 | no | no | 0.334 | 0 | 0 | 0 | |||||||||||
0504836 | CR8 | 3 | 0 | 0 | 0 | no | no | 1.538 | 0 | 0 | 0 | |||||||||||
0504858 | Hidden Valley Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0504887 | Fast Pack 3 CR10 | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
0504888 | Fast Pack 3 CR9 | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
2901667 | Baca Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2000041 | Ottawa Lake Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2000042 | Maybee Quarry | 1 | 0 | 0 | 0 | no | no | 0.363 | 0 | 0 | 0 | |||||||||||
2002524 | Stoneco Burmeister | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2002595 | 100th Street | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
2002902 | Newport | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
2002934 | Denniston Quarry | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
2002949 | Zeeb Road | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2002995 | Patterson Road | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2003051 | South Kent Portable Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2003090 | Moscow | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0102140 | Alexander City | 0 | 0 | 0 | 0 | no | no | 0.300 | 0 | 0 | 0 | |||||||||||
0102727 | Tarrant Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0103083 | Opelika Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 1 | |||||||||||
0103264 | Wedowee Quarry | 1 | 0 | 0 | 0 | no | no | 0.685 | 0 | 0 | 1 | |||||||||||
0901024 | Cartersville | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0901039 | Ringgold Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0901152 | Mulberry Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0901169 | Lithonia Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0901204 | Warren County Quarry | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
4000060 | Lookout Valley Quarry | 1 | 0 | 0 | 0 | no | no | 0.285 | 0 | 1 | 1 | |||||||||||
1500056 | Mountain Aggregates, Inc., Pine Mountain | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1500213 | Elkhorn Stone | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
CLR | Mountain Enterprises Inc. | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1500001 | Valley Stone | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1500098 | Carter City | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1517312 | Mountain Materials, Inc. - Grassy Stone | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 |
2400497 | Helena Sand & Gravel - Portable Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2400785 | Helena Sand & Gravel - Lake Helena Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2401412 | Helena Sand & Gravel Portable Crusher | 0 | 0 | 0 | 0 | no | no | 0.300 | 0 | 0 | 0 | |||||||||||
2401910 | Blahnik Portable | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2402140 | Screen Plant | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 1 | |||||||||||
2402267 | Portable Colberg Screen | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2401765 | L S Jensen-Portable Crusher | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2401820 | LS Jensen Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2402185 | LS Jensen Screen Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1900007 | Dracut Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1900046 | Acushnet Quarry | 1 | 0 | 0 | 0 | no | no | 0.300 | 1 | 1 | 0 | |||||||||||
1900075 | Keating Quarry and Mill | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
3700002 | Cranston Quarry | 1 | 0 | 0 | 0 | no | no | 1.730 | 1 | 1 | 1 | |||||||||||
3600023 | E. Petersburg Quarry | 1 | 0 | 0 | 0 | no | no | 1.270 | 0 | 0 | 0 | |||||||||||
3600032 | Newport Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3600039 | Prescott Quarry | 0 | 0 | 0 | 0 | no | no | 0.327 | 0 | 0 | 0 | |||||||||||
3600074 | Landisville Quarry | 1 | 0 | 0 | 0 | no | no | 1.312 | 0 | 0 | 0 | |||||||||||
3600212 | Silver Springs Quarry | 0 | 0 | 0 | 0 | no | no | 0.300 | 0 | 0 | 0 | |||||||||||
3600246 | Summit Station Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3600513 | Fontana Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3603215 | Mt Holly Quarry | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
3603432 | Thomasville Mine | 8 | 0 | 0 | 0 | no | no | 9.712 | 0 | 0 | 0 | |||||||||||
3604291 | Hummelstown Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3608148 | Fiddlers Elbow Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3608187 | Fiddlers North Quarry | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
3609058 | Millard Quarry | 6 | 0 | 0 | 0 | no | no | 3.668 | 0 | 0 | 0 | |||||||||||
3609272 | Penn Township Quarry | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
3600048 | Pittson Quarry | 2 | 0 | 0 | 0 | no | no | 0.125 | 0 | 0 | 0 | |||||||||||
3600048 | Small Mountain Quarry Inc. - Salem Sand | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3608033 | Sm. Mountain Quarry Inc. | 4 | 0 | 0 | 0 | no | no | 1.716 | 0 | 0 | 0 | |||||||||||
1700002 | C636-Sidney Crushing Facility | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1700218 | Wells Quarry C624 | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
1700582 | Poland Crushed Stone C610 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1700605 | Keller Pit C625 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1700666 | Pike Industries | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1700722 | Portable Sand Screen 001692 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1700757 | C637 Portable Sand Screen | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1700794 | Spring St Quarry C606 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1700866 | Prospect Quarry-C646 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1700877 | New Vineyard | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 |
1700925 | Pike Washington | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
17400946 | Pike Industries Inc. - C647 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700003 | Lebanon Crushed Stone C623 | 1 | 0 | 0 | 0 | no | no | 0.408 | 0 | 1 | 1 | |||||||||||
2700052 | Campton Sand & Gravel C616 | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
2700061 | Gorham Sand & Gravel C619 | 1 | 0 | 0 | 0 | no | no | 0.499 | 0 | 0 | 0 | |||||||||||
2700073 | Farmington Pit & Mill C618 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700128 | Madbury Pit C629 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700132 | Pike Industries Inc C628 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700158 | Twin Mountain Sand & Gravel (C609) | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700192 | Hooksett Crushed Stone C607 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700276 | Portable Sandscreen C659 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700289 | LA Drew - Portable Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700305 | Portable Sandscreen C650 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700313 | Belmont Sand & Gravel (C627) | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700338 | Columbia Sand & Gravel Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700379 | Viper - Portable Screen | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2700477 | Portable Read Screen | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4300105 | Waterford Crushed Stone C603 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4300185 | Haven Crushed Stone C600 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4300589 | Portable Power Screen 01631 | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
4300628 | Pike Industries Inc-C604 | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
4300642 | Pike Industries C601 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4300643 | Pike Industries Inc-C608 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4300679 | Pike Industries -Wash Plant 634 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4300690 | Pike Industries C654/664 Crusher | 1 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4300715 | Pike Industries Wash Screw-Danby | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0700059 | Bay Road Plant #7 | 2 | 0 | 0 | 0 | no | no | 1.895 | 0 | 0 | 0 | |||||||||||
0700093 | Tarburton Pit | 1 | 0 | 0 | 0 | no | no | 0.351 | 0 | 0 | 0 | |||||||||||
0103380 | Calera | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0800526 | Golden Gate Quarry | 1 | 0 | 0 | 0 | no | no | 0.685 | 0 | 1 | 1 | |||||||||||
800526 | Golden Gate Quarry | 1 | 0 | 0 | 0 | no | no | 0.899 | 0 | 1 | 1 | |||||||||||
801243 | Laurel Shell Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3500631 | Ellendale Portable Crusher | 0 | 0 | 0 | 0 | no | no | 0.317 | 0 | 0 | 0 | |||||||||||
3501002 | Hilroy Facility | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3502478 | Turner Gravel Facility | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
3503044 | Bethel Heights Portable Crusher | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3503596 | River Bend West | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1000313 | Joplin Screening Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 |
1000326 | Mt Home Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1000604 | City Transfer Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1000740 | Eagle Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1001704 | Treasure Valley Portable #1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1001709 | Rental Portable Screen Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1001742 | Treasure Valley Portable #2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1001949 | Linder Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1001976 | Middleton Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1002035 | Summit Stone Portable | 1 | 0 | 0 | 0 | no | no | 0.597 | 0 | 0 | 0 | |||||||||||
1002055 | Richfield Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3503437 | Ontario Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4201717 | PORTABLE #5 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1000373 | Pocatello Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.208 | 0 | 0 | 0 | |||||||||||
1001673 | Dingle Pit | 0 | 0 | 0 | 0 | no | no | 0.534 | 0 | 0 | 0 | |||||||||||
4200388 | Mcquire | 0 | 0 | 0 | 0 | no | no | 0.127 | 0 | 0 | 0 | |||||||||||
4200398 | Brigham City Pit | 0 | 0 | 0 | 0 | no | no | 0.634 | 0 | 0 | 0 | |||||||||||
4200402 | Parson Hyrum Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4200406 | South Weber Pit | 0 | 0 | 0 | 0 | no | no | 1.686 | 0 | 0 | 0 | |||||||||||
4201857 | Gomex | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202320 | Hot Springs | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
4202320 | Hot Springs | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
4202354 | Browns Canyon | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202397 | Staker/Parson Fast Pack | 1 | 0 | 0 | 0 | no | no | 1.594 | 0 | 0 | 0 | |||||||||||
4202440 | Trenton Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202501 | Backus Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2600429 | Boehler Pit | 3 | 0 | 0 | 0 | no | no | 0.867 | 0 | 0 | 1 | |||||||||||
4200021 | Keigley Quarry | 0 | 0 | 0 | 0 | no | no | 0.400 | 0 | 1 | 1 | |||||||||||
4200364 | Heber Binggeli Quarry | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
4200410 | Beck Street South | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4200884 | Bauer Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4201452 | Beck Street | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4201816 | Little Mac | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4201874 | Falcon Ridge | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4201978 | Lehi Peck | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202006 | Erda | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202007 | Burdick Portable #1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202009 | SPC Portable | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202043 | Point West Lehi | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202082 | Big Mac | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202130 | Lehi Point East | 2 | 0 | 0 | 0 | no | no | 2.297 | 0 | 0 | 1 | |||||||||||
4202154 | Bauer | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202192 | West Jordan Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202214 | Burtdick Portable #2 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202236 | Francis | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 |
4202282 | Nebo Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202294 | Elkins Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202348 | Burdick Portable #3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202368 | Utah County Portable | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202381 | West Valley Pit | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
4202430 | Burdick Portable #4 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202460 | Burdick Portable #5 | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
4202517 | Beef Hollow | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202558 | Portable #4 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202561 | Reynolds Portable | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0201483 | Ina Pit | 0 | 0 | 0 | 0 | no | no | 5.000 | 1 | 1 | 0 | |||||||||||
0202643 | Green Valley | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2602394 | Portable Wash Plant #1 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4201089 | Centerfield Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4201122 | Big Water | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
4201572 | Portable Crusher #1 | 1 | 0 | 0 | 0 | no | no | 0.974 | 0 | 0 | 0 | |||||||||||
4202099 | Western Rock Fast Pack | 2 | 0 | 0 | 1 | no | no | 1.832 | 1 | 1 | 0 | |||||||||||
4202150 | Panguitch Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202264 | Portable Crusher #3 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202267 | Sorensen Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202270 | Cedar City Pit | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
4202278 | Ft. Pierce | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202407 | WR Portable Plant 4 | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202459 | Paria | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202489 | Elsinore Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4202490 | Redmond Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3300042 | Fultonham Stone | 0 | 0 | 0 | 0 | no | no | 0.799 | 0 | 0 | 0 | |||||||||||
3300049 | East Liberty Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3300079 | Hardin Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3300091 | White Rock Quarry | 4 | 0 | 0 | 0 | no | no | 2.044 | 0 | 0 | 0 | |||||||||||
3300097 | Marble Cliff Stone | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3300129 | Belle Center Quarry | 3 | 0 | 0 | 0 | no | no | 1.069 | 0 | 0 | 0 | |||||||||||
3300149 | Shelly Materials Inc York Center | 1 | 0 | 0 | 0 | no | no | 0.493 | 0 | 0 | 0 | |||||||||||
3300167 | Tri County Limestone Company | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3300168 | Shelly Materials Inc Ostrander Quarry | 0 | 0 | 0 | 0 | no | no | 0.424 | 0 | 0 | 0 | |||||||||||
3301408 | Coshocton Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3301438 | Shelly Materials Inc Dresden Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3301471 | St. Louisville Plant | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
3301480 | Lockbourne Aggregates | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
3301627 | Shelly Materials Racine Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3301659 | Shelly Materials Inc Springfield | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3301661 | Shalersville North Plant | 1 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 |
3301661 | Shalersville North Plant | 0 | 0 | 0 | 0 | no | no | 0.376 | 0 | 0 | 0 | |||||||||||
3302784 | Columbus Limestone Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3303935 | Shelly Materials Inc Lancaster | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3304233 | Shelly Materials Inc Chillicothe | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3304354 | Alexandria Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3304444 | Willow Island Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3304493 | Forest Quarry | 0 | 0 | 0 | 0 | no | no | 0.324 | 0 | 0 | 0 | |||||||||||
3304581 | Portland Plant | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
3304657 | Columbus Limestone | 10 | 0 | 0 | 1 | no | no | 8.299 | 0 | 0 | 0 | |||||||||||
3302913 | Allied Corporation Inc | 0 | 0 | 0 | 0 | no | no | 0.300 | 0 | 0 | 0 | |||||||||||
3304195 | Petersburg | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3301526 | Jefferson Materials Co | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1100298 | Rockford | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1200058 | Bryant Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3300087 | Celina Quarry | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
3300102 | Maumee Quarry | 0 | 0 | 0 | 0 | no | no | 0.276 | 0 | 0 | 0 | |||||||||||
3300103 | Auglaize Quarry | 0 | 0 | 0 | 0 | no | no | 0.517 | 0 | 0 | 0 | |||||||||||
3300104 | Lime City Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3300105 | Portage Quarry | 0 | 0 | 0 | 0 | no | no | 0.176 | 0 | 0 | 0 | |||||||||||
3300169 | Scott Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3302696 | Rocky Ridge Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
#3385 El Jay Jaw | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | ||||||||||||
2100879 | #0876 Dundas Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2102959 | Cedar Rapids Portable Jaw | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
2102961 | #2961 Lipman Jaw-Portable | 1 | 0 | 0 | 0 | no | no | 1.231 | 0 | 1 | 1 | |||||||||||
2103060 | #3060 Hewitt Robins Crusher (Kasota) | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2103343 | #3343 North Star Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2103488 | #3488 Fold & Go Pep Screener | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2103503 | #3503 El Jay Cone | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2103504 | #3504 Kolberg Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2103530 | #3530 Hydro Grid Screener | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2103609 | Stripping Crew | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2103741 | Cedarapids Classic 45 Cone Crusher | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
2103742 | SVEDALA Wash Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4603727 | Kelly Mountain Quarry | 1 | 0 | 0 | 0 | no | no | 1.204 | 0 | 0 | 0 | |||||||||||
3101354 | Candor Sand Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0600003 | Tilcon Newington Quarry | 2 | 0 | 0 | 0 | no | no | 0.462 | 0 | 1 | 1 | |||||||||||
0600012 | North Branford Quarry | 2 | 0 | 0 | 0 | no | no | 3.871 | 1 | 1 | 0 | |||||||||||
0600013 | Wallingford Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0600015 | Wauregan Quarry | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
600022 | New Britain Quarry | 1 | 0 | 0 | 0 | no | no | 1.045 | 0 | 1 | 1 | |||||||||||
0600224 | Tilcon Manchester Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 |
0600251 | Granby Notch Pit | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 1 | 1 | |||||||||||
0600345 | Southington Pit & Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0600654 | Griswold Sand & Gravel | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
0600677 | Montville Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
0600680 | Groton Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1900338 | Monson Sand & Gravel | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1901045 | Southwick Sand & Gravel | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2800001 | Riverdale Quarry | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
2800014 | Millington Quarry & Mill | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2800024 | Pompton Lakes Quarry | 0 | 0 | 0 | 0 | no | no | 0.100 | 0 | 0 | 0 | |||||||||||
2800026 | MT Hope Quarry | 0 | 0 | 0 | 0 | no | no | 0.262 | 0 | 0 | 0 | |||||||||||
2800030 | Prospect Park Quarry & Mill | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2800035 | Clifton Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2800490 | Certified Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2800541 | Oxford Quarry & Mill | 2 | 0 | 0 | 0 | no | no | 0.716 | 0 | 0 | 0 | |||||||||||
2800541 | Oxford Quarry & Mill | 1 | 0 | 0 | 0 | no | no | 0.293 | 0 | 0 | 0 | |||||||||||
2800670 | Byram Aggregates | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2800757 | Ringwood Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2800994 | Landing Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000038 | Goshen Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000074 | Tomkins Cover Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
3000075 | Haverstraw Quarry & Mill | 2 | 0 | 0 | 0 | no | no | 1.132 | 1 | 1 | 0 | |||||||||||
3000082 | Clinton Point Quarry & Mill | 5 | 0 | 0 | 0 | no | no | 2.736 | 0 | 1 | 2 | |||||||||||
3000083 | West Nyack Quarry | 1 | 0 | 0 | 0 | no | no | 1.100 | 1 | 1 | 0 | |||||||||||
3001692 | Empire Sand & Gravel | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2800032 | Pennington Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
2800033 | Kingston Quarry | 4 | 0 | 0 | 0 | no | no | 2.435 | 1 | 1 | 1 | |||||||||||
2800874 | Moores Station Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4400164 | Glade Stone Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4400165 | Castlewood Plant | 0 | 0 | 0 | 0 | no | no | 0.200 | 0 | 0 | 0 | |||||||||||
4404924 | Saltville Stone Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4405372 | Rural Retreat Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4406371 | Mouth of Wilson Plant | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4407168 | Dickensonville Plant | 1 | 0 | 0 | 0 | no | no | 1.685 | 0 | 0 | 0 | |||||||||||
A0884 | W-L Construction | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
L8N | W-L Construction & Paving | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
MVG | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | ||||||||||||
4104124 | 973 Pit | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4104441 | Austin Aggregates APAC Texas, Inc. | 0 | 0 | 0 | 0 | no | no | 0.438 | 0 | 0 | 0 | |||||||||||
4104468 | Naruna Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
4104489 | Marble Falls Quarry | 0 | 0 | 0 | 0 | no | no | 0.700 | 0 | 0 | 0 | |||||||||||
4104693 | Lampasas Quarry | 0 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
1900018 | Oldcastle Stone Products | 10 | 0 | 0 | 0 | no | no | 13.449 | 1 | 2 | 1 | |||||||||||
3101125 | Lilesville Mine | 2 | 0 | 0 | 0 | no | no | 1.268 | 0 | 1 | 2 |
1600033 | Erwinville #1671 | 2 | 0 | 0 | 0 | no | no | 9.915 | 0 | 0 | 2 | |||||||||||
0100034 | Livingston #1672 | 0 | 0 | 0 | 0 | no | no | 0.450 | 0 | 0 | 0 | |||||||||||
2400014 | Trident Plant & Quarry | 8 | 0 | 0 | 0 | no | no | 0.000 | 0 | 0 | 0 | |||||||||||
167 | 0 | 0 | 2 | 0 | 0 | 154.599 | 16 | 30 | 32 |
(1) MSHA assigns an identification number to each mine or operation and may or may not assign separate identification numbers to related facilities. The information provided in this table is presented by mine identification number.
(2) The definition of mine under Section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools, and preparation facilities. Unless otherwise indicated, any of these other items associated with a single mine have been aggregated in the totals for that mine.
(3) Represents the total number of citations issued by MSHA, for violation of health or safety standards that could significantly and substantially contribute to a serious injury if left unabated. If MSHA determines that a violation of a mandatory health or safety standard is reasonably likely to result in a reasonably serious injury or illness under the unique circumstance contributed to by the violation, MSHA will classify the violation as a significant and substantial violation.
(4) Represents the total number of orders issued, which represents a failure to abate a citation under section 104(a) within the period prescribed by MSHA.
(5) Represents the total number of citations and orders issued by MSHA of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards. These violations are similar to those described above, but the standard is that the violation could significantly and substantially contribute to the cause and effect of a safety or health hazard, but the conditions do not cause imminent danger, and the MSHA inspector finds that the violation is caused by an unwarranted failure of the operator to comply with the health and safety standards.
(6) Represents the total number of imminent danger orders issued under section 107(a) of the Mine Act. These orders are issued for situations in which MSHA determines an imminent danger exists in the quarry or mine and results in orders of immediate withdrawal of all persons (except certain authorised persons) from the area of the quarry or mine affected by its condition until the imminent danger and the underlying conditions causing the imminent danger no longer exist.
(7) Represents whether a mine has received a written notice of a pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of our mine health or safety hazards under section 104(e) of the Mine Act.
(8) Represents whether a mine has received a written notice of the potential to have a pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of our mine health or safety hazards under section 104(e) of the Mine Act.
(9) Total dollar value of proposed assessments from MSHA under the Mine Act. These are the amounts of proposed assessments issued by MSHA with each citation or order for the time period covered by the reports. Penalties are assessed by MSHA according to a formula that considers a number of factors, including the mine operators history, size, negligence, gravity of the violation, good faith in trying to correct the violation promptly, and the effect of the penalty on the operators ability to continue in business.
(10) Pending legal actions before the Commission as required to be reported by Section 1503(a)(3)of the Dodd-Frank Act. All 16 pending legal actions are Subpart B of 29 CFR Part 2700. There are no contests of citations and orders referenced in contests of proposed penalties referenced in Subpart C of 29 CFR Part 2700; no complaints of discharge, discrimination or interference referenced in Subpart E of 29 CFR Part 2700; no complaints for compensation referenced in Subpart D of 29 CFR Part 2700; no applications for temporary relief referenced in Subpart F of 29 CFR Part 2700; and no appeals of judges decisions or orders to the Federal Mine Safety and Health Review Commission referenced in Subpart H of 29 CFR Part 2700.
O>'GK#]IJ<\$,-)Y!LNDK^>>!<6_Q][$@ &>J&.I
M/KUC>F'F77S @LW
MB&C$Z5K1132, ]U"6)ZM6, (/I%BH'UY'^%_R3;V-_$]>HU((-#UB^WT\$ W
M-P38D#C_ %N![MX@ZL489ICKP@/%P%Y)_)L?]:QMQ[]X@^?6@I)IUT8FU(%
M96N6-O\ 7^IO];'_ &WNP8$'KVDUX=913W8BZ_0 W6_-K@GG^G^O[J9*"H'6
MB*<3U#RM=0X7$Y/,Y&=H<;A\?6Y3(3+')*T5'CZ:6KJY%BB#2RE*>%B%4%F(
ML!?WI&9W5 .XFG7F[5U>5.JJ?EQ_,TVEU=1Y#;OQVDP/:.]X:*:/);MJJN&?
MJW:#STL=51ST]7!/ =[;@B$R_P"34D@H$U:9YF=3#[.+7;)I5,EPFF,'AYGU
M^P=!R^WZ&"8P6QU2@4)/P@^0'J?7R'S..M/2J.(&I(\^I)QP>P6--8!T^
MG4I_('T/'I_V'NHEI0UQT[].&J-&>NOX8NECH5>/JJ\, 1< 7UC\ _3WXS=
MPSUKPPHI2E.H34L=RBK=%!N+6!-R26^J@ $7_P!C]?;FHD5)STG:-6..'7,0
M6](U @[(K&YTD*/J
M/KSQ^.#?Z@?X>U2FB@5\NJ%%)R/+KE]FH#>H7-CJLOU_I
;#\?7WJOSZ>T"@-#7KM8C8J01QZ0"+K
=0M!\JAO\G2Z*ZNRJF6*.A'D6!_9I(_GU,RW\WS<-3+3C8_
MQSI<]'6+BI(F;L!
M9S6>S>8_N/#GMK"@9)WCR%/282DFIY"\=*8(71$1/:-&AA,=J7
6%K1#3HT:26[UW3^&5544Z JJ-*A02%Q5@NICYL2?/JX4TWJ-_2U[*IO
MQ8:6X(N&N/S]/;FKJHBK6N.L#4YOPH(_(_%N2.6X!-OZ?7WL-U4QFH'78HE(
M'T! # ']((-A] 3O6PE:8QUR-*"2G(%OJMR5N2 S-R/K_0'W[4/7K>BF!P
MZYBC/'%[FS%K?0D@$$&]O==8ZL%].NC3-R0-2\<$@<&Z_0DG@?3\^]>(.'GU
M[0:=<&II!]0VG0I( Y)Y_!!%[\_[#W8.ISUHJ0>'618- 5B!J)U#\DE22+L;
MEB!_O/NC/6H'#K14\>LC0W4 ?I!)M^D!2 "2;$GZ<>ZUI7J^D=[_:[6XFNN7KI8=2G4S0+I[:$?VA(!:K
M$_,>E.M[CL&V;O
VYC-U'-[AP[8[$[_;:=/7;&SF\JFHQ,M'-(*>#(34D:-3Z7CLL)6=""
M#BM1J(-#PX<