# Directors' report

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-cyclical-auto-parts/LSE_ABDP.L_2018/LSE_ABDP.L_2018.mmd` · pages 15-21_

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Directors' report

The Directors present their report and the audited financial statements of AB Dynamics plc for the year ended 31 August 2018.

## Dividends

During the year an interim dividend of £0.01465 per share was paid and the Board has proposed a final dividend of £0.022 per share.

## Research and development

The Group continues to invest in research and development associated with the design and manufacture of test equipment for vehicle suspension, steering, noise and vibration. Costs attributed to this process have been charged to profit or loss to the extent that they do not meet all of the criteria for capitalisation as set out in IAS 38 'Intangible Assets'.

Research and development costs expensed is separately identified and disclosed in Note 5.

## Financial instruments

The Company's principal financial instruments comprise cash at bank, bank facilities, and various items within current assets and current liabilities that arise directly from its operations including foreign currency forward contracts. The Group's financial risk management objectives and policies are set out in note 19 to the financial statements.

## Future Developments

Please see the Strategic Report for details of future developments.

## Directors

The following directors have held office during the year:

Anthony Best
Dr James Mathew Routh Appointed 1 October 2018
Timothy John Rogers Resigned 28 February 2018
Robert Andrew Leonard Hart
Graham Dudley Eves
Frederick Bryan Smart
Matthew Hubbard
Richard Hickinbotham

At the forthcoming Annual General Meeting, and in accordance with the Company's articles of association, Dr James Routh as a Director appointed by the Board after the conclusion of the Company's previous Annual General Meeting is required to retire and stands for re-appointment. Anthony Best and Graham Dudley Eves will also retire by rotation and being eligible will offer themselves for re-election.

## Conflicts of interest

Under the articles of association of the Company and in accordance with the provisions of the Companies Act 2006, a director must avoid a situation where he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict with the Company's interests. However, the directors may authorise conflicts and potential conflicts, as they deem appropriate. As a safeguard, only directors who have no interest in the matter being considered will be able to take the relevant decision, and the directors will be able to impose limits or conditions when giving authorisation if they think this is appropriate. During the financial year ended 31 August 2018, the directors have authorised no such conflicts or potential conflicts.

## Directors' indemnities

The company has made qualifying third party indemnity provisions for the benefit of its directors which were made during the year and remain in force at the date of this report.

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## Directors' interests in shares

Directors' interests in the shares of the Company, including family interests, were as follows:

<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr></table>

There have been no changes in the Directors' shareholdings since the year end.

<table><tr><td colspan="7">Directors' interests in share options</td></tr><tr><td></td><td>Exercise price (pence)</td><td>As at 1 September 2017</td><td>Exercised during the year</td><td>As at 31 August 2018</td><td>Earliest date for exercise</td><td>Latest date for exercise</td></tr><tr><td>Robert Andrew Leonard Hart</td><td>395.00</td><td>100,341</td><td>-</td><td>100,341</td><td>11 July 2017</td><td>11 July 2026</td></tr><tr><td>Matthew Hubbard</td><td>395.00</td><td>65,119</td><td>-</td><td>65,119</td><td>11 July 2017</td><td>11 July 2026</td></tr></table>

## Directors' remuneration and service contracts

The remuneration paid to the directors during 2018 is shown below:

<table><tr><td></td><td>Short term benefits (Incl. bonus)</td><td>Post employment benefits</td><td>Share based payments</td><td>2018 Total</td><td>2017 Total</td></tr><tr><td></td><td>£</td><td>£</td><td>£</td><td>£</td><td>£</td></tr><tr><td>Anthony Best</td><td>94,409</td><td>-</td><td>-</td><td>94,409</td><td>76,785</td></tr><tr><td>Timothy John Rogers</td><td>178,818</td><td>7,675</td><td>37,160</td><td>223,653</td><td>307,261</td></tr><tr><td>Robert Andrew Leonard Hart *</td><td>165,924</td><td>12,000</td><td>49,466</td><td>227,390</td><td>265,236</td></tr><tr><td>Matthew Hubbard</td><td>162,620</td><td>12,000</td><td>32,102</td><td>206,722</td><td>202,288</td></tr><tr><td>Graham Dudley Eves</td><td>38,000</td><td>-</td><td>-</td><td>38,000</td><td>30,000</td></tr><tr><td>Frederick Bryan Smart</td><td>38,000</td><td>-</td><td>-</td><td>38,000</td><td>30.000</td></tr><tr><td>Richard Hickinbotham</td><td>38,000</td><td>-</td><td>-</td><td>38,000</td><td>-</td></tr><tr><td></td><td>715,771</td><td>31,675</td><td>118,728</td><td>866,174</td><td>911,570</td></tr></table>

 \( ^{*} \)  Highest paid director

## Other substantial shareholdings

As at 12 November 2018, being the latest practicable date before the issue of these financial statements, the Company had been notified of the following shareholdings which constitute 3% or more of the total issued shares of the Company.

<table><tr><td></td><td>Ordinary shares No.</td><td>Shareholding %</td></tr><tr><td>Anthony Best</td><td>4,647,107</td><td>24.0</td></tr><tr><td>Naemi Best</td><td>1,500,000</td><td>7.7</td></tr><tr><td>Castlefield CFP SDL UK Buffetology Fund General</td><td>1,315,000</td><td>6.8</td></tr><tr><td>Anne Middleton</td><td>1,200,000</td><td>6.2</td></tr><tr><td>Cannacord Genuity Group Inc</td><td>971,893</td><td>5.0</td></tr><tr><td>Liontrust Investment Management</td><td>964,690</td><td>5.0</td></tr><tr><td>Hargreaves Landsdown Asset Management</td><td>933,775</td><td>4.8</td></tr><tr><td>Tellworth Investments</td><td>742,818</td><td>3.8</td></tr><tr><td>Amati AIM VCT plc</td><td>652,750</td><td>3.4</td></tr></table>

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## Statement of Directors' responsibilities

The Directors are responsible for preparing the Strategic Report, Directors' Report, any other surround information and the group and parent company financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare group and parent company financial statements for each financial year. Under that law, they have elected to prepare the group financial statements in accordance with International Reporting Standards (IFRSs) as adopted by the European Union (EU) and applicable law and have elected to prepare the parent company financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).

Under Company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and parent company and of their profit or loss for that year. In preparing each of the group and parent company financial statements, the Directors are required to:

● select suitable accounting policies and then apply them consistently;

● make judgments and accounting estimates that are reasonable and prudent;

● state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

● prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the parent company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the parent company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

They are further responsible for ensuring that the Strategic Report and the Report of the Directors and other information included in the Annual Report and Financial Statements is prepared in accordance with applicable law in the United Kingdom.

The maintenance and integrity of the AB Dynamics PLC web site is the responsibility of the directors; the work carried out by the auditors does not involve the consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred in the accounts since they were initially presented on the website.

Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other information included in annual reports may differ from legislation in other jurisdictions.

## Provision of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

● so far as that director is aware, there is no relevant audit information of which the Company's auditors are unaware; and

● that director has taken all the steps that ought to have been taken as a director in order to be aware of any information needed by the Company's auditors in connection with preparing their report and to establish that the Company's auditors are aware of the information.

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## Auditor

The auditor, Crowe U.K. LLP, will be proposed for re-appointment in accordance with Section 489 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.

Tony Best

Director

13 November 2018