morgan crucible
annual report 201 1
advanced materials
record results
continuing ambition
the morgan crucible company plc  annual report 201 1
the morgan crucible company plc
quadrant 5557 high street 
windsor berkshire sl4 1lp
tel 44 01753 837000 
fax 44 01753 850872
wwwmorgancruciblecom overview business review governance financial statements
overview
01  operational and financial 
highlights
02 morgan crucible at a glance
04  chief executive officer’s 
strategic review 
06 market sector reviews
20 chairman’s statement
business review
22  chief executive officer’s 
review
24 group business review
25 key performance indicators 
26 review of operations 
34 corporate responsibility
44 financial review
48 risk management 
50  key resources and  
contractual relationships
51 cautionary statement
governance
52  board of directors and  
executive committee
54  directors’ report
58  corporate governance
65  statement of directors’ 
responsibilities 
66 remuneration report
77 independent auditor’s report
financial statements
78  c o n s ol i d a t ed i n c o m e 
statement
79  c o n s ol i d a t ed s t a t em en t  
of comprehensive income
80 consolidated balance sheet
81  c o n s ol i d a t ed s t a t em en t  
of changes in equity
82  c o n s ol i d a t ed s t a t em en t  
of cash flows
83 notes to the consolidated 
 financial statements
129 company balance sheet
130  notes to the company  
balance sheet
139 group statistical information
140 shareholder information
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morgan crucible  
is a worldleader  
in advanced materials
we produce a wide range of specialist  
highspecification materials that have  
extraordinary attributes and properties
engineered into products they deliver  
enhanced performance often under  
extreme conditions
our dynamic highly skilled people  
are continuously engaged in finding  
solutions for complex and technologically  
demanding applications which are  
used all over the world
in short we supply innovative  
differentiated products made from highly  
technical advanced materials which enable  
our customers’ products and processes  
to perform more efficiently more reliably  
and for longer
 t r ans por t a t i on
page 08
 p etrochemical
page 14
 healthcare
page 18
security  defence
page 10
energy
page 16
 electronics
page 12
 industrial
page 06 annual report 2011  the morgan crucible company plc 01
overview business review governance financial statements
  a year of strong performance 
with record revenue and 
operating profit for the group
  revenue for the year increased 
by 82 to £11010 million
  underlying profit before  
taxation

 increased by 581  
to £1 197 million
  underlying earnings per share

 
increased by 599 to 299 pence 
per share
  proposed final dividend increased 
by 200 to 60 pence giving a 
fullyear dividend of 925 pence
operati on al a nd  
fin anci al hig hlig hts
revenue
continuing businesses £m
2009
2010
2011
9426
10171
11010
82
underlying profit 
before taxation

continuing businesses £m
2009
2010
2011
477
757
1197
581
underlying earnings 
per share

pence
2009
2010
2011
132
187
299
599
underlying operating 
profit

 margin
continuing businesses 
2009
2010
2011
82
100
129

  defined as operating profit before amortisation of intangible assets  
less net financing costs

  defined as operating profit before amortisation of intangible assets

  defined as basic earnings per share adjusted to exclude amortisation  
of intangible assets  02 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
a truly global operation with 
significant and growing levels  
of business in the dynamic 
growth economies of asia  
and south america
our regions
 
morgan c rucible’s markets
 
morgan c ruci ble 
at a g l ance
1 industrial 41 5 petrochemical 8
2 transportation 1 7 6 energy 8
3 security  defence 1 1 7 healthcare 4
4 electronics 1 1
2
3
4
5
6
7
£1  1010m
2011 total revenue
1
£4293m
£3825m
£454m
£2438m
south america
asia and rest of world
north america
europe annual report 2011  the morgan crucible company plc 03
overview business review governance financial statements
our d ivisions
 
morgan ceramics uses its expertise in material science 
and applications engineering to manufacture custom 
products for demanding environments
t hrough its t echnical c eramics business it supplies customerspecific 
applicationsengineered industrial products manufactured from 
advanced materials including structural ceramic electroceramic and 
precious metals t he t hermal c eramics business provides thermal 
management solutions for hightemperature applications which 
benefit technically financially and environmentally from optimised 
energy and emissions control
core products
  insulating fibre insulating bricks and monolithics
  c eramic cores for complex turbine blades
  c omponents for electron tubes
  feedthroughs for medical implants
  piezoelectric ceramic actuators 
core markets
  industrial
  t ransportation
  electronics
  petrochemical
  energy
  h ealthcare
revenue £m
6852m
divisional ebita

 £m 
c ontinuing business
927m
morgan engineered materials delivers materials 
technology through its global businesses
morgan engineered materials delivers highly engineered solutions 
across the world from a portfolio of advanced material technologies 
that include carbon silicon carbide oxidebased ceramics and 
advanced polymeric composites t he d ivision’s core applications  
are industrial and rail transportation fluid handling power generation 
gas turbine solar and wind molten metal handling and advanced 
lightweight ceramiccomposite armour systems for personnel and 
vehicle protection
core products
  electrical brushes
  seals and bearings
  protective ballistic armour
  ultrahightemperature insulation
  crucibles
  l ithium ion battery anode materials
core markets
  industrial
  security  d efence
  t ransportation
  energy
  electronics
  petrochemical
revenue £m
4 158m
divisional ebita

 £m 
c ontinuing business
557m

 divisional ebita is defined as segment operating profit before restructuring costs  
other oneoff items and amortisation of intangible assets
morgan c eramics morgan en gineer ed m ater ials  04 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
ambitious goals to 2013 with  
very substantial progress made  
against them in 201 1
mark robertshaw chief executive officer
chie f exec utive off ice r’s  
stra te gic r eview
    be number one or  
number two in our  
chosen market segments
     be innovative differentiated 
and high valueadded  
to our customers
   our goal is to continue  
to be one of the world’s  
very best advanced  
materials companies
our goal
   our aim is to create 
longterm sustainable 
shareholder value
our aim
    focus on higher growth 
higher margin 
noneconomically  
cyclical markets
     have a culture of  
operational excellence  
and cost efficiency
st rate gic pr iorities
     find keep and develop  
the right people annual report 2011  the morgan crucible company plc 05
overview business review governance financial statements

 group underlying pbt is defined as operating profit before amortisation

 underlying operating profit is defined as operating profit before amortisation of intangible assets

  return on operating capital employed is defined as group underlying operating profit divided by the sum of working capital which excludes pension liability and provisions 
and the net book value of tangible assets goodwill and other intangible assets are excluded
in the early part of 201 1 we announced  
three financial goals which we aim to  
deliver by the end of 2013 t hese are to
1  d ouble group underlying pbt

  
from £757 million to circa £150 million
2  achieve midteen underlying operating 
profit

 margin
3  improve return on operating c apital 
employed

 from circa 25 in 2010  
to circa 35 by 2013
3year goals
t he group’s strong financial performance  
in 201 1 means that we have made significant 
progress on all three of these goals over the 
past year
h ow we ar e d oin g
1  group underlying pbt increased  
by 581 from £757 million to  
£1 197 million
2  underlying operating profit margin 
increased by 290 basis points from  
100 to 129
3  return on operating c apital employed 
improved from 254 to 337
circa 
£150m
2013 
underlying 
pbt
£757m
2010  
underlying 
pbt

selective use of  
valueaccretive ma
growth in new  
marketsproducts  
eg clean energy hdd
recovery and organic 
growth in traditional 
businesses
rapid growth potential 
in dynamic growth 
economies
c ost benefits of lowcost 
manufacturing and 
divisional streamlining  06 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
morgan ceramics makes highperformance ceramic materials  
that are resistant to chemical and physical wear corrosion and  
extreme heat t hey are ideal for equipment destined for harsh 
processing environments
t he d ivision is developing new ceramic membranes for efficient 
industrial water filtration and purification i t makes a range of  
hightemperature components that are used in heating pumps 
thermocouples and other specialist thermal processing equipment  
for applications from industrial annealing to the manufacture of 
medical devices
its ceramic rollers are deployed in kilns used to manufacture metals 
glass and ceramicware and its n ilcra
®
 mgpsz magnesia partially 
stabilised zirconia is widely used in severeservice valves and pumps
insulating products from morgan c eramics such as monolithic linings 
and firebricks help manufacturers control a variety of thermal processing 
operations thereby optimising throughput and yields its fire protection 
products are used in all types of building and infrastructure projects  
its piezoelectric materials are used in highpower ultrasonic systems  
and it also designs and manufactures sensors and transducers
morgan engineered materials is a leading global supplier of carbon 
brushes linear collectors and rotary current transfer products to 
equipment manufacturers in a large range of industrial markets  
from the processing industries of steel chemicals and pharmaceuticals 
to food paper and cement the d ivision has developed advanced brush 
materials to maximise performance system life and energy efficiency 
thereby lowering total maintenance and operating costs in addition  
to these electrical applications morgan amt manufactures a range  
of carbon and graphite felt and rigid board materials and machined 
graphite that are used in high temperature furnaces where the  
structural and purity characteristics of morgan’s products are critical
t he molten metal systems business is the recognised worldleader in 
crucibles for foundries diecasters and metal melting facilities working 
with for zinc precious metals aluminium copper brass bronze and 
other nonferrous materials
improvin g performance 
in hi gh tech indu st rial 
processes
morgan t echnical c eramics has developed 
a new silicon carbide material for  
hardwearing seals used in ‘longlife’ pumps 
for demanding processing applications
it offers better reliability for reduced  
downtime and maintenance costs
2x
better wear rate than other materials
lo n gli fe pumps annual report 2011  the morgan crucible company plc 07
overview business review governance financial statements
morgan c rucible’s products are used in a broad 
range of challenging process and manufacturing 
environments from foundry equipment to seals 
and bearings for industrial fluids handling and 
insulation products for thermal processing  
its advanced materials improve process efficiency 
and productivity minimise waste and reduce 
environmental impact
sustainability     efficiency      reliability        performance
advanced
materials
industrial    healthcare    energy    petrochemical    electronics    security  defence    transportation  
morgan mms is supporting c hina’s efforts 
to recycle more aluminium and other  
nonferrous materials
t raditionally a leader in the production and 
consumption of nonferrous metals china 
is increasingly turning to recycled materials 
for its manufacturing industries creating 
new demand for crucibles
25
increase in demand for recycled aluminium
in c hina
met al rec yclin g
one of the world’s largest sea defence projects 
the modulo sperimentale elettromeccanico 
mose  in venice italy is using 40km of 
firemaster
®
 fastw rap xl ™ fire protection 
blanket from morgan t hermal c eramics
t he installation will provide essential 
protection for the historic city for the next 
hundred years
 100 years
of protection
se a def ence
morgan amt ’s patented silicon carbide 
composite has increased reliability in 
downhole submersible pump applications 
enabling the extraction of water in the 
southwestern united states plagued  
by drought conditions
2x
the seal life of previous designs
submersi ble pump 
applic atio ns  08 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
morgan ceramics makes ceramic and brazed alloy parts that help  
its customers improve the efficiency and reliability of their products  
t he ceramic materials offer a combination of mechanical electrical 
thermal and chemical properties that makes them an attractive 
costeffective option for designers of transportation systems whilst  
the thermal management products are widely used for fire protection
in the aerospace industry the d ivision supplies specialist braze alloy  
parts for use in aeroengine build and repair and ceramic components 
for engine monitoring and control instrumentation and guidance 
systems c eramic cores and insulation materials are used in the casting 
of turbine blades
in the automotive sector it supplies ceramic components for a  
new hybrid vehicle and piezoceramic materials that are used widely  
in fuel level sensors parking aids alarm sensors wheel balancing  
engine knock sensors and ignition systems 
morgan engineered materials is a leading supplier of advanced material 
solutions to the railroad and transit industry providing carbon brushes 
commutation system components earthing brushes third rail and 
pantograph collectors through its global network application engineers 
work with customers to deliver customised solutions and research  
and development facilities enhance the solutions provided to customers 
with analytical and machine testing
t he d ivision plays a vital role in the world’s aerospace industry from 
commercial airlines and military aircraft to helicopters c arbon and 
graphite components are manufactured for a range of demanding 
applications including jet engine main shaft bearing seals electrical 
brushes for alternators and generators bearings for fuel pumps and  
high temperature carbon fabrics for insulating systems
in the automotive sector the d ivision supplies graphite anode materials 
for lithium ion batteries used in electric vehicles and is engaged in 
developing next generation materials with a number of partners  
in this exciting new growth market
improvin g efficienc y  
and r eli abilit y in  
globa l t rans portati on
morgan t echnical c eramics is supplying 
ceramic components for watercooling 
pumps used in electric vehicles c eramic is 
resistant to chemical attack from the glycol 
coolant and provides long life its reduced 
weight contributes to low noise running and 
increased energy efficiency of the vehicle
 60
lighter than steel
vehicle w ate rc ooling annual report 2011  the morgan crucible company plc 09
overview business review governance financial statements
morgan c rucible plays a significant role in the 
world’s transport industries t he group makes 
precisionengineered materials for commercial 
and military aircraft and vehicles as well as vital 
components for the rail and marine sectors
sustainability     efficiency      reliability        performance
advanced
materials
industrial    healthcare    energy    petrochemical    electronics    security  defence    transportation  
morgan t hermal c eramics’ mink
®
 f382 
and mink
®
 f351 materials are used for  
fire barriers in challenging hightemperature 
aerospace applications t hey offer  
2025 lower thermal conductivity  
than the industry standard f182 and  
f150 microporous materials
20
lower thermal conductivity
aerospace fire barriers
morgan amt provides highduty water 
pump sealface components using patented 
silicon carbide composite that have reduced 
warranty claims and significantly increased 
reliability in offroad vehicles
 50
reduction in warranty claims
offroad w ate r pumps
modern rail systems have huge potential  
to make major savings in global demand  
for oil morgan amt is capitalising on 
significant global growth in this sector 
supplying carbon pantographs for  
highspeed rail and city metro systems
 1 trillion 



global rail investment
hi gh speed rail s ystem s  10 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
morgan ceramics’ superior materials technology and impressive 
manufacturing capability deliver real performance benefits in the field  
for applications from military hardware to surveillance equipment and 
armour for personnel and vehicle protection
it makes lightweight heavyduty fire protection systems for naval vessels 
working to far higher specifications than is required for commercial 
shipping its firemaster
®
 system is certified to meet most national and 
international military standards
it manufactures lightweight prestressed piezoceramic tubes that provide 
highacoustic output for the most demanding military sonar systems  
and is a major supplier to manufacturers of power tubes for use in image 
intensifiers electronic countermeasure equipment and communications
t he unique properties of its metallised alumina ceramics have enabled 
the manufacture of significantly smaller higher resolution x ray tubes for 
luggage and cargo scanners and its d iamonex™ diamondlike carbon 
coatings are used in fingerprint swipe sensors
morgan engineered materials is a global leader in lightweight armour 
systems its n p aerospace business has an unparalleled record in rapid 
fielding of new equipment in support of defence programmes around 
the world it is a critical resource supplier to the uk’s ministry of 
d efence and has supplied tactical wheeled vehicles and other 
equipment for use in iraq and afghanistan 
n p aerospace develops and manufactures advanced lightweight armour 
solutions for tactical wheeled vehicles t hese unique solutions combine 
n p aerospace’s expertise in ceramics composites and ballistics and  
are typically less than 40 of the weight of an equivalent armoured  
steel solution
morgan amt is a major tier 2 supplier of body armour systems used 
by the us military i n the uk n p aerospace is the prime supplier for 
integrated body armour systems to the uk ministry of d efence
enh ancin g protective qualities  
for sec urit y  de fence app lic atio ns
metallised aluminas from morgan t echnical 
c eramics enable security scanners to  
operate with higher accelerating voltages 
as a result equipment manufacturers  
can build smaller x ray tubes with  
a much better resolution and faster 
throughput speed for luggage cargo  
and parcel inspection
2x
increase in focal spot power
sec urit y sc anner s annual report 2011  the morgan crucible company plc 11
overview business review governance financial statements
morgan c rucible’s lightweight body and  
vehicle armour technology and its fire insulation 
products help to protect civilian military and 
naval personnel around the world t he group 
also makes ceramic components for surveillance 
equipment and sonar systems
sustainability     efficiency      reliability        performance
advanced
materials
industrial    healthcare    energy    petrochemical    electronics    security  defence    transportation  
c oastal protection and naval ships  
worldwide use lightweight highperformance 
firemaster
®
 fire protection products from 
morgan t hermal c eramics
t he products are chosen because they  
are able to meet higher specifications than 
those required for commercial shipping
 135
higher temperatures than commercial ships
c oasta l protecti on
a new ceramic protection system 
developed by the d efence science and 
t echnology l aboratory and n p aerospace 
is being used to protect troops and military 
vehicles from the threat of improvised 
explosive devices and machinegun fire
50
lighter than equivalent steel armour
milit ary protecti on
n p aerospace has developed and  
manufactured armour solutions which  
are typically more than 40 lighter than an 
equivalent performance armoured steel 
solution by integrating hightechnology 
ceramic and composite materials
 40
lighter than equivalent systems
armour sol uti ons  12 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
morgan ceramics makes piezoceramic components that are versatile 
durable and stable with excellent thermal and electrical properties  
its broad range of dielectric materials offers highquality capacitance  
for applications from laser instrumentation to microwave and  
highvoltage systems
t he d ivision engineers many different ceramic components and 
ceramicmetal subassemblies to high specifications to meet the 
demanding precision reliability and cost requirements of semiconductor 
fabricators and manufacturers of consumer electronics 
examples include piezoceramic actuators for highcapacity hard drive 
disk hdd  data storage which enable the head to be positioned with 
extraordinary accuracy and vibration control and wirewound ceramic 
rf inductors for mobile phones laptops hd tv s lighting controls 
sensors and wireless devices t he d ivision is a major supplier of 
components for electron tubes used in communications signalling  
and control equipment
its highpurity alumina ceramic is used extensively for waveguides in 
co
2
 lasers and insulators in excimer lasers creating robust assemblies 
that resist the combination of voltages temperatures and harsh 
environments
morgan engineered materials is helping the electronics industry  
to achieve smaller faster lowercost devices its products are found  
at the heart of many electronics innovations and in semiconductor 
fabrication processes including ion implantation epitaxy and compound 
crystal growth
t he d ivision supplies products used in the manufacture of components 
such as optical fibres and silicon wafers and is securing a growing 
presence in the highgrowth led market
t he market has come to value the d ivision’s engineered solutions 
innovation and global reach and its ability to deliver advanced materials 
that are able to work at higher temperature and have the higher purity 
levels needed to achieve the required performance
en gineer in g hi gh performance  
precisi on prod ucts for the 
elect ronics sector
c eramic handling equipment from morgan 
t echnical c eramics is a critical component 
in nextgeneration 450mm semiconductor 
wafer fabrication facilities
alumina’s combination of strength and 
stiffness allows for thinner wafer handlers 
which enables closer stacking and better 
productivity
 15
increase in stacking density
semic ondu ct or  
storage annual report 2011  the morgan crucible company plc 13
overview business review governance financial statements
morgan c rucible engineers precision parts for  
an increasing number of niche applications in 
consumer telecoms and specialist electronics 
t he group helps manufacturers continue to 
drive towards higher performance and reliability 
in smaller lighter more robust products
sustainability     efficiency      reliability        performance
advanced
materials
industrial    healthcare    energy    petrochemical    electronics    security  defence    transportation  
morgan t echnical c eramics makes 
piezoceramic actuator plates for disk drive 
storage in devices from hd tv s to pc s 
c eramic enables the head to be positioned 
with greater accuracy allowing for higher 
capacity without increasing disk size
20
more capacity
d ata st orage  
facilities
graphite felt from morgan amt is used to 
provide a uniform thermal environment for 
crystal growth in led sapphire production
its stable insulation enables long process 
cycles and improves insulation life and its 
chemical inertness reduces contamination 
of the sapphire ingot
 9999 
purity
led s apphi re  
produ ctio n
morgan amt ’s material expertise  
and custom process solutions is helping  
semiconductor device manufacturers  
to reduce the line width by 50  
45nm to 22nm in 2016 with ultrapure 
precisionmachined graphite components 
used in the manufacturing processes
50
reduction in line width
semic ondu ct or 
c ompon ents  14 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
morgan ceramics supplies a wide range of products for projects in the 
global petrochemical market t he d ivision’s highperformance ceramic 
materials provide a level of precision and reliability equally suited to the 
harsh environments of drilling and refining
it also supplies entire heat management solutions for fired heaters 
sulphur recovery units fluid catalytic cracking units and boilers 
firemaster
®
 fire protection systems are comprehensively certified  
and extensively tested to meet national and international standards 
offering proven fire protection performance
morgan c eramics recently launched a range of very hardwearing 
components made of d eranox
®
 975 alumina designed for use in 
hydrocyclones where sand and other solids are separated from  
the liquid hydrocarbon stream it is a very harsh environment for 
mechanical equipment and the reliability of the specialist materials  
helps to protect sensitive instrumentation such as export pumps  
and heat exchangers downstream
morgan engineered materials uses its wide range of carbon and silicon 
carbide materials to manufacture critical seals and bearings for pumps 
and compressors used in fluid handling applications in the petrochemical 
industry t he d ivision’s products are able to reduce and sometimes 
eliminate fugitive gas and product vapour emissions from valves pumps 
compressors and other pressurised equipment which is imperative 
across this sector w ith leading edge materials offering excellent wear 
characteristics for extreme applications a broad product offering  
and worldwide manufacturing and customer support it is recognised  
as the leading global provider of seal faces bearings rotors and vanes  
in this market
devel opin g har de rwe arin g  
and l on gerl astin g prod ucts  
for the pet roche mic al indu st ry
morgan t hermal c eramics provided
 1 0000m
2
 of firemaster
®
 marine plus  
blanket for living quarters of the fixed  
processing platform on gud run oil field
superior thermal conductivity allowed  
a very lightweight installation with  
a high standard of protection
20
lighter than conventional products
oil r ig safet y annual report 2011  the morgan crucible company plc 15
overview business review governance financial statements
morgan c rucible supplies products to the  
global petrochemical industry including heat 
management insulation and fire protection 
systems for offshore exploration and 
downstream processing its highperformance 
components are ideal for severeduty service 
valves pumps and tooling
sustainability     efficiency      reliability        performance
advanced
materials
industrial    healthcare    energy    petrochemical    electronics    security  defence    transportation  
h ardwearing d eranox
®
 975 alumina  
from morgan t echnical c eramics is ideal  
for making longlasting components for  
use in the harsh processing environment  
of the hydrocyclone where sand and  
other solids are separated from the  
liquid hydrocarbon stream
98
of 50µm particles screened
hyd roc arbon 
processing
morgan amt produces pg s 100 
graphiteloaded sintered silicon carbide 
which is the material of choice for a wide 
range of petroleum industry equipment 
including use with highly corrosive sour 
crude at 700°f
n o other material can perform in  
these conditions
 100
better than any other material
petro le um ind ustry 
equipment
using highperformance insulating materials 
from morgan t hermal c eramics the heat 
loss from high temperature furnaces like 
those used in ethylene crackers can be 
reduced by around 20 t his ensures 
significant energy savings and reduces 
external casing temperatures
20
reduction in heat loss
hi gh performance
insu l ati on  16 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
morgan ceramics makes highperformance insulating products  
that enable users to reduce energy costs and improve environmental 
performance t he d ivision’s ceramic live line indicators are used in  
highvoltage dc power distribution applications all over the world  
t he d ivision’s hightemperature insulating fibre bricks and monolithics 
are used to optimise thermal efficiency in industrial applications from 
500°c to 1600° c  
l atestgeneration low biopersistent superwool
®
 plus™ fibre is used  
in duct and chimney insulation process heater linings pipe wrap and 
automotive exhaust heat shields where its exceptionally low thermal 
conductivity allows engineers to specify a significantly thinner blanket  
to achieve the same level of insulation
t he d ivision makes products used in the manufacture of thinfilm 
photovoltaic cells for the solar industry and it manufactures cores  
used in the production of blades for industrial gas turbines
a new ultrasonic sensor launched this year helps reduce energy usage 
by providing precise and reliable measurement of heat and water flow 
even in harsh environments
morgan engineered materials makes components that are  
critical to traditional power generation the nuclear industry and 
renewable energy
t he d ivision is a world leader in advanced hightemperature solutions 
which provide major producers of polysilicon and silicon ingots the 
means to enhance solar cell performance
its crucibles are widely used in the manufacture of metal components 
for electricity distribution and transmission systems its carbon brushes 
and rotary transfer systems designed to perform in the harshest 
environment are used widely in wind power applications and its  
634 grade is the gold standard for turbo generator brush applications  
the world over
t he acquisition of morgan amt h airong complemented ongoing 
product development and broadened morgan engineered materials’ 
presence in renewable energy to now include graphite materials for 
anodes used in lithiumion batteries for portable electronic devices  
and electric vehicles
incr easin g powe r  
and sust ainab ilit y  
in the energy sector
morgan t hermal c eramics’ lining  
materials are used in insulating systems for 
hightemperature processing equipment in 
chemical plants and hydrocarbon refineries
t his can have a significant effect in reducing 
energy usage costs and greenhouse  
gas emissions
20
lower thermal conductivity
hi gh te mperat ure 
processin g annual report 2011  the morgan crucible company plc 17
overview business review governance financial statements
morgan c rucible continues to develop  
highperformance products for the evolving 
energy sector t he group makes components  
for power distribution and generation  
from renewable and traditional sources  
and is a worldleader in heat management 
insulation products
sustainability     efficiency      reliability        performance
advanced
materials
industrial    healthcare    energy    petrochemical    electronics    security  defence    transportation  
piezoceramic from morgan t echnical 
c eramics is used in new smart gas meter 
technology being rolled out across the uk
accurate realtime energy consumption 
data helps consumers save energy
£14 billion
predicted uk savings through use of 
smart meters
smart ga s mete rin g
morgan amt has helped to reduce energy 
and maintenance costs for production of 
electronic grade polysilicon by up to 50 
customers benefit from a 20 reduction  
in the cost of capital due to optimised 
throughput using morgan amt ’s materials 
and applications knowhow
50
reduction in costs
energy c ost 
redu ctio n
morgan amt provide lowfriction 
highstrength seal face components  
that significantly improves the energy 
efficiency of water pumps allowing  
drinking water to be delivered more 
extensively in developing countries
30
reduction in energy consumption
elect ricit y suppl y  18 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
morgan ceramics’ materials are used in precision tools including dental 
descalers and specialist ultrasonic surgery scalpels its ceramic capacitors 
and reflectors can be found in lasers for eye surgery it supplies critical 
components used in implantable devices such as pacemakers cochlear 
implants defibrillators and implants for neurostimulation
in a recent breakthrough in cancer treatment an efficient and minimally 
invasive new procedure to ablate tumours has been made possible 
because of a very small precision ceramic tip engineered for the 
treatment needle by morgan c eramics additionally for throat cancer 
patients a new longlasting speech valve has been developed using 
zirconia ceramic components
t he d ivision recently launched a tube contact sensor for accurate 
detection of occlusions in medical infusion lines t he sensor gives 
noninvasive detection of pressure changes providing instrument 
manufacturers with a simple and reliable method of recognising  
when the tube is blocked
t he d ivision also makes key components for instrumentation and 
diagnostic equipment such as ultrasonic imaging x ray c at and mr i 
scanners t he superior piezoelectric ceramic components are used 
extensively in medical ultrasound to enable increased image resolution 
while its multilayer chip capacitors are used in mri systems to tune the 
magnetic field accurately
piezoelectric components are popular in applications such as blood flow 
measurement and foetal heart monitors for their reliability and accurate 
detection additionally they can be found in ultrasonic airinline sensors 
in medical devices and infusion pumps
morgan engineered materials makes advanced composites  
used in place of metal components in an x ray treatment couch  
t he components help to ensure that patients are positioned correctly 
for optimum treatment higher image quality and lower x ray doses
in endoscopes and scanners rotary distributors are employed wherever 
rotary transmission of electric currents data and signals is called for 
smalldiameter slip rings are installed in operating theatre lamps
inn ovatin g in medic al  
devices a nd he althc are 
inst rumentati on
a precisionengineered ceramic tip made  
by morgan t echnical c eramics is used  
in a new treatment to ablate tumours
t he minimally invasive procedure means 
that patient trauma following surgery is 
reduced and postoperation recovery  
times are significantly shorter
70
reduction in hospital recuperation time
t umour tr eatm ent annual report 2011  the morgan crucible company plc 19
overview business review governance financial statements
morgan c rucible makes ceramic components 
used in medical instrumentation for monitoring 
and diagnostics and tools for treatment and 
surgery its medical engineering expertise 
includes orthopaedic replacement ceramic  
joints and specialised ceramic assemblies for 
implantable devices
sustainability     efficiency      reliability        performance
advanced
materials
industrial    healthcare    energy    petrochemical    electronics    security  defence    transportation  
morgan t echnical c eramics has created  
a medical ceramictometal feedthrough 
array for an implantable device which  
it is hoped will be able to restore sight  
to patients suffering from blindness caused 
by retinitis pigmentosa rp
  75000
people suffer from rp in the us a
eye impl ants
morgan t echnical c eramics components 
are increasingly used in x ray and  
c at scanning machines in preference  
to traditional glass t he highpurity 
engineered components help equipment 
manufacturers produce machines that  
offer longer life higher power and  
better performance
2x
the speed of conventional scanners
x ray and  
c at sc anne rs
morgan t echnical c eramics is working  
with medical equipment suppliers on  
highly engineered multipin feedthroughs 
for use in implantable devices to treat 
currently incurable brain diseases including 
parkinson’s dystonia and epilepsy
precision engineering enables accurate  
application of deep brain stimulation therapy
 16x
more leads per unit area
brain the rapy  20 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
cha irman ’s st ate ment
a record year for morgan c rucible  
the strongest performance in 155 years 
of history – tribute to a sound and  
wellimplemented strategy and a  
skilled and dedicated team of employees  
a result which puts us well on track  
to achieving our three published goals  
for 2013 doubling of underlying pbt  
to circa £150 million midteen operating 
profit margins and an operating roce  
of 35
overview
a stronger global economy and a disciplined 
approach to making reality of our strategy 
delivered sales growth of over 8 at £11010 
million compared to £10171 million in 2010 
underlying operating profit was £1415 million 
compared to £1016 million in 2010 and 
underlying diluted earnings per share was  
286 pence 2010 178 pence n et debt was 
reduced from £2362 million to £2154 million 
meaning that the net debt to ebitd a ratio 
improved to 12 times compared to 17 times 
at d ecember 2010
a particular success in the year has been the  
positive results achieved from the integration of 
the t hermal c eramics and t echnical c eramics 
businesses in 2010 t he anticipated benefits 
have been successfully delivered more 
important it is clear that the relative strengths 
of each business complement each other  
in a way that can be used to improve the 
performance of both 
dividend
against this background the board is 
recommending a 20 increase in the final 
dividend to 60 pence per ordinary share 
bringing the total dividend for the year to  
925 pence
tim stevenson chairman
dividend per share
pence
2007
2008
2009
2010
2011
675
70
70
77
925
20
tim stevenson chairman annual report 2011  the morgan crucible company plc 21
overview business review governance financial statements
board and governance
w e pay close attention to the need for our 
board to add substantial value to the work of 
the executive by ensuring that nonexecutives 
have a real understanding of the business  
that they know its senior people and that  
the culture of the board is conducive to 
straightforward debate and challenge on  
the right issues at the right level of discussion  
t he setting of agendas is carefully managed 
through the year to ensure that all key areas  
of strategy are covered and that the board  
has the maximum possible exposure to  
senior employees from across the group  
t his is achieved also by ensuring regular visits 
to group locations and attendance at group 
executive meetings
w ith seven members the board is small 
enough to enable full discussion and the 
characteristics of the nonexecutive cadre 
provide a valuable variety of approach in 
discussion of major issues t he current 
effectiveness of the board was confirmed by  
a thorough external review conducted during 
the year by d r t racy l ong d r l ong’s review 
made suggestions for ways in which the board’s 
performance could be further improved  
these are dealt with in more detail later in  
the governance section of this report most 
important is the need to ensure that as existing 
nonexecutive directors retire there is an 
appropriate managed process of renewal  
an important part of this will be to ensure that 
so far as possible there is useful diversity of skill 
and experience by diversity we imply by no 
means just the gender issue – although that  
is important – but the requirement to have 
nonexecutives with a variety of different 
backgrounds to enable the most appropriate 
stretch and challenge for the executive 
outlook
it is impossible in current circumstances to  
be other than cautious about the outlook  
for business in 2012 yet after a record year  
of revenue and operating profit in 201 1 and 
with healthy order books as we go into the 
new year we are confident that absent a 
serious exogenous shock – most obviously a 
euroled crisis – we can successfully continue 
with implementation of what is now a 
wellproven strategy for growth in our 
businesses even if there is a major economic 
problem we are wellplaced to manage 
through it both because of the underlying 
strength of all our businesses and because 
management having amply demonstrated 
appropriate agility through the last recession 
will be wellprepared for taking the right steps 
early to see our way through another
morgan c rucible is a wellmanaged group 
with a sound culture which elicits strong loyalty 
and commitment from all of its employees  
t he success that we have had in 201 1 – and 
our firm foundations for the future – is very 
much their success as always the board 
thanks them for their effort enthusiasm  
and commitment
tim stevenson
chairman  22 the morgan crucible company plc  annual report 2011
chie f exec utive off ice r’s review
group results
t he group’s continuing strategy of focusing on 
the right growth markets and the right growth 
geographies with innovative differentiated 
addedvalue products drove revenue and 
operating profit to record levels in 201 1  
as one of the world’s leading advanced 
materials companies innovation and 
differentiation in our product offerings are  
the bedrock of our longterm profitable  
growth aspirations i am therefore very 
encouraged by the success we achieved in  
201 1 in commercialising an increasing number 
of new products and technologies such as our 
growing range of offerings to renewable energy 
markets our environmentally friendly range of 
low biopersistent superwool
®
 hightemperature 
insulating fibres and our piezoceramic 
components being sold into the hard disk drive 
hdd  endmarket each of these new 
products and technologies along with the 
many others which are highlighted in case 
studies throughout this annual report reflect 
the benefits of the investment in research and 
development innovation and differentiation 
that morgan c rucible has been making over 
recent years t he strong levels of revenue 
growth in 201 1 are the commercial results of 
seeds planted in previous years now beginning 
to blossom and bear fruit
our continued expansion into the dynamic
growth economies of the world such as china 
india and l atin america also made significant 
strides in 201 1 with our revenue to non
w estern world markets growing substantially 
yearonyear up by nearly 20 versus 2010  
at the same time our w estern world 
businesses also delivered good growth  
with revenue to n orth america and europe 
excluding n p aerospace up by 75 and 
98 respectively w hilst we strongly believe 
that the true test of a longterm sustainable 
highquality business is one which is able to 
deliver profitable longterm organic topline 
growth we are equally committed to a 
mindset of continuous improvement to  
drive yearonyear operational efficiencies  
as a result during 201 1 we continued to 
increase our production in lowcost locations 
to improve our unit costs of manufacturing  
in particular our three factories in mexico  
are playing a growing role in the supply of 
products to our markets in the united states 
and increasingly other parts of the world 
t here have also been some significant 
improvements to our operating efficiencies  
in w estern world plants most notably in  
the new hightemperature products from  
our morgan amt business as we rampup 
into larger commercial volumes and  
in doing so find additional ways to improve  
our manufacturing processes
overall therefore the healthy levels of topline 
growth achieved in 201 1 allied to continuous 
improvement initiatives on our cost base  
meant that our profit increased substantially 
with group underlying pbt up by 581 
compared to 2010
divisional highlights
t he morgan c eramics d ivision had a very 
strong year in 201 1 with reported revenue  
up 125 versus 2010 137 on a constant 
currency basis both the t echnical and 
t hermal c eramics businesses registered 
doubledigit topline growth rates with  
excellent performance in the dynamic growth 
economies and healthy growth also in the 
w estern world t echnical c eramics revenue 
grew by 140 161 on a constant currency 
basis compared to 2010 with t hermal 
c eramics delivering 1 14 growth  
122 on a constant currency basis
i am also pleased to report very good progress 
during 201 1 in realising the benefits of the 
merger of the t echnical c eramics and t hermal 
c eramics businesses that was announced  
in the summer of 2010 t his was undertaken 
with the aim of increasing the potential topline 
growth rate of each business through 
leveraging their respective strengths that of 
t hermal c eramics’ deep and wellestablished 
presence in the dynamic growth economies 
and that of t echnical c eramics in identifying 
distinctive advanced material competencies  
in secular growth higher margin endmarkets 
revenue growth initiatives are by their  
nature focused on a medium to longerterm 
timeframe but the early signs are encouraging 
from both businesses for example we have 
now put in place dedicated t echnical c eramics 
sales and application engineering expertise into 
t hermal c eramics locations around the world 
to open up new potential geographic markets 
in both asia and l atin america with a resultant 
i am pleased to report that 201 1 was  
a record breaking year of revenue and 
operating profit for the group
overview business review governance financial statements
mark robertshaw chief executive officer annual report 2011  the morgan crucible company plc 23
increase in the flow of new business prospects 
coming into our pipeline on the t hermal 
c eramics side significant progress has been 
made in our strategy and plans for global  
hightemperature insulating fibre products 
fibre products represent some 20 of total 
group revenue and i am delighted to say  
that our efforts in research and development  
now mean that we are have a full range of  
low biopersistent fibres superwool
®
 products  
to offer to the market w e believe that the 
environmentally friendly credentials of the  
new superwool
®
 range combined with their 
technical performance leave us wellplaced  
to deliver profitable growth in this important 
business area over the coming years
t he cost synergies of the d ivisional merger 
– which relate primarily to shared management 
and administration costs – have been delivered 
as planned during the year with circa £6 million 
of benefits in 201 1 which we anticipate will  
rise to a fullyear benefit of £8 million pa from 
2012 onwards
another highlight of the year in the morgan 
c eramics d ivision has been the successful 
commercial rampup of our hard disk drive 
hdd  business t he operational demands of 
such a significant stepup in volumes have been 
handled admirably by the t echnical c eramics 
team with excellent global coordination of 
production activities both in n orth america 
and asia revenue from this product increased 
from circa £6 million in 2010 to over  
£15 million in 201 1 and we are optimistic  
about further revenue growth potential in  
this business during 2012
t he combination of strong topline growth 
allied to the benefits of cost reduction initiatives 
mean that d ivisional ebit a for the morgan 
c eramics d ivision increased by 347 from 
£688 million to £927 million with d ivisional 
ebit a margin improving from 1 13 to 135 
d ivisional ebit a for the t echnical c eramics 
business was up 268 from £340 million  
to £431 million with the d ivisional ebit a 
margin improving from 136 to 151 
t hermal c eramics’ d ivisional ebit a  
was up by 425 from £348 million to  
£496 million with operating profit margin 
improving from 97 to 124
t he morgan engineered materials d ivision  
also delivered good d ivisional ebit a margin 
progression during the year from 1 12  
in 2010 to 134 in 201 1 in this d ivision  
the topline growth was 19 28 on a 
constant currency basis as the anticipated 
reduction in ministry of d efence spending  
on personal and vehicle ballistic protection 
following the surge of troops and equipment 
into afghanistan during 2007 to 2009 was 
continued from 2010 into 201 1 as a result  
n p aerospace which provides ballistic 
protections solutions into this market  
saw revenue decline from £1209 million in 
2010 to £930 million in 201 1 encouragingly 
our initiatives to take n p aerospace’s 
differentiated lightweight vehicle armour 
solutions to international markets made 
progress during the year h aving established  
an n p aerospace office in the us a in the 
summer of 2010 n p aerospace won a first 
prototype order for vehicle armour in the  
early part of 201 1 which was then successfully 
converted into a full production order later  
in the year for delivery in the first half of 2012 
w hilst only small scale at this point this first 
production order reinforces our view that  
n p aerospace has an attractive range of 
technologies and solutions with commercial 
potential well beyond the traditional uk market
t he rest of the morgan amt business 
delivered healthy revenue growth in 201 1  
up 1 19 versus 2010 at reported rates  
131 on a constant currency basis t he most 
notable driver of this was strong performance 
from our growing range of carbongraphite 
insulating materials for hightemperature 
applications such as photovoltaic and led 
processing markets sales into these markets 
have benefited from significant research and 
development initiatives to develop innovative 
differentiated products that set industryleading 
levels of performance in terms of their energy 
efficiency and purity characteristics as a result 
sales of hightemperature products increased 
from circa £12 million in 2010 to circa  
£27 million in 201 1 as production levels have 
ramped up in the hightemperature business 
we have been able to drive operational 
improvements in our manufacturing processes 
to improve yields and reduce our unit costs  
of production elsewhere the morgan amt 
business has continued to increase the use  
of lowcost manufacturing locations which  
has also had a beneficial impact on our 
operating costs
t he combination of robust revenue growth 
allied to the cost efficiencies has driven strong 
d ivisional ebit a margin progression from 
90 in 2010 to 127 in 201 1 for morgan 
amt excluding n p aerospace with ebit a 
increasing 584 over the period from  
£221 million to £350 million
similarly strong performance has also been 
delivered in the molten metal systems mms 
business where revenue increased 159 
yearonyear 176 at constant currency  
with good growth across all regions with the 
asian businesses performing particularly well 
mms d ivisional ebit a improved 222 from 
£63 million to £77 million with d ivisional 
ebit a margins rising from 156 in 2010 to 
165 in 201 1
looking forward
t he macroeconomic outlook as we enter  
2012 remains uncertain particularly with the 
ongoing risks to the eurozone and indeed the 
global economy due to sovereign debt issues  
in several countries h owever we believe  
that unless there is a major and pronounced 
global downturn morgan c rucible remains 
wellplaced in 2012 to make further progress 
against the threeyear financial goals that we 
announced in early 201 1 w e have an exciting 
pipeline of innovative differentiated new 
products and technologies w e have a strong 
and growing presence in the dynamic growth 
economies of the world above all we have  
a talented and committed workforce around 
the world who have shown themselves to be 
nimble imaginative and tenacious in driving  
the group’s business forward once more in 
201 1 i would like to take this opportunity to 
thank them all for their efforts in making 201 1  
a recordbreaking year of revenue and 
operating profit and know they will be equal  
to the challenge of trying to make our 2012 
performance even better once again
mark robertshaw
c hief executive officer
overview business review governance financial statements  24 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
group activities
morgan c rucible is a worldleader in advanced 
materials focused on specialist ceramics carbon 
and composites w orking at the forefront  
of advanced materials technology the group 
develops solutions that help to make the world 
more efficient better protected and healthier
t he group has two global d ivisions morgan 
engineered materials and morgan c eramics
morgan engineered materials delivers highly 
engineered solutions built from a portfolio of 
advanced material technologies that includes 
carbon silicon carbide oxidebased ceramics 
and advanced polymeric composite materials 
t he d ivision consists of two global reportable 
operating segments morgan amt  which 
includes n p aerospace with core applications 
including current transfer systems for industrial 
and rail transportation seals and bearings for 
fluid handling hightemperature insulation for 
solar silicon wafer production and advanced 
lightweight ceramiccomposite armour systems 
for personal and vehicle protection and  
molten metal systems with core products  
of crucibles and foundry consumables
morgan ceramics consists of two global 
reportable operating segments t echnical 
c eramics is a leading supplier of customer
specific applicationsengineered industrial 
products with core products manufactured 
from advanced materials including structural 
ceramic electroceramic and precious  
metals t hermal c eramics provides thermal 
management solutions for hightemperature 
applications which benefit technically financially 
and environmentally from optimised thermal 
and energy efficiency management c ore 
products are hightemperature insulating fibre 
bricks and monolithics
group strategy
morgan c rucible’s goal is to continue to  
be one of the world’s very best advanced 
materials companies
t he group’s aim is to create longterm 
sustainable shareholder value
t he group’s five strategic priorities are
  t o focus on higher growth higher margin 
noneconomically cyclical markets 
  t o be high valueadded to its customers 
  t o be number one or number two in its 
chosen market segments
  t o have a culture of operational excellence 
and cost efficiency 
  t o find keep and develop the right people 
t he group uses its strategic priorities to test 
new investment opportunities to screen its 
businesses for fit with the existing group and  
to identify areas requiring strategic attention 
and action
business model
morgan c rucible’s business model is aligned 
with and driven by the group’s strategy as  
set out above in each d ivision and across  
all businesses and sites morgan c rucible  
utilises advanced materials technology and 
manufacturing expertise to design develop 
manufacture and integrate technically 
differentiated solutions that help enhance the 
performance and efficiency of its customers’ 
products or operations t his is supported  
with a focus on service excellence and the 
development of genuine partnerships such that 
the group works alongside its customers and 
suppliers in the ongoing refinement of products 
and solutions further details of the group’s 
key resources and contractual relationships  
are set out on page 50 of this business review
t his outwardfacing part of morgan c rucible’s 
business model is combined with an internal 
focus on operational excellence and effective 
cost management t he 2010 combination of 
businesses to create the two d ivisions through 
which morgan c rucible now operates and  
the ongoing work to take full advantage of the 
group’s lowcost manufacturing footprint are 
tangible examples of this
t he group’s focus on highquality customer 
solutions and efficient operations combine to 
satisfy morgan c rucible’s stated aim of creating 
longterm sustainable shareholder value
additional information on the markets  
served by the group and on its products  
are included in the review of operations on 
pages 26 to 33 and in the overview section  
on pages 1 to 21
revenue and profits
group revenue increased by 82 to £11010 
million 2010 £10171 million group ebit a 
before restructuring charges and oneoff items 
was £1434 million 2010 £1095 million 
representing a margin of 130 2010 108 
t he main factors for these movements are  
as follows
morgan engineered materials
  morgan amt  revenue including  
n p aerospace was £3691 million  
2010 £3677 million d ivisional ebit a 
was £480 million an 224 increase  
at reported rates reflecting the strong 
performance in the core morgan amt 
business n p aerospace trading has been 
in line with expectations with revenue  
of £930 million 2010 £1209 million  
and d ivisional ebit a of £130 million 
maintaining a midteen margin of  
140 despite the reduced revenue
  molten metal systems revenue was  
up by 159 compared to 2010 at  
£467 million 2010 £403 million 
d ivisional ebit a was £77 million 
compared to £63 million for 2010 with 
growth continuing to come in particular 
from china and i ndia where lowcost 
manufacturing bases continue to enhance 
margin performance
morgan ceramics 
  t echnical c eramics revenue for 201 1  
was £2851 million 2010 £2501 million 
an increase of 140 with all regions 
showing strong improvement d ivisional 
ebit a was £431 million 2010 £340 
million reflecting a yearonyear increase 
of 268 at reported rates
  t hermal c eramics revenue increased  
by 1 14 to £4001 million in 201 1  
2010 £3590 million d ivisional ebit a 
also increased in the year to £496 million 
2010 £348 million an increase of  
425 at reported rates
cash generation
free cash flow before acquisitions and 
dividends was £578 million 2010 £765 
million t here was an outflow from working 
capital of £291 million 2010 inflow of £105 
million t he group excluding n p aerospace 
improved its working capital to sales ratio from 
200 at the end of 2010 to 192 at the end 
of 201 1 n p aerospace had a higher level of 
trade receivables and inventory than expected 
at the year end which is expected to reduce 
significantly during 2012
group business review annual report 2011  the morgan crucible company plc 25
overview business review governance financial statements
t o support the group’s strategy and to 
monitor performance the board of d irectors 
and the executive c ommittee use a number of 
financial and nonfinancial key performance 
indicators kpis t hese kpis are selected as 
being important to the success of the group in 
delivering its strategic objectives progress is 
assessed by comparison with the group’s 
strategy its budget for the year and against 
historic performance at a business level a 
range of further benchmarks and other kpis 
are also used as part of the d ivisional planning 
and performance review processes in order to 
measure the underlying performance of the 
business management further analyse the 
headline kpis to exclude the impact of 
acquisitions and foreign exchange
as morgan c rucible’s businesses grow and 
evolve we will review and update the list of 
kpis selected to ensure they remain important 
to the success of the group
financial and nonfinancial performance is 
reviewed in more detail in the d ivisional 
financial and corporate responsibility sections  
of this business review
key performance indic at ors
performance
kpi 2011 2010 relevant strategic objective
financial kpis
revenue growth 82 79  c reating consistent longterm value for shareholders
  focus on higher growth markets
underlying operating profit

 growth 393 319  c reating consistent longterm value for shareholders
  focus on higher growth markets
  t o be high valueadded to our customers
  t o have a culture of operational excellence and  
costefficiency
underlying operating profit

 margin 129 100  c reating consistent longterm value for shareholders
  focus on higher growth markets
  t o have a culture of operational excellence and  
costefficiency
underlying profit before taxation

£1197m £757m  c reating consistent longterm value for shareholders
  focus on higher growth markets
  t o have a culture of operational excellence and  
costefficiency
free cash flow before acquisitions and dividends £578m £765m  c reating consistent longterm value for shareholders
return on operating c apital employed

337 254  c reating consistent longterm value for shareholders
underlying earnings per share

299p 187p  c reating consistent longterm value for shareholders
d ividend per share 925p 77p  c reating consistent longterm value for shareholders
nonfinancial kpis
u
yearonyear pricing change 23 11  t o be high valueadded to our customers
t otal employment costs as  of sales 292 295  t o have a culture of operational excellence and  
costefficiency
employee turnover 137 137  t o find keep and develop the right people
t raining hours per employee 133 129  t o find keep and develop the right people
l ost time accident frequency per 100000 hours worked 057 057  t o have a culture of operational excellence and  
costefficiency
  t o find keep and develop the right people
t onnes c o
2
 per £m revenue 394 416  t o have a culture of operational excellence and  
costefficiency
t onnes waste per £m revenue 41 44  t o have a culture of operational excellence and  
costefficiency

  underlying operating profit is defined as operating profit before amortisation of intangible assets

  underlying profit before taxation is defined as operating profit before amortisation of intangible assets less net financing costs

  return on operating c apital employed is defined as group underlying operating profit divided by the sum of w orking c apital which excludes pension liability and provisions  
and the net book value of tangible assets goodwill and other intangible assets are excluded

  underlying earnings per share is defined as basic earnings per share adjusted to exclude amortisation of intangible assets s ee note 9 on page 98 for definition of basic earnings per share
u 	
n onfinancial kpis are at constant currency and updated to reflect changes in reporting methodology  26 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
review of operati ons
business description
t he businesses within engineered materials  
are global suppliers of highly engineered 
solutions built from a portfolio of material 
technologies that includes carbon silicon 
carbide oxidebased ceramics and advanced 
polymeric composites t he d ivision’s footprint 
provides a global reach that enables the 
delivery of marketleading solutions to a  
variety of chosen endmarkets t hese chosen 
endmarkets are served through three global 
businesses morgan advanced materials  
t echnology morgan amt  n p aerospace 
and molten metal systems mms for 
reporting purposes the d ivision consists of  
two global reporting segments morgan amt 
including n p aerospace and molten metal 
systems mms
t he d ivision’s capabilities are rooted in the 
understanding application and processing  
of its broad range of advanced materials  
t he acquisition of a majority equity stake in  
n p aerospace in 2009 extended the d ivision’s 
materials and ballistic technologies to include 
lightweight ceramicscomposites and the 
acquisition of changsha h airong n ew materials 
c o l td h airong in china at the end of 2010 
complemented ongoing product development 
to broaden the d ivision’s presence in 
renewable energy to now include anode 
materials for lithium ion batteries t oday the 
engineered materials d ivision has strong 
positions in carbon brushes for industrial and 
rail traction applications seals and bearings  
for fluid handling crucibles for the processing  
of nonferrous metals hightemperature 
insulation for silicon solar wafer production  
and advanced lightweight protective ceramic
composite armour systems
as at 1 january 2012 the d ivision employs 
some 4000 people serving customers in 
around 100 countries worldwide its global 
presence includes 40 operating facilities in  
25 countries with major materials processing 
plants in the us a europe south america and 
asia feeding an integrated network of finishing 
plants t he d ivision benefits from a strategically 
located lowcost manufacturing base with sites 
in mexico china h ungary and india that  
allow the d ivision to serve customers across 
the globe
t he d ivision’s strategy aligns with the group’s 
strategic priorities and has fostered success  
in the ballistic protection market entry to  
the silicon solar cell market and entry into  
the lithium ion anode market specifically  
the d ivision’s strategy is to
  add value to advanced materials and 
technology to deliver engineered solutions 
to chosen markets 
  engender a culture of operational 
excellence with a focus on continually 
improving the value the d ivision delivers  
to its customers 
  establish and fully embed a mindset  
for growth through focused business 
development specifically in highgrowth 
and highmargin markets 
  invest in our future through its technology 
centres of excellence and through 
acquisitions alliances and partnerships
  fully engage its entire workforce and  
instil a culture of continuous reinvention 
  c ontinuously seek and develop the  
right people 
t he d ivision’s three global businesses go to 
market through an effective array of channels 
that include both direct sales and distributor 
networks morgan amt primarily uses direct 
sales channels complemented by strategic 
distribution partners who serve both the 
original equipment market and the aftermarket 
and are supported by a global network of 
applications engineers n p aerospace uses 
direct channels to serve major militaries  
and vehicle oems around the world while 
mms leverages an effective global network  
of independent distributors to serve the global 
nonferrous metals industry t he d ivision  
is strategically positioned to ensure that the  
best possible resource is deployed to provide 
advanced materials and technologies in the 
form of engineered solutions to the following 
key global markets
revenue
£m
2009
2010
2011
4215
4080
4158
19
divisional ebita
£m
2009
2010
2011
414
455
557
224
morgan en gineer ed m ater ials d ivisi on annual report 2011  the morgan crucible company plc 27
overview business review governance financial statements
transportation
morgan amt plays a vital role in the world’s 
aerospace industry as well as in the railroad  
and transit industry electric current transfer  
is critical in many transportation systems such 
as rail trams the underground and helicopters 
as well as supplying carbon brushes collectors 
and rotary current transfer products  
morgan amt has developed an innovative 
carbon material which transfers current 
between stationary wires and moving parts  
in the lowhumidity environments found  
at highaltitude and in space used in starter 
motors for fixed and rotary wing aircraft  
it provides highperformance with increased 
life reducing maintenance and operating costs
security  defence
already a major t ier 2 supplier of ceramic 
body armour plates to the us d epartment  
of d efense morgan c rucible’s acquisition  
of a majority equity stake in n p aerospace  
in 2009 broadened the company’s materials 
portfolio and competency in ballistics 
positioning morgan c rucible as a global leader 
in lightweight armour systems founded  
in 1926 n p aerospace is headquartered  
in c oventry uk and has offices in kingston 
ontario c anada in 2010 n p aerospace 
opened a new location in sterling h eights 
michigan us a w ith a clear focus on delivery 
to the frontline soldier and leadingedge 
technical innovation at the core of its business 
n p aerospace has an unparalleled record  
in the rapid fielding of new survivability  
systems and equipment in support of defence 
programmes around the globe t he business 
remains a critical resource to the uk’s ministry 
of d efence for major integration contracts for  
the fielding of nextgeneration tactical wheeled 
vehicles and the highly advanced systems have 
seen service in both iraq and afghanistan
industrial
t he morgan amt business has a strong 
position in the global market providing 
engineered solutions that add value and 
improved reliability to a diversified customer 
base t he business utilises a proven advanced 
materials portfolio combined with a customer
focused global footprint to supply carbon 
brushes linear collectors and rotary current 
transfer products to a diverse oem and 
enduser base operating within steel mining 
and a variety of other key industrial markets
w ith more than 150 years experience  
the mms business is the recognised leader 
worldwide in the supply of crucibles to 
nonferrous metals industries mms crucibles 
and foundry products provide melting solutions 
to foundries diecasters and metal melting 
facilities covering melting applications that include 
zinc precious metals aluminium copper 
brass bronze and other nonferrous metals
petrochemical
morgan engineered materials uses its wide 
range of carbon and silicon carbide materials  
to manufacture critical seals and bearings for 
pumps and compressors used in fluid handling 
applications in the petrochemical oil and gas 
industries w ith a broad product offering  
and worldwide manufacturing and customer 
support it is recognised as the leading global 
provider of seal faces bearings rotors and 
vanes in this market
energy
over the past few years the global energy 
sector has become an increasingly important 
target market for the d ivision t he business’s 
technology and product portfolio includes 
components which are critical to traditional 
power generation companies the nuclear 
industry and the renewables sector in solar 
power morgan amt is a worldleader in 
advanced hightemperature solutions providing 
major producers of polysilicon and silicon  
ingots with the means to enhance solar cell 
performance in wind power generation the 
business supplies carbon brushes and rotary 
transfer systems which perform in the harshest 
environments around the globe w ith the 
acquisition of changsha h airong n ew materials 
c o l td h airong morgan amt added a 
recognised technical leader in the production  
of graphite materials for anodes used in lithium 
ion batteries for portable electronic devices 
and electric vehicles
electronics
morgan amt products are at the heart of 
many electronic innovations and are used in 
semiconductor manufacturing processes such 
as ion implantation epitaxy and compound 
crystal growth w ith the drive to faster  
smaller and lower cost devices semiconductor 
processing equipment companies are 
dependent on advanced materials being  
able to work at higher temperatures and  
having higher purity levels to achieve the 
required performance t he business also 
supplies products used in the manufacture  
of components such as optical fibres and laser 
diodes and is securing a growing presence  
in the highgrowth market for led s growing 
significantly in 201 1 the market has come  
to value the business’s engineered solutions 
innovation and global reach  28 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
review of operati ons
continued
research and development
t he businesses within the engineered materials 
d ivision are leaders in carbonbased materials 
oxide and nonoxide ceramics lightweight 
composites and in ballistics and blast 
technology h airong has added the sciences  
of electrochemistry and rechargeable batteries 
to the d ivision’s expanding technology 
portfolio t he d ivision’s research activities 
include material and process capabilities as  
well as product and systems development 
t hese activities are located within the major 
material processing facilities in the us a  
the uk and china t he d ivision’s businesses 
deploy application development engineers 
worldwide to work with customers in applying 
advanced materials and technologies to develop 
leadingedge engineered solutions according  
to customer need with a focus to position each 
business as leaders in dynamic growth markets
business performance
revenue in the engineered materials d ivision 
was £4158 million 2010 £4080 million 
representing an increase at reported rates  
of 19 at constant currency this increase  
in revenue was 28 t he revenue for  
morgan amt excluding n p aerospace  
was £2761 million 2010 £2468 million 
representing an increase of 1 19 at reported 
rates and 131 on a constant currency basis 
n p aerospace revenue was £930 million 
2010 £1209 million in line with the  
group’s expectations mms achieved  
revenue of £467 million 2010 £403 million 
representing growth of 159 176  
on a constant currency basis
d ivisional ebit a for the engineered  
materials d ivision was £557 million  
2010 £455 million a margin of 134  
2010 1 12 morgan amt e bit a margin 
was 130 2010 107 and mms d ivisional 
ebit a margin was 165 2010 157
t he improvement in the morgan amt  
results reflects sustained recovery from  
its core markets continued expansion in  
dynamic growth markets and the successful 
introduction of new products particularly the 
hightemperature product range a continued 
focus on improving cost efficiencies through  
the operational excellence programme also 
realised further significant benefits in 201 1
mms revenue grew across all regions with a 
particularly strong performance in china and 
india t he business has continued to improve 
profitability through to highteen margins  
by driving through cost improvements and 
focusing on highgrowth markets
business developments
t he morgan amt business saw strong 
demand throughout the year with nearly  
all sectors and regions performing above 
prerecession levels revenue from  
hightemperature products more than 
doubled t he china and asia regions continued 
strong growth in the wind market for electrical 
and rotary products while continuing to 
advance penetration into the solar market  
for hightemperature products
t he business increased its efforts to rebalance 
resources and focus to growth sectors such as 
renewable energy while continuing to expand 
capacity in lowcost countries
morgan amt ’s focus on pursuing 
opportunities in renewable energy  
extends to the lithium ion anode market
d uring the year the recently acquired chinese 
lithium ion battery material supplier morgan 
amt h airong was successfully integrated into 
the d ivision and has made significant progress 
in advancing relationships with a number of 
lithium ion battery manufacturers for portable 
electronic devices and electric vehicles
t he d ivision continues to invest heavily in the 
development of ballistic solutions to counter 
everincreasing threats and to meet demand  
for lighter weight solutions as expected  
n p aerospace is trading below 2010 levels due 
to reduced urgent operational requirement 
demand for tactical wheeled vehicles by  
the uk ministry of d efence n p aerospace 
continues to pursue a number of additional 
domestic and international opportunities  
with existing and new customers leveraging its 
strong portfolio of advanced materials ballistic 
expertise and long history of delivering 
advanced armour solutions to the uk’s ministry 
of d efence following the opening of a 
dedicated n p aerospace office in d etroit the 
business has developed working relationships 
with major oems on current and future 
projects resulting in an order in late 201 1  
with a wellestablished us a vehicle oem  
to be delivered in 2012
mms continued to see strong growth across  
all regions in particular from china i ndia and 
the far east t he business maintained and 
improved its margins with the chinese and 
india lowcost manufacturing bases enhancing 
margin performance
morgan en gineer ed m ater ials d ivisi on continued annual report 2011  the morgan crucible company plc 29
overview business review governance financial statements
outlook
entering 2012 morgan amt ’s order book  
is at a healthy level and the outlook remains 
positive for continued growth in asia and 
sustained performance in core markets in 
europe and the americas d emand for led  
hightemperature products is expected to 
remain strong while demand from the solar 
sector has softened improvements to the  
cost base and to global operational capability 
along with increased focus and resource  
on higher growth markets mean that the 
business is wellpositioned to take advantage of 
opportunities throughout the global economy
n p aerospace revenue is expected to  
continue to decline in 2012 as demand  
for tactical wheeled vehicles by the  
uk ministry of d efence ramps down 
h owever there are new opportunities  
being actively pursued to commercialise  
n p aerospace’s technologies overseas 
particularly in the n orth american market
t he outlook for mms remains positive with 
continued sales growth in all regions focused 
commitment to operational excellence and 
strengthening positions in china i ndia and 
brazil mms continues to be wellplaced to 
take advantage of its marketleading position  
in dynamicgrowth economies  30 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
review of operati ons
continued
business description
morgan c eramics comprises two operating 
businesses t echnical c eramics is a leader in 
customerspecific components and assemblies 
manufactured from advanced materials while 
t hermal c eramics is a worldleader in thermal 
management solutions for hightemperature 
applications in industrial markets
as at 1 january 2012 morgan c eramics 
employs some 5900 people worldwide  
t he d ivision is a truly global business  
with 57 manufacturing sites across six 
continents it is structured with regional teams 
supported by global engineering marketing 
technology research and development 
strategy and finance functions t he d ivision’s 
major sites are located in argentina australia 
brazil china france germany i ndia italy 
japan korea mexico russia the uk and the 
us a t he d ivision has 50 sales offices working 
directly with endusers and also sells some 
products through distribution networks
t he d ivision’s engineering and design 
capabilities are the key to its success  
full technical support and advice is offered  
to customers throughout their product 
development cycle working closely with  
them to understand their needs and provide 
engineered solutions that add value and  
help differentiate their endproducts
t he morgan c eramics business strategy  
is aligned with that of the group with the 
objective of being a worldleader in engineered 
solutions based on advanced ceramic and 
related materials t he d ivision’s strategy is
  t o focus on market niches where the 
d ivision’s distinctive competences and 
innovation skills differentiate it
  t o structure the d ivision’s businesses for 
simplicity and high levels of accountability 
  t o drive operational excellence in all of  
the d ivision’s facilities
  t o actively manage the d ivision’s portfolio 
to achieve optimum shareholder returns
  t o develop the d ivision’s leaders teams 
and technical talent to deliver its strategy
t he t echnical c eramics business is a leading 
supplier of bespoke applicationengineered 
industrial products manufactured from 
materials including structural ceramics 
electroceramics and precious metals  
key markets for these products include 
electronics aerospace industrial equipment 
healthcare and energy
t echnical c eramics’ components and 
assemblies are used in hundreds of  
hightechnology application niches including
  c eramic cores used in the casting of 
turbine blades for aeroengine and 
industrial gas turbines
  braze alloys ceramics and subassemblies 
used in the manufacture monitoring and 
control of aero engines
  c omponents and subassemblies for  
a broad range of medical applications 
including implantable devices prosthetics 
surgical and diagnostic equipment
  c eramics and assemblies for electron 
tubes used in a range of medical security 
industrial and research applications such  
as airport security scanners tv and radio 
broadcasting and x ray equipment
  engineered ceramics for fluid handling 
equipment
  piezoelectric ceramic actuators for 
electronic data storage
  c omponents and assemblies for lasers 
used in product marking medical and 
industrial applications
t he t hermal c eramics business is a world
leader in heat management solutions serving  
a broad spectrum of industrial markets with 
insulation requirements ranging from 500°c to 
1600°c  its hightemperature insulating fibre 
insulating bricks and monolithics enable users 
to optimise thermal efficiency reduce energy 
costs and improve environmental performance 
through reduced c o
2
 emissions t he business 
also provides passive fire protection for the 
industrial and construction sectors
products are manufactured from advanced 
insulating materials marketed under a number 
of leading brands including superwool
®
  
jm™ pyrobloc ™ firemaster
®
 and t rimor ™  
t hey are used worldwide in demanding 
applications which are increasingly influenced 
by legislative and environmental requirements 
major markets include petrochemical iron and 
steel and industrial equipment
revenue
£m
2009
2010
2011
5211
6091
6852
125
divisional ebita
£m
2009
2010
2011
518
688
927
347
morgan ce ramics d ivisi on annual report 2011  the morgan crucible company plc 31
overview business review governance financial statements
market sectors
industrial
morgan c eramics makes highperformance 
ceramic materials that are resistant to chemical 
and physical wear corrosion and extreme heat 
t hey are ideal for equipment destined for 
harsh processing environments
t he d ivision is developing new ceramic 
membranes for efficient industrial water 
filtration and purification helping businesses  
to reduce maintenance and save energy 
it makes a range of hightemperature 
components that are used in heating pumps 
thermocouples and other specialist thermal 
processing equipment for applications from 
industrial annealing to the manufacture of 
medical devices 
its ceramic rollers are deployed in kilns used  
to manufacture metals glass ceramicware  
and fuel cells and its n ilcra
®
 mgpsz magnesia 
partially stabilised zirconia is widely used in 
severeservice valves and pumps
insulating products from morgan c eramics 
help manufacturers control a variety of  
thermal processing operations thereby 
optimising throughput and yields t he d ivision 
supplies monolithic linings for blast furnaces  
and fibre modules and firebricks for heat 
treatment furnaces its fire protection  
products are used in all types of building  
and infrastructure projects
its piezoelectric materials are used in  
highpower ultrasonic systems and it also designs 
and manufactures sensors and transducers 
transportation 
morgan c eramics makes ceramic and brazed 
alloy parts that help its customers improve  
the efficiency and reliability of their products 
t he ceramic materials offer a combination  
of mechanical electrical thermal and chemical 
properties that makes them an attractive 
costeffective option for designers of 
transportation systems including road rail and 
aircraft whilst the thermal management 
products are widely used for fire protection
in the aerospace industry the d ivision  
supplies specialist braze alloy parts for use  
in aeroengine build and repair and ceramic 
components for engine monitoring and control 
instrumentation and guidance systems c eramic 
cores and insulation materials are used in the 
casting of turbine blades 
in the automotive sector it supplies ceramic 
components for a new hybrid vehicle and 
piezoceramic materials that are used widely in 
fuel level sensors parking aids alarm sensors 
wheel balancing engine knock sensors and 
ignition systems alumina and zirconia are ideal 
as materials for injector units pump bearing 
and valve plates
electronics
morgan c eramics makes piezoceramic 
components that are versatile durable and 
stable with excellent thermal and electrical 
properties its broad range of dielectric 
materials offers highquality capacitance  
for applications from laser instrumentation  
to microwave and highvoltage systems
t he d ivision engineers many different ceramic 
components and ceramicmetal subassemblies 
to high specifications to meet demanding 
precision reliability and cost requirements of 
semiconductor fabricators and manufacturers 
of consumer electronics 
examples include piezoceramic actuators  
for highcapacity hard drive disk hdd  data 
storage which enable the head to be positioned 
with extraordinary accuracy and vibration 
control and wirewound ceramic rf inductors 
for mobile phones laptops hd tv s lighting 
controls sensors and wireless devices t he 
d ivision is a major supplier of components  
for electron tubes used in communications 
signalling and control equipment
its highpurity alumina ceramic is used 
extensively for waveguides in c o
2
 lasers and 
insulators in excimer lasers creating robust 
assemblies that resist the combination of 
voltages temperatures and harsh environments
petrochemical
morgan c eramics supplies a wide range  
of products for projects in the global 
petrochemical market t he d ivision makes 
components used in machinery and equipment 
for hydrocarbon processing it also supplies 
entire heat management solutions for fired 
heaters sulphur recovery units fluid catalytic 
cracking units and boilers firemaster
®
  
fire protection systems are comprehensively 
certified and extensively tested to meet 
national and international standards offering 
proven fire protection performance t he 
d ivision works with fire protection specialists  
in the sector and supplies the market through 
both direct sales and distributors  32 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
review of operati ons
continued
a range of parts and subassemblies are 
manufactured for use in equipment for  
the petrochemical sector including specialist 
valves pumps seals and bearings t he 
highperformance ceramic materials provide a 
level of precision and reliability equally suited to 
the harsh environments of drilling and refining
morgan c eramics recently launched a range  
of very hardwearing components made of 
d eranox
®
 975 alumina designed for use in 
hydrocyclones where sand and other solids are 
separated from the liquid hydrocarbon stream 
it is a very harsh environment for mechanical 
equipment and the reliability of the specialist 
materials helps to protect sensitive 
instrumentation such as export pumps  
and heat exchangers downstream
energy
morgan c eramics makes highperformance 
insulating products that enable users to reduce 
energy costs and improve environmental 
performance t he d ivision’s ceramic live line 
indicators are used in highvoltage dc power 
distribution applications all over the world  
t he d ivision’s hightemperature insulating 
fibre bricks and monolithics are used to 
optimise thermal efficiency in industrial 
applications from 500°c to 1600° c  
l atestgeneration low biopersistent 
superwool
®
 plus ™ fibre is used in duct and 
chimney insulation process heater linings  
pipe wrap and automotive exhaust heat  
shields where its exceptionally low thermal 
conductivity allows engineers to specify  
a significantly thinner blanket to achieve  
the same level of insulation 
t he d ivision makes products used in the 
manufacture of thinfilm photovoltaic cells for 
the solar industry and it manufactures cores 
used in the production of blades for industrial 
gas turbines
a new ultrasonic sensor launched this year 
helps reduce energy usage by providing precise 
and reliable measurement of heat and water 
flow even in harsh environments
healthcare
morgan c eramics’ materials are used in 
precision tools including dental descalers  
and specialist ultrasonic surgery scalpels  
its ceramic capacitors and reflectors can  
be found in lasers for eye surgery it supplies 
critical components used in implantable devices 
such as pacemakers cochlear implants 
defibrillators and implants for neurostimulation
in a recent breakthrough in cancer treatment 
an efficient and minimally invasive new 
procedure to ablate tumours has been made 
possible because of a very small precision 
ceramic tip engineered for the treatment 
needle by morgan c eramics additionally  
for throat cancer patients a new longlasting 
speech valve has been developed using zirconia 
ceramic components
t he d ivision recently launched a tube contact 
sensor for accurate detection of occlusions  
in medical infusion lines t he sensor gives 
noninvasive detection of pressure changes 
providing instrument manufacturers with a 
simple and reliable method of recognising 
when the tube is blocked
t he d ivision also makes key components  
for instrumentation and diagnostic equipment  
such as ultrasonic imaging x ray c at and  
mri scanners t he superior piezoelectric 
ceramic components are used extensively in 
medical ultrasound to enable increased image 
resolution while its multilayer chip capacitors 
are used in mri systems to tune the magnetic 
field accurately
piezoelectric components are popular in 
applications such as blood flow measurement 
and foetal heart monitors for their reliability 
and accurate detection additionally they  
can be found in ultrasonic airinline sensors  
in medical devices and infusion pumps 
security  defence
morgan c eramics’ superior materials 
technology and impressive manufacturing 
capability deliver real performance benefits  
in the field for applications from military 
hardware to surveillance equipment and 
armour for personnel and vehicle protection
it makes lightweight heavyduty fire protection 
systems for naval vessels working to far higher 
specifications than is required for commercial 
shipping its firemaster
®
 system is certified  
to meet most national and international  
military standards
it manufactures lightweight prestressed 
piezoceramic tubes that provide highacoustic 
output for the most demanding military  
sonar systems and is a major supplier to 
manufacturers of power tubes for use in  
image intensifiers electronic countermeasure 
equipment and communications
t he unique properties of its metallised alumina 
ceramics have enabled the manufacture of 
significantly smaller higher resolution x ray 
tubes for luggage and cargo scanners and its 
d iamonex™ diamondlike carbon coatings  
are used in fingerprint swipe sensors
research and development
research and development capabilities are led 
by two t echnical d irectors with a network of 
materials scientists and applications and process 
engineers across the d ivision’s global sites 
t hey work with customers to engineer 
solutions that address their needs t he d ivision 
also undertakes research in collaboration  
with leading universities in europe and  
n orth america
recent developments have focused on 
products for the medical transportation  
and energy markets product innovation  
is driven by the customer’s endapplication  
the d ivision’s newest products are being  
used in hybrid vehicles water filtration and  
the nuclear industry
t he majority of the d ivision’s research and 
development into thermal management 
solutions is carried out at the d ivision’s 
bromborough uk site in a purposebuilt 
worldclass facility w ith 25 dedicated  
scientists the team has led the market in  
the development of low biopersistent fibres 
lowenergy furnace operation and product 
development t he role of low biopersistent 
fibres is seen as being of increasing importance 
in the future of the hightemperature insulation 
market and so research and development 
activities have been directed towards extending 
the d ivision’s product range in this area 
morgan ce ramics d ivisi on continued annual report 2011  the morgan crucible company plc 33
overview business review governance financial statements
a major focus for the d ivision is on recruitment 
of highcalibre material scientists and engineers 
to provide the talent and resources that the 
d ivision requires to fuel the growth from these 
exciting expanding markets
business performance
revenue in the morgan c eramics d ivision  
was £6852 million 2010 £6091 million 
representing an increase at reported rates  
of 125 at constant currency the increase  
in revenue was 137
revenue for the t echnical c eramics business in 
201 1 was £2851 million 2010 £2501 million 
an increase of 140 at reported rates 
revenue was up by 161 on a likeforlike 
constant currency basis with all regions showing 
strong improvement t hermal c eramics’ revenue 
increased by 1 11 to £4001 million in 201 1 
2010 £3590 million on a constant currency 
basis the yearonyear increase was 122
d ivisional ebit a for the morgan c eramics 
d ivision was £927 million 2010 £688 
million a margin of 135 2010 1 13  
for t echnical c eramics d ivisional ebit a was 
£431 million 2010 £340 million reflecting  
a yearonyear increase of 268  at reported 
rates t echnical c eramics raised its d ivisional 
ebit a margin by 15 percentage points 
reaching 151 for the year 2010 136 
t hermal c eramics’ d ivisional ebit a also 
increased in the year to £496 million 2010 
£348 million an increase of 425 at 
reported rates t he d ivisional ebit a margin 
also showed good improvement to 124 
2010 97
business developments
in 201 1 major investments and decisions 
concentrated on opportunities to develop  
the d ivision’s footprint in the dynamic asian 
and south american markets c apital was 
invested in moti bhoyan india for a line to 
produce highperformance thinfibrebased 
laminates for thermal insulation t he d ivision 
approved the expansion of its fibre capacity  
in brazil and in its facility in yixing china for 
fused silica production it also established  
a superwool
®
 fibre line in kailong china  
in n orth america and malaysia the d ivision 
continued to invest in additional capacity for 
nextgeneration hard disc drive components 
t he merger of the former t echnical and 
t hermal c eramics d ivisions was completed to 
time and the expected benefits were delivered 
helping to improve profit and operating 
roce  t he new d ivision now has greater 
resources to establish a significant t echnical 
c eramics business in asia and south america 
t hese were strengthened by the addition of 
management and sales personnel who will be 
able to define and develop the opportunities 
that exist in these regions
d uring the year the t echnical c eramics 
business continued to make progress towards 
its declared target of positive mix shift 
increasing the number of new business  
projects in higher margin higher valueadded 
endmarkets such as medical and aerospace 
whilst continuing to reduce exposure to more 
commoditised and economically cyclical 
product areas c ontinuous operational 
improvement programmes cost reduction 
initiatives and emphasis on positive price 
passthrough are all helping to support  
margin growth 
t he t hermal c eramics business continued  
its growth from the low of 2009 with the 
majority of endmarkets returning to  
prerecessionary levels t his growth was  
most notable in n orth america it has also 
been a period of continued cost control  
and consolidation in the face of challenging  
global economic conditions d uring 201 1  
the d ivision completed the process of  
reducing costs in mainland europe principally  
by reducing overheads
n ew product development in the t hermal 
c eramics business remains concentrated in  
the field of low biopersistent fibre with the 
continued rollout of superwool
®
 plus
tm
 and 
the higher temperature superwool
®
 ht
tm
 
t hese products offer significantly improved 
insulation performance and position the 
business as the global technology leader in the 
production of low biopersistence products
t he ‘operational excellence’ programme  
first established in 2010 with targets based  
on a benchmarking programme that have 
accountability and responsibility at plant level 
delivered the improvements that were 
expected t hese locally based and managed 
initiatives continue to be coordinated and 
supported by engineering and rd personnel 
to optimise manufacturing processes t hese 
now constitute a normal business activity
outlook
overall market demand strengthened in 201 1 
as shown by the d ivision’s order books and 
improved new business pipeline t he n orth 
american business traded strongly throughout 
the year as did asia europe showed positive 
signs of improvement in most markets with 
the possible exception of construction which 
remains weak t his principally affects sales of 
h aldenwanger
tm
 products manufactured in 
germany for industrial applications involving 
thermal processing t he south american 
business is looking particularly strong driven by 
the significant investments that are being seen 
in the petrochemical sector d espite these 
encouraging signals the d ivision continues to 
watch recessionary indicators and for any signs 
of inflation 
w eakness in the industrial gas turbine sector 
and medical device markets continued in 201 1 
but these are being offset by improvements  
in demand from sectors within the electronics 
market t he production rampup to meet 
demand for the next generation of hdd 
products remains on plan t owards the end  
of the year some weakness was noted for 
products supplied to the solar market
t he mediumterm outlook for the t hermal 
c eramics business remains encouraging  
driven by the growth in global population  
and the continuing industrialisation of dynamic 
growth economies t hese factors combined 
with the need to reduce energy expenditure 
and the increasingly stringent environmental 
legislation that favours low biopersistent fibres 
such as superwool
®
 will continue to drive 
demand for heat management solutions 
methodology transferred from the t echnical 
c eramics business is encouraging further 
differentiation of the d ivision’s fibre products 
and will allow it to leverage the strength of  
its worldwide management team t his will  
be helped by a new management focus being 
applied to the global business streams – fibre 
insulating fire bricks and engineering projects
t he business continues to look carefully  
at potential bolton acquisition opportunities 
that would enhance the offering in key markets 
which together with a strong new business 
pipeline leaves the d ivision wellplaced for  
the future  34 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
c orporate responsib ilit y
c orporate responsibility  
is integral to morgan 
c rucible’s business and  
the group’s activities  
and programmes in  
this area support each of  
the group’s five strategic 
priorities and address key 
risks and opportunities 
t his report summarises 
the group’s key corporate 
responsibility policies  
and procedures their 
implementation and their 
effectiveness which is 
where appropriate 
monitored using key 
performance indicators 
t he following section reports on morgan 
c rucible’s responsible business programme 
including the group’s policies procedures  
and performance in respect of business ethics 
community relations and suppliers and 
customers subsequent pages cover 
environment health and safety ehs  and 
people in addition morgan c rucible’s 201 1 
ehs report planned for publication on the 
website in may 2012 will provide a more 
comprehensive review of the group’s ehs 
performance in 201 1
morgan c rucible’s approach to corporate 
responsibility is encapsulated in the group’s 
c ore values statement which was first 
published in 2004 and is regularly reviewed  
as the group works to implement its strategic 
priorities the c ore values statement provides 
the framework for the group’s policies 
programmes and procedures t he statement  
is available on the website and applies  
to all morgan c rucible businesses and  
employees worldwide
t he governance structure for corporate 
responsibility is aligned with the management 
structure of the group t he board is 
accountable for corporate responsibility policies 
and procedures t he chief e xecutive officer 
mark robertshaw is the executive in charge  
of all corporate responsibility matters including 
internal and external stakeholders h e is 
supported by the executive team with 
functional heads having specific responsibility 
for environment health and safety human 
resources and other areas operational 
implementation is delegated to the c hief 
executive of each of the group’s d ivisions
corporate responsibility policies  
and procedures
t he group continues to develop its 
responsible business programme as a training 
and education platform for morgan c rucible’s 
corporate responsibilityrelated policies and 
procedures d uring 201 1 the programme  
was extended to include the refreshed and 
updated antit rust c ompliance programme 
t his was relaunched in 201 1 with implementation 
continuing into 2012 
t he group provides employees with access  
to the group’s policies and related procedures 
and guidance notes key policies and other 
relevant material are also published on  
the group website and are required to  
be displayed on site noticeboards
business ethics
t he audit c ommittee is responsible for 
overseeing the group’s ethics policy and 
reports to the board on its effectiveness
t he group’s c ore values statement and  
ethics policy oblige all employees to operate  
in accordance with applicable laws and 
regulations and specifically prohibit the giving  
or receiving of bribes t hese policies apply  
so far as is appropriate to morgan c rucible’s 
business partners including contractors  
agents joint ventures and representatives  
t he c ompany also requires that no employee 
shall suffer discrimination as a result of refusing 
to pay or receive a bribe 
t he morgan c rucible responsible business 
programme covers ethics and antibribery 
human rights legal and contract risk 
management and as noted above  
now incorporates the group’s antit rust 
c ompliance programme d uring 2012 the 
group plans to further develop and implement 
the responsible business programme and  
to make further use of scenarios and dilemmas 
to reinforce the existing training materials
d uring the year the group also updated  
its whistleblowing procedures and a new 
thirdparty operated ethics h otline was 
launched globally t he morgan c rucible  
ethics h otline enables employees and other 
stakeholders who are aware of or suspect 
misconduct illegal activities fraud abuse  
of c ompany assets or violations of morgan 
c rucible’s ethics policy to report these 
confidentially without fear of retribution should 
they feel they cannot use a local channel
customers and suppliers
morgan c rucible’s customer service strategy  
is to respond quickly to changing customer 
demand to identify emerging needs and to 
ensure product availability quality and value 
t he group stays close to its current and 
potential customers building longterm 
relationships each d ivision and business 
implements appropriate sales and customer 
account management structures with customer 
contacts and monitoring at senior level to help 
ensure that customer feedback concerns and 
opportunities are addressed annual report 2011  the morgan crucible company plc 35
overview business review governance financial statements
over 90 of the group’s manufacturing 
output is accredited to is o 9001 and the 
group’s quality management systems help 
ensure that morgan c rucible’s products  
meet or exceed customer requirements 
management of the supply chain is a key part  
of is o 9001 and is o 14001 accreditation  
and includes supplier audits and screening  
as appropriate
t he group engages with its customers 
suppliers and other partners in mutually 
beneficial ways and works with business 
partners who the group believes will act in 
accordance with morgan c rucible’s policies  
and values morgan c rucible’s support for  
the universal d eclaration of h uman rights 
referred to in the people section on page 42 
commits the group in respect of all those who 
work for it and those who have dealings with it  
including suppliers
community
t he group’s practice is to engage with local 
communities in relation to matters of mutual 
interest and concern at a local level where 
morgan c rucible often has longestablished 
roots and is frequently a major employer  
this helps to foster mutual understanding  
and credibility in addition morgan c rucible 
engages with local and national governments 
and agencies both directly and through 
professional bodies d onations to political 
parties or causes are prohibited
corporate responsibility policy 
implementation
t he implementation of morgan c rucible’s 
corporate responsibilityrelated policies  
and procedures is aligned with the overall 
governance structure of the group t he 
implementation of the group’s ehs and 
peoplerelated policies is covered in more 
detail on pages 37 to 43
d escribed below are some of the processes 
for implementing and monitoring the group’s 
key corporate responsibility policies and 
procedures and those in respect of the 
verification of morgan c rucible’s environmental 
social and governance esg disclosures
business ethics
t he board of morgan c rucible is committed  
to ensuring that the c ompany’s policies  
relating to business integrity are upheld  
t he group’s ethics policy is translated into 
appropriate languages for the c ompany’s sites 
worldwide t he c ore values statement and 
ethics policy are promoted to employees 
globally in particular through coverage in ‘360’  
the group’s global employee emagazine 
which is available in 13 languages appropriate 
induction training is provided for new 
employees in addition to training under  
the responsible business programme
t he morgan c rucible responsible business 
programme is implemented via ‘trainthe
trainer’ sessions for general managers and 
compliance officers who then deliver  
facetoface training to relevant local and site 
staff t he facetoface training is complemented  
by elearning modules available in up to  
13 different languages
t he first phase of the programme was 
completed during 201 1 t his covered human 
rights contract risk management ethics and 
antibribery with training delivered to over 
1900 relevant employees worldwide
d uring 201 1 the group’s antit rust 
c ompliance programme which helps ensure 
that the group complies with antitrust and 
competition laws around the world was 
updated and fully incorporated into the second 
phase of the responsible business programme 
in addition to covering antitrust the second 
phase of the programme reinforces and 
refreshes the training provided in phase one
antit rust c ompliance officers within each 
business report to the c ompany secretary as 
global c ompliance d irector on the continuing 
effectiveness of the programme t he antit rust 
c ompliance programme includes independent 
audits t he results of the audits are considered 
by the c ompany secretary as global 
c ompliance d irector who reports to the 
executive c ommittee and the board on the 
effectiveness of the programme and on any 
issues arising
d uring the year the new thirdpartyoperated 
morgan c rucible ethics h otline was launched 
globally t he ethics h otline is promoted on  
the group’s intranet through site posters and 
other promotional materials in 17 languages 
t he implementation of the h otline is 
complemented by training as part of the 
responsible business programme t he ethics 
h otline includes local freephone numbers  
in each of the countries in which the group 
operates with realtime translators available as 
necessary t he remit of internal audit includes 
ensuring the availability of the ethics h otline is 
suitably promoted at site level
customers and suppliers
t he chief e xecutives of each of the  
group’s d ivisions have specific responsibility  
for customers and suppliers and related  
policies and procedures within their  
respective d ivisions
in additional to quality and capability 
assessments d ivisional supplier audits and 
screening cover matters such as the un global 
c ompact health and safety labour standards 
including with regard to minimum age 
maximum hours minimum wages equal 
opportunities grievance procedures and 
human rights anticorruption procedures  
and environmental management
community
t he implementation of morgan c rucible’s 
communityrelated policies and procedures is 
aligned with the management of the group’s 
overall business and is focused at site level on 
engagement and initiatives which are relevant 
to the local community and to the group’s 
business d ivisional and group support  
is made available where appropriate  
all charitable and other donations are  
fully accounted for
verification of esg disclosures
t he c ompany secretary and the d irector  
of ehs work with independent external 
consultants to review and where appropriate 
verify the group’s es g disclosures t his 
process covers the environmental and  
health and safetyrelated nonfinancial key 
performance indicators included in this report  36 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
c orporate responsib ilit y
continued
as described on page 37 the group has 
engaged pricewaterhousec oopers ll p  
to provide independent external assurance  
on selected environmental data for 201 1  
t heir independent assurance report is set out  
on page 41
in addition all morgan c rucible businesses  
are regularly reviewed under the group’s  
ehs c ompliance audit programme and those 
sites and businesses certified to is o 9001  
is o 14001 ohs as 18001 and other 
standards have regular external audits t he 
group also uses external professional advisers 
in relation to specific ehs matters as required
t he board considers that these procedures 
provide a reasonable level of assurance that  
the group’s es g disclosures are free from 
material misstatement whether caused by 
fraud or other irregularity or error
corporate responsibility 
policy effectiveness
business ethics
participation in the responsible business 
programme and implementation of the 
sitebysite training are monitored at a group 
level participants are required to achieve  
a 100 score in each elearning module in 
order to pass
t he antit rust c ompliance programme is also 
subject to independent audit to confirm the 
continued effectiveness of the programme 
which as noted above is monitored by the 
c ompany secretary with a direct reporting line 
to the executive c ommittee and the board
issues raised through the ethics h otline or via 
other channels are followed up by the d irector 
of risk assurance in consultation with the 
c ompany secretary further investigations may 
be conducted through the audit c ommittee  
as required w here appropriate disciplinary 
action up to and including dismissal is taken 
andor additional guidance and training provided 
d uring the year 14 reports were received  
via the h otline from nine different countries 
indicating that the whistleblowing facility is  
being used worldwide and in different cultures  
t he audit c ommittee monitors and reviews 
the effectiveness of the ethics h otline and  
of the followup and investigation processes
customers and suppliers
morgan c rucible continues to benefit from 
longterm relationships with many customers 
and suppliers reflecting the effectiveness of the 
group’s customer service and supplierrelated 
strategies some examples of the products and 
markets served are included on pages 6 to 19 
of this annual report
community
d uring the year the group’s charitable 
donations were £194744 2010 £250229 
t his is in addition to the time given and 
donations made by morgan c rucible 
employees around the world
d uring 201 1 morgan c rucible supported a 
number of initiatives at group d ivisional and 
site level t he main emphasis of this support  
is to help disadvantaged young people and 
sponsor local community projects which  
can also engage and involve employees 
example initiatives include
  t he group continued its threeyear 
£60000 programme to support the  
army c adet force association ac fa 
outreach project 
  morgan c rucible continues to support the 
joint barnardo’soutward bound initiative 
which provides opportunities for young 
people to develop life skills at a centre in 
ullswater uk 
  n p aerospace in c oventry uk is a major 
sponsor of the local godiva h arriers 
athletics club and other local community 
and charitable initiatives and also supports 
the army w inter sports association which 
creates the opportunity for many hundreds 
of soldiers to take part in winter challenges 
  t he group also supported the british 
h eart foundation and a number of  
other sports and healthrelated charities 
and appeals
t he group’s staff also support a variety  
of local and national initiatives and projects 
helping to raise funds and giving their time 
examples of employee activities include
  employees from the morgan c eramics 
asia office took part in the s ingapore 
marathon in the 10km half and full 
marathon categories funds were raised 
for a number of different charities including 
the autism association and everyman  
the prostate and testicular cancer campaign
  employees at the morgan c eramics site in 
n ew bedford ma us a continued their 
tradition of community and charitable 
initiatives in 201 1 they held a raffle to raise 
money for the american c ancer society 
participated in the salvation army’s angel 
t ag fund raiser and collaborated to donate 
t hanksgiving turkeys to the united w ay’s 
h unger c ommission for the benefit of 
needy members of the local community 
  a team from the morgan c eramics site  
in ruabon uk organised a local fun run  
to raise funds to support a colleague who 
suffered brain damage friends family and 
colleagues all wore outrageous costumes 
as they took to the track annual report 2011  the morgan crucible company plc 37
overview business review governance financial statements
morgan c rucible is committed to conducting  
all its activities in a manner which achieves the 
highest practicable standards of health and 
safety for employees and others affected by  
its operations t he group is also committed  
to minimising the impact of its business on the 
environment and to maximising the positive 
environmental benefits of its products 
examples of morgan c rucible’s products  
which help enhance the environmentrelated 
performance and efficiency of the products  
and operations of the group’s customers are 
included in pages 6 to 19 of this report
morgan c rucible’s environment h ealth and 
safety ehs  policy and implementation 
programmes support the group’s five strategic 
priorities and c ore values statement ehs 
performance has a direct and significant effect 
on operating performance and is therefore a 
key focus for operational management across 
the group t he regular collection and 
reporting of ehs key performance indicators 
kpis and the setting of ehs related targets 
assists in the development and monitoring  
of programmes to enhance the operational 
performance and to reduce the impact of  
the group’s operations on the environment
t his report includes a summary of the  
group’s ehs policy and its effectiveness  
as demonstrated through its ehs kp is and 
programmes further detail will be included  
in the 201 1 ehs report to be published  
on the group’s website in may 2012  
t he ehs report will also include case studies 
to help demonstrate the group’s approach  
to ehs performance improvement
ehs policy
morgan c rucible’s ehs policy applies 
groupwide it forms the basis for the  
executive and management focus and has  
been communicated across all sites within  
the group t he policy is published on the 
group’s website and in the annual ehs report
ehs policy implementation
morgan c rucible’s ehs policy forms the basis 
of the group’s ehs management systems and 
processes it requires high standards of ehs 
management at all sites t his is implemented 
through risk assessment and the management 
and mitigation of identified risks to help provide 
continuous improvement in ehs performance 
in support of the group’s strategic priorities 
ehs performance is reported regularly  
to the board by the chief financial officer  
t he governance structure for ehs places 
responsibility for ehs performance on  
the chief e xecutive of each of the group’s 
d ivisions with each site having a point of 
accountability t he chief financial officer is 
responsible for ehs policy and performance 
monitoring and the group’s d irector 
environment h ealth and safety provides 
group direction oversight and has 
responsibility for implementation of the group 
ehs programmes including standards and 
procedures review of the adequacy of ehs 
resources across the group as well as training 
performance reporting and all assurance 
processes d uring 201 1 the group has been 
active in the recruitment of d ivisional ehs 
leaders in india and china which has helped 
improve the progress and standards of 
implementation of ehs management in  
these countries
t he group recognises the need for high 
consistent and demonstrable standards in  
ehs governance and control as a result  
of this ehs governance arrangements have 
been reviewed during 201 1 and proposals for 
further enhancement and formalisation have 
been presented to the board for adoption  
during 2012 in addition as described  
below the group commissioned an  
external assurance process from 
pricewaterhousec oopers llp pw c 
envi ron ment he alth a nd s afet y
morgan c rucible’s grouplevel ehs 
management processes include
  t he ehs c ompliance audit programme 
which is carried out by external ehs 
consultants in europe and asia and 
inhouse resources in the americas t his 
programme reviews the ehs management 
at each site and helps ensure compliance 
with local regulations and good 
management practice d uring 201 1 the 
ehs c ompliance audit programme was 
extended to cover the ehs management 
systems and the ehs kp is reported by 
each site all of the group’s manufacturing 
facilities are reviewed on a threeyear 
rolling cycle d uring 201 1 25 sites were 
audited and the target for 2012 is to audit 
32 sites t he audit reports are reviewed  
by the d irector environment h ealth  
and safety and by the d ivisional chief 
executives action items are tracked 
through a formal followup process
  formal training as an integral part of the 
implementation of the group’s ehs policy 
t his is undertaken at a d ivisional level 
according to businessspecific risks and 
opportunities with grouplevel support 
and oversight for example during 201 1 
the group’s ongoing training programme  
in china focused on reinforcing the 
effectiveness of the ehs management 
systems at each site in india substantial 
progress was made in the implementation 
of ehs management systemsrelated 
training and specific training in job safety 
analysis was carried out at the sites 
  monthly performance reporting against  
the group kpis by all group sites t he 
data is subject to biannual review and 
challenge at group level with reporting  
of performance to the executive 
c ommittee and the board by the  
chief financial officer  38 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
c orporate responsib ilit y
continued
in 201 1 environmental management  
systems were in place at 93 sites worldwide 
including 38 major sites certified to is o 14001 
2010 34 sites four additional sites in india 
china and japan achieved certification in 201 1 
t hese new certifications are in addition to  
the ongoing programme of recertifications  
all major production sites worldwide have 
health and safety management systems in 
place with 15 sites certified to or working 
towards ohs as 18001 201 11 1
ehs policy effectiveness
t he group monitors the effectiveness of its 
ehs policy through the ehs c ompliance audit 
programme and the review of performance 
against a series of relevant kpis as is referred  
to above 
t he summary charts on pages 39 and 40 
represent the group’s ehs performance 
covering 100 of production sites during  
the year
environmental intensity kpis are reported  
at constant currency and where necessary 
historic ehs data is updated to reflect changes 
in reporting methodology and to ensure 
yearonyear consistency
as noted above in 201 1 the group engaged 
pwc to provide independent external 
assurance on the group’s c o
2 
intensity  
energy intensity and water intensity using 
international assurance standards t he report 
from pwc is set out on page 41 i n addition  
a workprogramme is underway with a view  
to gain assurance for the group’s waste and 
lost time accident frequency data in future 
t he overall verification of morgan c rucible’s 
environmental social and governance 
disclosures is further discussed on page 35
t he group participates in a number of external 
initiatives which help to benchmark policy 
effectiveness and progress including
  d uring the year morgan c rucible’s  
uk sites were accredited to the c arbon 
t rust standard t his certified that the  
uk businesses have measured managed 
and reduced their carbon footprint 
  morgan c rucible has made filings in 
respect of the group’s uk facilities under 
the uk government’s c arbon reduction 
c ommitment energy efficiency scheme 
  t he group also participates in the c arbon 
d isclosure project cd p t he cd p is a 
charity that assesses and ranks companies 
in the major industrial countries according 
to their carbonrelated reporting 
strategies management and performance 
in 201 1 the cd p ftse 350 report 
positioned the group’s performance  
as among the best of its peer group of 
participating uk industrial companies
environmental performance
w herever possible the group works to 
minimise the impact of its business on the 
environment and to maximise the positive 
environmental benefit of its products
morgan c rucible sets twoyear targets for  
the reduction of the impact of its operations  
on the environment as measured by  
co
2
 emissions energy waste and water 
intensity t he group’s 201 1 performance is  
an interim report against the current targets  
for the twoyear period 201012 further 
details of the group’s ehs targets and 
objectives will be included in the group  
201 1 ehs report which is due for publication 
on the group’s website in may 2012
in 201 1 the group’s c o
2
 intensity was reduced 
by 5 compared to 2010 with performance 
on track to achieve the target to reduce the  
co
2
 emissions intensity due to energy use by 
5 over the two years 201012 energy intensity 
was down by 6 compared to 2010 t his was 
achieved through increased efficiency at many 
of the group’s energyintensive businesses 
driven by a combination of sales growth and 
energy reduction programmes t his 6 
reduction follows on from the 1 1 reduction 
achieved over the twoyear period 200810  
in absolute terms total c o
2
 emissions due to 
energy use in 201 1 were some 432900 tonnes 
against 417200 tonnes in 2010 t otal energy 
use was some 1434 gw h in 201 1 against 
1390 gw h in 2010 t he group will be 
seeking further reductions in energy intensity  
in 2012
w aste intensity was down by 6 in 201 1 
ahead of the target to reduce waste intensity  
by 5 over the two years 201012 t his was 
achieved through increased emphasis on waste 
management and reduction with an increase  
in sales volume t he proportion of total waste 
which was recycled was increased from 20  
in 2010 to 21 in 201 1 which is not on track  
to achieve the target to increase recycling  
to 25 of total waste over the two years 
201012 t he group will increase its focus  
on this area over the coming year with  
a view to increasing recycling rates however 
performance in this area is highly dependent  
on the markets for recycled materials  
t otal waste in 201 1 was some 45100 tonnes  
in 201 1 against 43900 tonnes in 2010
w ater intensity was down by 12 in 201 1 
ahead of the target to reduce water intensity  
by 5 over the two years 201012 t his 
improvement was achieved through a focus  
on reducing water use at the group’s more 
waterintensive businesses combined with 
further reductions achieved through reuse  
and recycling of water at a number of sites  
and an increase in sales t otal water use  
in 201 1 was 280 million m
3
 down from  
291 million m
3
 in 2010
envi ron ment  he alth a nd s afet y continued annual report 2011  the morgan crucible company plc 39
overview business review governance financial statements
co 2 intensity

t onnes£m revenue

2007
2008
2009
2010
2011
494
469
403
416
394
waste intensity

t onnes£m revenue

2007
2008
2009
2010
2011
74
67
55
44
41
energy intensity

mwh£m revenue

2007
2008
2009
2010
2011
1641
1563
1362
1385
1306
water intensity

m
3
£m revenue

2007
2008
2009
2010
2011
3299
2814
2609
2904
2553
  t he 201 1 c o
2
 intensity energy intensity and water intensity information has 
been subject to assurance by pwc 
 co
2
 equivalent from all fossil fuels including countryspecific electricity
  c onstant currency basis and updated to reflect changes in reporting methodology
  energy from all sources
 h azardous and nonhazardous waste including recycled material
   w ater from all sources including process irrigation and sanitary use  40 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
c orporate responsib ilit y
continued
health and safety performance
morgan c rucible’s longterm health and safety 
objective is to have no accidents or injuries  
in 201 1 the group continued to extend its 
accident prevention and training programmes 
with the objective of reducing accident 
numbers and the time lost per lost time 
accident particular focus is placed on those 
sites with belowaverage performance
t he group’s health and safety kpis include 
accident frequencies and causes and related 
lost working time t hese are used to monitor 
the effectiveness of the group’s h ealth and 
safety policies and related systems on a 
monthly basis
in 201 1 lost time due to accidents and 
workrelated illnesses as a proportion of 
working time was down 9 to 010 of 
working time t he number of days lost was 
down 4 t he average time lost per lost time 
accident decreased to 22 days from 24 days  
in 2010 
t he frequency of lost time accidents  
across the group was 057 per 100000 hours 
worked 2010 057 t he number of lost time 
accidents was 129 2010 123 with the number 
of hours worked up 6 manual handling  
cuts and abrasions remain the most common 
causes of accidents and the group continues  
to address this specifically targeting businesses 
with belowaverage performance
lost time accident
frequency

ltas100000 hours

2007
2008
2009
2010
2011
055
069
056
057
057
health and safetyrelated
lost time
 of total working time
2007
2008
2009
2010
2011
008
015
014
011
010
lost time per lta

days per lta

2007
2008
2009
2010
2011
19
27
32
24
22
  l ost time accident lt a accident 
which results in one or more days’  
lost time
envi ron ment  he alth a nd s afet y continued annual report 2011  the morgan crucible company plc 41
overview business review governance financial statements
indep endent a ss urance r eport
to the directors of the morgan crucible company plc
what we found
based on the work described below nothing has come to our attention that causes us to believe that the s elected d ata for the year ended  
1 january 2012 has not been prepared in all material respects in accordance with the reporting c riteria
what we did
t he morgan c rucible c ompany plc morgan c rucible engaged us  
to perform a limited assurance engagement on selected performance  
data within the environment h ealth and safety ehs  section of the 
morgan c rucible 201 1 annual report for the year ended 1 january 2012 
the annual report
selected data
1
t he 201 1 performance data set out in the charts and related narrative 
on pages 38 and 39 of the annual report in respect of
  co
2
 intensity
  energy intensity
  w ater intensity
reporting criteria
t he basis of preparation of the selected d ata is available under the 
heading ‘reporting c riteria’ on the ehs performance reporting page  
of morgan c rucible’s website wwwmorgancruciblecomgovernance
responsiblebusinessenvironmenthealthsafety as at 15 february 2012
responsibilities
morgan crucible
morgan c rucible is responsible for the contents of the annual report 
including preparation and presentation of the selected d ata in 
accordance with the reporting c riteria and implementation and 
maintenance of systems that support production and reporting of  
the selected d ata
pricewaterhousecoopers llp
our responsibility is to express an independent limited assurance
2
 
conclusion based on the procedures described below
t his report including our conclusions has been prepared solely for the 
d irectors of morgan c rucible to assist them in reporting ehs performance 
w e consent to the inclusion of this report in the annual report to  
assist the d irectors to demonstrate how they have discharged their 
responsibilities by commissioning an independent assurance report in 
connection with the selected d ata t o the fullest extent permitted by 
law we do not accept or assume responsibility to anyone other than the 
d irectors as a body and morgan c rucible for our work or this report save 
where terms are expressly agreed and with our prior consent in writing
what our work involved
w e conducted our work in accordance with the international s tandard 
on assurance engagements 3000 assurance engagements other than 
audits or reviews of historical financial information t his standard 
requires that we comply with independence and ethical requirements 
and plan the engagement so that it will be performed effectively
main procedures performed
  making enquiries of relevant morgan c rucible management
  evaluating the design of the key processes and controls for  
managing and reporting the selected d ata
  t esting the selected d ata on a sample basis substantively  
at both an operational and corporate level
  undertaking analytical procedures over the selected d ata
  reviewing a sample of relevant management information and 
documentation supporting assertions made in the selected d ata
w e believe that the information we have obtained is sufficient and 
appropriate to provide a basis for our conclusion
pricewaterhousecoopers llp 
c hartered accountants
l ondon
15 february 2012
1 inherent limitations
n onfinancial data may be subject to more inherent limitations than financial data given  
both its nature and the methods used for determining calculating and estimating such data 
t he range of different but acceptable techniques used can result in materially different 
reporting outcomes which may affect comparability with other organisations
2 limited assurance
w e have sought to obtain sufficient appropriate evidence to support our assurance 
conclusions a limited assurance engagement is restricted primarily to enquiries and 
analytical procedures t he work is substantially less in scope than that undertaken for  
a reasonable assurance engagement accordingly the level of assurance is lower than  
would be obtained in a reasonable assurance engagement  42 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
c orporate responsib ilit y
continued
morgan c rucible has continued to make good 
progress through improvements in the financial 
performance of the business and realising  
the benefits of streamlining the c ompany’s 
organisational structure t he creation of the  
two d ivisions morgan c eramics and morgan 
engineered materials has been supported by 
strategic recruitment of new talent as well as 
internal development of existing leadership 
capability t his has been particularly important 
to support enhanced growth opportunities 
t hese changes in the business have enabled 
the group to further enhance the positive 
working environment for employees and create 
new and exciting challenges all over the world 
d uring this period the group has continuously 
worked to develop the skills of individuals and 
the capabilities of the organisation as a whole  
to meet these challenges as the performance  
of the group’s people is critical to its success
t he group’s people resource management 
performance is evaluated monthly quarterly 
and annually through the collation of key 
performance indicators which are summarised 
in the sections below
people policies
t he group supports the universal d eclaration 
of h uman rights and the group’s h uman 
rights policy commits the group to protect  
the rights of everyone who works for it and all 
those who have dealings with it t he principles 
of the policy cover child labour forced labour 
health and safety freedom of association 
discrimination discipline working hours and 
compensation and the policy is published on 
the group’s website t he d irector of h uman 
resources reports to the chief e xecutive 
officer and is responsible for the development 
of the h uman rights policy and related matters 
with the chief e xecutives of each d ivision 
having responsibility for policy implementation 
within their respective d ivisions t he d ivisional 
chief e xecutives report annually on their 
implementation of the h uman rights policy 
t he morgan c rucible ethics h otline enables 
employees who are aware of or suspect issues 
under the group’s h uman rights policy to 
report these confidentially
t he group’s global h uman resources policy 
provides an infrastructure of human resource 
activities that enables the business to attract 
retain and engage people with the skills and 
capabilities to deliver its business plans and 
outperform the competition
key to building and maintaining the trust and 
respect of the group’s people and growing 
their understanding and motivation levels  
is open timely and factual communication  
t he d ivisions communicate regularly through 
employee forums team briefs and d ivisional 
magazines t he group regularly requests 
feedback from employees on many different 
aspects of its business
d emands on the business as a whole are 
continuously changing and the group’s 
individual businesses are exploring different 
business development opportunities as they 
evolve into new markets and industries  
t he group’s approach is therefore to develop 
existing employee talent and recruit new 
people into jobs that fit those business 
requirements at the time they are needed 
t he group reviews short and longterm 
business needs on a regular basis and carries 
out succession planning and talent reviews  
to identify any skill gaps w hether recruiting 
internally or externally for a vacant position 
selection is based on many factors including  
a candidate’s relevant education work 
experience competencies and performance 
record t he group does not unfairly 
discriminate and it respects human rights 
should existing employees become disabled 
the group’s policy is to provide continuing 
employment and training wherever practicable
for the business to achieve superior 
performance there is an expectation that its 
people need to perform at their very best  
t he group aims to support them through a 
formalised performance management system 
cascaded through the businesses that focuses 
on setting clear resultsbased objectives 
directly linked to the strategic goals and annual 
objectives of the business providing people 
with the skills to perform at a superior level  
is also critical and the group sees continuous 
learning and professional development as a 
major investment in its future
people
t otal lost time
 of working time
2008
2009
2010
2011
24
27
26
29
employee turnover
 per year
2008
2009
2010
2011
142
167
137
137
training
hours per employee
2008
2009
2010
2011
149
124
129
133
  2010 data rebased
  annual report 2011  the morgan crucible company plc 43
overview business review governance financial statements
t he group recognises and celebrates the 
accomplishments of its people individually  
or as teams and makes recognition awards  
to acknowledge achievement loyalty and 
innovation t he group’s compensation 
systems reward people who apply their 
knowledge skills and talents to support the 
achievement of business goals t he group  
pays for performance in all its compensation 
practices t he total reward package includes  
a mix of base pay variable pay and benefits 
t he group establishes compensation levels  
that are both competitive and affordable to 
morgan c rucible t he group has the flexibility 
to respond to changing market conditions  
and competition for highdemand skills  
while maintaining equity in salary ranges  
and pay levels
implementation of the  
group’s peoplerelated policies
in 2010 the group launched its responsible 
business programme a blended learning 
programme focused on human rights 
antibribery and corruption and contract risk 
awareness in 201 1 the group updated and 
refreshed its existing antit rust c ompliance 
programme and fully incorporated this training 
within the wider programme t he programme 
covers direct training of general managers and 
compliance officers utilising the group’s online 
training programmes in these areas and 
providing them with the skills to cascade this 
training through their respective parts of the 
business t his programme will evolve with  
the changing demands of the business and 
regulatory frameworks around the world  
all of the group’s businesses must complete  
an annual certification process confirming their 
compliance with the morgan c rucible policies
d uring the year ‘morgan et’ the group’s 
intranet site has grown to provide faster and 
more efficient access to information from 
diverse sources across the globe in addition 
the two d ivisions have developed their own 
sites to facilitate more effective communication
t he group keeps employees informed about 
what is happening in other parts of the group 
through its global ‘360’ emagazine which is 
translated into 13 languages including chinese 
t he d ivisions continue to issue regular 
d ivisional newsletters both electronically and  
in hardcopy formats in europe the group 
has an established consultative arrangement 
that provides an arena for the exchange of 
relevant and appropriate information across  
the european region t he group also held  
its 15th annual european employee forum in  
may 201 1 where site representatives attended 
from france germany h ungary italy  
the n etherlands and the united kingdom
l ocal business units have conducted employee 
surveys during the year according to the needs 
of local employee relations and team agendas 
t hese have measured a range of issues 
relevant to the business units including 
employee satisfaction and awareness of 
business objectives surveys of leadership  
style and culture have also been conducted  
at regional and d ivisional levels
in 201 1 the group continued to make progress 
with its online ‘d eveloping for performance’ 
system t he system focuses on developing  
the skills of the group’s employees through 
performance management goalsetting 
competency assessment and development 
planning
in addition the group’s businesses continue  
to deliver local learning initiatives to meet 
operational and local leadership needs
t he group has further developed its existing 
approaches to the assessment of management 
capability and development t here has been 
increased investment in management training 
and leadership development in both d ivisions 
and across all regions a new approach to the 
assessment of capability and potential of senior 
management has been introduced
in pursuit of growing capability in the labour 
market morgan c rucible continues to sponsor 
annually the science engineering  t echnology 
student of the year awards morgan c rucible  
is proud to sponsor this event as it allows 
highcalibre students to showcase their 
outstanding research work and demonstrate 
the depth of ability of graduates in the uk in 
201 1 the winner of the best materials student 
award was edward pickering from c ambridge 
university t he group has also laid plans  
this year to increase the number of graduate 
recruits in 2012 and has established a  
global approach to graduate recruitment  
and development
people policy effectiveness
at the end of the year morgan c rucible 
employed circa 10000 people additionally 
the group employs circa 1000 people  
on shortterm contractual arrangements  
to provide the numerical flexibility for the 
group’s businesses to react quickly to  
changes in market conditions
t he group’s geographic spread of people  
is as follows 35 of employees in europe 
middle east and africa 33 in n orth america  
4 in south america and 28 in the rest of 
the w orld of these employees 75 are male 
l ost time as a proportion of total working time 
was 29 26 in 2010 with lost time due  
to accidents in the workplace of 01 of total 
working time t raining hours per employee 
were 133 129 hours in 2010 t he group’s 
employee turnover was 137 in 201 1  
137 in 2010 1 of the workforce was 
made redundant during the year with higher 
levels of natural turnover coming from china 
and mexico where the labour markets are 
exceptionally fluid
d uring the year 10 employees around the 
world celebrated 40 years of loyal service  
with morgan c rucible with 221 employees 
celebrating anniversaries of 20 25 or 30 years’ 
service t he group is pleased by the number 
of employees who remain with the morgan 
c rucible for significant periods of their careers 
and whose experience we have retained  
t he average length of service of the group’s 
employees is 137 years  44 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
fin anci al review
introduction
t hese results are produced under international 
financial reporting standards as adopted  
by the eu adopted ifrss all the figures 
referred to below are extracted from the 
financial statements on pages 78 to 139 and 
comply with adopted ifrss
reference is made to ‘underlying operating 
profit’
3
 and ‘underlying earnings per share eps’ 
eps is defined in note 9 on page 98 t hese 
measures of earnings are shown because  
the d irectors consider that they give a better 
indication of underlying performance
group revenue and operating profit
group revenue was £11010 million  
2010 £10171 million an increase of 82 
compared to 2010 on a constant currency 
basis revenue increased by 93
group ebit a
2
 was £1434 million 2010 
£1095 million representing a margin of  
130 2010 108
group underlying operating profit
3
  
was £1415 million 2010 £1016 million 
underlying operating profit margin was  
129 compared to 100 for 2010
group operating profit was £1332 million 
2010 £936 million operating profit margins 
were 121 compared to 92 for 2010
morgan engineered materials morgan c eramics
morgan 
amt
molten metal
systems
t echnical 
ceramics
t hermal 
ceramics c onsolidated
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
revenue from external customers 3691 3677 467 403 2851 2501 4001 3590 11010 10171
divisional ebita
1
480 392 77 63 431 340 496 348 1484 1143
unallocated costs 50 48
group ebita
2
1434 1095
restructuring costs and other oneoff items – 16 – 01 11 17 30 47 19 79
underlying operating profit
3
1415 1016
amortisation of intangible assets 45 42 01 01 25 25 12 12 83 80
operating profit 1332 936
finance income 277 290
finance expense 495 549
profit before taxation 1114 677
1 s egment profit is defined as d ivisional ebit a which is segment operating profit before restructuring costs other oneoff items and amortisation of intangible assets
2 group ebit a is defined as operating profit before restructuring costs other oneoff items and amortisation of intangible assets
3 underlying operating profit is defined as operating profit before amortisation of intangible assets
t he group has delivered significantly 
improved results in 201 1 across all 
financial metrics and importantly  
a substantial achievement in  
delivering a significant part of  
our threeyear financial goals
kevin dangerfield chief financial officer annual report 2011  the morgan crucible company plc 45
overview business review governance financial statements
t he restructuring costs and other oneoff  
items of £19 million charge 2010 £79 million 
included restructuring costs of £56 million 
2010 £85 million a gain on sale of properties 
of £24 million 2010 £06 million and a net 
pension credit of £13 million 2010 nil
foreign currency impact
t he principal exchange rates used in the 
translation of the results of overseas subsidiaries 
were as follows
average rate yearend rate
2011 2010 2011 2010
usd 16043 15447 15541 15657
¤ 11529 11659 11972 11671
t he potential impact of changes in foreign 
exchange rates is given in note 19 on  
pages 108 to 1 16
amortisation of intangible assets
t he group amortisation charge was  
£83 million 2010 £80 million
finance costs
t he net finance charge was £218 million 
2010 £259 million t his charge was primarily 
net bank interest and similar charges of  
£204 million 2010 £247 million a decrease 
of £43 million t he decrease in the net interest 
charge is due to the continuing reduction in 
debt levels and improvement in overall bank 
facility costs as a result of the refinancing in  
april 201 1 in part offset by the writeoff of the 
previous facility fees t he balance of the finance 
charge under ifrs is the net interest charge  
on pension scheme net liabilities which was 
£09 million 2010 £20 million and interest 
expense of £05 million 2010 £12 million on 
the unwinding of the discount on the deferred 
consideration relating to the n p aerospace 
acquisition t he impact of potential changes  
in interest rates on profit or loss is stated in 
note 19 on pages 108 to 1 16
taxation
group taxation for the year was £326 million 
2010 £197 million t he effective tax rate  
was 293 2010 291 t he mediumterm 
view is that the effective tax rate will remain  
at approximately 29
earnings per share
underlying earnings per share was 299 pence 
2010 187 pence basic earnings per share 
was 269 pence 2010 158 pence d etails  
of these calculations can be found in note 9  
on page 98
dividend
t he d irectors recommend the payment  
of a final dividend at the rate of 60 pence  
per share on the ordinary share capital of  
the c ompany payable on 6 july 2012 to 
ordinary shareholders on the register at the 
close of business on 25 may 2012 t ogether 
with the interim dividend of 325 pence  
per share paid on 12 january 2012 this final 
dividend if approved by shareholders brings 
the total distribution for the year to 925 pence  
per share 2010 77 pence
a scrip alternative to the cash dividend will 
again be offered 
a fiveyear summary of the group’s financial 
results is set out on page 139 of this report
cash flow
free cash flow before acquisitions and dividends 
was £578 million 2010 £765 million  
t here was an outflow from working capital  
of £291 million 2010 inflow of £105 million 
t he group excluding n p aerospace improved 
its working capital to sales ratio from 200  
at the end of 2010 to 192 at the end of 201 1 
n p aerospace had a higher level of trade 
receivables and inventory than expected  
at the year end which is expected to reduce 
significantly during 2012
n et debt at the year end was £2154 million  
2010 £2362 million as a result of the 
significant improvement in operating 
performance the net debt

 to ebitd a ratio  
at the year end was improved to just below  
12 times 2010 17 times
2011
£
2010
£
net cash inflow from  
operating activities 1374 1481
n et capital expenditure 255 170
restructuring costs and  
other oneoff items 81 78
n et interest paid 204 227
tax paid 256 241
free cash flow before  
acquisitions and dividends 578 765
c ash flows in respect  
of acquisitions 104 329
d ividends paid 184 154
exchange movement and  
other items 82 117
movement in net debt

  
in period 208 165
opening net debt 2362 2527
c losing net debt 2154 2362

 n et debt is defined as interestbearing loans and 
borrowings and bank overdrafts less cash and  
cash equivalents
c ommitments for property plant and 
equipment and computer software for which 
no provision has been made are set out in  
note 24 on page 127  46 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
fin anci al review
continued
capital structure
at the year end total equity was £2702 million 
2010 £2521 million with closing net debt of 
£2154 million 2010 £2362 million
n oncurrent assets were £5945 million  
2010 £6018 million and total assets were 
£10414 million 2010 £10332 million
d etails of undiscounted contracted maturities 
of financial liabilities and capital management 
are set out in note 19 on page 1 1 1
t here have been no significant postbalance 
sheet events
c apital structure is further discussed in  
note 19 on page 1 15 under the heading  
c apital management
pensions
t he group operates a number of pension 
schemes throughout the world the majority  
of which are of a funded defined benefit type 
t he largest of these are located in the uk  
and the us a with the majority of others in 
c ontinental europe t he group pension  
deficit increased by £312 million since last  
year end to £1351 million on an ias 19 basis 
t he main movements were in the us a and 
uk defined benefit pension schemes t he  
uk schemes’ deficit increased by £208 million  
to £474 million 2010 £266 million and the 
us a schemes by £82 million to £585 million 
2010 £503 million both mainly due to the 
impact of lower discount rates t he uk defined 
benefit pension schemes’ deficit also includes  
a reset of the future indexation of current 
employees’ accrued benefits to the c onsumer 
prices index rather than the retail price index 
t his has resulted in a pension credit of  
£31 million being recognised in the  
income statement
treasury policies
t he following policies were implemented  
and in place across the group throughout  
the year t he manager of each business unit  
is required to confirm compliance as part of  
the year end process
financial risk management and  
treasury policy
group t reasury works within a framework  
of policies and procedures approved by  
the audit c ommittee it acts as a service to 
morgan c rucible’s businesses not as a profit 
centre and manages and controls risk  
in the treasury environment through the 
establishment of such procedures group 
t reasury seeks to align treasury goals 
objectives and philosophy to those of the 
group it is responsible for all of the group’s 
funding liquidity cash management interest 
rate risk foreign exchange risk and other 
treasury business as part of the policies  
and procedures there is strict control  
over the use of financial instruments to  
hedge foreign currencies and interest rates 
speculative trading in derivatives and other 
financial instruments is not permitted
foreign exchange risks
d ue to the international reach of the group 
currency transaction exposures exist  
t he group has a policy in place to hedge all 
material firm commitments and highly probable 
forecast foreign currency exposures and 
achieves this through the use of the forward 
foreign exchange markets t he group 
continues its practice of not hedging income 
statement translation exposure
t here are exchange control restrictions  
which affect the ability of a small number of  
the group’s subsidiaries to transfer funds to  
the group t he group does not believe such 
restrictions have had or will have any material 
adverse impact on the group as a whole or 
the ability of the group to meet its cash flow 
requirements
currency translation risks are controlled 
centrally t o defend against the impact  
of a permanent reduction in the value of  
its overseas net assets through currency 
depreciation the group seeks to match the 
currency of financial liabilities with the currency 
in which the net assets are denominated  
t his is achieved by raising funds in different 
currencies and through the use of hedging 
instruments such as swaps and is implemented 
only to the extent that the group’s gearing 
covenant under the terms of its loan documents 
as well as its facility headroom are likely to 
remain comfortably within limits in this way 
the structure of the group’s borrowings 
becomes more aligned to the trading cash 
flows that service them
interest rate risk
t he group seeks to reduce the volatility in its 
interest charge caused by rate fluctuations t he 
group seeks to ensure that between 30 and 
80 of its exposure to changes in interest rates 
on borrowings is on a fixed rate basis t his is 
achieved through a combination of fixed rate 
debt and interest rate swaps group t reasury 
may not actively seek to fix or cap more than 
80 of the group’s current overall debt 
h owever the fixed or capped proportion is 
permitted to rise above that level with audit 
c ommittee approval
credit risk
c redit risk arises when a counterparty fails to 
perform its obligations t he group is exposed 
to credit risk on financial instruments such  
as liquid assets derivative assets and trade 
receivables c redit risk is managed by investing 
liquid assets and acquiring derivatives in a 
diversified way from highcreditquality financial 
institutions c ounterparties are reviewed 
through the use of rating agencies systemic  
risk considerations and through regular review 
of the financial press t he group has a c redit 
policy in place in relation to trade receivables 
and exposure to credit risk is monitored  
on an ongoing basis c redit evaluations are 
performed on all customers requiring credit 
over a certain amount t he nature of the 
group’s operations is such that the group  
has a significant number of lowvalue trade 
receivables t he risk is therefore considered 
minimal c redit risk is further discussed  
in note 19 on pages 108 to 1 16 annual report 2011  the morgan crucible company plc 47
overview business review governance financial statements
capital investment
t he group has wellestablished formal 
procedures for the approval of investment in 
new businesses and of capital expenditure to 
ensure appropriate senior management review 
and signoff
tax planning risk
t he group’s reported aftertax income is 
calculated based on the relevant tax legislation 
in each of the jurisdictions that it operates in 
changes in tax legislation including tax rates 
could materially affect the group’s aftertax 
income t he group undertakes tax planning 
initiatives where appropriate t he outcome  
of such planning cannot be assured and could 
materially influence the effective tax rate
accounting policies
w e adopted international financial reporting 
standards as adopted by the eu adopted 
ifrss in 2005 all accounting policies  
shown on pages 83 to 90 are compliant  
with adopted ifrss
borrowing facilities and liquidity 
all of the group’s borrowing facilities are 
arranged by group t reasury and the funds 
raised are then lent to operating subsidiaries on 
an arm’slength basis in a few cases operating 
subsidiaries have external borrowings but these 
are supervised and controlled centrally group 
t reasury seeks to obtain certainty of access to 
funding in the amounts diversity of maturities 
and diversity of counterparties as required to 
support the group’s mediumterm financing 
requirements and to minimise the impact of 
poor credit market conditions
in april 201 1 the group completed the 
refinancing of its bank facility with a £150 million 
unsecured fiveyear multicurrency revolving 
credit facility on improved terms t he group 
has retained the same lending group of  
eight banks further information on the 
group’s debt and maturity profile is provided  
in note 18 on page 107
going concern
t he group’s business activities together  
with the factors likely to affect its future 
development performance and position are 
set out in the business review on pages 22  
to 51 t he financial position of the group  
its cash flows liquidity position and borrowing 
facilities are described earlier in this financial 
review in addition note 19 includes the 
group’s policies and processes for managing 
financial risk details of its financial instruments 
and hedging activities and its exposures to 
credit risk and liquidity risk
t he group meets its daytoday working 
capital requirements through local banking 
arrangements that are supported by the 
flexibility provided by the facility t he group’s 
forecasts and projections taking account  
of reasonably possible changes in trading 
performance and exchange rates show the 
group operating comfortably within its debt 
financial covenants for the next 12 months
t he current economic climate continues to 
have an impact on the group its customers 
and suppliers t he board fully recognises  
the challenges that lie ahead but after making 
enquiries the d irectors have a reasonable 
expectation that the c ompany and the  
group have adequate resources to continue  
in operational existence for the foreseeable 
future accordingly they continue to adopt  
the going concern basis in preparing the  
annual report and accounts  48 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
ris k manag ement
t he group has an established risk 
management methodology together with a 
comprehensive internal control framework  
and appropriate assurance processes t he risk 
management processes are forwardlooking in 
the identification management and mitigation 
of business risks that could impact the group’s 
immediate and longterm performance and 
value w hilst they will not fully eliminate risks 
they will facilitate mitigation to an acceptable 
level within the context of the business 
environment in which the group operates 
management of business risk is an integral  
part of delivering performance and is the 
responsibility of all managers some specific 
areas of risk for example supply chain are 
assessed and managed through steering groups 
t he risk management decisionmaking and 
reporting procedures are integrated into  
formal business reporting up to the board 
assurance of the effectiveness of risk 
management processes procedures and 
internal control continues to be monitored by 
the audit c ommittee d ivisional management 
attend the audit c ommittee at least annually  
to report on internal control and compliance 
with group policies key risks and  
issues are reported to the board via the  
risk management c ommittee and the 
executive c ommittee
t he following key risk areas are those that  
the group feels could have the most serious 
adverse effect on its performance and 
reputation t he relative importance of some  
of these risks has changed during 201 1 as 
business conditions change w here necessary 
monitoring and controls to manage risk have 
been adjusted to ensure that the risks continue 
to be managed within acceptable limits
strategy and strategic planning risks
obstacles to delivery of strategy
ability to exploit new business opportunities
ability to deliver anticipated benefits from investments
d elivering the benefits of acquisitions and disposals
balancing cyclical business sectors to smooth results
overdependence on key customers
external risks
changing political economical and social environment
t his includes the types of risks that have manifested themselves in 201 1  
for example arab spring japanese earthquake and tsunami and c hina 
slowdown many of these events impacted local markets and some had  
a worldwide impact on supply chains and markets
c urrent eurozone issues
changing global financial environment
t he group like its peers is exposed to the risks presented by the  
ongoing state of the financial markets the banking sector and the challenge  
to the euro
t he board approves and monitors strategy consulting external advisers  
and experts when necessary w ithin its delegated authority the executive 
c ommittee and d ivisional management implement strategic plans and 
regularly report performance
businesses are spread geographically with reduced reliance on cyclical markets 
w here the group chooses to continue to operate in cyclical markets  
it selects industries with different cycles to reduce the impact on group results
processes are in place to ensure a structured approach to strategy  
threeyear plans budgets investment approval as well as monitoring  
and reporting performance
acquisitions and disposals are managed through an established process  
with appropriate monitoring and reporting
risk mitigation and contingency planning minimised the negative impact  
of the 201 1 events on the group
key risks and events are regularly tracked at a business d ivisional and group 
level with contingency plans adjusted to manage the changing situation
mitigation plans are in place to manage the financial and business impact  
of the eurozone crisis and any large currency swings t hese include not  
only cash and banking but also operational issues in the businesses
financial and treasury controls limit exposure to foreign currency interest 
rate credit and liquidity risk
our pension funds are managed using independent competent t rustee 
boards and external advisers 
t he group maintains a carefully managed debt facility to ensure  
that its debt ratio is within acceptable market tolerances
risk mitigation annual report 2011  the morgan crucible company plc 49
overview business review governance financial statements
market dynamics and competition
maintaining technology and innovation lead 
d ealing with increasing competition
as some of our business opportunities are in substitute materials  
we are frequently in competition with existing technology producers  
or other innovators
operational risks
treasury risks
t he uncertainty in the financial markets and the banking sector impact  
foreign exchange interest rate credit and liquidity risks as well as the risk  
of bank failure impacting the group’s cash
supply chain exposures including raw materials
supply chain risks include internal risks within the group especially where 
some sites supply and contribute to the profitability of several businesses
natural or manmade catastrophes impacting operations and  
business continuity
t he group’s facilities and processes are exposed to a number of potential 
catastrophes including fire and explosion that are inherent to the industry  
in addition some sites are exposed to natural hazards such as windstorm 
flooding and earthquake that are inherent to their geographical location  
a major incident could impact the continuity of the business
recruiting maintaining and motivating highquality staff
as many of the group’s processes require a high degree of skill loss of these 
employees to other markets or competitors would impact the businesses
similarly loss of key persons in commercial or management areas could  
also impact profitability
product safety and liability
products used in applications for which they were not intended
materials that require special handling
potential liability from product quality performance service safety
compliance and ethics risks
changes to or noncompliance with laws and regulation
unethical behaviour including bribery corruption antitrust human rights etc 
t he group operates in countries where bribery corruption and antitrust 
are known risks
t he increasing volume and scope of legislation and regulation complicate  
the business environment and increase noncompliance risk and the 
associated penalties
environment health and safety risks
t he d ivisions monitor technology business developments and future 
regulation to ensure that they are in a strong position to optimise future events
 
rd investment is maintained in newimproving technologies through  
the group’s research and development facilities
as many of the group’s products are designed for a specific customer  
they are developed in tandem with them to maintain leadingedge solutions
t hrough the t reasury function there are strict controls on the selection  
of banks and cash management additional actions have been taken to 
respond to the eurozone crisis
d ual sourcing of materials or strategic stocks
key risk areas identified managed and monitored
supply c hain steering group monitors risks throughout the group
key processes and equipment assessed risks mitigated to an acceptable  
risk level using improved procedures protection and controls
t here is an ongoing risk management process together with external experts 
to identify and assess key risk areas risk is mitigated through improved 
processes and protection is installed where needed fire protection 
equipment controls natural hazard protection etc
c risis management and business continuity plans are in place and tested
t he group maintains human resource policies and processes to manage  
the risks relating to its people t hese cover areas including reward and 
recognition health and safety talent management including succession 
planning skills assessment and development performance management  
and employee consultation
many products designed to customers specifications
w here necessary products are tested and certified to meet  
nationalinternational standards
quality control processes on materials and finished products
monitoring of legislation and regulation to manage future risk issues
t he group monitors changes in legislation and regulation proactively 
modifying existing controls and compliance frameworks and providing 
training where needed 
t he group has a responsible business programme dealing with most areas 
of ethics compliance and regulation 
t he group’s ethical standards are defined and driven by the group ethics 
policy and an external hotline is maintained in countries in which we operate 
in 201 1 controls and training were reviewed and upgraded to support 
worldwide compliance with the uk bribery act
w here the group is occasionally subject to legal action we maintain adequate 
provisions see notes 21 and 25 on pages 126 and 127
further detail of the programmes in place to manage these risks  
are included on pages 37 to 40
risk mitigation  50 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
key resources a nd  
c ont ract ual rel ati onshi ps
morgan c rucible has built up significant 
resources and benefits from contractual and 
other relationships with multiple stakeholders 
including customers and suppliers employees 
and joint venture partners t hese relationships 
have been built up over many years to support 
morgan c rucible’s competitive positioning in 
the key markets which the group serves
as is described below no one contractual  
or other relationship is considered essential  
to the business of the group as a whole 
further information on the group’s 
stakeholder relationships is included elsewhere 
in this business review including in the 
c orporate responsibility section on pages 34  
to 43 as referred to in the d irectors’ report 
on page 57 a number of commercial and 
contractual agreements include change of 
control provisions which come into effect  
in the event of a change in ownership of the 
c ompany following a takeover
in accordance with its goal aim and strategic 
priorities the group continues to invest  
in the areas discussed below to maintain  
its leading market positions
commercial relationships market 
position and reputation
morgan c rucible is generally ranked number 
one or two in its chosen market segments  
t he group is a worldleader in advanced 
ceramic and composite materials t he 
c ompany was founded in 1856 and has  
a worldwide reputation
morgan c rucible’s businesses provide  
products and services to other companies  
and the group has developed close working 
relationships with many of its customers  
and suppliers and collaborates with them  
to develop new products
t he group has a wide range of customers  
and suppliers and while the loss of or 
disruption to certain of these arrangements 
could temporarily affect the operations of a 
particular business none is considered essential 
to the group as a whole n otwithstanding  
this the group devotes significant resources  
to ensuring these relationships continue to 
operate satisfactorily
employees
morgan c rucible’s most important resource  
is its people and the group employs a highly 
skilled and qualified workforce one of the 
group’s strategic priorities is ‘finding keeping 
and developing the right people’ many 
employees stay with the group for their  
whole careers as is highlighted on page 43 
morgan c rucible places great emphasis on 
recruitment and training and the group’s 
policies and performance in these areas are  
set out on pages 42 and 43
succession plans are in place covering key 
management and technical roles and as such  
no individual employee is considered essential 
to the business of the group as a whole
t he executive d irectors’ contracts and the 
terms and conditions of appointment of the 
nonexecutive d irectors are referred to on 
page 71 and are available for inspection prior  
to the annual general meeting and at the 
c ompany’s registered office
research and development  
patents and intellectual property
morgan c rucible’s goal is to continue to be  
one of the world’s very best advanced materials 
companies supported by the strategic priority 
of ‘offering high addedvalue to our customers’ 
t he group’s d ivisions use their extensive 
knowledge base particularly in the areas of 
advanced ceramic and composite materials  
to develop new products and services to meet 
customer needs and to differentiate themselves 
in the markets they serve
morgan c rucible benefits from technological 
knowhow and other forms of intellectual 
property some of which are covered by 
patents c ollectively this intellectual property 
supports the development and manufacture of 
new products and services to meet customer 
needs but no one single patent is considered 
essential to the business of the group as  
a whole
both of morgan c rucible’s d ivisions have  
a t echnical d irector and have research and 
development capabilities variously located at 
d ivisional centres of excellence and diffused 
through the business in the form of applications 
engineering further details are included in the 
review of operations for both d ivisions on 
pages 26 to 33
manufacturing capabilities
over many years morgan c rucible has 
invested heavily in manufacturing capacity and 
technology to develop its capability to serve  
its chosen markets worldwide in recent years 
the group has developed and extended  
its manufacturing presence and capabilities  
in china i ndia and l atin america to meet 
customer needs in both local and global 
markets t his investment supports the  
group’s strategic priority of ‘having a culture  
of operational excellence and cost efficiency’
joint venture partners
in a number of territories around the world 
the group has established joint ventures with 
local partners many of these joint ventures 
have been in operation for many years 
however no individual joint venture agreement 
is considered to be essential to the business of 
morgan c rucible as a whole
banking and other financial 
relationships
d etails of significant banking and other financial 
relationships are referred to on page 57 in the 
d irectors’ report h owever no one banking  
or financial relationship is considered to be 
essential to the performance and value of  
the c ompany annual report 2011  the morgan crucible company plc 51
overview business review governance financial statements
t his document has been prepared for and 
only for the members of the c ompany as  
a body and no other persons its purpose  
is to assist members to assess how the 
d irectors have performed their duties  
the c ompany’s strategies and the potential  
for those strategies to succeed and for no 
other purpose save as would otherwise  
arise under english law the c ompany  
its d irectors employees agents or advisers  
do not accept or assume responsibility or 
liability to any third parties to whom this 
document is shown or into whose hands  
it may come and any such responsibility  
or liability is expressly disclaimed
t his document contains forwardlooking 
statements that are subject to risk factors 
associated with amongst other things  
the economic and business circumstances 
occurring from time to time in the countries 
sectors and markets in which the group 
operates t hese and other factors could 
adversely affect the outcome and financial 
effects of the plans and events described 
forwardlooking statements by their nature 
involve a number of risks uncertainties and 
assumptions because they relate to events 
andor depend on circumstances that may  
or may not occur in the future and could 
cause actual results and outcomes to  
differ materially from those expressed in or  
implied by the forwardlooking statements
it is believed that the expectations reflected  
in these statements are reasonable but  
they may be affected by a wide range  
of such variables n o assurances can be  
given that the forwardlooking statements  
in this document will be realised t he 
forwardlooking statements reflect the 
knowledge and information available at  
the date this document was prepared and  
will not be updated during the year but  
will be considered in the annual report  
for next year n othing in this document  
should be construed as a profit forecast
c auti on ary state ment  52 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
board of directors
tim stevenson obe
†§
nonexecutive chairman
tim was appointed as chairman of morgan crucible 
in december 2006 he is also chairman of johnson 
matthey plc tim was chairman of travis perkins plc 
from 2001 to 2010 a nonexecutive director of 
tribal group plc from 2004 to 2008 and was latterly 
their senior independent director from 2001 to 
2005 tim was senior independent director and 
chair of the audit committee of national express plc 
and from 2000 to 2004 he was a nonexecutive 
director of partnerships uk plc from 1975 to 
2000 tim held a variety of senior management 
positions at burmah castrol plc including chief 
executive from 1998 to 2000 he is a qualified 
barrister and is lord lieutenant of oxfordshire
mark robertshaw
§
chief executive officer
mark was appointed as chief executive officer in 
august 2006 prior to this he was chief operating 
officer from february 2006 and chief financial 
officer from october 2004 before joining  
morgan crucible he was chief financial officer  
of gartmore investment management plc from  
2000 to 2004 mark is a nonexecutive director of 
segro plc and was a nonexecutive director of 
rathbones brothers plc from 2006 to 2010 
andrew hosty
ceo morgan ceramics
andrew was appointed as chief executive officer  
of morgan ceramics and joined the morgan crucible 
board in july 2010 before this appointment  
he held a number of senior positions within the  
morgan crucible group andrew was chief executive 
officer of technical ceramics from 2004 to  
july 2010 whereupon the technical ceramics  
and thermal ceramics businesses were brought 
together as the morgan ceramics division  
he is a nonexecutive director of british ceramic 
research limited and was president of the british 
ceramics confederation from 2003 to 2005
kevin dangerfield
chief financial officer
kevin was appointed as chief financial officer  
in august 2006 having joined morgan crucible  
in july 2000 as deputy group financial controller 
before being promoted to group financial 
controller he is a nonexecutive director of e2v 
technologies plc before joining morgan crucible 
kevin worked for london international group plc 
and virgin retail europe limited he qualified as a 
chartered accountant with pricewaterhousecoopers
martin flower
†§
senior independent director
martin was appointed as a nonexecutive director  
in december 2004 and senior independent 
director in april 2008 he is chairman of croda 
international plc and low  bonar plc he was 
previously chairman of autogrill holdings uk plc  
a nonexecutive director of autogrill group inc and 
deputy chairman and senior independent director 
of severn trent plc martin held a variety of senior 
management positions with coats plc from 1968 to 
2004 and was group chief executive of that group 
and chairman of the board from 2001 to 2004
kevin dangerfield
chief financial officer
mark robertshaw
§
chief executive officer
tim stevenson obe
†§
chairman
martin flower
†§
senior independent director
andrew hosty
ceo morgan ceramics annual report 2011  the morgan crucible company plc 53
overview business review governance financial statements
executive committee
andrew given
†§
nonexecutive director
andrew was appointed as a nonexecutive director  
in december 2007 and is the chairman of the  
audit committee he was previously the senior 
nonexecutive director and chair of the audit 
committee of vt group plc the senior independent 
director and chair of the audit committee  
of spectris plc and a nonexecutive director  
and chair of the audit committee of spirent 
communications plc andrew was formerly  
deputy chief executive of logica plc and held  
senior management positions in plessey and  
nortel networks
simon heale
†§
nonexecutive director
simon was appointed as a nonexecutive director  
in february 2005 and is the chairman of the 
remuneration committee he is a nonexecutive 
director and chairman of the remuneration 
committee of coats plc a nonexecutive director  
and chair of the audit committee of kazakhmys plc  
a nonexecutive director and chair of the csr 
committee of pz cussons plc a nonexecutive 
director and chair of the audit and compliance 
committee of marex spectron group limited  
and trustee and treasurer of macmillan cancer 
support chairing their finance and legal committee 
and sitting on their audit committee he was  
chief executive of china now from 2007 to 2008 
and was chief executive of the london metal 
exchange from 2001 to 2006 simon qualified  
as an accountant with price waterhouse and has  
had extensive experience in the far east having held  
senior positions with the swire group in japan and 
hong kong and with jardine fleming in hong kong
mark robertshaw
chief executive officer
kevin dangerfield
chief financial officer
andrew hosty
ceo morgan ceramics
don klas
ceo morgan engineered materials
paul boulton
company secretary
peter blausten
director of human resources
 member of the audit committee
† 
member of the remuneration committee
§ 
member of the nomination committee
simon heale
†§
nonexecutive director
peter blausten
director of human resources
paul boulton
company secretary
don klas
ceo morgan engineered materials
andrew given
†§
nonexecutive director  54 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
directors’ report
the directors present their report together with the financial 
statements and independent auditor’s report for the year ended  
1 january 2012 this directors’ report was approved by the board  
on 15 february 2012
principal activities
the morgan crucible company plc the company and its subsidiary 
undertakings comprise two divisions covering four operating segments  
as outlined on page 24 that design manufacture and market primarily 
carbon and ceramic components for applications in a wide range of 
markets a review of developments affecting the group during the year 
and of its prospects for the future appears on pages 22 to 50 to be  
read in conjunction with the cautionary statement on page 51
business review
the business review sets out a comprehensive review of the 
development and performance of the business of the company for  
the year ended 1 january 2012 and future developments the business 
review is set out on pages 22 to 51 inclusive of this annual report  
all information detailed in those pages is incorporated by reference  
into this directors’ report and is deemed to form part of this  
directors’ report
corporate governance statement
the corporate governance statement as required by rule 721 of  
the fsa’s disclosure and transparency rules is set out on pages 58  
to 64 of this annual report all information detailed in the corporate  
governance statement is incorporated by reference into this directors’ 
report and is deemed to form part of this directors’ report
financial results 
the total profit for the year ended 1 january 2012 was £788 million 
2010 £480 million profit before taxation for the same period was 
£1 1 14 million 2010 £677 million revenue was £11010 million  
2010 £10171 million and operating profit was £1332 million  
2010 £936 million basic earnings per share was 269 pence  
2010 158 pence capital and reserves at the end of the year  
were £2702 million 2010 £2521 million the total profit of  
£788 million will be transferred to equity the group’s accounting 
policies can be found on pages 83 to 90
dividends
the directors recommend the payment of a final dividend at the rate  
of 60 pence per share on the ordinary share capital of the company 
payable on 6 july 2012 to shareholders on the register at the close  
of business on 25 may 2012 together with the interim dividend of  
325 pence per share paid on 12 january 2012 this final dividend  
if approved by shareholders brings the total distribution for the year  
to 925 pence per share 2010 77 pence
acquisitions and disposals
on 8 april 201 1 the company increased its equity stake in  
np aerospace from 70 to 80 by acquiring an additional  
10 of the equity for £91 million which represents full consideration  
for the 10 of share capital acquired
postbalance sheet events
there have been no material events since the year end
share capital
the company’s share capital is set out in note 17 on pages 104 to 106 
the company’s ordinary shares represent 9984 of the total issued 
share capital with the 55 cumulative first preference shares 
representing 005 and the 50 cumulative second preference 
shares representing 01 1 the rights and obligations attaching to the 
company’s ordinary shares and restrictions on the transfer of shares  
in the company are set out in the company’s articles of association 
articles copies of which can be obtained from companies house  
in the uk or from the company secretary the holders of ordinary 
shares are entitled to receive dividends when declared to receive  
the company’s reports and accounts to attend and speak at general 
meetings of the company to appoint proxies and to exercise voting 
rights details of the structure of the company’s preference share  
capital and the rights attached to the company’s preference shares  
are set out on page 106 no person holds securities in the company 
carrying special rights with regard to control of the company the 
company is not aware of any agreements between holders of securities 
that may result in restrictions on the transfer of securities or on voting 
rights the articles may be amended by a special resolution of the 
company’s shareholders annual report 2011  the morgan crucible company plc 55
overview business review governance financial statements
policy on the payment of creditors
the company’s policy in relation to its suppliers is where possible  
to settle terms of payment when agreeing the terms of the transaction 
to ensure suppliers are made aware of the terms of payment and  
to abide by those terms provided that it is satisfied that the supplier 
provided the goods and services in accordance with the agreed terms 
and conditions the company and its subsidiaries do not follow any  
one code or standard on payment practice due to the diverse nature  
of the global markets in which the group operates
the number of days purchases outstanding for payment by the 
company at the end of the year was 45 days 2010 30 days and  
for the group was 58 days 2010 69 days
research and development
innovative use of existing and emerging technologies will continue to be 
crucial to the successful development of new products and solutions to 
satisfy customer demands the company has research and development 
facilities at its key manufacturing sites the spend on research and 
development which excludes the amounts spent working with 
customers and others by way of product enhancement and application 
engineering was £143 million during the year 2010 £159 million  
the group did not capitalise any development costs in 201 1 2010 £nil
financial instruments
details of the group’s use of financial instruments together with 
information on policies and exposure to price liquidity cash flow  
credit interest rate and currency risks can be found in note 19 on  
pages 108 to 1 16 all information detailed in this note is incorporated 
into this directors’ report by reference and is deemed to form part  
of this directors’ report
human resources
details of the group’s human resources policy and employee 
involvement are set out on pages 42 and 43
there are no agreements between the company and its directors or 
employees providing for compensation for loss of office or employment 
whether through resignation purported redundancy or otherwise  
that occurs because of a takeover bid
employee share and share option schemes
the company continues to encourage employee ownership of  
its shares through the provision of a number of employee share  
and share option schemes 156 employees hold awards under the  
morgan crucible long term incentive plan 36 employees hold awards 
under the morgan crucible bonus deferral share matching plan  
34 employees have options under the company’s executive share 
option schemes and 652 employees participate in the company’s  
uk sharesave plan there are 12 participants in the company’s german 
employee share purchase plan there are currently no participants  
in the company’s us employee share purchase plan details of 
outstanding options are given in note 20 on pages 1 17 to 125
np aerospace operates an employee share option scheme pursuant  
to which np aerospace employees who were in employment as at  
31 july 2007 have been granted options over shares in clearpower 
limited the np aerospace holding company 135 employees hold 
awards under this scheme the np aerospace employee benefit trust 
holds 16665 shares in clearpower limited in respect of the scheme
all of the company’s share schemes contain provisions relating to a 
change of control outstanding options and awards would normally  
vest and become exercisable on a change of control subject to the 
satisfaction of any performance conditions at that time
the morgan general employee benefit trust the trust held  
2044458 shares on 1 january 2012 in connection with awards granted 
under the company’s employee share schemes the trustees of the 
trust trustees have agreed to waive their entitlement to the payment 
of dividends on the shares held by the trust the directors are not 
aware that any other shareholders waived or agreed to waive any 
dividends or future dividends during the period under review
the trustees have absolute and unfettered discretion in relation to 
voting any shares held in the trust at any general meeting their policy  
is not to vote the shares if any offer is made to shareholders to acquire 
their shares the trustees will have absolute and unfettered discretion  
on whether to accept or reject the offer in respect of any shares held  
by them  56 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
directors’ report
continued
directors
all those who served as directors at any time during the year under 
review are listed on pages 52 to 53
details of directors’ interests in the share capital of the company are 
listed on page 72 in the period from 1 january 2012 to 15 february 2012 
the executive directors acquired further ordinary shares in the company 
pursuant to the company’s scrip dividend scheme the directors’ 
shareholdings are shown on page 72
all information detailed on pages 72 to 76 in respect of directors’ 
interests is incorporated into this directors’ report by reference and  
is deemed to form part of this directors’ report
all of the directors will be offering themselves for reelection at the 
forthcoming annual general meeting agm on 8 may 2012 details  
of their background and experience can be found on pages 52 and 53 
and details of the board committees on which they serve can be found 
on pages 62 to 64
appointment and replacement of directors and amendments 
to the articles
the articles give the directors power to appoint and replace directors 
under the terms of reference of the nomination committee any 
appointment must be recommended by the nomination committee 
for approval by the board of directors the articles also require 
directors to retire and submit themselves for election at the first  
agm following appointment and all directors are required to submit 
themselves for reelection at the third agm following their appointment 
or reelection notwithstanding the provisions of the articles the board 
has once again determined that the full board of directors will stand for 
reelection at the forthcoming agm in compliance with the provisions  
of the uk corporate governance code
subject to the articles uk legislation and any directions given by special 
resolution the business of the company is managed by the board 
which may exercise all the powers of the company
share allotment and repurchase authorities
the directors were granted authority at the 201 1 agm to allot shares  
in the company and to grant rights to subscribe for or convert any 
securities into shares in the company up to a a nominal amount of 
£22742584 and b a nominal amount of £45485168 in connection 
with a rights issue such amount to be reduced by any shares allotted 
under a this authority is due to lapse at the 2012 agm at the agm 
shareholders will be asked to grant a similar allotment authority
a special resolution will also be proposed to renew the directors’ 
powers to make non preemptive issues for cash up to an aggregate 
nominal amount representing approximately 5 of the issued share 
capital as at the last practicable date before the publication of the notice 
of agm 2012
the directors did not seek an authority at the 201 1 agm to repurchase 
shares in the capital of the company as at 1 january 2012 there was no 
such authority in place the directors do not intend to seek an authority 
to repurchase shares at the 2012 agm
full details of the resolutions to be proposed at the 2012 agm are set out 
in the circular to shareholders which will be circulated in march 2012
directors’ indemnities
the company has entered into separate indemnity deeds with each 
director containing qualifying indemnity provisions as defined at section 
236 of the companies act 2006 under which the company has agreed 
to indemnify him in respect of certain liabilities which may attach to  
him as a director or as a former director of the company or any of its 
subsidiaries the indemnity deeds were in force during the financial year 
to which this directors’ report relates and are in force as at the date of 
approval of the directors’ report
donations
during the year morgan crucible companies made charitable donations 
of £194744 2010 £250229
further details of charitable donations and activities of the group are 
given on page 36 no political donations have been made annual report 2011  the morgan crucible company plc 57
overview business review governance financial statements
significant agreements
the group has a number of borrowing facilities provided by various 
financial institutions these facility agreements generally include change 
of control provisions which in the event of a change in ownership of the 
company could result in renegotiation or withdrawal of these facilities
the most significant of such agreements are the uk £150 million 
multicurrency revolving facility agreement which was signed on  
5 april 201 1 and the privately placed note purchase and guarantee 
agreements signed on 6 march 2003 15 december 2007  
and 30 june 2010 for which the outstanding loan amounts are  
usd18 million usd350 million and €60 million respectively
there are a number of other agreements that take effect alter  
or terminate upon a change of control of the company following  
a takeover bid such as commercial contracts and joint venture 
agreements no such individual contract is considered to be significant  
in terms of its potential impact on the business of the group as a whole
substantial shareholdings
as at 1 january 2012 the company had been notified of the following 
interests representing 3 or more of the issued ordinary share capital 
of the company
number of
ordinary
shares 
ax a investment managers sa 23560970 8630
prudential plc group of companies mg 21128681 7730
standard life investments ltd 18828160 6893
hsbc 13736314 5030
ameriprise financial inc 13170196 4822
schroders plc 12494272 4522
jpmorgan chase  co 11935619 4420
lloyds tsb group plc 10907770 4037
legal  general group plc 10738156 3970
norges bank 8203282 3003
  as at 28 february 2012 there was no change in the details shown in the above table 
  percentages are shown as a percentage of the company’s issued share capital as at  
1 january 2012
disclosures of information to auditors
each director holding office at the date of approval of this directors’ 
report confirms that so far as he is aware there is no relevant audit 
information of which the company’s auditors are unaware and that  
he has taken all steps that he ought to have taken as a director to  
make himself aware of any relevant audit information and to establish 
that the company’s auditors are aware of that information
auditors
kpmg audit plc has expressed its willingness to continue in office 
resolutions for its reappointment as auditors and authority for the 
directors to determine the auditors’ remuneration will be proposed  
at the forthcoming agm
annual general meeting
the agm of the company will be held on 8 may 2012 at  
the lincoln centre 18 lincoln’s inn fields london wc2a 3ed  
a circular will be sent with this report to shareholders in march 2012 
incorporating the notice of agm
fsa’s disclosure and transparency rules
for the purposes of dtr 415r2 and dtr 418 this directors’ report 
is the management report
directors’ responsibility statement in respect of the 
disclosure and transparency rules
each of the directors the names and roles of whom are set out  
on pages 52 and 53 confirms to the best of his knowledge
  the group financial statements in this report which have been 
prepared in accordance with international financial reporting 
standards as adopted by the eu adopted ifrss including 
interpretations issued by the international accounting standards 
board iasb and those sections of the companies act 2006 
applicable to companies reporting under ifrss as adopted in the eu 
give a true and fair view of the assets liabilities financial position and 
profit of the group taken as a whole 
  the parent company financial statements in this report which  
have been prepared in accordance with uk accounting standards  
uk generally accepted accounting practice and applicable law 
give a true and fair view of the assets liabilities financial position  
and profit of the company 
  the business review contained in this report includes a fair review 
of the development and performance of the business and the 
position of the company and the group taken as a whole  
together with a description of the principal risks and uncertainties 
that they face 
for and on behalf of the board
paul boulton
company secretary
15 february 2012
the morgan crucible company plc
quadrant 5557 high street windsor berkshire sl4 1lp 
registered in england no 286773  58 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
corporate governance
statement of compliance with the uk corporate 
governance code
throughout the year ended 1 january 2012 the company has been  
in full compliance with the provisions set out in section 1 of the  
uk corporate governance code the ‘code’ published by the 
financial reporting council and available on its website wwwfrcorguk
this statement describes how the company has applied the main 
principles of the code it should be read in conjunction with the 
business review and remuneration report on pages 22 to 51 and  
66 to 76 respectively
directors
the board
the board is collectively responsible to the company’s shareholders  
for the success of the company the board is satisfied it has met the 
code’s requirements for its effective operation it has set the company’s 
strategic aims which were reviewed by the board at its strategy meeting 
during the year and has ensured that there is a framework of prudent 
and effective controls which enable risk to be assessed and managed 
the board sets the company’s values and standards which are 
contained in the core values statement and ethics policy both of  
which are referred to on page 34 in the business review
the board met formally eight times during the year to review current 
performance against agreed objectives and to make and review major 
business decisions there is a schedule of matters specifically reserved 
for the board including significant contractual commitments including 
the acquisition or disposal of companiesbusinesses treasury and 
intellectual property transactions the review of the effectiveness  
of risk management processes major capital expenditure and corporate 
responsibility one meeting each year is specifically focused on strategy 
and the longer term development of the group various matters are 
delegated to duly authorised subcommittees of the board as is further 
described below
during the year there were no changes of membership of the board 
and there were no changes of role
as at 15 february 2012 the board comprises tim stevenson chairman 
mark robertshaw chief executive officer kevin dangerfield 
chief financial officer andrew hosty chief executive officer of  
the morgan ceramics division and three nonexecutive directors 
deemed by the board to be independent martin flower andrew given 
and simon heale martin flower is the senior independent director 
biographies of the directors including details of their other main 
commitments are set out on pages 52 and 53
 board audit remuneration nomination
director
eligible
to attend attended
eligible
to attend attended
eligible
to attend attended
eligible 
to attend attended
tim stevenson 8 8 – – 5 5 2 2
mark robertshaw 8 8 – – – – 2 2
kevin dangerfield 8 8 – – – – – –
andrew hosty 8 8 – – – – – –
martin flower 8 8 5 5 5 5 2 2
andrew given 8 8 5 5 5 5 2 2
simon heale 8 8 5 5 5 5 2 2
excludes meetings attended by invitation for all or part of a meeting
 indicates a director deemed by the board to be independent or in the case of the chairman independent on appointment
all directors submit themselves for election by the shareholders  
at the first annual general meeting following their appointment  
all directors who are willing to continue in office stand for reelection 
by the shareholders each year nonexecutive directors are appointed 
for a term of three years subject to annual reelection the 
independence commitment and effectiveness of any nonexecutive 
director who has served for two terms is subject to rigorous review 
prior to reappointment for a further threeyear term
the attendance of each director at board and audit remuneration  
and nomination committee meetings is set out in the table below
 
the chairman and the nonexecutive directors met without the 
executive directors present on a number of occasions during the  
year in addition the senior independent director and the other 
nonexecutive directors met without the chairman present
should a director have concerns about the running of the company  
or a proposed action which are not resolved their concerns would  
be recorded in the board minutes
an appropriate directors’ and officers’ liability insurance policy is  
in place
chairman and chief executive officer
the roles of chairman and chief executive officer are separate  
clearly established set out in writing and agreed by the board
the chairman is responsible for the leadership and effectiveness of  
the board including setting the board’s agenda and ensuring sufficient 
time is available for all agenda items particularly regarding strategic 
issues for promoting a culture of open debate and constructive 
challenge facilitating effective contributions by the nonexecutive 
directors and ensuring constructive relationships between the executive 
and nonexecutive directors the chief executive officer is responsible 
for the management of the company including the delivery of the 
group’s business plan the formulation and implementation of strategy 
chairing the executive committee and for ensuring the implementation 
of the group’s policies and strategies the management of the group’s 
operating divisions reports to the chief executive officer annual report 2011  the morgan crucible company plc 59
overview business review governance financial statements
board balance and independence
the size structure and composition of the board was reviewed  
during the year taking into account succession planning and  
the need to progressively refresh the membership of the board 
at the year end in addition to the chairman whom the company 
deemed to be independent on appointment the board comprised 
three executive directors and three nonexecutive directors deemed 
by the board to be independent thus there is a balance of executive 
and nonexecutive directors which helps ensure that no individual or 
small group can dominate the board’s decisionmaking throughout  
the year the company complied with the requirement of the code  
that at least half the board excluding the chairman should comprise 
nonexecutive directors determined by the board to be independent 
in addition to the factors set out in the code the board’s assessment  
of a nonexecutive director’s independence and effectiveness covers 
their total number of commitments and any relationships with major 
suppliers and with charities receiving material support from the company
appointments to the board
as is further detailed in the report of the nomination committee set 
out on page 64 there is a formal rigorous and transparent procedure 
for appointments to the board appointments are made on merit  
and against objective criteria having due regard for diversity including 
gender the board has also considered the recommendations made  
by the davies report on women on boards and has concluded that 
ensuring the board has the right balance and an appropriately diverse 
mix of skills and experience is of paramount importance but that quotas 
are not appropriate for the group
the board is satisfied that there are succession plans in place for 
appointments to the board and for senior management
information and professional development
the company secretary with the chairman is responsible for ensuring 
the board has full and timely access to all appropriate information to 
enable it to discharge its duties board papers are generally sent out  
five working days before each meeting nonexecutive directors  
also receive updates and information between formal board meetings 
new directors receive a full formal and tailored induction on joining  
the board a new director’s experience and background is taken into 
account in developing a tailored programme
the chairman considers the individual training and development  
needs of each director taking into account environmental social and 
governance matters the company secretary keeps the suitability  
of external courses under review and facilitates the induction of  
new directors and the ongoing training and development of all 
directors as necessary 
nonexecutive directors have access to management and staff  
at all levels and are encouraged to visit operating sites in addition to 
visits by individual directors and the chairman each year at least one 
board meeting is held at an operating facility during 201 1 formal board 
meetings were held at the technical ceramics site in corby uk and  
at the thermal ceramics site in saint marcellin france in addition  
the nonexecutive directors attended the group’s leadership 
conference held in singapore
the directors have access to the advice and services of the company 
secretary who with the chairman is responsible for ensuring that 
board procedures are followed and that applicable rules and regulations 
are observed a procedure is in place to enable the directors to seek 
independent professional advice at the company’s expense in 
connection with their duties as directors
performance evaluation
the board undertook a formal evaluation of its performance its 
committees and of the individual directors during the year the code 
requires that the company conducts an externally facilitated evaluation 
every three years and the 201 1 board performance evaluation was 
facilitated by dr tracy long of boardroom review dr long and 
boardroom review have no other connection with the company  
the evaluation process consisted of a structured interview with the 
chairman each director the divisional chief executives and the 
company secretary with an outline of the topics to be covered in the 
interview sent to each director in advance the evaluation also included 
the review of relevant papers and the observation of board committee 
meetings the output from the evaluation was summarised as a 
discussion document which was presented to the december board 
meeting with collective and individual feedback provided as appropriate 
the evaluation concluded that the board performed effectively  
with the chairman facilitating a culture of openness and transparency 
which encourages constructive challenge the meetings of the board 
follow a structured pattern with flexible agendas focused on debate 
rather than presentation strategy discussions are part of a continuing 
cycle through the year with the chief executive providing leadership  
in setting strategic priorities in conjunction with the board the 
nonexecutive directors have strong familiarity with the group  
and its businesses and contribute to strategic thinking and judgment 
providing multiple and relevant perspectives the relationship between 
the board and management is open and transparent the audit 
committee has a positive and appropriately challenging relationship  
with the external auditor and provides good quality oversight through 
the detailed reporting identification and mitigation of key control risks  
the remuneration committee is constructive and there is alignment 
between the group strategy performance expectations and rewards  60 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
corporate governance
continued
the recommendations which will be implemented following the 201 1 
board performance evaluation include a review of the style presentation 
and length of board papers in the context of the planned transition  
from paperbased to electronic board papers in 2012 and ongoing 
emphasis on succession planning to ensure the composition of the 
board and the balance of skills and experience of the directors 
continues to be appropriate 
the recommendations made following the 2010 board performance 
review were implemented during the year further emphasis was placed 
on succession planning and the composition of the board allowance 
was made in the board timetable for informal meetings and the board 
used an external facilitator to support the 201 1 board performance 
evaluation process as described above 
the nonexecutive directors led by the senior independent director 
met without the chairman present to evaluate the chairman’s 
performance during the year taking into account the views of the 
executive directors
during the year the chairman took up an additional role as  
nonexecutive chairman of johnson matthey plc a ftse 100 company 
prior to undertaking an additional external role or appointment  
the chairman and the nonexecutive directors are asked to confirm  
that they will continue to have sufficient time to fulfil their commitments  
to the company
conflicts of interest
the board has procedures in place to address the requirements  
of the companies act 2006 concerning the duty of the directors  
to avoid conflicts of interest accordingly the directors are required to  
1 disclose proposed outside interests before they are taken in order  
to enable a prior assessment of any actual or potential conflict and  
2 disclose without delay any situation which arises which gives rise  
to an actual or potential conflict
the board reviews the outside interests of the directors and any 
conflicts disclosed and authorisations given at least annually should an 
actual or potential conflict be identified the board considers whether  
to authorise the situation in accordance with the company’s articles  
of association and if so the terms of any authorisation in the event  
of an actual conflict arising the director concerned is to notify the 
chairman the chairman would notify the senior independent director 
and the director would be excluded from the relevant information 
debate and decision
remuneration
remuneration policy and practice is discussed in the remuneration 
report on pages 66 to 76
accountability and audit
financial reporting
in its reporting to shareholders the board is satisfied that it has met  
its obligations to present a balanced and understandable assessment of 
the company’s position and prospects as required by the code and in 
accordance with the accounting standards board’s reporting statement 1  
the operating and financial review rs1  this is included in the 
business review on pages 22 to 51 the board also presents updated 
information in its half year and other public reports
a summary of the statement of directors’ responsibilities in respect  
of the annual report and the financial statements is set out on page 65 
and the ‘going concern’ statement is set out in the business review on 
page 47
internal control
the board has overall responsibility for establishing and maintaining a 
sound system of internal control to safeguard shareholders’ investment 
and the company’s assets and for reviewing the effectiveness of such 
system the company’s system of internal control has been in place 
for the year under review and up to the date of approval of the  
annual report through the audit committee the board reviews the 
effectiveness of the internal control system annually and did so during 
the year the system of internal control accords with the financial 
reporting council’s guidance on the internal control requirements of  
the code turnbull this review covered all material controls including 
financial operational and compliance controls and risk management 
systems the audit committee receives regular risk management 
reports covering the full range of risks faced by morgan crucible as a 
group and ensures there are adequate systems in place and evaluates 
their effectiveness annual report 2011  the morgan crucible company plc 61
overview business review governance financial statements
the directors believe that the group’s system of internal financial 
controls provides reasonable but not absolute assurance that the 
assets of the group are safeguarded that transactions are authorised  
and recorded in a correct and timely manner and that such controls  
would prevent and detect within a timely period material errors or 
irregularities the system is designed to manage rather than eliminate 
risk and to address key business and financial risks including social 
environmental and ethical risks the internal control framework 
complements the group’s management structure the main features of 
the group’s systems for internal control and for assessing the potential 
risks to which the group is exposed are summarised as follows
  control environment the group’s management processes  
include delegated authorities and the segregation of duties  
with documented policies and manuals these cover financial 
procedures environmental health and safety practice and other 
areas in addition there is a schedule of matters reserved for  
the board the group’s core values statement ethics policy  
and other supporting policies and procedures set out the group’s 
commitment to the highest standards of corporate and individual 
behaviour and provide guidance for employees the group’s 
responsible business programme includes relevant training and 
reporting and is part of the control framework the ethics hotline  
is available to employees and others in this regard the chief 
executive of each division makes an annual statement of compliance 
to the board confirming that for each of the businesses for which  
he is responsible the financial statements are fairly presented in  
all material respects appropriate systems of internal controls have 
been developed and maintained and the businesses comply with 
group policies and procedures
  financial reporting risk management systems and internal controls 
are in place in relation to the group’s financial reporting processes 
and the process for preparing consolidated accounts these include 
policies and procedures which require the maintenance of records 
which accurately and fairly reflect transactions and dispositions of 
assets provide reasonable assurance that transactions are recorded 
as necessary to allow the preparation of financial statements in 
accordance with international financial reporting standards ifrs 
and the review and reconciliation of reported data as noted above 
representatives of the business are required to certify that their 
reported information gives a true and fair view of the state of affairs 
of the business and its results for the period the audit committee 
is responsible for monitoring these risk management systems and 
internal controls
  performance monitoring there are regular meetings of the board 
and of the executive committee a comparison of forecast and 
actual results is considered including cash flows and comparisons 
against budget and the prior year divisional management teams  
also meet regularly to review performance presentations of actual 
and forecast performance are made to the executive committee 
and the board by the group’s divisional chief executives  
in addition regular site visits are made by members of the  
executive committee
  risk management the identification of major business risks is  
an ongoing process carried out in conjunction with operating 
management steps are taken to mitigate or manage any material 
risks identified the board either directly or through the audit 
committee receives reports on financial taxation insurance 
treasury pension legal and social environmental and ethical risks 
from management the divisional chief executives cover risk issues  
at their management meetings and the director of risk assurance 
helps to ensure that internal control and risk management is 
embedded into the group’s operations through the risk management 
committee which is chaired by the chief financial officer and is 
attended by the chief financial officer of each division 
  risk factors morgan crucible’s businesses are affected by a number 
of factors many of which are influenced by macroeconomic  
trends and are therefore outside the company’s immediate  
control although as described above and in the business review  
the identification and management of such risks is carried out 
systematically these are further discussed in the risk management 
section on pages 48 and 49
  internal audit the group’s internal audit function reviews internal 
control and risk management processes the audit committee 
approves the plans for internal audit reviews and receives reports 
accordingly actions resulting from internal audit reviews are agreed 
with management the internal auditor has direct access to the 
chairman of the audit committee 
audit committee and auditors
the board has formal and transparent arrangements for considering 
how the directors apply the company’s financial reporting and internal 
control principles and for maintaining an appropriate relationship with 
the company’s auditors this requirement is met by the work of the 
audit committee as described below and by the audit work carried 
out by the company’s external auditors kpmg audit plc
the audit committee has received confirmation from kpmg audit plc 
that its general procedures support the auditors’ independence and 
objectivity in relation to nonaudit services after considering such 
procedures the opinion of the audit committee was that the auditors’ 
objectivity and independence was safeguarded despite the provision  
of nonaudit services by kpmg audit plc  62 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
corporate governance
continued
relations with shareholders
dialogue with shareholders
the importance of dialogue with major shareholders is recognised  
and meetings are held in order to help achieve a mutual understanding 
of objectives in this respect the chief executive officer and chief 
financial officer make themselves available to major shareholders  
as appropriate throughout the year in particular at the time of the  
half year and final results announcements 
the chairman also discusses governance and other matters directly  
with shareholders the chairman and the nonexecutive directors  
avail themselves of opportunities to meet major shareholders and  
attend investor briefings to help ensure they have an understanding  
of the views of major shareholders they would also attend meetings 
with major shareholders if requested the senior independent director  
is available to attend separate meetings with major shareholders  
on request
during 201 1 the chairman and other nonexecutive directors attended 
the annual and half year results presentations the group’s capital 
markets day and other investor events this provided the opportunity 
to meet institutional shareholders and other attendees and to further 
develop an understanding of their views
following the announcement of the group’s results and after other 
significant statements and presentations investor opinion is canvassed 
and any feedback is made available to the board in addition the board 
is provided with brokers’ reports and feedback from shareholder 
meetings on a regular basis
to help facilitate dialogue with shareholders the investors section of the 
company’s website includes details of stock exchange announcements 
press releases presentations webcasts and other relevant information
constructive use of the annual general meeting
the annual general meeting is normally attended by all members  
of the board and by a representative of the auditors at the agm  
held in may 201 1 the chief executive officer made a short business 
presentation shareholders are also invited to ask questions during the 
meeting and have the opportunity to meet the directors and other 
members of senior management before and after the formal meeting 
the results of the proxy voting on all resolutions are provided for all 
attendees and are released to the london stock exchange and published 
on the group’s website as soon as practicable after the meeting
board committees
the full terms of reference of the following board committees are 
available upon request and are also available on the group’s website
audit
the audit committee assists the board in effectively discharging  
its responsibilities for financial reporting and corporate control  
martin flower andrew given and simon heale were members of  
the committee throughout the year all members of the committee 
are independent directors and andrew given the chairman of the 
committee has the requisite financial experience
the audit committee met five times during the year and has the  
power to and does request the attendance at meetings of any director 
auditor or member of management as may be considered appropriate 
by the committee at the end of each meeting the nonexecutive 
directors who are members of the committee also meet the auditors 
without the executive directors or other members of management 
present between meetings the members of the audit committee keep 
in contact with the chairman of the board the chief executive officer 
the chief financial officer the external auditors and the internal auditor 
as necessary
the committee identifies and confirms that it receives the information  
it needs to enable it to fulfil its responsibilities this is complemented  
by an annual presentation made by the divisional chief executives and 
chief financial officers on the internal control environment within their 
respective divisions training and development information is made 
available to the members of the audit committee when appropriate
the audit committee’s terms of reference were reviewed and updated 
during the year they are available on the group’s website and include
  monitoring and making appropriate recommendations to the board 
with regard to the financial reporting process the integrity of the 
financial statements of the group preliminary announcements  
half year reports and any formal announcements relating to the 
group’s financial performance and reviewing significant financial 
reporting judgments contained in them
  reviewing accounting policies used by the group and their 
consistent application across the group
  reviewing whether the group has followed appropriate accounting 
standards and made appropriate estimates and judgments taking 
into account the views of the external auditor
  reviewing and monitoring the effectiveness of the group’s internal 
financial controls and internal control internal audit and risk 
management systems 
  reviewing and monitoring the group’s whistleblowing arrangements 
and systems and controls for the prevention of bribery
  making recommendations to the board for it to put to the 
shareholders for their approval at the agm in relation to the 
appointment reappointment and removal of the external auditors 
and to approve the remuneration and terms of engagement of the 
external auditors 
  reviewing and monitoring the external auditors’ independence  
and objectivity
  reviewing the effectiveness of the process for the statutory audit of 
the annual consolidated accounts taking into consideration relevant 
uk professional and regulatory requirements 
  developing and implementing policy on the engagement of the 
external auditors to supply nonaudit services taking into account 
relevant ethical guidance regarding the provision of nonaudit 
services by the external auditors 
  reporting to the board identifying any matters in respect of which  
it considers that action or improvement is needed and making 
recommendations as to the steps to be taken annual report 2011  the morgan crucible company plc 63
overview business review governance financial statements
the committee has the authority to investigate any matters according  
to its terms of reference and may obtain external advice at the cost  
of the company but did not do so during the year the director  
of risk assurance and the internal auditor both have access to the 
chairman of the committee and regularly meet with the committee 
without other executives present
the work of the committee in discharging those responsibilities in 
respect of 201 1 included
  reviewing the group’s 2010 financial statements and 201 1 half year 
statements prior to board approval 
  reviewing the scope of the external audit and confirmation of  
the external auditors’ terms of engagement and fee structures
  assessing the effectiveness of the external audit process and all 
aspects of the service provided by the external auditors
  the review of the work of the risk management committee  
and of the process by which the group’s main business risks are 
assessed and managed with the principal risks being considered  
by the board as a whole 
  reviewing the effectiveness of and receiving reports from 
management on the group’s internal audit and risk management 
systems and updates to the group’s governance risk and 
compliance plans 
  approval of the work and plans for the internal audit function  
and the monitoring of progress against the plan 
  appraisal of the group’s whistleblowing provision and related 
procedures and policies and of any breaches of the group’s 
ethicsrelated and other policies 
  reviews of material litigation crisis management plans and controls  
in relation to joint ventures
  monitoring the level of nonaudit work of the auditors which  
in 201 1 included services amounting to £03 million mainly in 
connection with tax services
to help ensure the objectivity and independence of the external 
auditors the policy implemented by the committee for the provision  
of nonaudit services by the external auditors is in summary as follows
  certain nonaudit services may not be provided by the external 
auditors including the review of their own work they may not  
make management decisions their work must not create a mutuality 
of interest and they may not put themselves in the position  
of advocate 
  any nonaudit work proposed to be placed with the external 
auditors with a fee between £50000 and £200000 must be 
approved in advance by the chairman of the audit committee 
projects in excess of £200000 must be approved in advance  
by the audit committee work which includes multiple phases  
is treated as a single project for approval purposes
  the prior approval of the audit committee is required for any 
nonaudit work which when added to the fees paid for other 
nonaudit work would total more than 80 of the audit fee
during the year the proportion of the auditors’ fees for nonaudit work 
relative to the audit fee was 14 2010 6
the committee’s policy is to undertake an annual review of the 
effectiveness of the audit process and of all aspects of the external 
auditor’s performance and independence before determining whether 
to undertake a formal review of the auditors including a retender 
presentation or whether to put the group’s audit work out to full 
thirdparty tender
the external auditors have processes in place to safeguard their 
independence and have written to the committee confirming that  
in their opinion they are independent the group last changed its 
auditors in late 2001 and undertook a formal review of the external 
auditors which included a retender presentation during 2007  
the external auditors rotated the partner responsible for the group’s  
audit work in 2008 and the next rotation of audit partner will take  
place in 2013 having reviewed the effectiveness of the audit process  
all aspects of the service provided by the auditors and taking account  
of the assurance given by the auditors as to their independence the 
committee recommended to the board that the group’s audit work 
should not be put out to thirdparty tender during 201 1 and will further 
review the situation during 2012  64 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
corporate governance
continued
remuneration
as is further described in the remuneration report on pages 66 to 76 
the remuneration committee has responsibility for setting remuneration 
for all executive directors and the chairman including benefits such as 
share options and awards under the company’s incentive plans pension 
rights and any compensation payments the committee also monitors 
the level and structure of remuneration for senior management  
the committee’s terms of reference were reviewed and updated 
during the year and are available on the group’s website
tim stevenson martin flower andrew given and simon heale  
who is the committee chairman were members of the committee 
throughout the year the committee is assisted in its duties by the chief 
executive officer the company secretary and the director of human 
resources no member of the committee or attendee is present when 
their own remuneration is under consideration nor do they participate 
in any relevant voting the committee also has the power to request 
for all or part of any meeting the attendance of any director or member 
of management as may be considered appropriate by the committee 
the committee met five times during the year
it is the company’s policy to disclose the fees of any executive  
director who serves as a nonexecutive director of another company 
during the year mark robertshaw served as a nonexecutive director 
of segro plc kevin dangerfield was appointed as a nonexecutive 
director of e2v technologies plc on 28 january 201 1 and andrew hosty 
served as a nonexecutive director of british ceramic research limited 
the fees received by mark robertshaw kevin dangerfield and  
andrew hosty in this regard are shown on page 72
the report of the remuneration committee which includes details  
of the committee’s responsibilities and terms of reference and of the 
directors’ remuneration and directors’ interests in options and shares 
is set out on pages 66 to 76
nomination
the nomination committee leads the process for board appointments 
and makes recommendations to the board on the appointment of new 
directors a majority of members of the nomination committee are 
independent nonexecutive directors tim stevenson as chairman  
of the committee martin flower andrew given simon heale and 
mark robertshaw were members of the committee throughout the 
year the committee’s terms of reference were reviewed and updated 
during the year and are available on the group’s website
the committee has the power to request the attendance of any other 
director or member of management for all or part of any meeting  
as may be considered appropriate by the committee the committee 
met twice during 201 1
the nomination committee reviews the balance of skills knowledge 
and experience on the board succession planning and the leadership 
needs of the group in the light of this review the committee  
prepares a description of the role and capabilities required for a 
particular appointment
candidates for appointment as director are considered by the 
committee taking advice from external consultants where appropriate
the terms and conditions of appointment of nonexecutive directors 
are available for inspection nonexecutive directors including the 
chairman are asked to undertake that they will have sufficient time  
to meet their commitments to the company and their other significant 
commitments are disclosed to the board before appointment with an 
indication of the time involved the board is informed of any subsequent 
changes with additional commitments disclosed before they are taken 
the terms of appointment for nonexecutive directors do not include  
a notice period
there were no nominations to the board or changes in role during  
the year
disclosure and transparency rules
this statement complies with subsections 21 221 231 25  
27 and 210 of rule 7 of the uk listing authority disclosure and 
transparency rules the information required to be disclosed by 
subsection 26 of rule 7 is shown in the directors’ report on  
pages 54 to 57 and is incorporated in this statement by reference
information on share capital and other matters
the information about share capital required to be included in this 
statement can be found on pages 54 to 57 of the directors’ report annual report 2011  the morgan crucible company plc 65
overview business review governance financial statements
statement of directors’ responsibilities in respect 
of the annual report and the financial statements
the directors are responsible for preparing the annual report 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 are required to prepare the group financial statements in 
accordance with ifrss as adopted by the 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 period
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 estimates that are reasonable and prudent 
  for the group financial statements state whether they have  
been prepared in accordance with ifrss as adopted by the eu 
  for the parent company financial statements state whether 
applicable uk accounting standards have been followed subject  
to any material departures disclosed and explained in the parent 
company financial statements 
  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 its financial statements comply with the companies act 2006  
they have general responsibility for taking such steps as are reasonably 
open to them to safeguard the assets of the group and to prevent and 
detect fraud and other irregularities
under applicable law and regulations the directors are also responsible 
for preparing a directors’ report directors’ remuneration report  
and corporate governance statement that comply with that law and 
those regulations
the directors are responsible for the maintenance and integrity of the 
corporate and financial information included on the company’s website 
legislation in the uk governing the preparation and dissemination of 
financial statements may differ from legislation in other jurisdictions
by order of the board
paul boulton 
company secretary
15 february 2012  66 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
remuneration report
introduction by the chairman of the remuneration committee
i am pleased to introduce this year’s remuneration report following another year of strong performance by the group
the remuneration committee considers that its approach to aligning management incentives with shareholders’ interests is helping to produce 
strong returns that are in the longer term interests of the group we think the changes to some of the performance measures we made last year 
– in particular the introduction of longterm ebita and roce measurement at divisional level – have enhanced management focus on value 
creation and provide clearer lineofsight in relation to the group’s strategy in addition for 2012 we have also included roce as an ltip measure  
at group level
the committee believes that the directors are fairly and appropriately remunerated with a significant element of their package being linked to  
the longterm success of morgan crucible
shareholders will be aware of the considerable achievement by management of key performance measures over the last three years not least  
the upperquartile growth in shareholder return including a more than threefold increase in the share price
this performance has resulted in a maximum vesting of the 2009 ltip and a 18 times match vesting of the 2009 bdsmp  which is subject to  
very demanding earnings per share eps growth targets those shares will be released during 2012 at the end of their threeyear vesting period 
and will be detailed in the 2012 annual report
the 2008 ltip awards were tested for the threeyear performance to the end of 2010 and lapsed in full and hence no longterm shares  
were released to executive directors during 201 1
eps targets continue to be set considering internal and external reference points awards made this year will be on the back of a strong set  
of financial results the committee believes that the existing 815 pa range for the 2012 ltip and the 820 pa for the bonus deferral  
plan represent demanding yet appropriate performance targets over the next three years and remain appropriate for the 2012 award cycle
roce targets have been set using a similar approach with external references and reflecting the returns required to meet and exceed the group’s 
internal strategic plan the target range for group roce has been set at 3337 which the committee believes provides a significant degree 
of demanding performance
the committee feels that although challenging the targets it sets are fair and incentivise both strong earnings growth eps and high returns on 
capital roce simultaneously whilst taking proper account of risk
as with 201 1 the committee’s approach to setting bonus targets for 2012 is that bonuses are only paid “at threshold” if morgan crucible’s profit 
increases versus the prior year’s achievement
the committee welcomes and carefully considers feedback from shareholders and particularly the encouragement that overall remuneration 
should both be in the longer term interests of shareholders and meaningful for management i hope you will find this balance appropriately 
reflected in the report that follows
simon heale
chairman
remuneration committee
remuneration report 
the directors’ remuneration report has been prepared by the remuneration committee the committee and has been approved by the board 
shareholders will be given the opportunity to approve the report at the annual general meeting on 8 may 2012
the report has been drawn up in accordance with the uk corporate governance code schedule 8 of the large and mediumsized companies 
and groups accounts and reports regulations 2008 and the uk listing authority listing rules
the remuneration report is divided into two parts the first part contains commentary on remuneration policy which is not required to be audited 
the second part contains the remuneration tables that have been audited in accordance with the relevant statutory requirements
the remuneration committee
the remuneration committee is responsible for developing group policy on executive remuneration and for determining on behalf of the board 
specific remuneration packages for the executive directors and the chairman the committee’s terms of reference are available on our website
during the year the members of the committee were simon heale who is the chairman of the committee martin flower tim stevenson and 
andrew given each of the nonexecutive directors is regarded by the board as independent tim stevenson was independent at the time of his 
appointment as chairman of the board
the committee met on five occasions during the year each committee member’s attendance at these meetings is set out in the corporate 
governance report on page 58 annual report 2011  the morgan crucible company plc 67
overview business review governance financial statements
the company secretary acts as secretary to the committee the chief executive officer and the director of human resources attend meetings 
of the committee by invitation the committee also had access to advice from the chief financial officer no executive director or other 
attendee is present when his or her own remuneration is under consideration
kepler associates was appointed by the committee in 2010 as its independent executive remuneration advisers and during 201 1 provided advice 
on performance measurement setting of annual bonus and longterm incentive targets total shareholder return tsr analysis and provided market 
data in respect of senior executive remuneration and nonexecutive director fees kepler reports directly to the chairman of the remuneration 
committee and provided no other services to the group during the year
remuneration policy
the remuneration committee aims to ensure that all the remuneration packages offered are competitive and designed to attract retain and 
motivate executive directors and senior executives of the right calibre in order to run the group successfully and to create value for shareholders  
the committee takes a longerterm perspective on retention and motivation and although the shortterm is important the committee’s view  
is that this has to be put in the context of the group’s longterm interests
the policy of the committee is to ensure that a significant proportion of the total remuneration opportunity is performancerelated with particular 
emphasis on longterm performance and based on the achievement of measurable targets that are relevant to and support the business strategy 
this is in order to create a strong link between performance and reward which should be beneficial to shareholders employees and the group
in assessing all aspects of pay and benefits the committee also takes into account the packages offered by similar companies to ensure the 
remuneration of executive directors is competitive against the market in which the company competes for talent for the purposes of such analysis 
comparator companies are chosen having regard to business sector the size of the company eg in terms of market capitalisation turnover and 
number of people employed the diversity and complexity of its businesses and the geographical spread of its businesses the committee also 
considers the level of pay and employment conditions throughout the group when determining executive directors’ remuneration
the committee believes that the current remuneration structures are appropriate and support the business strategy
main components of remuneration
the table below summarises the company’s policies in respect of each of the key elements of executive directors’ remuneration as they applied 
during the year
element policy details
base salary  provides the fixed element of the remuneration package
  set at competitive levels against the market
  reviewed against companies of a similar sector 
size and complexity in the ftse 350
  annual review date of 1 january 
annual bonus  incentivises the achievement of specific goals over  
the shortterm that are also aligned to the longterm  
business strategy
  maximum bonus award of 100 of salary
  targets based on profit before tax and 
amortisation and for the ceo morgan ceramics 
include key measures of divisional performance
bonus deferral  
share matching plan
  designed to encourage longterm company growth and  
to retain key individuals over this time period
  provides an opportunity for individuals to invest in  
company shares and receive matching shares based on 
group performance
  designed to work alongside the long term 
incentive plan
  up to 75 of the annual bonus may be 
voluntarily deferred into shares for three years 
  a matching award of up to three shares for  
each deferred share may be earned based on  
the company’s performance against stretching 
eps targets
long term  
incentive plan
  aligns the interests of executives and shareholders by 
delivering executive directors and other senior executives 
shares as a reward for outstanding longterm performance
  award of shares based on performance over  
a threeyear period
  awards made in 201 1 were based on  
tsr and eps performance 
  2012 awards will be based on roce  
tsr and eps performance
pension  provides postretirement benefits for participants in a 
costefficient manner
  defined benefit scheme subject to a notional 
earnings cap with an abovethecap allowance  
for current executive directors
shareholding  
guidelines
  encourages executives to build an interest in the company’s 
shares and supports alignment with shareholder interests
  policy of 100 of basic salary for executive 
directors
  supported by the bonus deferral share  
matching plan which encourages investment  
in company shares  68 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
remuneration report
continued
the relative proportion of fixed and variable remuneration for the executive directors at ‘target’ and ‘stretch’ performance is illustrated below  
this is based on the group’s remuneration policy
calculated on a projected value basis assuming 10 pa share price growth at ‘target’ performance and 15 pa share price growth at ‘stretch’
base salary
the base salary for each executive director is determined by the remuneration committee taking into account the performance of the individual 
and having regard to practice in ftse 350 companies of comparable sector size and complexity salaries are normally reviewed on an annual basis
in line with the approach being taken across the organisation executive directors’ salaries will be increased in 2012 in considering the level of 
increase the committee has been mindful of the general level of increase across the group of 3 as well as the positioning of roles against the 
market the table below shows the salaries in 201 1 and with effect from 1 january 2012
2011
salary
2012
mark robertshaw £465000 £480000
kevin dangerfield £275000 £285000
andrew hosty £305000 £312500
base salary is the only element of the remuneration package that is pensionable
annual bonus
the targets for the annual bonus are set by the remuneration committee taking into account the short and longterm requirements of the group 
challenging goals are set which must be met before any bonus is paid this approach is intended to align executive reward with shareholder return 
by rewarding the achievement of ‘stretch’ targets
the bonus scheme provides the opportunity for executive directors to earn a bonus of up to 100 of basic salary if stretching performance targets 
are achieved
for 201 1 the bonus for the ceo and cfo was based on group profit before taxation and amortisation the targets were set to incentivise the 
executive directors to manage much more of the income statement to improve the earnings per share of the group for 201 1 the bonus for the 
ceo morgan ceramics was balanced between the performance of the morgan ceramics division and the group as a whole comprising group 
profit before tax and amortisation 30 morgan ceramics ebita 50 and morgan ceramics thirdparty working capital to sales  20 
in addition to the achievement of the targets set in considering any awards to be made the committee also takes into account the quality of the 
overall performance of the company
the bonuses awarded to executive directors in respect of 201 1 were as follows
  mark robertshaw  – 100 of salary 2010 100
  kevin dangerfield  – 100 of salary 2010 100
  andrew hosty – 975 of salary 2010 100
the awards for the ceo and cfo were made on the basis that in 201 1 the maximum group profit before tax and amortisation target was 
achieved resulting in a bonus payment of 100 of salary the award for the ceo morgan ceramics also reflected performance against the  
group profit before tax and amortisation target together with a morgan ceramics division ebita target achieved at the maximum performance 
level and a morgan ceramics division thirdparty working capital to sales  target achieved at 875 of the target resulting in a bonus payment  
of 975 of salary
no changes will be made to the annual bonus opportunity or performance measures for executive directors in 2012
0 10 20 30 40 50 60 70 80 90 100
20
50
20
25
60
25
stretch
target
salary bonus longterm incentives annual report 2011  the morgan crucible company plc 69
overview business review governance financial statements
longterm incentive arrangements
the committee believes that share ownership by the executive directors and senior executives helps align their interests with those of shareholders 
accordingly the company operates a number of share schemes for the executive directors and other senior employees details of which are set 
out below
bonus deferral share matching plan bdsmp
the bdsmp was introduced following shareholder approval in 2008
this plan operates alongside the other longterm incentive arrangements under the plan rules participants may be offered the opportunity to 
defer up to 75 of their annual bonus on a pre or posttax basis into company shares participants must hold the deferred shares for three years 
to be eligible for a matching award based on the pretax value of their deferred shares matching shares may be earned at the end of three years in 
the event that stretching eps targets have been met
for the bonus earned for the 2010 performance year ie payable in early 201 1 participants were given the opportunity to defer up to 50 of their 
bonus under the plan this was a lower deferral level compared with the 75 deferral opportunity in respect of the bonus earned for the 2009 
performance year ie payable in early 2010 as explained in the 2010 report the performance criteria attaching to awards under this plan are 
disclosed in notes 4 5 and 6 to the ‘awards to directors under the bonus deferral share matching plan’ table on page 75
for the bonus earned in respect of the 201 1 performance year payable in early 2012 participants will be given the opportunity to defer up to  
50 of their bonus under the bdsmp 
targets for the 201 1 matching awards were as follows
eps performance matching shares
20 pa 3x match
16 pa 2x match
12 pa 1x match
 8 pa 0x match
there is straightline vesting between each of the points above
eps growth is considered the best measure of performance for the bdsmp  as it provides alignment with group strategy and good lineofsight  
for management the reference to rpi was removed for 201 1 awards following consultation with the group’s 10 largest shareholders as  
uk retail price inflation is not considered by the committee to be a relevant benchmark for morgan crucible’s profit growth given 84 of sales 
are generated outside the uk the committee believes that the above targets are appropriately stretching and will continue to review the targets  
at the start of each award cycle
during the year under review 2008 bdsmp awards lapsed in full the committee expects a 18 times match vesting under the 2009 bdsmp 
shares which would subject to achievement of performance conditions be released in 2012 in line with the group’s strong eps performance 
over the threeyear period to 1 january 2012 details of the outcome of this award will be disclosed in next year’s report
no changes will be made to the bdsmp opportunity performance measures or targets in 2012
long term incentive plan ltip
the ltip was introduced following shareholder approval in 2004 it offers executive directors and other senior executives the opportunity  
to receive shares as a reward for outstanding performance the scheme allows awards of up to 150 of basic salary although in exceptional 
circumstances the committee is able to make awards of up to 200 of basic salary the vesting of the awards is subject to the achievement  
of performance targets measured over the threeyear period from the start of the year in which the award is made
during 201 1 an award over 171068 shares equivalent to 1 1 1 of 2010 salary was made to mark robertshaw 97147 shares equivalent to  
100 of 2010 salary were awarded to kevin dangerfield and 102641 shares equivalent to 100 of 2010 salary were awarded to andrew hosty 
for the ceo and cfo performance for these awards will be based 50 on eps growth and 50 on tsr relative to the constituents of the  
ftse allshare industrials index as follows
tsr performance against ftse allshare industrials index  of the award that vests eps growth  of the award that vests 
upperquartileranked performance 50 15 pa 50
medianranked performance 15 8 pa 15
belowmedianranked performance 0  8 pa 0
straightline vesting applies between each point for both vesting schedules  70 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
remuneration report
continued
long term incentive plan continued
the committee must also be satisfied that the group’s underlying financial performance justifies the level of vesting
to support the group’s divisional structure the committee approved longterm incentive plans for senior divisional executives tailored to the 
value creation of each division the ltip within each division is therefore based on performance against stretching ebita growth and roce 
targets for the divisional ceos andrew hosty and don klas half of their 201 1 incentive is linked to group tsr as for the ceo and cfo and 
half is based on the relevant divisional ebita and roce measures this combination of measures is considered most appropriate for the divisional 
ceos reflecting their roles as senior executives within the group as well as their roles as heads of divisions the stretching targets reflect the 
strategic plans within each of these divisions
for andrew hosty ceo morgan ceramics the divisional portion of the 201 1 ltip will only vest if stretching performance is achieved with no 
vesting occurring unless ebita growth in morgan ceramics is at least 12 pa and roce is 357 in 2013 full vesting will occur for ebita growth 
of 18 pa and roce of 407
during the year under review the 2008 ltip awards lapsed in full the committee expects full vesting of shares under the 2009 ltip shares which 
would be released in 2012 in line with the group’s strong eps and tsr performance over the threeyear period to 1 january 2012 details of the 
outcome of this award will be disclosed in next year’s report
for the awards to be granted in 2012 the committee considered its desire to have the most relevant balance of measures that reflected feedback 
from shareholders and directly related to the stretching objectives in the group’s business plan the committee therefore decided on the introduction 
of a roce measure for the 201214 performance period for the ceo and cfo tsr eps and roce performance will be rewarded on an equal 
onethird basis as follows
tsr performance against ftse allshare industrials index
 of the 
award
that vests eps growth
 of the
 award 
that vests roce
 of the
 award 
that vests
upperquartileranked performance 33 15 pa 33 37 33
medianranked performance 10 8 pa 10 33 10
belowmedianranked performance 0  8 pa 0  33 0
for the divisional ceos andrew hosty and don klas a third of their 201214 ltip will continue to be linked to group tsr and two thirds will be 
based on the relevant divisional ebita and roce performance
for andrew hosty the divisional portion of the ltip will only vest if stretching performance is achieved with no vesting occurring unless ebita 
growth in morgan ceramics is at least 6 pa and the average roce for the three years ended 2012 2013 and 2014 average roce is 41  
full vesting will occur for ebita growth of 15 per annum and average roce of 435
the details of outstanding awards held by all directors are shown on page 74
executive share option scheme esos
the esos was approved by shareholders in 2004 and offers executive directors and other senior executives the opportunity to receive options 
granted at the market price of the company’s shares at the time of the grant the scheme allows awards of up to 150 of basic salary although in 
exceptional circumstances the committee is able to make awards of up to 200 of basic salary
no awards were made under the esos in 201 1 there is one outstanding award to mark robertshaw who has a vested option from 2004 that  
he has not exercised see directors’ share options table on page 73 there is currently no intention to make awards under the esos in 2012
savingsrelated share option scheme saye
as uk employees the executive directors may also participate in the savingsrelated share option scheme on the same basis as other eligible 
employees and subject to uk legislation scheme members save a fixed amount per month over three years and options have been granted with 
an exercise price at 80 of the market price at the date of grant those directors who received options under this scheme are shown in the table 
on page 76 no performance conditions apply to these options as they are a taxefficient mechanism for all employees to acquire shares in the 
company at their own cost
other benefits
executive directors are eligible to receive certain benefits including either a company car or a car allowance health insurance and where 
appropriate relocation and other expenses
shareholding guidelines
in order to encourage alignment with shareholders individual shareholding guidelines are operated for executive directors and senior executives 
under such guidelines executive directors are encouraged to build and maintain over time a shareholding in the company equivalent to at least 
100 of basic salary this policy is supported by the bdsmp under which participants are encouraged to invest their bonus in company shares annual report 2011  the morgan crucible company plc 71
overview business review governance financial statements
at the market price on 15 february 2012 mark robertshaw kevin dangerfield and andrew hosty respectively held shares worth 372  
246 and 165 of their basic salaries more detail on directors’ interest in shares are shown on page 72
chairman and nonexecutive directors
annual fees paid to the chairman are reviewed on a biennial basis tim stevenson was appointed as chairman on 1 december 2006 and the fee 
was first reviewed in december 2008 however in view of the economic conditions at the time the recommended increase was deferred for  
12 months to 1 january 2010 when his fee was increased from £125000 to £140000 the chairman’s fee was next reviewed in december 201 1 
a fee increase to £150000 was recommended with effect from 1 january 2012
nonexecutive director fees are also reviewed biennially 
following the biennial review in 2010 the annual fee for nonexecutive directors was set at £42000 pa additional payments of £8000 are made 
to the senior independent director the chairman of the audit committee and to the chairman of the remuneration committee no changes 
were made to nonexecutive fees during the year
the chairman and nonexecutive directors are also entitled to reimbursement of expenses incurred in attending board strategy and other meetings
none of the nonexecutive directors has a service contract with the company although they do have letters of appointment which contain no 
obligations relating to any notice period there are no obligations on the company to make any payments in lieu of notice to any nonexecutive 
director the nonexecutive directors do not participate in any of the incentive share or share option plans 
service contracts
executive directors are employed on contracts subject to 12 months’ notice at any time contracts may be terminated on 12 months’ notice given 
by the company or on six months’ notice given by the director concerned contracts end on each director’s anticipated normal retirement date 
the following table shows the date of the contract for each executive director who served during the year
executive director
date of
appointment
date of 
service agreement 
kevin dangerfield 3 august 2006 15 august 2008
mark robertshaw 4 august 2006 15 august 2008
andrew hosty 28 july 2010 17 august 2010
the service agreements for mark robertshaw kevin dangerfield and andrew hosty do not contain specific termination provisions
in the event of early termination the company may be liable to pay an amount in damages having regard to salary bonus and other benefits that 
would have been received had they served out their notice period the value of any termination payment made will be at the judgment of the 
committee having regard to all relevant factors including ensuring that the full benefit of mitigation is obtained there is no automatic entitlement  
to bonus as part of the termination arrangements
company pensions policy
the three executive directors participate in the morgan group senior staff pension and life assurance scheme which is a contributory  
hmrcregistered defined benefit funded occupational pension scheme with effect from 6 april 2006 the basis of the scheme changed from  
final salary to career average and the normal pension age increased by five years its main features are now
  a normal pension age of 65
  pension at normal pension age based on twothirds career average pensionable salary subject to completion of at least 20 years’ employment 
26 years and eight months for joiners since 2006
  life assurance of four times basic salary
  dependants’ pension on death
pensionable salary is the member’s basic salary restricted to a scheme earnings cap of £129600 for the 201 112 tax year
in addition executive directors received a pension allowance derived from employer contributions based notionally on the registered scheme 
pensionable salary in excess of the earnings cap the value of the pension allowance for each executive director is set out in the directors’ 
emoluments table on page 73
the committee has also reviewed the impact of the government’s new annual allowance limits on pension contributions a small number of 
senior managers are impacted by these changes and mark robertshaw is the only executive director similarly affected at this time the company  
is currently involved in a consultation process over consequent changes to the scheme as a result of the new measures the committee decided it 
wished to provide allowances for those involved though needs to wait for the outcome of the consultation process with scheme members before 
its proposals can be confirmed overall these allowances will be costneutral and consistent with market practice the allowance if the proposals 
are confirmed would be paid from april 2012 and will be reported in next year’s remuneration report  72 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
remuneration report
continued
external directorships
with the approval of the board in each case and subject to the overriding requirements of the group executive directors may accept external 
appointments as nonexecutive directors of other companies and retain any fees received
the total amount of fees received by mark robertshaw in respect of his nonexecutive directorship was £53000
the total amount of fees received by kevin dangerfield in respect of his nonexecutive directorship was £32300
the total amount of fees received by andrew hosty in respect of his nonexecutive directorship was £6750
performance graph
the following graph shows the cumulative total shareholder return tsr for the company for the fiveyear period to 1 january 2012 against  
the ftse allshare industrials index both are rebased to 100 as at 5 january 2006 the ftse allshare industrials index is considered to be 
appropriate for comparison as it is a broad market index and the company forms part of that index
the auditors are required to report on the following information
directors’ interests in shares
directors’ interests in the ordinary share capital of the company are as follows
as at
2 january
2011
as at
1 january
2012
as at 
15 february
2012
executive directors
mark robertshaw 348525 502057 504614
kevin dangerfield 138914 197589 197790
andrew hosty  98213 144778 145727
nonexecutive directors
tim stevenson 29000 29000 29000
martin flower 15000 15000 15000
simon heale 18000 18000 18000
andrew given 10000 10000 10000
 the date of report as at 28 february 2012 there was no change to the details listed in the above table
t otal shareholder return for the fiveyear period 
january 2007 to january 2012
0
50
100
150
200
january 07 data source bloomberg
ftse allshare industrials index
morgan crucible
january 08 january 09 january 10 january 11 january 12
value of £100 since january 2007 annual report 2011  the morgan crucible company plc 73
overview business review governance financial statements
directors’ emoluments
feessalary
£000
annual bonus
£000
1
other benefits
£000
2
total emoluments
£000
pension allowance
£000
other payments
£000
total remuneration
£000
2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
executive directors
mark robertshaw 465 450 465 450 14 13 944 913 114 114 –  – 1058 1027
kevin dangerfield 275 265 275 265 14 13 564 543 66 66 –  – 630 609
andrew hosty
3
 305 270 297 300 12 11 614 581 72 63 –  – 686 644 
nonexecutive directors
tim stevenson chairman 140 140 – – – – 140 140 – – – – 140 140
martin flower 50 45 – – – – 50 45 – – – – 50 45
andrew given 50 48 –  –  –  – 50 48 –  –  –  – 50 48
simon heale 50 45 – – – – 50 45 – – – – 50 45
1  annual bonus shows the total bonus payable in respect of the relevant year mark robertshaw voluntarily deferred 50 of his 2010 bonus award into the bonus deferral share 
matching plan as set out in the table on page 75 kevin dangerfield deferred 25 and andrew hosty deferred 40 of their 2010 bonuses also shown in the same table
2 other benefits include private medical insurance and a company carcar allowance 
3 andrew hosty’s salary received reflects an increase in his annual salary from £240000 to £300000 on his appointment to the board on 28 july 2010
directors’ share options
at
2 january
201 1
granted
during
the year
exercised
during
the year
lapsed
during
the year
at
1 january
2012
exercise
price
earliest
date of
exercise
expiry
date
mark robertshaw 200000 – – – 200000 145275p 011 107 011 114
kevin dangerfield 10520 – – 10520 – 18008p 231 104 231 11 1
the performance measure for the executive share option scheme awards above was based on the company’s tsr performance against  
the ftse 350 30 of the awards vest for achieved medianranked performance with full vesting for upperquartileranked performance  
for performance between median and upper quartile awards vest on a straightline prorata basis
the share price at the year end was 2630 pence and the high and low during the year were 3571 pence and 2240 pence respectively  74 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
remuneration report
continued
awards to directors under the long term incentive plan
as at
2 january
201 1
allocations
during
the year
shares
released
during
the year
shares
lapsed
during
the year
as at
1 january
2012
market
price at
date of
allocation
market
price at
date of
release performance periods
mark robertshaw
2008 ltip 220000 –  – 220000 – 203p –  050108 – 040111
2009 ltip 489705 –  –  – 489705 8985p –  050109 – 040112
2010 ltip 214529 –  –  – 214529 20510p –  040110 – 311212
2011 ltip – 171068 –  – 171068 29228p –  030111 – 291213
kevin dangerfield
2008 ltip 120000 –  – 120000 – 203p –  050108 – 040111
2009 ltip 283806 –  –  – 283806 8985p –  050109 – 040112
2010 ltip 118939 –  –  – 118939 20510p –  040110 – 311212
2010 ltip – csop 5390 –  –  – 5390 20510p –  040110 – 311212
2010 ltip – funding 5390 –  –  – 5390 20510p –  040110 – 311212
2011 ltip – 84185 –  – 84185 29228p –  030111 – 291213
201 1 ltip – csop – 6481 –  – 6481 29228p –  030111 – 291213
201 1 ltip – funding – 6481 –  – 6481 29228p –  030111 – 291213
andrew hosty
2008 ltip 120000 – – 120000 – 203p –  050108 – 040111
2009 ltip 267111 – – – 267111 8985p – 050109 – 040112
2010 ltip 102389 – – – 102389 20510p – 040110 – 311212
2010 ltip – csop 14627 – – – 14627 20510p –  040110 – 311212
2010 ltip – funding 14627 –  – – 14627 20510p –  040110 – 311212
2011 ltip – 102641 – – 102641 29228p –  030111 – 291213
notes
1  awards granted to executive directors in 2008 were subject to relative tsr and eps the eps target applying to 50 of each award requires threeyear eps growth of rpi4 pa  
for 30 of that element to vest rising to full vesting for eps growth of rpi10 pa or higher the tsr target applying to the other 50 of each award requires morgan crucible’s 
threeyear tsr performance to rank at median against 17 industrial and engineering comparators for 30 of that element to vest rising to full vesting if morgan crucible’s tsr ranks  
at or above the upper quartile against these peers the performance conditions attached to the 2008 ltip awards were not met and therefore awards lapsed in full
2  awards granted to executive directors in 2009 were subject to relative tsr the tsr target required morgan crucible’s threeyear tsr performance to rank at median against  
17 industrial and engineering comparators for 30 of that element to vest rising to full vesting if morgan crucible’s tsr ranks at or above the upper quartile against these peers  
at the end of the performance period morgan crucible’s tsr performance resulted in 100 vesting vested awards will not be released until the third anniversary of grant  
27 february 2012
3  awards granted to executive directors in 2010 are subject to relative tsr and eps the eps target applying to 50 of each award requires threeyear eps growth of rpi4 pa  
for 30 of that element to vest rising to full vesting for eps growth of rpi10 pa or higher the tsr target applying to the other 50 of each award requires morgan crucible’s 
threeyear tsr performance to rank at median against 23 industrial and engineering comparators for 30 of that element to vest rising to full vesting if morgan crucible’s tsr ranks  
at or above the upper quartile against these peers
4  awards granted to executive directors in 201 1 are subject to relative tsr and eps the eps target applying to 50 of each award requires threeyear eps growth year eps growth 
above a threshold of 8 pa of that element to vest commencing at 30 vesting for that element rising to full vesting for eps growth of 15 pa or higher the tsr target applying to 
the other 50 of each award requires morgan crucible’s threeyear tsr performance to rank at median against the ftse allshare industrials index for 30 of that element to vest 
rising to full vesting if morgan crucible’s tsr ranks at or above the upper quartile against the companies in this index
5  ltip awards made in 2010 to kevin dangerfield and andrew hosty are structured as an approved performance share plan apsp and comprise three elements i hm revenue  
customs hmrc approved options csop over shares to the value of up to £30000 with an exercise price of 2051 pence per share ii an ltip award in the form of a conditional 
award of free shares to the value of the remainder of the award above this limit and iii a funding award also in the form of a conditional award of free shares over such numbers  
of shares whose value at exercise at the approved option equals £30000 the provisions of these csop options funding awards and ltip awards are linked so that the maximum 
aggregate number of shares that can be acquired on exercise of ltip and csop awards the funding award being used to pay the exercise price arising on exercise of the csop  
is limited to that number of shares that had a market value on the date of the awards equal to 100 of kevin dangerfield’s 2009 base salary and £240000 for andrew hosty  
‘the limit’ vested funding awards are not transferred to the participant annual report 2011  the morgan crucible company plc 75
overview business review governance financial statements
awards to directors under the bonus deferral share matching plan
as at
2 january
201 1
allocations
during
the year
shares
released
during
the year
shares
lapsed
during
the year
as at
1 january
2012
market
price at
date of
allocation
market
price at
date of
release performance periods
mark robertshaw
2008 award
matching shares
2
314229 –  – 314229 – 197625p – 050108 – 04011 1
2009 award
investment shares
1
48222 –  –  – 48222 8075p – –
matching shares
2
245201 –  –  – 245201 8075p – 050109 – 040112
2010 award
investment shares
1
20635 – –  – 20635 18870p – –
matching shares
2
104928 – –  – 104928 18870p – 040110 – 301212
2011 award
investment shares
1
 – 74875 –  – 74875 30050p –  – 
matching shares
2
 – 224625 – – 224625 30050p – 03011 1 – 291213
2008 replacement  
deferred award 68675 – 68675 – – 188p – –
kevin dangerfield
2008 award
matching shares
2
174798 – – 174798 – 197625p – 050108 – 04011 1
2009 award 
investment shares
1
13973 –  –  – 13973 8075p – –
matching shares
2
71052 – – – 71052 8075p – 050109 – 040112
2011 award
investment shares
1
– 22046 –  – 22046 30050p –  – 
matching shares
2
– 66138 – – 66138 30050p – 03011 1 – 291213
2008 replacement 
deferred award 38202 – 38202 – – 188p – –
andrew hosty   
2008 award 
matching shares
2
160956 –  – 160956 – 197625p – 050108 – 04011 1
2009 award 
investment shares
1
71042 – – – 71042 8075p – –
matching shares 361233 –  –  – 361233 8075p – 050109 – 040112
2011 award
investment shares
1
 – 39933 –  – 39933 30050p – – 
matching shares
2
 – 1 19799 – – 1 19799 30050p – 03011 1 – 291213
2008 replacement 
deferred award 35175 – 35175 – – 188p – –
1 investment shares represent those shares acquired with a portion of the bonus set out in the emoluments table on page 73 voluntarily deferred into the bonus deferral share matching plan 
2  this is the maximum number of shares based on the pretax value of the deferred shares that could be earned at the end of the performance period if the performance condition set out  
on page 69 is met in full 
3  in 2008 the executive directors deferred their bonus payment on a gross basis and in 2009 and 2010 deferral was on a net basis in 201 1 deferral was on a gross basis as it will be for 2012 
the flexibility to defer on either basis is within the plan rules 
4  matching awards granted to executive directors in 2008 and 2010 are subject to threeyear eps growth the eps target requires threeyear eps growth of rpi4 pa for a 025x match 
rpi5 pa for a 05x match rpi 75 pa for a 1x match rpi 10 pa for a 175x match and rpi 15 pa or higher for a 3x match there is straightline vesting between these points  
the performance conditions attached to the 2008 bdsmp awards were not met and therefore matching awards lapsed in full 
5  matching awards granted to executive directors in 2009 are subject to threeyear eps growth the eps target requires threeyear eps growth of 4 pa for a 025x match 5 pa for a  
05x match 75 pa for a 1x match 10 pa for a 175x match and 15 pa or higher for a 3x match there is straightline vesting between these points the performance targets for awards 
made in 2009 did not reference growth above rpi given the difficult economic climate at that time the committee considered the targets to be stretching
6  matching awards granted to executive directors in 201 1 are subject to threeyear eps growth the eps target requires threeyear eps growth above a threshold of 8 pa before any matching 
12 pa for a 1x match 16 pa for a 2x match and 20 pa or higher for a 3x match there is straightline vesting between these points
note prior to 6 april 2010 the committee amended the terms of the 2008 investment shares in line with the plan rules to allow individuals to crystallise the tax due on their earned deferred 
bonus awards this decision has not resulted in any additional costs to the company the net value of these awards will continue to be held until the normal vesting date no amendment has 
been made to the terms of the matching shares  76 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
options under the sharesave scheme
as at
2 january
201 1
granted
during
the year
exercised
during
the year
lapsed
during
the year
as at
1 january
2012
exercise
price exercise periods
mark robertshaw 
2010 scheme 5454 –  –  – 5454 165p 011213 – 310514
kevin dangerfield        
2008 scheme 5680 – 5680 –  – 169p 01121 1 – 310512
201 1 scheme – 4225 –  – 4225 213p 011214 – 310515
andrew hosty       
2008 scheme 4544 – 4544 –  – 169p 01121 1 – 310512
2009 scheme 1417 –  –  – 1417 128p 011212 – 310513
201 1 scheme – 3380 –  – 3380 213p 011214 – 310515
pension benefits earned by the directors
the three executive directors participate in the morgan group senior staff pension and life assurance scheme this is a contributory  
hmrcregistered defined benefit uk occupational pension scheme as noted above the scheme was amended on 6 april 2006
executive directors
accrued
benefits at
1 january
2012
£000
increase
in accrued
benefits
excluding
inflation a
£000
increase
in accrued
benefits
including
inflation
£000
transfer 
value of a
less director’s
contributions
£000
transfer value
of accrued
benefits at
2 january
2011
£000
transfer value
of accrued
benefits at
1 january
2012
£000
increase
decrease
in transfer
value less
director’s
contributions
£000
mark robertshaw 25 3 4 24 210 340 111
kevin dangerfield 34 2 4 21 366 532 155
andrew hosty 46 2 4 19 578 803 214
notes re pension benefits
1  the accrued benefit entitlement for mark robertshaw kevin dangerfield and andrew hosty is the pension that would be paid annually on retirement based on service at the end of  
the year 
2  the transfer values for the pension benefits have been calculated on the basis set by the trustee of the pension scheme the trustee of the pension scheme is an independent body  
that is separate from the company and they must calculate transfer values in accordance with legislation having taken actuarial advice from an independent adviser the assumptions 
used in the calculation of transfer values depend on market conditions over the year government bond yields fell this movement increases the assessed transfer values and was  
much more significant than the increase in accrued benefits over the year
3 members of the pension scheme had the option to pay additional voluntary contributions neither the contributions nor the resulting benefits are included in the above table 
mark robertshaw kevin dangerfield and andrew hosty also received a pension allowance details of which are set out in the directors’ 
emoluments table on page 73
the directors’ remuneration report has been approved by the board and is signed on its behalf by
simon heale
chairman
remuneration committee
15 february 2012
remuneration report
continued annual report 2011  the morgan crucible company plc 77
overview business review governance financial statements
independent auditor’s report to the members of
the morgan crucible company plc
we have audited the financial statements of the morgan crucible company plc for the year ended 1 january 2012 set out on pages 78 to 139  
the financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and international 
financial reporting standards ifrss as adopted by the eu the financial reporting framework that has been applied in the preparation of the 
parent company financial statements is applicable law and uk accounting standards uk generally accepted accounting practice
this report is made solely to the company’s members as a body in accordance with chapter 3 of part 16 of the companies act 2006
our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them  
in an auditor’s report and for no other purpose to the fullest extent permitted by law we do not accept or assume responsibility to anyone  
other than the company and the company’s members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities statement set out on page 65 the directors are responsible for the preparation  
of the financial statements and for being satisfied that they give a true and fair view our responsibility is to audit and express an opinion on  
the financial statements in accordance with applicable law and international standards on auditing uk and ireland those standards require us  
to comply with the auditing practices board’s apb’s ethical standards for auditors
scope of the audit of the financial statements
a description of the scope of an audit of financial statements is provided on the apb’s website at wwwfrcorgukapbscopeprivatecfm
opinion on financial statements
in our opinion
  the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 1 january 2012  
and of the group’s profit for the year then ended 
  the group financial statements have been properly prepared in accordance with ifrss as adopted by the eu 
  the parent company financial statements have been properly prepared in accordance with uk generally accepted accounting practice 
  the financial statements have been prepared in accordance with the requirements of the companies act 2006 and as regards the  
group financial statements article 4 of the ias regulation 
opinion on other matters prescribed by the companies act 2006
in our opinion
  the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the companies act 2006 and 
  the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent with the 
financial statements 
  information given in the corporate governance statement set out on pages 58 to 64 with respect to internal control and risk management 
systems in relation to financial reporting processes and about share capital structures is consistent with the financial statements 
matters on which we are required to report by exception
we have nothing to report in respect of the following
under the companies act 2006 we are required to report to you if in our opinion
  adequate accounting records have not been kept by the parent company or returns adequate for our audit have not been received from 
branches not visited by us or 
  the parent company financial statements and the part of the directors’ remuneration report to be audited are not in agreement with the 
accounting records and returns or 
  we have not received all the information and explanations we require for our audit or
  certain disclosures of the directors’ remuneration specified by law are not made or
  a corporate governance statement has not been prepared by the company
under the listing rules we are required to review
  the directors’ statement set out on page 47 in relation to going concern 
  the part of the corporate governance statement on pages 58 to 64 relating to the company’s compliance with the nine provisions of the  
uk corporate governance code specified for our review and
  certain elements of the report to shareholders by the board on directors’ remuneration
stephen cooper senior statutory auditor for and on behalf of kpmg audit plc statutory auditor
chartered accountants
15 canada square london e14 5gl
15 february 2012  78 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
cons olidated in come statement
for the year ended 1 january 2012
n ote
2011
£m
2010
£m
revenue 2 11010 10171 
operating costs before restructuring costs other oneoff items and amortisation of intangible assets 4 9576 9076
profit from operations before restructuring costs other oneoff items and amortisation  
of intangible assets 1434 1095 
restructuring costs and other oneoff items 8
 restructuring costs 56 85
 gain on disposal of properties 24 06 
 n et pension credit 13 – 
profit from operations before amortisation of intangible assets 2 1415 1016 
a mortisation of intangible assets 4 83 80
operating profit 2 1332 936 
finance income 277 290 
finance expense 495 549
net financing costs 6 218 259
profit before taxation 1114 677 
income tax expense 7 326 197
profit for the period 788 480 
profit for period attributable to
 owners of the parent 730 425 
 n oncontrolling interests 58 55 
788 480 
earnings per share 9
basic 269p 158p
d iluted 257p 150p
dividends
proposed interim dividend – pence 325p 270p
  – £m 89 73 
proposed final dividend – pence 600p 500p
  – £m 164 136 
t he proposed interim and final dividends 2010 actual are based upon the number of shares outstanding at the balance sheet date annual report 2011  the morgan crucible company plc 79
overview business review governance financial statements
cons olidated statement of co mprehensi ve in come
for the year ended 1 january 2012
t ranslation
reserve
£m
hedging
reserve
£m
fair value
reserve
£m
retained
earnings
£m
t otal parent
comprehensive
income
£m
n oncontrolling
interests
£m
total
comprehensive
income
£m
2010
profit for the year – – – 425 425 55 480 
foreign exchange translation differences 35 – – – 35 27 62 
a ctuarial loss on defined benefit plans – – – 61 61 – 61
n et loss on hedge of net investment  
in foreign subsidiary 06 – – – 06 – 06
cash flow hedges
 effective portion of changes in  
 fair value – 06 – – 06 – 06 
 t ransferred to profit or loss – 05 – – 05 – 05
change in fair value of equity securities 
availableforsale – – 02 – 02 – 02 
t ax effect on components of other  
comprehensive income – – – 26 26 – 26 
total comprehensive income 
net of tax 29 01 02 390 422 82 504 
2011
profit for the year – – – 730 730 58 788 
foreign exchange translation differences 54 – – – 54 02 52
a ctuarial loss on defined benefit plans – – – 455 455 – 455
n et gain on hedge of net investment  
in foreign subsidiary 10 – – – 10 – 10 
cash flow hedges
 effective portion of changes  
 in fair value – 03 – – 03 – 03 
 t ransferred to profit or loss – 02 – – 02 – 02
change in fair value of equity securities 
availableforsale – – 01 – 01 – 01 
t ax effect on components of other  
comprehensive income – – – 59 59 – 59 
total comprehensive income 
net of tax 44 01 01 334 292 60 352   80 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
cons olidated b alan ce sheet
as at 1 january 2012
n ote
2011
£m
2010
£m
assets
property plant and equipment 10 2598 2692 
intangible assets 11 2833 2850 
investments 12 61 71 
other receivables 42 20 
d eferred tax assets 13 411 385 
total noncurrent assets 5945 6018 
inventories 14 1666 1610 
d erivative financial assets 19 16 07 
t rade and other receivables 15 1953 1847 
cash and cash equivalents 16 834 850 
total current assets 4469 4314 
total assets 10414 10332 
liabilities
interestbearing loans and borrowings 18 2873 3104 
employee benefits 20 1351 1039 
provisions 21 70 76 
n ontrade payables 22 105 136 
d eferred tax liabilities 13 445 452 
total noncurrent liabilities 4844 4807 
interestbearing loans and borrowings and bank overdrafts 18 115 108 
t rade and other payables 22 2513 2654 
current tax payable 108 58 
provisions 21 120 128 
d erivative financial liabilities 19 12 56 
total current liabilities 2868 3004 
total liabilities 7712 7811 
total net assets 2702 2521 
equity
share capital 17 687 685 
share premium 906 883 
reserves 604 646 
retained earnings 97 64
total equity attributable to equity owners of parent company 2294 2150 
noncontrolling interests 408 371 
total equity 2702 2521 
t he financial statements were approved by the board of d irectors on 15 february 2012 and were signed on its behalf by
mark robertshaw chief executive officer
kevin dangerfield chief financial officer annual report 2011  the morgan crucible company plc 81
overview business review governance financial statements
cons olidated statement of ch an ges in e quit y
for the year ended 1 january 2012
share
capital
£m
share
premium
£m
t ranslation
reserve
£m
hedging
reserve
£m
fair
value
reserve
£m
special
reserve
£m
capital
redemption
reserve
£m
other
reserves
£m
retained
earnings
£m
total
parent
equity
£m
n on
controlling
interests
£m
total
equity
£m
balance at 4 january 2010 679 853 101 02 17 60 357 1 11 300 1846 300 2146 
profit for the year – – – – – – – – 425 425 55 480 
other comprehensive income – – 29 01 02 – – – 35 03 27 24 
transactions with owners
d ividends 05 29 – – – – – – 189 155 11 166
equitysettled sharebased  
payment transactions – – – – – – – – 35 35 – 35 
issue of shares 01 01 – – – – – – – 02 – 02 
balance at 2 january 2011 685 883 130 03 15 60 357 1 11 64 2150 371 2521 
balance at 3 january 2011 685 883 130 03 15 60 357 111 64 2150 371 2521 
profit for the year – – – – – – – – 730 730 58 788 
other comprehensive income – – 44 01 01 – – – 396 438 02 436
transactions with owners
d ividends 02 23 – – – – – – 209 184 23 207
equitysettled sharebased  
payment transactions – – – – – – – – 68 68 – 68 
own shares acquired for  
share incentive schemes – – – – – – – – 32 32 – 32
balance at 1 january 2012 687 906 86 04 14 60 357 111 97 2294 408 2702 
d etails of the reserves are provided in note 17  82 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
cons olidated statement of c as h fl ows
for the year ended 1 january 2012
n ote
2011
£m
2010
£m
operating activities
profit for the period 788 480 
a djustments for
 depreciation 4 311 323 
 amortisation 4 83 80 
 n et financing costs 218 259 
 profit on sale of property plant and equipment 26 05
 income tax expense 7 326 197 
 equitysettled sharebased payment expenses 59 31 
cash generated from operations before changes in working capital and provisions 1759 1365 
increase in trade and other receivables 129 137
increase in inventories 77 116
d ecreaseincrease in trade and other payables 85 358 
d ecrease in provisions and employee benefits 175 67
cash generated from operations 1293 1403 
interest paid 220 257
income tax paid 256 241
net cash from operating activities 817 905 
investing activities
purchase of property plant and equipment 287 191
proceeds from sale of property plant and equipment 32 21 
sale of investments 07 03 
interest received 16 30 
a cquisition of subsidiaries net of cash acquired 104 329
forward contracts used in net investment hedging 48 60
net cash from investing activities 384 526
financing activities
purchase of own shares for share incentive schemes 32 – 
increase in borrowings 16 – 543 
repayment of borrowings 16 244 1021
payment of finance lease liabilities 16 04 05
d ividends paid 184 154
net cash from financing activities 464 637
n et decrease in cash and cash equivalents 31 258
cash and cash equivalents at start of period 850 1076 
effect of exchange rate fluctuations on cash held 15 32 
cash and cash equivalents at period end 16 834 850 
a reconciliation of cash and cash equivalents to net borrowings is shown in note 16 annual report 2011  the morgan crucible company plc 83
overview business review governance financial statements
n otes t o th e cons olidated finan cial statements
1 accounting policies estimates and judgments
accounting policies
t he morgan crucible company plc the ‘company’ is a company incorporated in the uk
t he group financial statements consolidate those of the company and its subsidiaries together referred to as the ‘group’ and include the  
group’s interest in associates t he parent company financial statements present information about the company as a separate entity and not  
about its group t hese consolidated financial statements have been drawn up to s unday 1 january 2012 t he group maintains a 52 or 53week 
fiscal year ending on the s unday nearest to the a ccounting reference d ate of the company 1 january
t he group financial statements have been prepared and approved by the d irectors in accordance with international financial reporting standards 
as adopted by the eu adopted ifrss t he company has elected to prepare its parent company financial statements in accordance with  
uk generally a ccepted a ccounting practice these are presented on pages 129 to 138
t he accounting policies set out below have unless otherwise stated been applied consistently to all periods presented in these group  
financial statements
d uring the period the group has applied amendments to the following adopted ifrss ifrs 3 revised 2008 business combinations –  
unreplaced and voluntarily replaced sharebased payment awards ifrs 3 revised 2008 business combinations – transitional requirements  
for contingent consideration from a business combination that occurred before the effective date of the revised ifrs ias 24 related party disclosures  
ias 32 classification of rights issues  ifric 14 prepayments of a minimum funding requirement and ifric 19 extinguishing financial liabilities  
t he above amendments have not had any significant impact on the reported results or financial position of the group
a measurement convention
t he financial statements are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value  
derivative financial instruments and financial instruments availableforsale
b functional and presentation currency
t he group financial statements are presented in pounds sterling which is the company’s functional currency
c basis of consolidation
i subsidiaries
subsidiaries are entities controlled by the company control exists when the company has the power directly or indirectly to govern the financial 
and operating policies of an entity so as to obtain benefits from its activities in assessing control potential voting rights that presently are exercisable 
or convertible are taken into account t he financial statements of subsidiaries are included in the consolidated financial statements from the date that 
control commences until the date that control ceases
ii associates
a ssociates are those entities in which the group has significant influence but not control over the financial and operating policies s ignificant 
influence is presumed to exist when the group holds between 20 and 50 of the voting power of another entity a ssociates are accounted  
for using the equity method and are initially recognised at cost
iii transactions eliminated on consolidation
intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions are eliminated in preparing 
the consolidated financial statements unrealised gains arising from transactions with associates are eliminated against the investment to the extent  
of the group’s interest in the associate unrealised losses are eliminated in the same way as unrealised gains but only to the extent that there is no 
evidence of impairment 
d foreign currency
i foreign currency transactions
t ransactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction monetary assets and liabilities 
denominated in foreign currencies at the balance sheet date are translated to pounds sterling at the foreign exchange rate ruling at that date  
foreign exchange differences arising on translation are recognised in the income statement n onmonetary assets and liabilities that are measured  
in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction n onmonetary assets and 
liabilities denominated in foreign currencies that are stated at fair value are translated to pounds sterling at foreign exchange rates ruling at the  
dates the fair value was determined
ii financial statements of foreign operations
t he assets and liabilities of foreign operations including goodwill and fair value adjustments arising on consolidation are translated to pounds sterling 
at foreign exchange rates ruling at the balance sheet date t he revenues and expenses of foreign operations are translated to pounds sterling at an 
average rate for the period where this approximates to the foreign exchange rates ruling at the dates of the transactions foreign exchange differences 
arising on retranslation since the adoption of ifrs are recognised directly in other comprehensive income oci  84 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
n otes t o th e cons olidated finan cial statements
continued
1 accounting policies estimates and judgments continued
e derivative financial instruments
t he group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational financing 
and investment activities in accordance with its treasury policy the group does not hold or issue derivative financial instruments for trading purposes 
however derivatives that do not qualify for hedge accounting are accounted for at fair value through profit or loss
d erivative financial instruments are recognised initially at fair value t he gain or loss on remeasurement to fair value is recognised immediately in 
profit or loss however where derivatives qualify for hedge accounting recognition of any resultant gain or loss depends on the nature of the item 
being hedged
t he fair value of forward exchange contracts is the present value of their quoted forward price on the balance sheet date
f hedging
i cash flow hedges
where a derivative financial instrument is designated as a hedge of the variability in cash flows of a highly probable forecasted transaction  
the effective part of any gain or loss on the derivative financial instrument is recognised directly in oci t he associated gain or loss is removed  
from equity and recognised in the income statement in the period in which the transaction to which it relates occurs
when a hedging instrument expires or is sold terminated or exercised or the entity revokes designation of the hedge relationship but the hedged 
forecast transaction is still expected to occur the cumulative gain or loss at that point remains in the hedging reserve and is recognised in accordance 
with the above policy when the transaction occurs if the hedged transaction is no longer expected to take place the cumulative unrealised gain or 
loss recognised in the hedging reserve is recognised immediately in the income statement
ii hedge of monetary assets and liabilities 
where a derivative financial instrument is used to hedge economically the foreign exchange exposure of a recognised monetary asset or liability  
no hedge accounting is applied and any gain or loss on the hedging instrument is recognised in the income statement
iii hedge of net investment in foreign operations
t he portion of the gain or loss on an instrument used to hedge a net investment in a foreign operation that is determined to be an effective hedge  
is recognised directly in the translation reserve t he ineffective portion is recognised immediately in profit or loss when the hedged net investment 
is disposed of the relevant amount in the translation reserve is transferred to profit or loss on disposal
iv fair value hedges
where a derivative financial instrument is designated as a hedge of the variability in fair value of a recognised asset or liability or an unrecognised  
firm commitment all changes in the fair value of the derivative are recognised immediately in the income statement t he carrying value of the 
hedged item is adjusted by the change in fair value that is attributable to the risk being hedged even if it is normally carried at cost or amortised cost 
and any gains or losses on remeasurement are recognised immediately in the income statement
g property plant and equipment
i owned assets
items of property plant and equipment are stated at cost or at deemed cost less accumulated depreciation see below and impairment losses 
t he cost of selfconstructed assets includes the cost of materials direct labour and an appropriate proportion of production overheads  
where parts of an item of property plant and equipment have different useful lives they are accounted for as separate items of property  
plant and equipment
gains and losses on the disposal of property plant and equipment are determined by comparing the proceeds from disposal with the carrying 
amount of the asset gains and losses on the disposal of property are recognised in ‘other oneoff items’ in the income statement gains and losses 
on the disposal of plant and equipment are recognised in ‘operating costs’ in the income statement
ii leased assets
l eases under the terms of which the group assumes substantially all the risks and rewards of ownership are classified as finance leases l eased 
assets acquired by way of a finance lease are stated at an amount equal to the lower of their fair value and the present value of the minimum lease 
payments at inception of the lease less accumulated depreciation and impairment losses
iii depreciation
d epreciation is charged to the income statement on a straightline basis over the estimated useful lives of each part of an item of property plant and 
equipment l and is not depreciated d epreciation methods useful lives and residual values are reviewed at each balance sheet date t he estimated 
useful lives are as follows
– buildings 50 years
– plant and equipment and fixtures 320 years annual report 2011  the morgan crucible company plc 85
overview business review governance financial statements
1 accounting policies estimates and judgments continued
h intangible assets
i goodwill
a ll business combinations are accounted for by applying the purchase method goodwill represents the difference between the cost of the 
acquisition and the fair value of assets liabilities and contingent liabilities acquired
goodwill is allocated to cashgenerating units and is tested annually for impairment
ii research and development
expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding is recognised 
in the income statement as an expense as incurred
expenditure on development activities whereby research findings are applied to a plan or design for the production of new or substantially 
improved products and processes is capitalised if the product or process is technically and commercially feasible and the group has sufficient 
resources to complete development use and sale of products or processes t he expenditure capitalised includes the cost of materials direct  
labour and an appropriate proportion of overheads capitalised development expenditure is stated at cost less accumulated amortisation  
see below and impairment losses other development expenditure is recognised in the income statement as an expense as incurred
iii other intangible assets
other intangible assets that are acquired by the group are stated at cost less accumulated amortisation see below and impairment losses
iv amortisation
a mortisation is charged to the income statement on a straightline basis over the estimated useful lives of intangible assets unless such lives are 
indefinite goodwill and intangible assets with an indefinite useful life are systematically tested for impairment at each balance sheet date other 
intangible assets are amortised from the date they are available for use t he estimated useful lives are as follows
  
– capitalised development costs 3 years
– computer software 36 years
– customer relationships 1520 years
– t echnology 1520 years
– order book a mortised over the period in which the associated orders are fulfilled
i trade and other receivables
t rade and other receivables are initially stated at their fair value and subsequently measured at amortised cost less impairment losses  
see accounting policy ‘l’
j inventories
inventories are stated at the lower of cost and net realisable value n et realisable value is the estimated selling price in the ordinary course of 
business less the estimated costs of completion and selling expenses
t he cost of inventories is based on the firstin firstout principle and includes expenditure incurred in acquiring the inventories and bringing them to 
their existing location and condition in the case of manufactured inventories and work in progress cost includes an appropriate share of overheads 
based on normal operating capacity
  
k cash and cash equivalents 
cash and cash equivalents comprises cash balances and call deposits  86 the morgan crucible company plc  annual report 2011
1 accounting policies estimates and judgments continued
l impairment
t he carrying amounts of the group’s assets other than inventories and deferred tax assets are reviewed at each balance sheet date to determine 
whether there is any indication of impairment if any such indication exists the asset’s recoverable amount is estimated see i below
a n impairment loss is recognised whenever the carrying amount of an asset or its cashgenerating unit exceeds its recoverable amount impairment 
losses are recognised in the income statement
impairment losses recognised in respect of cashgenerating units are allocated first to reduce the carrying amount of any goodwill allocated to 
cashgenerating units group of units and then to reduce the carrying amount of the other assets in the unit group of units on a prorata basis 
when a decline in the fair value of an availableforsale financial asset has been recognised directly in oci and there is objective evidence that the 
asset is permanently impaired the cumulative loss that had been recognised directly in oci is recognised in profit or loss a significant or prolonged 
decline in an availableforsale financial asset’s fair value below its cost is objective evidence of impairment t he amount of the cumulative loss that  
is recognised in profit or loss is the difference between the acquisition cost and current fair value less any impairment loss on that financial asset 
previously recognised in profit or loss
i calculation of recoverable amount
t he recoverable amount of the group’s investments in receivables carried at amortised cost is calculated as the present value of estimated future 
cash flows discounted at the original effective interest rate ie the effective interest rate computed at initial recognition of these financial assets 
receivables with a short duration are not discounted t he recoverable amount of other assets is the greater of their fair value less costs to sell and 
value in use in assessing value in use the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects 
current market assessments of the time value of money and the risks specific to the asset for an asset that does not generate largely independent 
cash inflows the recoverable amount is determined for the cashgenerating unit to which the asset belongs
ii reversals of impairment
a n impairment loss in respect of a receivable carried at amortised cost is reversed if the subsequent increase in recoverable amount can be related 
objectively to an event occurring after the impairment loss was recognised
a n impairment loss in respect of an investment in an equity instrument classified as availableforsale is not reversed through profit or loss i f the  
fair value of a debt instrument classified as availableforsale increases and the increase can be objectively related to an event occurring after the 
impairment loss was recognised in profit or loss the impairment loss shall be reversed with the amount of the reversal recognised in profit or loss 
a n impairment loss in respect of goodwill is not reversed in respect of other assets an impairment loss is reversed if there has been a change  
in the estimates used to determine the recoverable amount and when there is an indication that the impairment loss may no longer exist
a n impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been 
determined net of depreciation or amortisation if no impairment loss had been recognised
m share capital
i ordinary share capital
ordinary shares are classified as equity
ii preference share capital
preference share capital is classified as equity if it is nonredeemable and any dividends are discretionary or is redeemable but only at the 
company’s option d ividends on preference share capital classified as equity are recognised as distributions within equity
iii repurchase of share capital and own shares treasury shares held by the morgan general employee benefit trust the trust
when share capital recognised as equity is repurchased the amount of the consideration paid which includes directly attributable costs is net  
of any tax effects and is recognised as a deduction from equity repurchased shares and the purchase of own shares by the t rust are presented  
as a deduction from total equity
overview business review governance financial statements
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 87
overview business review governance financial statements
1 accounting policies estimates and judgments continued
n employee benefits
i defined contribution plans
obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred
ii defined benefit plans
t he group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future 
benefit that employees have earned in return for their service in the current and prior periods that benefit is discounted to determine its present 
value and the fair value of any plan assets is deducted t he discount rate is the yield at the balance sheet date on aa creditrated bonds that have 
maturity dates approximating the terms of the group’s obligations t he calculation is performed by a qualified actuary using the projected unit credit 
method when the calculation results in a benefit to the group the recognised asset is limited to the total of any unrecognised past service costs 
and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the 
plan a n economic benefit is available to the group if it is realisable during the life of the plan or on settlement of the plan liabilities a ctuarial gains 
and losses differences between the expected and actual returns and the effect of changes in actuarial assumptions are recognised in full in oci in 
the year in which they arise
iii longterm service benefits
t he group’s net obligation in respect of longterm service benefits other than pension plans is the amount of future benefit that employees have 
earned in return for their service in the current and prior periods t he obligation is calculated using the projected unit credit method or similar 
approximation and is discounted to its present value and the fair value of any related assets is deducted t he discount rate is the yield at the balance 
sheet date on aa creditrated bonds that have maturity dates approximating the terms of the group’s obligations
iv sharebased payment transactions
t he grant date fair value of sharebased payment awards granted to employees is recognised as an expense with a corresponding increase in 
equity over the period that the employees become unconditionally entitled to the awards t he amount recognised as an expense is adjusted  
to reflect the actual number of awards for which the related service and nonmarket performance conditions are met such that the amount 
ultimately recognised as an expense is based on the number of awards that meet the related service and nonmarket performance conditions  
at the vesting date
o provisions
a provision is recognised in the balance sheet when the group has a present obligation legal or constructive as a result of a past event it is 
probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the obligation  
t he best estimate of the expenditure required to settled the present obligation is the amount that an entity would rationally pay to settle the 
obligation at the end of the reporting period or to transfer it to a third party at that time if the effect is material provisions are determined by 
discounting the expected future cash flows at a pretax rate that reflects current market assessments of the time value of money and where 
appropriate the risks specific to the liability
i restructuring
a provision for restructuring is recognised when the group has approved a detailed and formal restructuring plan and the restructuring has  
either commenced or has been announced publicly future operating costs are not provided for
ii onerous contracts
a provision for onerous contracts is recognised when the expected benefits to be derived by the group from a contract are lower than the 
unavoidable cost of meeting its obligations under the contract
iii environmental
in accordance with the group’s environmental policy a provision is recognised for known environmental issues which the group will rectify  
over the next few years in a number of jurisdictions companies have a constructive obligation to remedy any known environmental problems   88 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
1 accounting policies estimates and judgments continued
p trade and other payables
t rade and other payables are initially stated at their fair value and subsequently measured at amortised cost
q revenue
revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable  
net of returns trade discounts and volume rebates revenue is recognised when persuasive evidence exists that the significant risks and rewards  
of ownership have been transferred to the customer recovery of the consideration is probable the associated costs and possible return of goods 
can be estimated reliably there is no continuing management involvement with the goods and the amount of revenue can be measured reliably  
if it is probable that discounts will be granted and the amount can be measured reliably then the discount is recognised as a reduction of revenue  
as the sales are recognised
r expenses
i operating lease payments
payments made under operating leases are recognised in the income statement on a straightline basis over the term of the lease l ease incentives 
received are recognised in the income statement as an integral part of the total lease expense
ii finance lease payments
l eases where the group assumes substantially all of the risks and rewards of ownership are classified as finance leases as if the asset had been 
purchased outright a ssets acquired under finance leases are recognised as assets of the group and the capital elements of the leasing commitments 
are shown as obligations in creditors d epreciation is charged on a basis consistent with similar owned assets or over the lease term if shorter 
minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability t he finance charge 
is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability
iii net financing costs
n et financing costs comprise interest payable on borrowings calculated using the effective interest rate method interest receivable on funds 
invested gains and losses on hedging instruments that are recognised in the income statement expected return on ias 19 pension assets and 
interest on ias 19 obligations i nterest income is recognised in the income statement as it accrues using the effective interest method
borrowing costs interest and other costs are capitalised when they are incurred on raising specific funds to finance a major capital project which 
will be a significant productive asset or to the extent that funds borrowed generally are used for the purposes of obtaining a qualifying asset
s income tax
income tax on the profit or loss for the year comprises current and deferred tax income tax is recognised in the income statement except to the 
extent that it relates to items recognised directly in oci in which case it is recognised in oci
current tax is the expected tax payable on the taxable income for the year using tax rates enacted or substantively enacted at the balance sheet 
date and any adjustment to tax payable in respect of previous years
d eferred tax is provided using the balance sheet liability method providing for temporary differences between the carrying amounts of assets and 
liabilities for financial reporting purposes and the amounts used for taxation purposes t he following temporary differences are not provided for  
the initial recognition of goodwill the initial recognition of assets or liabilities that affect neither accounting nor taxable profit and differences relating 
to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future t he amount of deferred tax provided is 
based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantively 
enacted at the balance sheet date
a deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be 
utilised d eferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 89
overview business review governance financial statements
1 accounting policies estimates and judgments continued
t segment reporting
t he group has identified four reportable operating segments t hese have been identified on the basis of internal management reporting 
information that is regularly reviewed by the group’s chief operating d ecision maker in order to allocate resources and assess performance
segment results assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis 
unallocated items comprise mainly investments and related income loans and borrowings and related expenses corporate assets primarily the 
company’s headquarters and head office expenses and income tax assets and liabilities
u classification of financial instruments issued by the group
financial instruments issued by the group are treated as equity ie forming part of shareholders’ funds only to the extent that they meet the 
following two conditions
i they include no contractual obligations upon the group to deliver cash or other financial assets or to exchange financial assets or financial liabilities 
with another party under conditions that are potentially unfavourable to the group and
ii where the instrument will or may be settled in the company’s own equity instruments it is either a nonderivative that includes no obligation  
to deliver a variable number of the company’s own equity instruments or is a derivative that will be settled by the company exchanging a fixed 
amount of cash or other financial assets for a fixed number of its own equity instruments
t o the extent that this definition is not met the proceeds of issue are classified as a financial liability where the instrument so classified takes  
the legal form of the company’s own shares the amounts presented in these financial statements for calledup share capital and share premium 
account exclude amounts in relation to those shares
finance payments associated with financial liabilities are dealt with as part of finance expenses finance payments associated with financial 
instruments that are classified in equity are dividends and are recorded directly in equity
v investments in debt and equity securities
investments in debt and equity securities held by the group are classified as being availableforsale and are stated at fair value with any resultant 
gain or loss being recognised directly in oci in the fair value reserve except for impairment losses and in the case of monetary items such as debt 
securities foreign exchange gains and losses when these investments are derecognised the cumulative gain or loss previously recognised directly  
in equity is recognised in profit or loss where these investments are interestbearing interest calculated using the effective interest method is 
recognised in profit or loss
w interestbearing borrowings
interestbearing borrowings are recognised initially at fair value less attributable transaction costs s ubsequent to initial recognition interestbearing 
borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over  
the period of the borrowings on an effective interest basis
x dividends
d ividends payable are recognised as a liability in the period in which they are declared and approved
y step acquisitions 
step acquisitions arise when the group acquires control of an entity through successive share purchases t he identifiable assets liabilities and 
contingent liabilities acquired are recorded at fair value on the date that control is acquired for step acquisitions occurring before 3 january 2010  
the amount recognised as goodwill or negative goodwill is determined separately for each tranche acquired calculated as the difference between 
the fair value of the consideration paid and the fair value of the identifiable assets liabilities and contingent liabilities acquired in accordance with  
ifrs 3 business combinations 2004 a ny changes in the fair value of the identifiable assets and liabilities acquired between the acquisition date  
and the date that control is obtained are recorded in other reserves in equity to the extent that they have not previously been recognised in the 
income statement a ny future step acquisitions would be accounted for in accordance with ifrs 3 business combinations 2008
z new standards and interpretations not yet adopted
t here were no new standards or amendments to standards and interpretations not yet effective but available for early application that would have 
had any significant impact on the financial statements for the year ended 1 january 2012  90 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
1 accounting policies estimates and judgments continued
accounting estimates and judgments
judgments made by the d irectors in the application of these accounting policies that have a significant effect on the financial statements and estimates 
with a significant risk of material adjustment in the next year are discussed below
management discussed with the a udit committee the development selection and disclosure of the group’s critical accounting policies and 
estimates and the application of these policies and estimates t he following accounting estimates are subject to significant uncertainty
provisions
n ote 21 contains information about provisions provisions for closure and restructuring costs environmental issues and settlement of litigation  
are judgmental by their nature a mounts provided are the group’s best estimate of exposure based on currently available information
recognition of identifiable intangible assets and goodwill
n ote 3 contains information about intangible assets recognised on acquisition t hese primarily relate to existing contracts order books and 
customer relationships which are supported by longterm relationships with key customers t he group has estimated that the customer 
relationships have an economic life of 1520 years
remeasurement of deferred contingent consideration
n ote 3 contains information on deferred contingent consideration arising as an element of the fair value of consideration on acquisition  
d eferred contingent consideration is remeasured based upon the group’s best estimate of its future liability calculated in accordance with  
the acquisition agreement
impairment of goodwill
n ote 1 1 contains information about the assumptions relating to goodwill impairment tests including a sensitivity analysis
credit risk
n ote 19 contains information about the group’s exposure to credit risk including a sensitivity analysis t he group establishes both specific and 
general allowances for impairment losses against receivables t he general loss allowance is estimated based on historical data of payment statistics 
for similar financial assets
foreign currency exposure 
n ote 19 contains information about the foreign currency exposure of the group and risks in relation to foreign exchange movements including a 
sensitivity analysis
pension assumptions
t he principal actuarial assumptions applied to pensions are shown in note 20 including a sensitivity analysis t he actuarial evaluation of pension 
assets and liabilities is based on assumptions in respect of inflation future salary increases discount rates returns on investments and mortality rates 
relatively small changes in the assumptions underlying the actuarial valuations of pension schemes can have a significant impact on the net pension 
liability included in the balance sheet
taxation
t he level of current tax and deferred tax recognised is dependent on the tax rates in effect at the balance sheet date and on subjective judgements 
as to the outcome of decisions to be made by the tax authorities in the various tax jurisdictions around the world in which the group operates 
d eferred tax assets are recognised based on management’s assessment of the extent to which they are recoverable
going concern
t he group’s business activities together with the factors likely to affect its future development performance and position are set out in the business 
review on pages 22 to 51 t he financial position of the group its cash flows liquidity position and borrowing facilities are described in the business 
review in addition note 19 includes the group’s policies and processes for managing financial risk details of its financial instruments and hedging 
activities and its exposures to credit risk and liquidity risk
in a pril 201 1 the group completed the refinancing of its bank facility with a £150 million unsecured fiveyear multicurrency revolving credit facility 
t he bank facility headroom at 1 january 2012 was £150 million t he group meets its daytoday working capital requirements through local banking 
arrangements that are supported by the flexibility provided by the facility
t he group’s forecasts and projections taking account of reasonably possible changes in trading performance and exchange rates show the group 
operating comfortably within its debt financial covenants for the next 12 months t he current economic climate continues to have an impact on  
the group its customers and suppliers t he board fully recognises the challenges that lie ahead but after making enquiries the d irectors have  
a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future a ccordingly  
they continue to adopt the going concern basis in preparing the a nnual report and a ccounts
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 91
overview business review governance financial statements
2 segment reporting
t he group comprises the following four reportable operating segments
  morgan am t – the m organ am t business delivers highly engineered solutions built from a portfolio of advanced material technologies  
that includes carbon silicon carbide oxidebased ceramics and advanced polymeric composite materials
  molten metal systems – the molten metal systems business produces crucibles and foundry consumables
  t echnical ceramics – the t echnical ceramics business is a leading supplier of customerspecific applicationsengineered industrial products 
with core products manufactured from advanced materials including structural ceramic electroceramic and precious metals
  t hermal ceramics – the t hermal ceramics business provides thermal management solutions for hightemperature applications which benefit 
technically financially and environmentally from optimised thermal and energy efficiency management
t he information presented below represents the operating segments of the group
morgan engineered materials morgan ceramics
morgan am t molten metal systems t echnical ceramics t hermal ceramics consolidated
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
revenue from external customers 3691 3677 467 403 2851 2501 4001 3590  11010 10171 
divisional ebita
1
480 392 77 63 431 340 496 348 1484 1143 
unallocated costs 50 48
group ebita
2
1434 1095 
restructuring costs and other oneoff items – 16 – 01 11 17 30 47
19 79
underlying operating profit
3
1415 1016 
a mortisation of intangible assets 45 42 01 01 25 25 12 12 83 80
operating profit 1332 936 
finance income 277 290 
finance expense
495 549
profit before taxation 1114 677 
1 s egment profit is defined as d ivisional ebita  which is segment operating profit before restructuring costs other oneoff items and amortisation of intangible assets
2 group ebita is defined as operating profit before restructuring costs other oneoff items and amortisation of intangible assets
3 underlying operating profit is defined as operating profit before amortisation of intangible assets
t he above measures of profit are shown because the d irectors use them to measure the underlying performance of the business as referred to  
in the business review section of the a nnual report
t he group did not have any significant intersegment revenue between reportable operating segments in 201 1 and 2010
morgan engineered materials morgan ceramics
morgan am t molten metal systems t echnical ceramics t hermal ceramics consolidated
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
segment assets 3720 3789 314 313 2257 2248 2777 2731 9068 9081 
unallocated assets 1346 1251 
t otal assets 10414 10332 
segment liabilities 774 816 85 76 508 432 816 854 2183 2178 
unallocated liabilities 5529 5633 
t otal liabilities 7712 7811 
segment capital expenditure 115 68 18 10 62 49 82 63 277 190 
unallocated capital expenditure 10 01 
t otal capital expenditure 287 191   92 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
2 segment reporting continued
morgan engineered materials morgan ceramics
morgan am t molten metal systems t echnical ceramics t hermal ceramics consolidated
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
segment depreciation 101 101 13 14 86 90 111 118 311 323 
europe n orth a merica s outh a merica
a sia and 
rest of the world consolidated
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
2011
£m
2010
£m
revenue from external customers based on 
geographical location of selling company 4293 4227 3825 3466 454 419 2438 2059  11010 10171 
n oncurrent assets excluding deferred tax  
and financial instruments 2544 2600 1960 2016 106 113 924 904 5534 5633 
segment assets are based on the geographical location of the assets
revenue from external customers attributed to the uk the group’s country of domicile was £1787 million 2010 £1976 million and noncurrent 
assets excluding deferred tax and financial instruments attributed to the uk was £1764 million 2010 £1750 million
major customer
revenue from a range of different products to one customer of the group’s morgan am t business represents £810 million of the group’s total 
revenue 2010 £1065 million
3 acquisitions
acquisitions in 2011 
clearpower limited
in 2007 the group acquired 49 of the ordinary share capital of clearpower l imited a company that via two intermediary holding companies 
owns 100 of n p a erospace l imited on 5 january 2009 the group acquired the remaining 51 of the ordinary share capital of clearpower 
l imited for a total of £568 million an amount contingent on the future performance of clearpower l imited t his comprised £122 million in  
cash for 1 1 of the ordinary share capital and £446 million in discounted deferred contingent consideration for 40 of the ordinary share capital  
t he discounted deferred contingent consideration takes the form of four synthetic forwards each to acquire 10 of the ordinary share capital of 
clearpower l imited at future dates from 2010 onwards the amount of which are based on a fixed ebitda multiple of clearpower l imited 
on 1 a pril 2010 the group agreed to pay £249 million of this amount £172 million relates to the first of the four synthetic forwards noted above 
t he remaining payment of £77 million relates to deferred contingent consideration on the acquisition of 1 1 of clearpower l imited in 2009  
£124 million of the total was deferred for payment until 6 july 2010 in addition to these payments the group paid £23 million to the employee 
benefit t rust in accordance with the terms of the original acquisition agreement
on 31 march 201 1 the group agreed to pay £91 million t his amount relates to the second of the four synthetic forwards noted above in addition 
to this payment the group paid £08 million to the employee benefit t rust in accordance with the terms of the original acquisition agreement 
in accordance with ias 32 financial instruments presentation  the group has also recognised a liability representing the estimated present value  
of the redemption amount in respect of its obligation to acquire the remaining 20 of the ordinary share capital of clearpower l imited it has 
treated these shares as if they were acquired by the group on 5 january 2009 since this consideration is contingent on the future performance  
of clearpower l imited this liability is remeasured at each reporting date with any adjustments recorded through goodwill in accordance with  
ifrs 3 business combinations 2004 it is possible that the carrying amount of this liability will increase or decrease if the future performance  
of clearpower l imited varies from current expectations
a t 1 january 2012 the group carries a total liability of £1 13 million in respect of deferred consideration t his is included within current and 
noncurrent nontrade payables t he unwinding of the discount on this liability of £05 million is recorded as a finance expense see note 6  
t he adjustment through goodwill since the date of acquisition as a result of the remeasurement is £41 million
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 93
overview business review governance financial statements
3 acquisitions continued
other acquisitions in 2011
t here were no other business combinations in 201 1
acquisitions in 2010
clearpower limited
a s disclosed above in 2007 the group acquired 49 of the ordinary share capital of clearpower l imited a company that via two intermediary 
holding companies owns 100 of n p a erospace l imited on 5 january 2009 the group acquired the remaining 51 of the ordinary share capital  
of clearpower l imited for a total of £568 million an amount contingent on the future performance of clearpower l imited t his comprised  
£122 million in cash for 1 1 of the ordinary share capital and £446 million in discounted deferred contingent consideration for 40 of the 
ordinary share capital
on 1 a pril 2010 the group agreed to pay £249 million of this amount £172 million related to the first of the four synthetic forwards noted above 
t he remaining payment of £77 million related to additional deferred contingent consideration on the acquisition of 1 1 of clearpower l imited  
in 2009 £124 million of the total was deferred for payment until 6 july 2010 in addition to these payments the group paid £23 million to the 
employee benefit t rust in accordance with the terms of the original acquisition agreement
a t 2 january 201 1 this liability was remeasured and reduced to £17 3 million and represents the total liability held in respect of deferred consideration  
in relation to the acquisition of clearpower l imited t his was included within current and noncurrent nontrade payables t he unwinding of the 
discount on this liability of £12 million was recorded as a finance expense t he adjustment through goodwill since the date of acquisition as a result 
of the remeasurement was £68 million
changsha hairong new materials co ltd
on 3 d ecember 2010 shanghai morgan carbon co l td a 70 owned subsidiary of the group acquired 100 of the ordinary share capital  
of changsha hairong n ew materials co l td t his comprised of £54 million in cash for 863 of the ordinary share capital and £08 million  
in deferred consideration for the remaining 137 of the ordinary share capital t he deferred consideration took the form of a synthetic forward  
to acquire 137 of the ordinary share capital of changsha hairong n ew materials co l td in january 201 1 for a fixed amount of £08 million 
consideration of the £08 million consideration £06 million was paid in advance in 2010 leaving £02 million of cash paid in january 201 1 
a t 2 january 201 1 a £02 million liability was included within current nontrade payables representing the present value of the remaining redemption 
amount in respect of the group’s obligation to acquire the remaining 137 of the ordinary share capital of changsha n ew materials co l td 
t he principal activity of changsha hairong n ew materials co l td is the production of graphite materials for anodes used in lithium ion batteries  
for portable electronics and electric vehicles
t he carrying value of assets and liabilities acquired was £20 million fair value adjustments were made to reflect the fair value of the assets  
and liabilities acquired comprising £33 million of assets in respect of technology £29 million and customer relationships £04 million  
working capital assets of £02 million goodwill of £12 million and a deferred tax liability of £05 million on the temporary difference created  
by the fair value adjustments
goodwill represents future economic benefits arising from assets that are not capable of being identified individually or recognised as separate 
assets t his includes acquirerspecific synergies such as crossselling opportunities and the enhancement of technologies and processes between 
existing and acquired sites
in the period since acquisition changsha hairong n ew materials co l td contributed revenue of £06 million and profit after taxation of £nil million 
to the consolidated net profit for the period t he group revenue and profit after taxation had the acquisition taken place at the beginning of the 
period would be £10198 million and £483 million respectively
other acquisitions in 2010
t here were no other business combinations in 2010  94 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
4 operating costs
2011
£m
2010
£m
change in stocks of finished goods and work in progress 23 16 
raw materials and consumables 3202 3018 
other external charges 1761 1686 
t otal 4940 4720 
employee costs
– wages and salaries 2541 2395 
– equitysettled sharebased payments 56 31 
– social security costs 485 450 
– other pension costs 101 106 
t otal 3183 2982 
d epreciation
– owned assets 309 321 
– assets held under finance leases 02 02 
t otal 311 323 
rentals under operating leases
– hire of plant and machinery 31 31 
– other operating leases 53 51 
t otal 84 82 
other operating charges and income
– n et foreign exchange gains 13 23
– other operating income and charges 1071 992 
t otal 1058 969 
t otal operating costs before restructuring costs other oneoff items and amortisation of intangible assets 9576 9076 
restructuring costs and other oneoff items
– employment termination costs 51 59 
– other site rationalisation and closure costs 05 26 
– profit on disposal of properties 24 06
– n et pension credit 13 – 
t otal 19 79 
a mortisation of intangible assets 83 80 
t otal operating costs 9678 9235 
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 95
overview business review governance financial statements
4 operating costs continued
t he group recognised £143 million in expense in respect of research and development 2010 £159 million
a summary of the audit and nonaudit fees in respect of services provided by kp mg a udit plc charged to operating profit in the year ended  
1 january 2012 is set out below
2011
£m
2010
£m
fees payable to the company’s auditor for the audit of the company’s annual accounts 04 04 
fees payable to the company’s auditor and its associates for other services
– t he audit of the company’s subsidiaries pursuant to legislation and other services 17 15 
– other nonaudit services 03 01 
24 20 
5 staff numbers
t he average number of persons employed by the group including d irectors during the year analysed by geographical area and reporting segment 
was as follows
n umber of employees
2011 2010
united kingdom 1552 1459
rest of europe 1668 1637
n orth a merica 3356 3246
south a merica 417 385
a sia and rest of the world 3035 2884
10028 9611
morgan am t 3625 3463
molten metal systems 480 432
t echnical ceramics 2724 2590
t hermal ceramics 3189 3117
corporate 10 9
10028 9611  96 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
6 net finance income and expense
2011
£m
2010
£m
recognised in profit or loss
interest income on bank deposits measured at amortised cost 13 10 
expected return on ias 19 scheme assets 264 260 
gain on foreign exchange derivatives in respect of financial indebtedness – 20 
finance income 277 290 
interest expense on financial liabilities measured at amortised cost 217 257
interest on ias 19 obligations 273 280
interest expense on unwinding of discount on deferred consideration 05 12
finance expense 495 549
n et financing costs recognised in profit or loss 218 259
recognised directly in equity
n et change in fair value of availableforsale financial assets 01 02 
cash flow hedges
– effective portion of changes in fair value of cash flow hedges 03 06 
– transferred to profit or loss 02 05
effective portion of change in fair value of net investment hedge 10 06
foreign currency translation differences for foreign operations 54 35 
42 32 
7 taxation – income tax expense
recognised in the income statement
2011
£m
2010
£m
current tax expense
current year 304 233 
a djustments for prior years 05 25
299 208 
deferred tax expense
origination and reversal of temporary differences 27 11
t otal income tax expense in income statement 326 197 
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 97
overview business review governance financial statements
7 taxation – income tax expense continued
reconciliation of effective tax rate
2011
£m
2011

2010
£m
2010

profit before tax 1114 677 
income tax using the domestic corporation tax rate 295 265 189 280 
n ondeductible expenses 33 30 06 08 
t emporary differences not equalised in deferred tax 28 25 28 41 
overprovided in prior years 04 04 25 37
other including the impact of overseas tax rates 30 27 01 01
326 293 197 291 
income tax recognised directly in equity
t ax effect on components of other comprehensive income
– d eferred tax associated with defined benefit schemes 59 26 
– other 01 – 
t otal income tax recognised directly in equity 60 26 
8 restructuring costs and other oneoff items
costs of restructuring were £56 million 2010 £85 million
included within restructuring costs and other oneoff items is a net pension credit of £13 million 2010 nil arising from the following
  for the united kingdom defined benefit pension schemes future indexation of current employees’ accrued benefits will be set by reference  
to the consumer prices index cpi rather than the retail prices index rpi t his change has resulted in a oneoff pension credit negative past 
service cost of £31 million
  in n orth a merica a total charge of £18 million arose as a result of a charge of £16 million in respect of a provision relating to a usa pension plan 
and a charge of £02 million in respect of the curtailment and settlement loss as a result of closure of three canadian defined benefit schemes  98 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
9 earnings per share
basic earnings per share
t he calculation of basic earnings per share at 1 january 2012 was based on the following
2011
£m
2010
£m
profit attributable to equity holders of the company 730 425 
weighted average number of ordinary shares
issued ordinary shares at the beginning of the period 272166025 270206256 
effect of shares issued in period and treasury shares held by the company 479322 378040
weighted average number of ordinary shares during the period 271686703 269828216 
basic earnings per share pence 269p 158p
diluted earnings per share
t he calculation of diluted earnings per share at 1 january 2012 was based on the following
2011
£m
2010
£m
profit attributable to equity holders of the company 730 425 
diluted weighted average number of ordinary shares
weighted average number of ordinary shares during the period 271686703 269828216 
effect of share optionsincentive schemes 12724153 13993035 
d iluted weighted average number of ordinary shares during the period 284410856 283821251 
diluted earnings per share pence 257p 150p
underlying earnings per share
t he calculation of underlying earnings per share at 1 january 2012 was based on the following
2011
£m
2010
£m
operating profit before amortisation less net financing costs income tax expense  
and noncontrolling interests 813 505 
weighted average number of ordinary shares during the period calculated as above 271686703 269828216 
earnings per share before amortisation of intangible assets pence 299p 187p
diluted underlying earnings per share
t he calculation of diluted underlying earnings per share at 1 january 2012 was based on the following
2011
£m
2010
£m
operating profit before amortisation less net financing costs income tax expense  
and noncontrolling interests
813 505 
d iluted weighted average number of ordinary shares during the period calculated as above 284410856 283821251 
diluted earnings per share before amortisation of intangible assets pence 286p 178p
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 99
overview business review governance financial statements
10 property plant and equipment
l and and
buildings
£m
plant and
equipment
and fixtures
£m
total
£m
cost
balance at 4 january 2010 1627 4956 6583 
a dditions and acquisitions through business combinations 27 178 205 
d isposals 02 40 42
effect of movement in foreign exchange 20 122 142 
balance at 2 january 201 1 1672 5216 6888 
balance at 3 january 201 1 1672 5216 6888 
a dditions 13 255 268 
d isposals 125 81 206
effect of movement in foreign exchange 14 48 62
balance at 1 january 2012 1546 5342 6888 
depreciation and impairment losses
balance at 4 january 2010 530 3291 3821 
d epreciation charge for the year 48 275 323 
d isposals – 31 31
effect of movement in foreign exchange 06 77 83 
balance at 2 january 201 1 584 3612 4196 
balance at 3 january 201 1 584 3612 4196 
d epreciation charge for the year 48 263 311 
impairment loss – 03 03 
d isposals 110 77 187
effect of movement in foreign exchange – 33 33
balance at 1 january 2012 522 3768 4290 
carrying amounts
a t 3 january 2010 1097 1665 2762 
a t 2 january 201 1 1088 1604 2692 
at 1 january 2012 1024 1574 2598 
assets pledged as security for liabilities
a t 1 january 2012 assets with a carrying amount of £33 million 2 january 201 1 £57 million are subject to registered debentures to secure  
bank loans and other liabilities see note 18  100 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
11 intangible assets
goodwill
£m
order
book
£m
customer
relationships
£m
t echnology
and
trademarks
£m
capitalised
development
£m
computer
software
£m
total
£m
cost
balance at 4 january 2010 2068 93 750 195 22 117 3245 
a dditions externally purchased and acquisitions through business 
combinations 12 – 04 29 – 06 51 
d isposals – – – – – 01 01
remeasurement of goodwill 138 – – – – – 138
effect of movement in foreign exchange 31 – 19 01 – 01 52 
balance at 2 january 201 1 1973 93 773 225 22 123 3209 
balance at 3 january 201 1 1973 93 773 225 22 123 3209 
a dditions externally purchased 03 – – – – 35 38 
d isposals – – – – – 27 27
remeasurement of goodwill 27 – – – – – 27 
effect of movement in foreign exchange 05 – 01 02 – 07 05 
balance at 1 january 2012 1998 93 774 227 22 138 3252 
amortisation and impairment losses
balance as at 4 january 2010 – 92 78 19 04 83 276 
a mortisation charge for the year – 01 43 15 07 14 80 
d isposals – – – – – 01 01
effect of movement in foreign exchange – – 03 – – 01 04 
balance at 2 january 201 1 – 93 124 34 11 97 359 
balance at 3 january 201 1 – 93 124 34 11 97 359 
a mortisation charge for the year – – 44 18 07 14 83 
d isposals – – – – – 27 27
effects of movement in foreign exchange – – – 01 – 03 04 
balance at 1 january 2012 – 93 168 53 18 87 419 
carrying amounts
a t 3 january 2010 2068 01 672 176 18 34 2969 
a t 2 january 201 1 1973 – 649 191 11 26 2850 
at 1 january 2012 1998 – 606 174 04 51 2833 
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 101
overview business review governance financial statements
11 intangible assets continued
impairment test for cashgenerating units containing goodwill
in accordance with the requirements of ias 36 impairment of assets  goodwill is allocated to the group’s cashgenerating units that are expected to 
benefit from the synergies of the business combination that gave rise to the goodwill
goodwill is attributed to each cashgenerating unit as follows
2011
£m
2010
£m
morgan am t 1075 1048 
molten metal systems 19 22 
t echnical ceramics 694 693 
t hermal ceramics 210 210 
1998 1973 
each cashgenerating unit is assessed for impairment annually and whenever there is an indication of impairment     
a s part of the annual impairment test review the carrying value of goodwill has been assessed with reference to its value in use reflecting the 
projected discounted cash flows of each cashgenerating unit to which goodwill has been allocated
t he key assumptions used in determining value in use relate to growth rates and discount rates
t he cash flow projections in year one are based on budgeted operating results for the forthcoming year
growth rates for the period not covered by budgets are specific to each operating segment ranging from 20 to 50 2010 40 to 60 
t hese growth rates reflect the products industries and countries in which the operating segments operate t hese medium to longterm growth 
rates have been reviewed by management during 201 1 and are considered to be appropriate
given the similar risk profiles of each of the operating segments together with common funding from the central group t reasury function  
a standard pretax discount rate of 139 2010 122 based on the group’s weighted average cost of capital has been used in discounting  
the projected cash flows and calculating the terminal value at the end of year five t his discount rate has been used as the group believes it suitably 
approximates the rate used by endmarket participants
t he d irectors have considered the following individual sensitivities and are confident that no impairment would arise in any of the following  
three circumstances
  if the pretax discount rate was increased by 550bps to 194 2010 650bps to 187
  if no growth was assumed for years two to five and in the calculation of terminal value and
  if the cash flow projections of all businesses were reduced by 35 2010 40  102 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
12 investments
2011
£m
2010
£m
noncurrent investments
investment in associate 15 15 
equity securities availableforsale 46 56 
61 71
investment in associates
integrated survivability technologies limited
d uring 2009 the group acquired a 50 stake in integrated survivability t echnologies l imited t he principal activity of integrated survivability 
t echnologies l imited is acting as prime contractor for delivery of military vehicles and provision of related support services t otal consideration  
paid including fees was £15 million
t he group’s share of profit after tax in integrated survivability t echnologies l imited was £nil 2010 £nil
summary financial information for the group’s investment in integrated survivability t echnologies l imited not adjusted for the 50 ownership 
held by the group
2011
£m
2010
£m
current assets 139 105 
n oncurrent assets – 01 
t otal assets 139 106 
current liabilities 111 75 
t otal liabilities 111 75 
revenue 440 732 
profit – –
equity securities availableforsale
t he equity securities availableforsale represent an investment in a mutual fund a 10 increase in the unit price would increase the fair value of 
the investments by £03 million
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 103
overview business review governance financial statements
13 recognised deferred tax assets and liabilities
d eferred tax assets and liabilities are attributable to the following
assets
2011
£m
a ssets
2010
£m
liabilities
2011
£m
l iabilities
2010
£m
net
2011
£m
n et
2010
£m
property plant and equipment – – 231 223 231 223 
intangible assets – – 214 229 214 229 
employee benefits 284 228 – – 284 228
provisions 70 71 – – 70 71
t ax value of loss carried forward recognised 55 64 – – 55 64
other items 02 22 – – 02 22
411 385 445 452 34 67 
unrecognised deferred tax assets
d eferred tax assets have not been recognised in respect of the following items
2011
£m
2010
£m
d eductible temporary differences 474 462
t ax losses 710 620
1184 1082
movements in temporary differences during the year
balance
3 january
2010
£m
recognised
in income
£m
recognised
directly
in equity
£m
balance
2 january
2011
£m
recognised
in income
£m
recognised
directly
in equity
£m
balance
1 january
2012
£m
property plant and equipment 233 10 – 223 08 – 231 
intangible assets 242 13 – 229 15 – 214 
employee benefits 198 04 26 228 03 59 284
provisions 54 17 – 71 01 – 70
t ax value of loss carried forward recognised 75 11 – 64 09 – 55
others 45 23 – 22 21 01 02
103 10 26 67 27 60 34 
d eferred income tax of £20 million is provided on the potential unremitted earnings of overseas subsidiary undertakings  104 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
14 inventories
2011
£m
2010
£m
raw materials and consumables 611 656 
work in progress 415 358 
finished goods 640 596 
1666 1610 
t he group holds consignment inventory amounting to £206 million 2010 £179 million which is not reflected in the balance sheet t he majority 
of this balance is for precious metals which are held on consignment by a subsidiary and for which it is invoiced only when the material is required 
d uring the year provisions of £18 million were made against inventories and recognised in operating expenses 2010 £44 million
15 trade and other receivables
2011
£m
2010
£m
current
t rade receivables due from associate 104 48 
other trade receivables 1594 1559 
l oans and receivables 1698 1607 
other nontrade receivables and prepayments 255 240 
1953 1847 
t he group’s exposure to credit and currency risks related to trade and other receivables is disclosed in note 19
16 cash and cash equivalents
2011
£m
2010
£m
bank balances 717 680 
cash deposits 117 170 
cash and cash equivalents 834 850 
reconciliation of cash and cash equivalents to net debt
2011
£m
2010
£m
opening borrowings 3212 3603
n et decrease in borrowings 244 478 
payment of finance lease liabilities 04 05 
effect of movements in foreign exchange on borrowings 24 92
closing borrowings 2988 3212
cash and cash equivalents 834 850 
closing net debt 2154 2362
n et debt is defined as interestbearing loans and borrowings bank overdrafts less cash and cash equivalents
17 capital and reserves
translation reserve
t he translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations  
as well as from the translation of liabilities that hedge the company’s net investment in a foreign subsidiary and forward contracts used for net 
investment hedging
hedging reserve
t he hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to 
hedged transactions that have not yet occurred
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 105
overview business review governance financial statements
17 capital and reserves continued 
fair value reserve
t he fair value reserve includes the cumulative net change in the fair value of availableforsale investments until the investment is derecognised
special reserve
a s pecial resolution to cancel the share premium a ccount was passed at the a nnual general meeting of the company held on 1 1 june 1993  
t his cancellation was confirmed by an order of the high court of justice chancery d ivision on 14 july 1993 t he amount of £889 million 
standing to the credit of the share premium a ccount on 14 july 1993 was transferred to the special reserve against which goodwill on consolidation 
could be written off t his reserve together with the amounts standing to the credit of the share premium a ccount on 12 october 1990 of  
£715 million on 19 june 1987 of £389 million and on 27 july 1989 of £123 million which were transferred following previous orders of the  
high court becomes distributable to the extent of subsequent increases in issued share capital and share premium account
capital redemption reserve
t he capital redemption reserve arose when the company redeemed preference shares wholly out of distributable profits
other reserves
t he other reserves includes the £108 million increase in the year ended 3 january 2010 in the fair value of the group’s original 49 interest in 
clearpower l imited from the date of its original acquisition to 5 january 2009 excluding goodwill and to the extent not previously recognised as the 
group’s share of the results of clearpower l imited
retained earnings
t he company has acquired own shares to satisfy the requirements of the various share option incentive schemes t he number of treasury  
shares held at the year end was 2044458 2010 1007003 2044458 shares were held by t he morgan general employee benefit t rust  
2010 1007003 and nil shares were held by the company 2010 nil a ll rights conferred by those shares are suspended until they are reissued 
dividends
t he following ordinary dividends were declared and paid by the company
per share total
2011
pence
2010
pence
2011
£m
2010
£m
2009 interim – 250 – 68 
2009 final – 450 – 121 
2010 interim 270 – 73 –
2010 final 500 – 136 –
t otal 770 700 209 189
t he company also declared the following ordinary dividend
per share
2011
pence
total
2011
£m
201 1 interim 325 89
325 89
t his ordinary dividend had not been paid by the company as at 1 january 2012 and has not been provided for at the year end 
in addition to the above the company also declared and paid dividends on the 55 cumulative first preference shares and 50 cumulative 
second preference shares
a fter 1 january 2012 the following dividends were proposed by the d irectors for 201 1 t hese dividends have not been provided for and there are 
no income tax consequences
£m
600 pence per qualifying ordinary share 164 
55 cumulative first preference shares see note 30 –
50 cumulative second preference shares see note 30 –
164   106 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
17 capital and reserves continued 
a uthorised issued
calledup share capital
2011
£m
2010
£m
2011
£m
2010
£m
equity share capital
434650876 2010 434650876 ordinary shares of 25 pence each 1087 1087 
fully paid 273139791 2010 272166025 ordinary shares of 25 pence each 683 681 
1087 1087 683 681 
preference share capital
125327 authorised and issued 55 cumulative first preference shares  
of £1 each fully paid
01 01 01 01 
31 1954 authorised and issued 50 cumulative second preference shares  
of £1 each fully paid 03 03 03 03 
t otal preference share capital 04 04 04 04 
total share capital 1091 1091 687 685 
ordinary shares preference shares
number of shares in issue 2011 2010 2011 2010
in issue at beginning of period 272166025 270206256 437281 437281
partial consideration relating to deferred consideration  
on purchase of clearpower l imited – 47175 – – 
scrip dividend 973766 1912594 – – 
in issue at end of period 273139791 272166025 437281 437281
a s at the date of this report 274802078 ordinary shares have been issued 2010 27291 1009
t he holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of 
the company
d etails of options outstanding in respect of ordinary shares are given in note 20
t he 55 cumulative first preference shares of £1 each and the 50 cumulative second preference shares of £1 each confer on the holders 
thereof the right to receive a cumulative preferential dividend at the rate of 55 and 50 respectively calculated up to 30 june and 31 d ecember 
respectively in every year t he first and second cumulative preference shares shall not entitle the holders thereof to attend or vote at any general 
meeting unless either
i  the meeting is convened to consider any resolutions for reducing the capital or authorising any issue of debentures or debenture stock  
or increasing the borrowing powers of the board under the a rticles of a ssociation of the company or winding up or sanctioning a sale of the 
undertaking or altering the a rticles in any manner affecting their respective interests or any other resolutions directly altering their respective 
rights and privileges or
ii  at the date of the notice convening the general meeting the preference dividend is upwards of one month in arrears from the payment date of 
any halfyearly instalment
on a return of capital on a windingup the assets of the company available for distribution shall be applied    
first in payment to the holders of the first preference shares of the amounts paid up on such shares together with interest at the rate of 55 pa 
second in payment to the holders of the second preference shares of the amounts paid up on such shares together with interest at the rate  
of 50 pa
t hird in repaying the capital paid up or credited as paid up on the ordinary shares
fourth any surplus shall be distributed rateably amongst the holders of the ordinary shares in proportion to the nominal amount paid up on their 
respective holdings of shares in the company
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 107
overview business review governance financial statements
18 interestbearing loans and borrowings
t his note provides information about the contractual terms of the group’s interestbearing loans and borrowings which are measured at amortised 
cost for more information about the group’s exposure to interest rate and foreign currency risk see note 19
2011
£m
2010
£m
noncurrent liabilities
senior n otes 2817 2870 
multicurrency revolving facility – 159 
bank and other loans 53 69 
obligations under finance leases 03 06 
2873 3104 
current liabilities
senior n otes 59 58 
bank and other loans 53 45 
obligations under finance leases 03 05 
115 108 
terms and debt repayment schedule
t he terms and conditions of outstanding loans were as follows
carrying amount
n ominal
interest rate
year of
maturity
2011
£m
2010
£m
684 us d ollar senior n otes 2013 684 2013 120 178 
570 us d ollar senior n otes 2014 570 2014 643 638 
365 euro senior n otes 2015 365 2015 337 345 
432 euro senior n otes 2017 432 2017 169 173 
612 us d ollar senior n otes 2017 612 2017 1125 1116 
626 us d ollar senior n otes 2019 626 2019 482 478 
bank and other loans 170800 up to 2012 106 273 
obligations under finance leases 600 up to 2014 06 11 
t otal interestbearing loans and borrowings 2988 3212 
finance lease liabilities
finance lease liabilities are payable as follows
minimum
lease
payments
2011
£m
interest
2011
£m
principal
2011
£m
minimum
lease
payments
2010
£m
interest
2010
£m
principal
2010
£m
l ess than one year 03 – 03 06 – 06 
between one and five years 03 – 03 06 01 05 
more than five years – – – – – – 
06 – 06 12 01 11 
bank and other loans include £07 million 2010 £04 million of loans secured on the assets of the group 
a s at 1 january 2012 the group had available headroom under the bank syndication of £1500 million 2010 £1629 million  108 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
19 financial risk management
overview
net liabilities
t he group has exposure to the following risks from its use of financial instruments
  credit risk
  liquidity risk
  market risk
t his note presents information about the group’s exposure to each of the above risks and the group’s management of capital further quantitative 
disclosures are included throughout these consolidated financial statements       
t he board delegates the establishment and implementation of the systems for internal control and risk management to the operating d ivisions 
which are responsible for the identification and evaluation of significant risks applicable to their area of business together with the design and 
operation of suitable internal controls t he board delegates the monitoring and review of the internal control and risk management systems to the 
a udit committee assisted by the risk management committee t he risk management committee which is chaired by the chief financial officer 
reviews the full range of risks faced by morgan crucible as a group ensures there are adequate systems in place and evaluates their effectiveness 
where necessary the risk management committee will initiate action to improve the systems and ensure compliance   
  credit risk
credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations  
and arises principally from the group’s receivables from customers and investment securities       
t he group has set up notional cash pooling agreements with a number of banks under the notional cash pooling agreement the group has the 
legal right to offset liabilities on undrawn bank accounts against surplus balances        
trade and other receivables
t he group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer t he demographics of the group’s 
customer base including the default risk of the industry and country in which customers operate has less of an influence on credit risk  
management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis credit evaluations are performed  
on all customers requiring credit over a certain amount t he group does not require collateral in respect of financial assets   
t he group serves thousands of customers many of these have purchased the same product for several years and in some cases decades  
others have modified and enhanced designs or adopted the same components into new products extending the lifecycle of the components  
that the group supplies t he group’s level of customer retention is very high particularly with its major accounts and although the top 20 ranking 
will alter from year to year many of the names remain consistent over time
t he group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables and 
investments t he main components of this allowance are a specific loss component that relates to individually significant exposures and a general 
loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified t he general loss allowance 
is determined based on historical data of payment statistics for similar financial assets       
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 109
overview business review governance financial statements
19 financial risk management continued
investments
t he group limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have a sound credit rating  
given these high credit ratings management does not expect any counterparty to fail to meet its obligations
exposure to credit risk
t he carrying amount of financial assets represents the maximum credit exposure t he maximum exposure to credit risk at the reporting date was
carrying amount
2011
£m
2010
£m
a vailableforsale financial assets 46 56 
l oans and receivables 1698 1607 
cash and cash equivalents 834 850 
2578 2513 
t he maximum exposure to credit risk for trade receivables at the reporting date by business was
carrying amount
2011
£m
2010
£m
morgan am t 581 545 
molten metal systems 62 59 
t echnical ceramics 334 311 
t hermal ceramics 721 692 
1698 1607 
t he maximum exposure to credit risk for trade receivables at the reporting date by geographic region was
carrying amount
2011
£m
2010
£m
europe 634 660 
n orth a merica 497 428 
south a merica 65 80 
a sia and rest of the world 502 439 
1698 1607   110 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
19 financial risk management continued
impairment losses
t he ageing of trade receivables at the reporting date was
gross
2011
£m
impairment
2011
£m
gross
2010
£m
impairment
2010
£m
n ot past due 1363 16 1235 15
past due 030 days 219 05 243 06
past due 3160 days 54 02 57 02
past due 6190 days 63 04 76 05
past due more than 90 days 93 46 88 39
1792 73 1699 67
general impairment allowance 21 25
94 92
t he movement in the allowance for impairment in respect of trade receivables during the year was as follows
2011
£m
2010
£m
balance at beginning of period 92 102 
increasedecrease in allowance for impairment 02 10
balance at end of period 94 92 
a specific impairment allowance may be created in respect of an individual trade receivable for which full recovery is doubtful a s at 1 january 2012 
and 2 january 201 1 there were no specific impairment allowances that were significant to the group i n addition local management may create an 
impairment allowance to reflect their experience of the historical recoverability of trade receivables past due in the respective markets in which their 
businesses operate
t he allowances in the accounts in respect of trade receivables are used to record impairment losses unless the group is satisfied that no recovery  
of the amount owing is possible at the point the amount is considered irrecoverable it is written off against the financial asset directly
concentrations of credit risk
t rade receivables from one customer of the group’s morgan am t operating segment represent £122 million of the group’s total trade 
receivables 2010 £88 million 
  liquidity risk
l iquidity risk is the risk that the group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by cash 
t he group’s approach to managing liquidity is to ensure as far as possible that it will always have sufficient liquidity to meet its liabilities when due 
under both normal and stressed conditions
t he group seeks a balance between certainty of funding and a flexible costeffective borrowing structure t he policy is to ensure that the group 
has sufficient liquidity available to meet all foreseeable needs
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 111
overview business review governance financial statements
19 financial risk management continued
t he following are the undiscounted contracted maturities of financial liabilities including interest payments
effective
interest
rate
carrying
amount
£m
contractual
cash flows
£m
less than
1 year
£m
12
years
£m
25
years
£m
2011
more than
5 years
£m
nonderivative financial liabilities
684 us d ollar senior n otes 2013 684 120 126 65 61 – – 
570 us d ollar senior n otes 2014 570 643 754 37 37 680 – 
365 euro senior n otes 2015 365 337 379 12 12 355 – 
432 euro senior n otes 2017 432 169 208 07 07 22 172 
612 us d ollar senior n otes 2017 612 1125 1540 69 69 207 1195 
626 us d ollar senior n otes 2019 626 482 724 30 30 91 573 
bank and other loans 170800 106 106 53 53 – – 
obligations under finance leases 600 06 06 03 01 02 – 
t rade and other payables 1213 1213 1160 53 – – 
derivative financial liabilities
forward exchange contracts as cash flow hedges 08 08 08 – – –
forward exchange contracts as fair value hedges 04 04 04 – – –
4213 5068 1448 323 1357 1940 
effective
interest
rate
carrying
amount
£m
contractual
cash flows
£m
l ess than
1 year
£m
12
years
£m
25
years
£m
2010
more than
5 years
£m
nonderivative financial liabilities
684 us d ollar senior n otes 2013 684 178 192 68 64 60 – 
570 us d ollar senior n otes 2014 570 638 784 36 36 712 – 
365 euro senior n otes 2015 365 345 403 13 13 377 – 
432 euro senior n otes 2017 432 173 220 07 07 22 184 
612 us d ollar senior n otes 2017 612 1116 1596 68 68 205 1255 
626 us d ollar senior n otes 2019 626 478 749 30 30 90 599 
multicurrency revolving facility 369 159 173 02 171 – – 
bank and other loans 350800 114 114 45 69 – – 
obligations under finance leases 600 11 12 06 02 04 – 
t rade and other payables 1394 1394 1300 94 – – 
derivative financial liabilities
forward exchange contracts as cash flow hedges 01 01 01 – – – 
forward exchange contracts as fair value hedges 01 01 01 – – – 
forward exchange contracts as net investment hedges 54 54 54 – – – 
interest rate swaps not designated – – – – – – 
4662 5693 1631 554 1470 2038   112 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
19 financial risk management continued
included in bank and other loans are loans drawn under the £150 million 2010 £180 million multicurrency revolving facility of £nil 2010 £17 1 million 
such loans are repayable within 12 months but are classified as maturing one month prior to the facility termination date t he present facility is 
available until 5 a pril 2016
t he following table indicates the periods in which cash flows associated with cash flow hedges are expected to occur t his is matched with the 
periods in which cash flows associated with cash flow hedges are expected to impact profit or loss
carrying
amount
£m
contractual
cash flows
£m
less than
1 year
£m
12
years
£m
25
years
£m
2011
more than
5 years
£m
cash flows associated with derivatives that are cash flow hedges
forward exchange contracts – a ssets 11 549 447 102 – – 
forward exchange contracts – l iabilities 08 542 443 99 – – 
03 07 04 03 – – 
carrying
amount
£m
contractual
cash flows
£m
l ess than
1 year
£m
12
years
£m
25
years
£m
2010
more than
5 years
£m
cash flows associated with derivatives that are cash flow hedges
forward exchange contracts – a ssets 04 348 241 107 – – 
forward exchange contracts – l iabilities 01 344 237 107 – –
03 04 04 – – – 
  market risk
market risk is the risk that changes in market prices such as foreign exchange rates interest rates and equity prices will affect the group’s income  
or the value of its holdings of financial instruments t he objective of market risk management is to manage and control market risk exposures within 
acceptable parameters while optimising the return on risk
t he group buys and sells derivatives in the ordinary course of business for hedging purposes and also incurs financial liabilities in order to manage 
market risks a ll such transactions are carried out in accordance with the t reasury policy which has been approved by the a udit committee 
generally the group seeks to apply hedge accounting in order to manage volatility in profit or loss
interest rate risk
profile
a t the reporting date the interest rate profile of the group’s interestbearing financial instruments was
carrying amount
2011
£m
2010
£m
fixed rate instruments
financial assets 116 –
financial liabilities 2927 2985
2811 2985
variable rate instruments
financial assets 834 850 
financial liabilities 191 227
643 623 
t he average cost of the group’s fixed rate debt is 57 2010 57
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 113
overview business review governance financial statements
19 financial risk management continued
fair value sensitivity analysis for fixed rate instruments
t he group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss
cash flow sensitivity analysis for variable rate instruments
a change of 100 basis points in interest rates on the group’s net debt at the reporting date would have increaseddecreased profit or loss by the 
amounts shown below t his analysis assumes that all other variables in particular foreign currency rates remain constant t he analysis is performed 
on the same basis for 2010
100 bp
increase
£m
profit or loss
100 bp
decrease
£m
1 january 2012
variable rate instruments 07 05
cash flow sensitivity net 07 05
2 january 201 1
variable rate instruments 06 03
cash flow sensitivity net 06 03
foreign currency risk
t he table below shows the group’s currency exposures being exposures on currency transactions that give rise to net currency gains and losses 
recognised in the income statement such exposures comprise the monetary assets and liabilities of the group that are not denominated in  
the functional currency of the operating company involved other than certain nonsterling borrowings treated as hedges of net investments  
in overseas entities
functional currency of group operations
gbp
£m
usd
£m
2011
€
£m
gbp
£m
usd
£m
2010
€
£m
t rade receivables 64 01 19 54 07 23 
cash and cash equivalents 53 02 16 09 02 30 
t rade payables 156 02 11 22 10 28
n et balance sheet exposure 39 01 24 41 01 25 
t he amounts shown in the table take into account the effect of the forward contracts entered into to manage these currency exposures
2011
£m
a verage rate
2010
£m
2011
£m
year end rate
2010
£m
usd 16043 15447 15541 15657 
€ 11529 11659 11972 11671 
t he group aims to hedge all material trade receivables and trade payables denominated in a foreign currency a t any point in time the group  
also hedges up to 75 of its estimated foreign currency exposure in respect of forecasted sales and purchases over the following twelve months  
t he group uses forward exchange contracts to hedge its foreign currency risk most of the forward exchange contracts have maturities of less  
than one year after the balance sheet date
in respect of other monetary assets and liabilities held in currencies other than the currency of the reporting unit the group ensures that the net 
exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates where necessary to address shortterm imbalances 
forecasted transactions
t he group classifies its forward exchange contracts hedging forecasted transactions as cash flow hedges and states them at fair value t he fair value 
of forward exchange contracts used as hedges of forecasted transactions at 1 january 2012 was an asset of £03 million 2010 asset of £03 million   114 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
19 financial risk management continued
cash flow hedges
t he contractual cash flows associated with the forward exchange contracts that are designated as cash flow hedges are shown in the section on 
liquidity risk t he impact on profit or loss is expected to occur at the same time as the associated cash flows
hedge of net investment in foreign subsidiaries
t he group maintains incountry local currency borrowings and has designated certain forward foreign exchange contracts and other borrowings 
as hedges of the foreign exchange risk associated with investments in foreign operations in this way the group seeks to manage the translation 
exposure of overseas net assets but only to the extent that its gearing covenant under the terms of its loan documents as well as its facility headroom 
are likely to remain comfortably within limits and provided the associated costs are not prohibitive
t he group’s currency split of t otal borrowings after the impact of net investment hedges was as follows
2011
£m
2010
£m
sterling 89 188
usd 2210 2410 
€ 706 728 
japanese yen 118 54 
other 06 199 
2951 3203 
sensitivity analysis
t he group’s sensitivity to changes in foreign exchange rates on financial assets and liabilities as at 1 january 2012 is set out in the table below  
t he impact of a weakening in sterling on the group’s financial assets and liabilities would be more than offset in equity and income by its impact  
on the group’s overseas net assets and earnings respectively
t he amounts generated from the sensitivity analysis are forwardlooking estimates of market risk assuming certain adverse market conditions occur 
a ctual results in the future may differ materially from those projected results due to developments
t he estimated changes for foreign exchange rates are based on an instantaneous 10 weakening or strengthening in sterling against all other 
currencies from the levels applicable at 1 january 2012 with all other variables remaining constant such analysis is for illustrative purposes only –  
in practice market rates rarely change in isolation
10 weakening in sterling
1 january 2012
equity
£m
profit
before tax
£m
usd 251 13
€ 47 03
other 66 02 
10 weakening in sterling
2 january 201 1
equity
£m
profit
before tax
£m
usd 197 14
€ 65 03
other 44 02 
t he impact of a onecent movement in the usd exchange rate on results that are reported in u sd would be a movement of circa £21 million  
in revenue and £02 million in profit
other market price risk
equity price risk arises from availableforsale equity securities held for meeting partially the unfunded portion of the group’s defined benefit 
pension obligations t he primary goal of the group’s investment strategy is to maximise returns in order to meet partially the group’s unfunded 
defined benefit obligations
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 115
overview business review governance financial statements
19 financial risk management continued
capital management
t he board’s policy is to maintain a strong capital base total equity so as to maintain investor creditor and market confidence and to sustain future 
development of the business t he board uses a number of measures identified as key performance indicators kpis to ensure the continued 
success of the group t he main kpi for the group is the underlying operating profit margin t he aim is to achieve midteen margins in good times 
and doubledigit margins when the environment is more challenging
t he board encourages employees of the group to hold the company’s ordinary shares t he group operates a number of employee share and 
share option schemes from time to time the company purchases its own shares on the market the timing of these purchases depends on market 
prices primarily the shares are intended to be used for issuing shares under the group’s various share option incentive schemes t he company may 
also acquire its own shares under a share buyback programme
t he board seeks to maintain a balance between the advantages and security afforded by a sound capital position and the higher returns that might 
be possible with higher levels of borrowings
t he group’s debt to adjusted capital ratio at the end of the reporting period was as follows
2011
£m
2010
£m
t otal interestbearing loans and borrowings 2951 3202 
l ess cash and cash equivalents and overdrafts 797 840
n et debt 2154 2362 
t otal equity 2702 2521 
l ess amounts accumulated in equity relating to cash flow hedges 04 03
a djusted capital 2698 2518 
d ebt to adjusted capital ratio 08 09
t here were no changes in the group’s approach to capital management during the year
n either the company nor any of its subsidiaries are subject to externally imposed capital requirements
fair values
t he fair values of financial assets and liabilities together with the carrying amounts shown in the balance sheet are as follows
carrying
 amount
2011
£m
fair value
2011
£m
carrying
amount
2010
£m
fair value
2010
£m
financial assets and liabilities at amortised cost
684 us d ollar senior n otes 2013 120 121 178 187
570 us d ollar senior n otes 2014 643 703 638 680
365 euro senior n otes 2015 337 351 345 344
432 euro senior n otes 2017 169 180 173 172
612 us d ollar senior n otes 2017 1125 1305 1116 1214
626 us d ollar senior n otes 2019 482 557 478 511
bank and other loans 106 106 273 273
obligations under finance leases 06 06 11 11
t rade and other payables 1213 1213 1394 1394
l oans and receivables 1698 1698 1607 1607 
cash and cash equivalents 834 834 850 850 
1669 2010 2149 2329
availableforsale financial instruments
a vailableforsale financial assets 46 46 56 56 
derivatives and other items at fair value
forward exchange contracts used for hedging 04 04 49 49
1619 1960 2142 2322  116 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
19 financial risk management continued
estimation of fair values
t he following summarises the major methods and assumptions used in estimating the fair values of financial instruments reflected in the preceding table
equity securities
fair value is based on quoted market prices at the balance sheet date
derivatives
forward exchange contracts are marked to market either using listed market prices or by discounting the contractual forward price and deducting 
the current spot rate
interestbearing loans and borrowings
fair value is calculated based on discounted expected future principal and interest cash flows
finance lease liabilities
t he fair value is estimated as the present value of future cash flows discounted at market interest rates for homogeneous lease agreements  
t he estimated fair values reflect changes in interest rates
trade and other receivablespayables
for receivablespayables with a remaining life of less than one year the notional amount is deemed to reflect the fair value a ll other receivables
payables are discounted to determine the fair value
interest rates used for determining fair value
t he interest rates used to determine the fair value of loans and borrowings and finance leases are as follows
2011
£m
2010
£m
l oans and borrowings 2452 2553
finance leases 60 60
fair value hierarchy
t he table below analyses financial instruments carried at fair value by valuation method t he different levels have been defined as follows 
l evel 1 quoted prices unadjusted in active markets for identical assets or liabilities
l evel 2 inputs other than quoted prices included within l evel 1 that are observable for the asset or liability either directly ie as prices or indirectly 
ie derived from prices
l evel 3 inputs for the asset or liability that are not based on observable market data unobservable inputs
1 january 2012
level 1
£m
level 2
£m
total
£m
a vailableforsale financial assets 46 – 46 
d erivative financial assets – 16 16 
46 16 62 
d erivative financial liabilities – 12 12 
46 04 50
2 january 201 1
l evel 1
£m
l evel 2
£m
total
£m
a vailableforsale financial assets 56 – 56 
d erivative financial assets – 07 07 
56 07 63 
d erivative financial liabilities – 56 56
56 49 07 
t here have been no transfers between level 1 and level 2 during 201 1 and 2010 and there were no level 3 financial instruments in either 201 1  
and 2010
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 117
overview business review governance financial statements
20 employee benefits
morgan crucible operates a number of defined benefit arrangements as well as defined contribution plans t he defined benefit plans are primarily in 
the uk usa and e urope and predominately provide pensions based on service and careeraverage pay in addition postretirement medical plans 
are operated in the usa 
2011
uk
£m
2011
usa
£m
2011
europe
£m
2011
rest of the
world
£m
2011
total
£m
pension plans and employee benefits
present value of unfunded defined benefit obligations – 89 237 27 353
present value of funded defined benefit obligations 3781 1389 15 136 5321
fair value of plan assets 3307 893 06 115 4321 
deficit 474 585 246 48 1353
unrecognised past service costs – – 02 – 02 
net obligations 474 585 244 48 1351
movements in present value of defined benefit obligation
a t 3 january 201 1 3472 1357 234 155 5218
current service cost 25 01 05 17 48
interest cost 187 70 11 05 273
a ctuarial losses 262 108 25 05 400
benefits paid 147 72 15 20 254 
contributions by members 14 – – – 14
past service credits 32 – – – 32 
curtailments and settlements – – – 02 02
exchange adjustments – 14 08 01 05
at 1 january 2012 3781 1478 252 163 5674
movements in fair value of plan assets
a t 3 january 201 1 3206 854 05 112 4177 
expected return on plan assets 200 58 – 06 264 
a ctuarial lossesgains 35 18 01 03 55
contributions by employer 69 64 15 22 170 
contributions by members 14 – – – 14 
benefits paid 147 72 15 20 254
exchange adjustments – 07 – 02 05 
at 1 january 2012 3307 893 06 115 4321 
a ctual return on assets 165 40 01 03 209 
2011
uk
£m
2011
usa
£m
2011
europe
£m
2011
rest of the
world
£m
2011
total
£m
pension plans and employee benefits
expense recognised in the consolidated income statement
current service cost and past service cost 07 01 05 17 16
interest on defined benefit pension plan obligation 187 70 11 05 273
expected return on defined benefit pension plan assets 200 58 – 06 264 
gain on curtailment and settlements – – – 02 02
total expense 20 13 16 18 27  118 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
20 employee benefits continued
t he ias 19 expense in relation to the group’s defined benefit arrangements is recognised in the following line items in the consolidated  
income statement
2011
£m
2010
£m
operating costs 48 51
finance income 264 260 
finance expense 273 280
restructuring and other oneoff items 30 01 
27 70
in the uk there has been a change in the future increases to be provided to active members of the two schemes before retirement from being 
linked to the retail prices index rpi to the consumer prices index cpi t his has resulted in a past service credit of £32 million
in the usa benefit accrual has been frozen in the m organ us employees pension plan which has caused a reduction in the charge to the income 
statement of £02 million in 201 1 and £01 million in 2010 in europe the £02 million unrecognised past service cost has been recognised as a result 
of a change in future benefit accrual in france and is being amortised over 13 years in canada a £02 million curtailment and settlement loss has been 
recognised in respect of the closure of three defined benefit schemes
t he group has adopted the policy of recognising actuarial gains and losses immediately in the balance sheet through other comprehensive income 
cumulative actuarial gainslosses reported in other comprehensive income since 5 january 2004 the date of transition to a dopted ifrss are  
£1473 million
statement of financial position reconciliation
2011
£m
2010
£m
a t 3 january 201 1 1039 1059
pension expense 27 70
contributions 170 161 
other comprehensive income 455 61
currency adjustments – 10
at 1 january 2012 1351 1039
t he group expects to contribute £180 million to these arrangements in 2012
t he fair values of the plan assets were as follows
2011
uk
£m
2011
usa
£m
2011
europe
£m
2011
rest of the
world
£m
2011
total
£m
equities 1259 449 – – 1708 
bonds 270 444 – – 714 
matching insurance policies 1764 – 05 22 1791 
other 14 – 01 93 108 
total 3307 893 06 115 4321 
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 119
overview business review governance financial statements
20 employee benefits continued
principal actuarial assumptions were
2011
uk

2011
usa

2011
europe

d iscount rate 490 500 430
expected rate of return on plan assets – equities 750 740 na
  – bonds 460 460 na
  – matching insurance 490 na 430
salary increase na 270 250
inflation rpi  cpi 300180 220 200
pensions increase 290320 na 200
mortality – postretirement
l ife expectancy of a male retiring at age 60 in 201 1 259 years 233 years 230 years
l ife expectancy of a male retiring at age 60 in 2031 272 years 241 years 259 years
expected rates of return on plan assets are determined by reference to relevant indices t he overall expected rate of return is calculated by weighting 
the individual rates in accordance with the anticipated balance in the plan’s investment portfolio
2011
£m
2010
£m
2009
£m
2008
£m
2007
£m
balance sheet
present value of defined benefit obligation 5674 5218 4891 4463 4507
fair value of plan assets 4321 4177 3830 3445 4030 
d eficit 1353 1041 1061 1018 477
unrecognised past service costs 02 02 02 – –
n et obligations 1351 1039 1059 1018 477
2011
£m
2010
£m
2009
£m
2008
£m
2007
£m
experience lossesgains
experience lossesgains on defined benefit obligation 142 08 22 17 02
experience lossesgains on plan assets 55 150 343 1047 175
t he sensitivities regarding the principal assumptions used to measure the scheme liabilities are
change in assumption
2011
increase
effect
£m
2010
increase
effect
£m
d iscount rate d ecrease by 01 61 61 
rate of increase in salaries increase by 01 – 01 
inflation increase by 01 37 35 
mortality – postretirement pensioners live 1 year longer 112 99   120 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
20 employee benefits continued
2010
uk
£m
2010
usa
£m
2010
europe
£m
2010
rest of the
world
£m
2010
total
£m
present value of unfunded defined benefit obligations – 90 225 27 342
present value of funded defined benefit obligations 3472 1267 09 128 4876
fair value of plan assets 3206 854 05 112 4177 
deficit 266 503 229 43 1041
unrecognised past service costs – – 02 – 02 
net obligations 266 503 227 43 1039
movements in present value of defined benefit obligation
a t 3 january 2010 3334 1201 235 121 4891
current service cost 22 08 05 16 51
interest cost 190 74 11 05 280
a ctuarial losses 67 114 05 25 211
benefits paid 154 75 15 17 261 
contributions by members 13 – – – 13
curtailments and settlements – 01 – – 01 
exchange adjustments – 36 07 05 34
at 2 january 2011 3472 1357 234 155 5218
movements in fair value of plan assets
a t 3 january 2010 2989 739 05 97 3830 
expected return on plan assets 198 58 – 04 260 
a ctuarial gains 97 42 – 11 150 
contributions by employer 63 68 15 15 161 
contributions by members 13 – – – 13 
benefits paid 154 75 15 17 261
exchange adjustments – 22 – 02 24 
at 2 january 2011 3206 854 05 112 4177 
a ctual return on assets 295 100 – 15 410 
2010
uk
£m
2010
usa
£m
2010
europe
£m
2010
rest of the
world
£m
2010
total
£m
expense recognised in the consolidated income statement
current service cost and past service cost 22 08 05 16 51
interest on defined benefit pension plan obligation 190 74 11 05 280
expected return on defined benefit pension plan assets 198 58 – 04 260 
gain on curtailment of us and french employee benefit schemes – 01 – – 01 
total expense 14 23 16 17 70
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 121
overview business review governance financial statements
20 employee benefits continued
t he fair values of the plan assets were as follows
2010
uk
£m
2010
usa
£m
2010
europe
£m
2010
rest of the
world
£m
2010
total
£m
equities 1317 484 – – 1801 
bonds 177 365 – – 542 
matching insurance policies
1699 – 05 19 1723 
other 13 05 – 93 1 11 
total 3206 854 05 112 4177 
principal actuarial assumptions were
2010
uk

2010
usa

2010
europe

d iscount rate 550 550 500
expected rate of return on plan assets – equities 780 840 na
  – bonds 520 530 na
  – matching insurance 550 na 500
salary increase na 270 250
inflation rpi  cpi 340270 220 200
pensions increase 330340 na 200
mortality – postretirement
l ife expectancy of a male retiring at age 60 in 2010 259 years 221 years 225 years
l ife expectancy of a male retiring at age 60 in 2030 272 years 221 years 254 years
t he actual liability in respect of global employee benefits will not be known until the last payments have been made in placing a current estimate  
on the group’s past service benefit obligations a number of assumptions about the future are required for defined benefit schemes the d irectors 
make annual estimates and assumptions in respect of discount rates future changes in salaries employee turnover inflation rates and life expectancy  
in making these estimates and assumptions the d irectors consider advice provided by external advisers such as actuaries
defined contribution plans
t he group operates a number of defined contribution pension plans t he total expense relating to these plans in the current year was £70 million 
2010 £60 million t he group expects to contribute £73 million to these arrangements in 2012
sharebased payments
t he group operates various share option programmes that allow group employees to acquire shares in the company under the l ong t erm 
incentive plan lti p and t he morgan crucible bonus d eferral share matching plan bdsm p awards of shares are made to various key executives 
and under the executive share option scheme 2004 2004 esos and the executive share option scheme 1995 1995 esos share options  
are granted by the company t he company also maintains an allemployee sharesave scheme available to employees in the uk and germany  
t he grant date fair value of options granted to employees is recognised as an employee expense with a corresponding increase in equity  
over the period that the employees become unconditionally entitled to the options t he amount recognised as an expense is adjusted to reflect  
the actual number of share options for which the related service and nonmarket vesting conditions are met
t he fair value of the options and awards under each scheme have been measured using the following models
lti p 2004 bdsm p  2004 esos monte carlo model
1995 esos binominal l attice option pricing model
employee sharesave scheme 2004 and employee sharesave scheme 2004 germany blackscholes merton mode  122 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
n otes t o th e cons olidated finan cial statements
continued
20 employee benefits continued
t he terms and conditions of all awards and grants made that were outstanding on or after 4 january 2010
grant dateemployees entitled
number of
instruments
 granted vesting conditions
contractual
life of option
a wards granted to senior employees in 201 1 under the bdsm p 1484633 
t hree years of service plus
satisfaction of performance criteria 3 years
options granted to uk employees in 201 1 under the
employee sharesave scheme 2004 471732 t hree years of service 3 years
a wards granted to senior employees in 201 1 under the lti p 2004 1500775 
t hree years of service plus
satisfaction of performance criteria 3 years
a wards granted to senior employees in 2010 under the bdsm p 82731 1 
t hree years of service plus
satisfaction of performance criteria 3 years
options granted to uk employees in 2010 under the
employee sharesave scheme 2004 484069 t hree years of service 3 years
a wards granted to senior employees in 2010 under the lti p 2004 2331758 
t hree years of service plus
of performance criteria 3 years
a wards granted to senior employees in 2009 under the bdsm p 3426473
t hree years of service plus
satisfaction of performance criteria 3 years
options granted to uk employees in 2009 under the
employee sharesave scheme 2004 1937568 t hree years of service 3 years
a wards granted to senior employees in 2009 under the lti p 2004 5085721
t hree years of service plus
satisfaction of performance criteria 3 years
a wards granted to senior employees in 2008 under the bdsm p 2888005
t hree years of service plus
satisfaction of performance criteria 3 years
options granted to uk employees in 2008 under the
employee sharesave scheme 2004 1089783 t hree years of service 3 years
options granted to german employees in 2008 under the
employee sharesave scheme 2004 germany 278451 t hree years of service 3 years
a wards granted to senior employees in 2008 under the lti p 2004 2691123
t hree years of service plus
satisfaction of performance criteria 3 years
options granted to uk employees in 2007 under the
employee sharesave scheme 2004 856885 t hree years of service 3 years
a wards granted to senior employees in 2007 under the lti p 2004 1540000
t hree years of service plus
satisfaction of performance criteria 3 years
options granted to senior employees in 2005 under the esos 2004 2097000
t hree years of service plus
satisfaction of performance criteria 10 years
options granted to senior employees in 2004 under the esos 2004 3157500
t hree years of service plus
satisfaction of performance criteria 10 years
options granted to senior employees in 2004 under the esos 1995 263000
t hree years of service plus
satisfaction of performance criteria 10 years
t he following options were outstanding at 1 january 2012 in respect of ordinary shares
exercise prices
n umber of shares
 outstanding from to
employee sharesave scheme 2004 12800p21300p 2698147 1 d ecember 201 1 31 may 2014
employee sharesave scheme 2004 germany €164 41592 1 d ecember 201 1 31 may 2012
2004 esos 12905p17190p 1006807 22 june 2007 23 may 2015
bdsmp 000p30050p 5642423 6 march 2012 23 march 2014
lti p 2004 000p 8610634 27 february 2012 23 march 2014
n ormal exercise dates ranging annual report 2011  the morgan crucible company plc 123
overview business review governance financial statements
20 employee benefits continued
performance criteria for ltip 2004 directors’ share option plan 2006 and 2004 esos
for awards under the lti p 2004 the extent to which 50 of the awards vested depended on the company’s t otal shareholder return ts r 
ranking against ts r of the other companies in the ftse 350 measured over the performance period t he extent to which the other 50 of these 
awards vested depended on the company’s earnings per share eps compared with the retail price index rpi t he full 50 vested if over the 
threeyear performance period the company’s eps increased by at least the sum of the annual rpi increase and 10 per annum if the company’s 
eps increased by the sum of the annual rpi increase and between 4 and 10 per annum then the proportion of awards vesting would be 
interpolated between 15 and 50 if the company’s eps increased by the sum of the annual rpi increase and 4 per annum then 15 of the 
awards would vest if the company’s eps increased by less than the sum of the rpi increase and 4 per annum then 0 of the awards would vest
in 2008 changes were made to the performance criteria attached to the lti p 2004 for awards made in 2008 and onwards for all participants 
excluding executive d irectors the ts r performance criteria referred to above now only related to 333 of awards made t he extent to which  
the other 667 of these awards vested now depended on the company’s eps compared with the rpi t he full 667 would vest if over the 
threeyear performance period the company’s eps increased by at least the sum of the annual rpi increase and 10 per annum if the company’s 
eps increased by the sum of the annual rpi increase and between 4 and 10 per annum then the proportion of awards vesting would be 
interpolated between 15 and 50 if the company’s eps increased by the sum of the annual rpi increase and 4 per annum then 15 of the 
awards will vest if the company’s eps increased by less than the sum of the rpi increase and 4 per annum then 0 of the awards would vest 
for executive d irector participants the conditions remained unchanged from 2007
in 2009 further changes were made to the performance criteria attached to the lti p 2004 for all participants the ts r performance criteria 
referred to above now relate to 100 of awards made
in 2010 the performance criteria attached to the awards granted pursuant to the lti p 2004 reverted to a ts reps split t he ts r performance 
criteria relate to 50 of awards made t he extent to which the other 50 of these awards vest will depend on the company’s eps compared  
with the rpi t he full 50 will vest if over the threeyear performance period the company’s eps increases by at least the sum of the annual  
rpi increase and 10 per annum if the company’s eps increases by the sum of the annual rpi increase and between 4 and 10 per annum 
then the proportion of awards vesting will be interpolated between 15 and 50 if the company’s eps increases by the sum of the annual  
rpi increase and 4 per annum then 15 of the awards will vest if the company’s eps increases by less than the sum of the rpi increase and  
4 per annum then 0 of the awards will vest in addition the 2010 lti p awards were restructured to include an hmrc approved element  
as part of the overall lti p award
in 201 1 the performance criteria attached to the awards granted pursuant to the lti p 2004 for the chief executive officer and the chief financial 
officer continued to be based on eps growth and on relative ts r performance t he ts r performance criteria relates to 50 of awards made 
t he extent to which the other 50 of these awards vest will depend on the company’s eps t he full 50 will vest if over the threeyear 
performance period the company’s eps increases by at least 15 per annum i f the company’s eps increases by between 8 and 15 per 
annum then the proportion of awards vesting will be interpolated between 15 and 50 if the company’s eps increases by 8 per annum  
then 15 of the awards will vest if the company’s eps increases by less than 8 per annum then 0 of the awards will vest t o support the  
new twod ivisional structure in 201 1 longterm incentive plans for senior d ivisional executives were tailored to the value creation of each d ivision 
for the chief executive officer of morgan ceramics 50 of the award is based on ts r and 50 on d ivisional performance t here must be an 
improvement in the underlying financial performance of morgan ceramics and the company over the performance period t he d ivisional portion 
of the lti p will only vest if stretching performance is achieved with no vesting occurring unless morgan ceramics d ivisional ebita growth is  
at least 12 per annum and return on capital employed roce is 357 in 2013 full vesting will occur for morgan ceramics d ivisional ebita 
growth of 18 per annum and roce of 407 for other morgan ceramics executives 100 of awards are based on morgan ceramics d ivisional 
performance roce and d ivisional ebita  t here must be an improvement in the underlying financial performance of morgan ceramics over the 
performance period t he lti p will only vest if stretching performance is achieved with no vesting occurring unless morgan ceramics d ivisional 
ebita growth is at least 12 per annum and roc e is 357 in 2013 full vesting will occur for morgan ceramics d ivisional ebita growth of  
18 per annum and roce of 407 for the chief executive officer of morgan engineered materials 50 of the award is based on ts r and  
50 on d ivisional performance t here must be an improvement in the underlying financial performance of morgan engineered materials and  
the company over the performance period t he d ivisional portion of the lti p will only vest if stretching performance is achieved with no vesting 
occurring unless morgan engineered materials d ivisional ebita growth is at least 10 per annum and roc e is 337 in 2013 full vesting will 
occur for ebita growth of 15 per annum and roc e of 361 for other morgan engineered materials executives 100 of awards are based  
on morgan engineered materials d ivisional performance roce and d ivisional ebita  t here must be an improvement in the underlying financial 
performance of morgan engineered materials over the performance period t he lti p will only vest if stretching performance is achieved with no 
vesting occurring unless ebita growth in m organ engineered materials is at least 10 per annum and roce is 337 in 2013 full vesting will occur 
for ebita growth of 15 per annum and roc e of 361
in addition an improvement must be shown in the group’s underlying financial performance  124 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
20 employee benefits continued
performance criteria for the bdsmp
participants are able to defer up to 75 of their annual bonus into company shares subject to approval by the remuneration committee 
participants must hold the deferred shares for three years to be eligible for a matching award matching shares may be earned at the end of  
three years in the event that a stretching eps target has been met
under the 2008 grant the remuneration committee allowed participants to defer up to 50 of their annual bonus into company shares  
if the company’s eps increases by rpi4 pa there is a 025x match by rpi5 pa there is a 05x match by rpi 75 pa there is a 1x match  
by rpi 10 pa there is a 175x match and by rpi 15 pa or higher there is a 3x match t here is straightline vesting between these points  
if the company’s rpi increases by less than rpi4 pa 0 of the matching award will vest
under the 2009 grant the remuneration committee allowed participants to defer up to 50 of their annual bonus into company shares  
if the company’s eps increases by 4 pa there is a 025x match by 5 pa there is a 05x match by 75 pa there is a 1x match by 10 pa there 
is a 175x match and by 15 pa or higher there is a 3x match t here is straightline vesting between these points if the company’s eps increases  
by less than 4 pa 0 of the matching award will vest
under the 2010 grant the remuneration committee allowed participants to defer up to 75 of their annual bonus into company shares  
if the company’s eps increases by rpi4 pa there is a 025x match by rpi5 pa there is a 05x match by rpi 75 pa there is a 1x match  
by rpi 10 pa there is a 175x match and rpi 15 pa or higher there is a 3x match t here is straightline vesting between these points if the 
company’s rpi increases by less than rpi4 pa 0 of the matching award will vest
under the 201 1 grant the remuneration committee allowed participants to defer up to 50 of their annual bonus into company shares  
t he eps target requires threeyear eps growth above a threshold of 8 pa before any matching if the company’s e ps increases by 12 pa  
there is a 1x match by 16 pa there is a 2x match and by 20 pa or higher there is a 3x match t here is straightline vesting between these points  
if the company’s eps increases by less than 8 pa 0 of the matching award will vest
performance criteria for the esos 1995
t he diluted earnings per share for the company must grow by at least 2 per annum in excess of rpi over the period of date of grant to date  
of vesting
t he fair values of services received are in return for awards made and share options granted t he estimate of the fair value of the services received 
is measured based on an appropriate model in the case of the binomial l attice model and monte carlo model the contractual life of the options 
and awards are used as an input expectations of early exercise are incorporated into both of these models
ltip 2004 2011 awards
fair value at measurement date 22833p27814p
share price 30050p
exercise price na
expected volatility expressed as weighted average volatility used in the model 45
option life expressed as weighted average life used in the model 3 years
expected dividends 26
riskfree interest rate 18
bdsmp 2011 awards
fair value at measurement date 30050p
share price 30050p
exercise price na
expected volatility expressed as weighted average volatility used in the model na
option life expressed as weighted average life used in the model 3 years
expected dividends na
riskfree interest rate na
esos 2004
t here were no awards during 201 1
n otes t o th e cons olidated finan cial statements
continued annual report 2011  the morgan crucible company plc 125
overview business review governance financial statements
20 employee benefits continued
employee sharesave schemes 2004 2011 awards
fair value at measurement date 6282p
share price 22400p
exercise price 21300p
expected volatility expressed as weighted average volatility used in the model 45
option life expressed as weighted average life used in the model 3 years
expected dividends 25
riskfree interest rate 09
employee sharesave scheme 2004 germany
t here were no awards during 201 1
esos 1995
t here were no awards during 201 1
t he expected volatility is based on the historic volatility calculated based on the weighted average remaining life of the share options adjusted for 
any expected changes to future volatility due to publicly available information
t he number and weighted average exercise prices of share options are as follows
weighted
 average
exercise price
1 january
2012
number
of options
1 january
2012
weighted
 average
exercise price
2 january
2011
number
of options
2 january
2011
outstanding at the beginning of the period 3786p 20795850 4553p 201 19192 
granted during the period 5988p 3457140 4041p 4005075 
forfeited during the period 11449p 364934 7943p 716976
exercised during the period 17206p 1265605 16526p 200440
l apsed during the period 082p 4622848 8313p 2411001
outstanding at the end of the period 4061p 17999603 3786p 20795850 
exercisable at the end of the period 15442p 1123641 16269p 1373554 
t he weighted average share price at the date of share options exercised during the period was 28342 pence 2010 23320 pence
t he options outstanding at the year end have an exercise price in the range nil to 30050 pence and a weighted average contractual life of 05 years
t he fair value of services received in return for share options granted are measured by reference to the fair value of share options granted
t he weighted average fair value of options issued in the period was 12455 pence 2010 14592 pence
t he ifrs 2 fair value charge expensed to the income statement was £59 million 2010 £30 million  126 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
n otes t o th e cons olidated finan cial statements
continued
21 provisions
closure and
 restructuring
provisions
£m
other
provisions
£m
environmental
provisions
£m
total
£m
balance at 2 january 201 1 77 59 68 204 
provisions made during the year 48 52 05 105 
provisions used during the year 65 32 08 105
provisions reversed during the year 01 08 04 13
effect of movements in foreign exchange 01 – – 01
balance at 1 january 2012 58 71 61 190 
current 31 60 29 120 
n oncurrent 27 11 32 70 
58 71 61 190 
closure and restructuring provisions are based on the group’s restructuring programmes and represent committed expenditure at the balance 
sheet date t he amounts provided are based on the costs of terminating relevant contracts under the contract terms and management’s best 
estimate of other associated restructuring costs including professional fees most of which are expected to be incurred over the next year  
t he amounts provided also include the obligation for discounted future payments under a noncancellable lease for the company’s former 
headquarters net of expected rental income under subleases t he lease expires in 2016
other provisions include the settlement of european class actions together with the associated legal costs t he estimated costs are based on  
the group’s assessment of the probable future costs of these activities t he group expects to incur most of the liability in more than one year
environmental provisions are for known environmental issues which the group will rectify over the next few years in a number of jurisdictions 
companies have a constructive obligation to remedy any known environmental problems t he estimated costs are based on management’s  
best estimate of the costs required to remedy these problems t he group expects to incur most of the liability over the next five years
22 trade and other payables
2011
£m
2010
£m
noncurrent
t rade payables 02 04 
n ontrade payables 103 132 
105 136 
current
t rade payables 1098 1217 
n ontrade payables and accrued expenses 1415 1437 
2513 2654 
included in current nontrade payables and accrued expenses and noncurrent nontrade payables is £62 million 2010 £83 million and  
£51 million 2010 £90 million respectively of deferred contingent consideration on purchase of 51 of the ordinary share capital of  
clearpower l imited for further details see note 3 annual report 2011  the morgan crucible company plc 127
overview business review governance financial statements
23 operating leases
leases as lessee
n oncancellable operating lease rentals are payable as follows
2011
£m
2010
£m
l ess than one year 66 80 
between one and five years 204 197 
more than five years 349 292 
619 569 
t he group leases a number of properties under operating leases of varying duration in some cases during the life of the lease the rental payable  
is reviewed after a fixed period to reflect market rentals
leases as lessor
t he total of future minimum sublease income under noncancellable subleases is £28 million 2010 £34 million
24 capital commitments
commitments for property plant and equipment and computer software expenditure for which no provision has been made in these accounts 
amount to £24 million 2010 £13 million for the group
25 contingencies
subsidiary undertakings within the group have given unsecured guarantees of £95 million 2010 £1 10 million in the ordinary course of business 
in an international group of companies a variety of claims arise from time to time provision has been made in these accounts against those claims 
which the d irectors consider meet the requirements of ias 37 provisions contingent liabilities and contingent assets and are likely to result in 
significant liabilities
t he group has been subject to legal claims in the usa  canada and europe settlements for the majority of these have been agreed t here remain 
provisions in respect of these claims of £14 million 2010 £14 million in some cases it will not be possible to form a view either because the facts 
are unclear or because further time is needed to properly assess the merits of the case and no provisions are held against such cases t he board 
having taken legal advice is of the opinion that the remainder of these actions will not have a material impact on the group’s financial position  128 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
n otes t o th e cons olidated finan cial statements
continued
26 related parties
identification of related parties
t he group has related party relationships with its subsidiaries a list of principal subsidiary undertakings is shown in note 42 with its associates  
see note 12 and with its d irectors and executive officers
transactions with key management personnel
t he company has written service contracts or letters of appointment with each of its d irectors under which the d irectors receive a salary or  
a fee and other emoluments
t he key management of the group and parent company consists of the board of d irectors including nonexecutive d irectors and members  
of the executive committee
t heir compensation charged in the year was
2011
£m
2010
£m
shortterm employee benefits 32 34 
employer n ational insurance contributions 05 04 
pension and other postemployment costs 03 04 
sharebased payments 10 07 
t ermination payments 02 04 
n onexecutive d irectors’ fees and benefits 03 03 
t otal compensation of key management personnel 55 56 
information on executive d irectors’ remuneration is given in the remuneration report on pages 66 to 76
other related party transactions
2011
£m
2010
£m
sales to associate 283 545 
t he balances with the group’s associate are shown in note 15
27 subsequent events
t here have been no material events since the year end annual report 2011  the morgan crucible company plc 129
overview business review governance financial statements
compan y balan ce sheet
as at 1 january 2012
n ote
2011
£m
2010
£m
fixed assets
t angible assets 31 31 12 
investment in subsidiary undertakings 32 6925 7402 
6956 7414 
current assets
d ebtors – due within one year 33 367 304 
cash at bank and in hand 246 275 
613 579 
creditors – amounts falling due within one year 34 821 1289 
net current liabilities 208 710
total assets less current liabilities 6748 6704 
creditors – amounts falling due after more than one year
a mounts payable to subsidiary undertakings 1115 1084 
other creditors including deferred consideration 34 51 90 
borrowings 35 493 677 
1659 1851 
provisions for liabilities and charges 36 38 36 
1697 1887 
net assets 5051 4817 
capital and reserves
equity shareholders funds
 calledup share capital 17 683 681 
 share premium account 37 906 883 
 merger reserve 37 170 170 
 capital redemption reserve 37 357 357 
 profit and loss account 37 2931 2722 
5047 4813 
n onequity shareholders’ funds
 calledup share capital 04 04 
shareholders funds 5051 4817 
t he financial statements were approved by the board of d irectors on 15 february 2012 and were signed on its behalf by
mark robertshaw chief executive officer
kevin dangerfield chief financial officer  130 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
28 accounting policies
t he following accounting policies have been applied consistently in dealing with items which are considered material in relation to the  
financial statements
basis of preparation
t he financial statements have been prepared in accordance with applicable accounting standards and under the historical cost accounting rules
under section 4084 of the companies a ct 2006 the company is exempt from the requirement to present its own profit and loss account
under frs 1 cash flow statements the company is exempt from the requirement to prepare a cash flow statement on the grounds that the  
cash flows of the company are included within the published consolidated financial statement
t he company has taken advantage of the exemption contained in frs 8 related parties and has therefore not disclosed transactions or balances 
with wholly owned subsidiaries
fixed assets and depreciation
d epreciation is provided to write off the cost less the estimated residual value of tangible fixed assets by equal instalments over their estimated 
useful economic lives as follows
plant equipment and fixtures – 320 years 
investments
investments in subsidiary undertakings associates and joint ventures are stated at cost less amounts written off unless they are designated as a 
hedged item in a fair value hedge of foreign currency risk under frs 26 financial instruments recognition and measurement in this case they are 
accounted for at historical cost plus a hedging adjustment recognised in profit or loss for the changes in their fair value attributable to the foreign 
currency exposure from the date the hedge is designated
interestbearing borrowings
immediately after issue debt is stated at the fair value of the consideration received on the issue of the capital instrument after deduction of issue 
costs t he finance cost of the debt is allocated to periods over the term of the debt at a constant rate on the carrying amount
foreign currency
t ransactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction or if hedged forward at the rate of 
exchange under the related forward contract monetary assets and liabilities denominated in foreign currencies are translated using the contracted 
rate or the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the profit and loss account
leases
rentals payable under operating leases are charged in the profit and loss account on a straightline basis over the lease term
postretirement benefits
t he company participates in a groupwide pension scheme providing benefits based on careeraverage pensionable pay t he assets of the scheme 
are held separately from those of the company t he company is unable to identify its share of the underlying assets and liabilities of the scheme  
on a consistent and reasonable basis and therefore as required by frs 17 retirement benefits accounts for the scheme as if it were a defined 
contribution scheme a s a result the amount charged to the profit and loss account represents the contributions payable to the scheme in respect 
of the accounting period refer to note 39 for the additional disclosures required by frs 17
taxation
t he charge for taxation is based on the result for the year and takes into account taxation deferred because of timing differences between the 
treatment of certain items for taxation and accounting purposes
d eferred tax is recognised without discounting in respect of all timing differences between the treatment of certain items for taxation and 
accounting purposes which have arisen but not reversed by the balance sheet date except as otherwise required by frs 19 deferred tax
n otes t o t he compan y balan ce sheet
continued annual report 2011  the morgan crucible company plc 131
overview business review governance financial statements
28 accounting policies continued
classification of financial instruments issued by the company
following the adoption of frs 25 financial instruments disclosure and presentation financial instruments issued by the company are treated  
as equity ie forming part of shareholders’ funds only to the extent that they meet the following two conditions
a   they include no contractual obligations upon the company to deliver cash or other financial assets or to exchange financial assets or financial 
liabilities with another party under conditions that are potentially unfavourable to the company and
b  where the instrument will or may be settled in the company’s own equity instruments it is either a nonderivative that includes no obligation  
to deliver a variable number of the company’s own equity instruments or is a derivative that will be settled by the company exchanging a  
fixed amount of cash or other financial assets for a fixed number of its own equity instruments
t o the extent that this definition is not met the proceeds of issue are classified as a financial liability where the instrument so classified takes the 
legal form of the company’s own shares the amounts presented in these financial statements for calledup share capital and share premium account 
exclude amounts in relation to those shares
finance payments associated with financial liabilities are dealt with as part of interest payable and similar charges finance payments associated with 
financial instruments that are classified as part of shareholders’ funds see dividend policy are dealt with as appropriations in the reconciliation of 
movements in shareholders’ funds
hedging instruments and hedged items are accounted for separately in the balance sheet in fair value hedges gains and losses from remeasuring 
the hedging instrument at fair value for a derivative instrument or the foreign currency component for a nonderivative financial liability in a foreign 
currency hedge are included in profit for the year when they arise in cash flow hedges gains and losses from remeasuring the hedging derivative 
instrument at fair value are initially recognised in other comprehensive income to the extent effective and are later reclassified to profit or loss when 
the hedged transaction occurs or is no longer expected to occur
certain financial assets and liabilities have been designated as fair value through profit or loss and are recognised in the balance sheet at fair value
own shares held by the morgan general employee benefit trust
t ransactions of the groupsponsored morgan general employee benefit t rust are treated as being those of the company and are therefore reflected 
in the company’s financial statements in particular the t rust’s purchases and sales of shares in the company are debited and credited to equity
sharebased payments
t he share option programme allows employees to acquire shares of the company t he fair value of options granted after 7 n ovember 2002 and 
those not yet vested as at 4 january 2005 is recognised as an employee expense with a corresponding increase in equity t he fair value is measured 
at grant date and spread over the period during which the employee becomes unconditionally entitled to the options t he fair value of the options 
granted is measured using an option pricing model taking into account the terms and conditions upon which the options were granted t he amount 
recognised as an expense is adjusted to reflect the actual number of share options that vest except where forfeiture is only due to share prices not 
achieving the threshold for vesting for details of sharebased payments made and the assumptions used in measuring the fair value see note 20
sharebased payments recharged to subsidiary undertakings are recorded via the intercompany loan account
dividends on shares presented within shareholders’ funds
d ividends unpaid at the balance sheet date are only recognised as a liability at that date to the extent that they are appropriately authorised and are 
no longer at the discretion of the company unpaid dividends that do not meet these criteria are disclosed in the n otes to the financial statements
financial guarantee contracts
where the company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group the company 
considers these to be insurance arrangements and accounts for them as such in this respect the company treats the guarantee contract as a 
contingent liability until such time as it becomes probable that the company will be required to make a payment under the guarantee  132 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
29 staff numbers and costs
t he average number of persons employed by the company including d irectors during the year analysed by category was as follows 
n umber of employees
2011 2010
d irectors and head office staff 28 26
d ivisional staff 15 16
43 42
t he majority of the d irectors and head office staff devote a proportion of their time to d ivisional duties of the 28 d irectors and head office staff 
the average number who spent all or a proportion of their time on corporate duties was ten 2010 nine as shown in note 5
t he aggregate payroll costs of these persons were as follows
2011
£m
2010
£m
wages and salaries 83 89 
equitysettled sharebased payments see note 20 56 30 
social security costs 09 09 
other pension costs 07 04 
155 132
30 dividends
d ividends payable for the first and second preference shares were £22491 2010 £22491 of which £1 1245 2010 £1 1245 was outstanding at 
the balance sheet date
t he 55 cumulative first preference shares of £1 each and the 50 cumulative second preference shares of £1 each confer on the holders 
thereof the right to receive a cumulative preferential dividend at the rate of 55 and 50 respectively calculated up to 30 june and 31 d ecember 
respectively in every year 
for proposed ordinary dividends see the consolidated income statement on page 78
31 tangible assets
plant equipment
and fixtures
£m
cost
a t 3 january 201 1 44
a dditions 30
d isposals 27
at 1 january 2012 47
accumulated depreciation
a t 3 january 201 1 32
a mount provided for in the year 11
d isposals 27
at 1 january 2012 16
net book amounts at 1 january 2012 31
n et book amounts at 2 january 201 1 12
n otes t o t he compan y balan ce sheet
continued annual report 2011  the morgan crucible company plc 133
overview business review governance financial statements
32 investment in subsidiary undertakings
shares
£m
loans
£m
total
£m
cost
a t 3 january 201 1 6460 1468 7928 
a dditions 26 117 143 
fair value hedge of investments exposure to foreign currency risk 06 – 06
l ess disposalsloan repaymentsliquidations 306 293 599
at 1 january 2012 6174 1292 7466 
amounts provided
a t 3 january 201 1 489 37 526 
provided in the year 15 – 15 
at 1 january 2012 504 37 541 
net book amounts at 1 january 2012 5670 1255 6925 
n et book amounts at 2 january 201 1 5971 1431 7402 
a list of principal subsidiary undertakings is shown in note 42
33 debtors
2011
£m
2010
£m
due within one year
other debtors 31 29 
d erivative financial assets 23 01 
prepayments and accrued income 03 04 
a mounts receivable from subsidiary undertakings 310 270 
367 304 
34 creditors
2011
£m
2010
£m
due within one year
bank overdrafts 519 839 
t rade creditors 19 18 
a mounts payable to subsidiary undertakings 80 182 
other creditors including deferred consideration 99 102 
a ccruals and deferred income 81 96 
d erivative financial liabilities 23 52 
821 1289 
due after one year
other creditors including deferred consideration 51 90 
51 90  134 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
n otes t o t he compan y balan ce sheet
continued
35 borrowings
2011
£m
2010
£m
bank and other loans 493 677 
bank overdrafts 519 839 
1012 1516 
l ess amount repayable within one year included within current liabilities 519 839
t otal repayable after more than one year 493 677 
36 provisions for liabilities and charges
closure and
restructuring
 provisions
£m
other
provisions
£m
total
£m
a t 3 january 201 1 18 18 36 
provided in the year 09 – 09 
utilised in the year 03 04 07
at 1 january 2012 24 14 38 
closure and restructuring provisions relate mainly to an onerous lease provision for morgan house the company’s previous registered address
other provisions include the settlement of european class actions together with the associated legal costs
37 share premium and reserves
share
premium
£m
merger
reserve
£m
capital
 redemption
reserve
£m
profit and loss
account
£m
a t 3 january 201 1 883 170 357 2722 
charges and transfers in relation to sharebased payments for the year – – – 66 
d ividends 23 – – 209
own shares acquired for share incentive schemes – – – 32
retained profit for the year – – – 384 
at 1 january 2012 906 170 357 2931 
capita t rustees l imited administer a t rust in which shares are held to satisfy awards granted under the company’s share plans t he shares are 
distributed via discretionary settlement governed by the rules of the t rust deed dated 1 march 1996 as amended
t he total number of own shares held by the t rust at 1 january 2012 is 2044458 2010 1007003 and at that date had a market value of  
£54 million 2010 £25 million
t he amount of reserves of t he morgan crucible company plc that may not be distributed under section 8314 of the companies a ct 2006 is 
£1451 million 2010 £1427 million
38 leasing commitments
operating lease commitments falling due during the next year for which no provision has been made in these accounts are
l and and buildings
2011
£m
2010
£m
l ess than one year – –
between one and five years 02 04 
more than five years – 03 
02 07  annual report 2011  the morgan crucible company plc 135
overview business review governance financial statements
39 pension costs
the morgan pension scheme and the morgan senior staff pension and life assurance scheme
t he company participates in two defined benefit schemes in the uk t he assets of these schemes are held in separate trusteeadministered funds 
t he morgan pension scheme mps and t he morgan group senior staff pension and l ife a ssurance scheme sss  given that the company is unable 
to identify its share of the scheme assets and liabilities on a consistent and reasonable basis as permitted by frs 17 retirement benefits the schemes 
have been accounted for in these financial statements as if they were defined contribution schemes
t he latest actuarial valuations of the mps and the sss were carried out as at 6 a pril 2009 and 1 a pril 2009 respectively and updated for frs 17 
purposes to 1 january 2012 by a qualified independent actuary t he results for these schemes in respect of the group are shown below
2011

2010

assumptions
 inflation rpi  cpi 300180 340270
 d iscount rate 490 550
 pension increases in payment 290320 330340
 general salary increases na na
t he assets in the scheme and the expected rates of return were
2011
expected
 return

2011
£m
2010
expected
return

2010
£m
asset distribution and balance sheet reconciliation
 equities 75 1259 78 1317 
 bonds 46 270 52 177 
 property 50 – 62 – 
 other 49 1778 55 1712 
t otal market value of assets 3307 3206 
present value of liability 3781 3472
d eficit in the scheme 474 266
employer contributions due within one year 02 02
other assets include an insurance policy as described in note 20
t he contribution for the year was £69 million 2010 £63 million
40 contingent liabilities
where the company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group the company 
considers these to be insurance arrangements and accounts for them as such in this respect the company treats the guarantee contract as a 
contingent liability until such time as it becomes probable that the company will be required to make a payment under the guarantee
t here are no other contingent liabilities in the company as at 1 january 2012
t he group has been subject to legal claims in the usa  canada and europe settlements for the majority of these have been agreed t here remain 
provisions in respect of these claims of £14 million 2010 £14 million in some cases it will not be possible to form a view either because the facts 
are unclear or because further time is needed to properly assess the merits of the case and no provisions are held against such cases t he board 
having taken legal advice is of the opinion that the remainder of these actions will not have a material impact on the group’s financial position  136 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
41 related parties
t he company’s transactions with nonwholly owned subsidiaries are as follows
2011
£m
2010
£m
a mounts invoiced to nonwholly owned subsidiaries 14 05
a mounts receivable from nonwholly owned subsidiaries 08 07
a mounts payable to nonwholly owned subsidiaries 66 70
t he d irectors have reviewed transactions with related parties as defined in frs 8 related party disclosures and have concluded that there are  
no other material transactions which require disclosure which have not been acknowledged elsewhere in the a nnual report and a ccounts
42 principal subsidiary undertakings
business
country of incorporation and 
principal place of business
morgan ceramics companies
 carbo san l uis sa  t hermal ceramics a rgentina
 morgan t echnical ceramics a ustralia pty l td t echnical ceramics a ustralia
d alian morgan refractories l imited t hermal ceramics china
morgan kailong jingmen t hermal ceramics co l td t hermal ceramics china
morgan t hermal ceramics international t rading shanghai co l td t hermal ceramics china
morgan t hermal ceramics shanghai l td t hermal ceramics china
 yixing haldenwanger fine ceramic co l td t echnical ceramics china
yixing morgan t hermal ceramics co l td t hermal ceramics china
certech international l imited t echnical ceramics england
morgan t echnical ceramics l imited t echnical ceramics england
morgan electro ceramics l imited t echnical ceramics england
t hermal ceramics uk l imited t hermal ceramics england
 t hermal ceramics de france sa s t hermal ceramics france
 t hermal ceramics d eutschland gmbh  co kg t hermal ceramics germany
 w haldenwanger t echnische keramik gmbh  co kg t echnical ceramics germany
wesgo ceramics gmbh t echnical ceramics germany
 ciria india l td t hermal ceramics india
murugappa morgan t hermal ceramics l imited t hermal ceramics india
 t hermal ceramics italiana srl t hermal ceramics italy
shinn ippon t hermal ceramics corporation t hermal ceramics japan
 morgan t echnical ceramics sa  de cv t echnical ceramics mexico
 t hermal ceramics benelux bv t hermal ceramics n etherlands
 l imited l iability company morgan t hermal ceramics sukhoy l og t hermal ceramics russia
t hermal ceramics a sia pte l td t hermal ceramics singapore
 t hermal ceramics south a frica pty l imited t hermal ceramics south a frica
 t hermal ceramics espana sl  t hermal ceramics spain
 certech inc t echnical ceramics usa
 morgan a dvanced ceramics inc t echnical ceramics usa
 morgan t echnical ceramics a uburn inc t echnical ceramics usa
 t hermal ceramics inc t hermal ceramics usa
n otes t o t he compan y balan ce sheet
continued annual report 2011  the morgan crucible company plc 137
overview business review governance financial statements
42 principal subsidiary undertakings continued
business
country of incorporation and 
principal place of business
morgan engineered materials companies 
 morgan molten metal systems suzhou co l td molten metal systems china
morgan am t  shanghai co l td a dvanced materials  t echnology china
shanghai morgan a dvanced material  t echnology co l td a dvanced materials  t echnology china
shanghai morganite electrical carbon co l td a dvanced materials  t echnology china
morganite electrical carbon l imited a dvanced materials  t echnology england
 n p a erospace l imited a dvanced materials  t echnology england
 morgan molten metal systems gmbh molten metal systems germany
 morgan rekofa gmbh a dvanced materials  t echnology germany
 morgan materials hungary kft a dvanced materials  t echnology hungary
 a ssam carbon products l td a dvanced materials  t echnology india
 morganite crucible india l imited molten metal systems india
 morgan carbon italia srl a dvanced materials  t echnology italy
 morganite carbon kabushiki kaisha a dvanced materials  t echnology japan
 morganite l uxembourg sa  a dvanced materials  t echnology l uxembourg
 n ational electrical carbon bv a dvanced materials  t echnology n etherlands
 morganite south a frica pty l imited a dvanced materials  t echnology south a frica
 morganite t aiwan l imited a dvanced materials  t echnology t aiwan
 morgan karbon grafit s anayi a s a dvanced materials  t echnology t urkey
 morgan a dvanced materials and t echnology inc a dvanced materials  t echnology usa
 n ational electrical carbon products inc a dvanced materials  t echnology usa
 graphite d ie mold inc a dvanced materials  t echnology usa
 morganite crucible inc molten metal systems usa
other subsidiary undertakings
 morganite a ustralia pty l imited group a ustralia
 morganite brasil l imitada group brazil
 morganite canada corporation group canada
grupo industrial morgan sa  de cv group mexico
morgan korea company l imited group south korea
morganite industries inc group usa
d enotes companies some or all of whose shares are owned by a subsidiary
in 201 1 and 2010 the following german subsidiaries which are included in the group consolidated accounts utilised article 264b of the german 
commercial code to be liberated from preparing and disclosing audited statutory accounts
  w haldenwanger t echnische keramik gmbh  co kg
  t echnische keramik  co kg
  t hermal ceramics d eutschland gmbh  co kg  138 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
n otes t o t he compan y balan ce sheet
continued
43 company reconciliation of movements in shareholders’ funds
for the year ended 1 january 2012
2011
£m
2010
£m
retained profit for the financial year 384 379 
d ividends 184 155
issue of shares – 02 
own shares acquired for share incentive schemes 32 – 
charges and transfers in relation to sharebased payments for the year 66 33 
net increase in shareholders funds 234 259 
opening shareholders funds 4817 4558 
closing shareholders funds 5051 4817  annual report 2011  the morgan crucible company plc 139
overview business review governance financial statements
2007
£m
2008
£m
2009
£m
2010
£m
2011
£m
revenue 6932 8350 9426 10171 11010 
profit from operations before restructuring costs  
other oneoff items and amortisation of intangible assets 881 1088 890 1095 1434 
restructuring costs and other oneoff items
restructuring costs and costs associated with settlement of prior period 
antitrust litigation 90 114 140 85 56
l ossprofit on disposal of properties 02 08 20 06 24 
n et pension credit – – – – 13 
profit from operations before amortisation of intangible assets 789 982 770 1016 1415 
a mortisation of intangible assets 16 32 163 80 83
operating profit 773 950 607 936 1332 
n et financing costs 55 127 293 259 218
l oss on disposal of businesses 03 07 – – – 
share of profit of associate net of income tax 02 12 – – – 
profit before taxation 717 828 314 677 1114 
income tax expense 152 201 87 197 326
profit for the period 565 627 227 480 788 
assets employed
property plant and equipment 2466 3196 2762 2692 2598 
intangible assets 698 1770 2969 2850 2833 
investments and other receivables 495 506 93 91 103 
d eferred tax assets 258 366 372 385 411 
n et current assets 744 1899 1365 1310 1601 
total assets less current liabilities 4661 7737 7561 7328 7546 
employee benefits 477 1018 1059 1039 1351 
provisions and other items 2029 4231 3881 3316 3048 
d eferred tax liabilities 192 408 475 452 445 
1963 2080 2146 2521 2702
equity
t otal equity attributable to equity holders of the parent company 1762 1778 1846 2150 2294 
n oncontrolling interests 201 302 300 371 408 
t otal equity 1963 2080 2146 2521 2702 
ordinary dividends per share paid 675p 70p 45p 70p 77p 
earnings per share
basic 191p 222p 71p 158p 269p
d iluted 185p 216p 68p 150p 257p
basic before amortisation of intangible assets 197p 234p 132p 187p 299p
d iluted before amortisation of intangible assets 191p 228p 126p 178p 286p
group statisti cal in formati on
under adopted ifrss  140 the morgan crucible company plc  annual report 2011
overview business review governance financial statements
sha reholde r in formati on
analysis of shareholdings as at 1 january 2012
number of 
holdings
 of
total holdings 
number of 
shares 
 of 
share capital 
size of holding 1 – 2000 6075 750927 3251940 11906
2001 – 5000 11 17 138072 3543580 12974
5001 – 10000 338 41780 2394280 08766
10001 – 50000 297 36712 6353764 23262 
50001 – 100000 75 09271 5543561 20296
100001 and above 188 23239 252052666 922797 
8090 10000 273139791 10000 
holding classification individuals 7070 8739 15407605 564 
n ominee companies 913 1129 251582425 9211 
t rusts pension funds etc 9 011 104734 004 
others 98 121 6045027 221 
8090 10000 273139791 10000
key dates
d ividends subject to members’ approval at the a nnual general meeting and to any scrip alternative  
a final cash dividend of 6 pence per ordinary share of 25 pence shall be paid in respect  
of the financial year ended 1 january 2012
6 july 2012
t he dividend shall be paid on 6 july 2012 to holders of ordinary shares on the register  
of members at the close of business on 25 may 2012
preference dividends subject to the relevant detailed terms and approvals of the board of d irectors where applicable
55 cumulative first preference shares of £1 each and 30 march 2012 and
50 cumulative second preference shares of £1 each 1 october 2012
a nnual general meeting t he 2012 a nnual general meeting will take place on 8 may 2012
financial results t he half year results are announced in july with the report and a ccounts for the year  
normally posted in march
other information 
capital gains tax t he market values of quoted shares and stocks at 31 march 1982 were 
ordinary shares of 25 pence each 1225 pence 
55 cumulative first preference shares of £1 each 305 pence 
50 cumulative second preference shares of £1 each 285 pence 
for capital gains tax purposes the cost of ordinary shares is adjusted to take account of rights 
issues a ny capital gains arising on disposal will also be adjusted to take account of indexation 
allowances since the adjustments will depend on individual circumstances shareholders are 
recommended to consult their professional advisers
share price t he price can be obtained on the company’s website wwwmorgancruciblecom 
company details 
registered office quadrant 5557 high street windsor berkshire sl 4 1l p registered in england n o 286773
t elephone 01753 837000   fax 01753 850872
website wwwmorgancruciblecom 
company registrars capita registrars t he registry 34 beckenham road beckenham kent br3 4t u
t elephone in uk 0871 664 0300 calls cost 10p per minute plus network extras lines are open 
mondayfriday 830am530pm
t elephone from overseas 44 0 20 8639 3399
email ssdcapitaregistrarscom
website wwwcapitaregistrarscom
share portal t he capita share portal wwwcapitashareportalcom is an online service enabling you to quickly 
and easily access and maintain your shareholding online reducing the need for paperwork and 
providing 24hour access for your convenience t hrough the share portal you may for example 
view your holding balance view the dividend payments you have received and register and  
change bank mandate instructions so that dividends can be paid directly to your bank account
scrip dividend scheme t he company’s scrip d ividend scheme enables shareholders to receive new fully paid  
ordinary shares in the company instead of cash dividends whenever a scrip alternative is offered 
scrip elections can be made or revoked either online at wwwcapitashareportalcom or by 
contacting the company’s registrars to request a paper copy of the mandate form and the  
scrip d ividend scheme terms and conditions overview business review governance financial statements
overview
01  operational and financial 
highlights
02 morgan crucible at a glance
04  chief executive officer’s 
strategic review 
06 market sector reviews
20 chairman’s statement
business review
22  chief executive officer’s 
review
24 group business review
25 key performance indicators 
26 review of operations 
34 corporate responsibility
44 financial review
48 risk management 
50  key resources and  
contractual relationships
51 cautionary statement
governance
52  board of directors and  
executive committee
54  directors’ report
58  corporate governance
65  statement of directors’ 
responsibilities 
66 remuneration report
77 independent auditor’s report
financial statements
78  c o n s ol i d a t ed i n c o m e 
statement
79  c o n s ol i d a t ed s t a t em en t  
of comprehensive income
80 consolidated balance sheet
81  c o n s ol i d a t ed s t a t em en t  
of changes in equity
82  c o n s ol i d a t ed s t a t em en t  
of cash flows
83 notes to the consolidated 
 financial statements
129 company balance sheet
130  notes to the company  
balance sheet
139 group statistical information
140 shareholder information
this report has been printed in the uk our printers are environmental management 
system iso 14001accredited and forest stewardship council fsc chain of 
custodycertified all inks used are vegetablebased this paper is environmentally  
friendly ecf elemental chlorinefree and woodfree with a high content of selected 
preconsumer recycled material the mill is fully fsccertified the paper is also 
completely biodegradable and recyclable
if you have finished reading this report and no longer wish to retain it please pass it on  
to other interested readers return it to morgan crucible or dispose of it in your recycled 
paper waste thank you
this annual report is available at wwwmorgancruciblecom
designed and produced by the college  wwwthecollegecom
morgan crucible  
is a worldleader  
in advanced materials
we produce a wide range of specialist  
highspecification materials that have  
extraordinary attributes and properties
engineered into products they deliver  
enhanced performance often under  
extreme conditions
our dynamic highly skilled people  
are continuously engaged in finding  
solutions for complex and technologically  
demanding applications which are  
used all over the world
in short we supply innovative  
differentiated products made from highly  
technical advanced materials which enable  
our customers’ products and processes  
to perform more efficiently more reliably  
and for longer
 t r ans por t a t i on
page 08
 p etrochemical
page 14
 healthcare
page 18
security  defence
page 10
energy
page 16
 electronics
page 12
 industrial
page 06 morgan crucible
annual report 201 1
advanced materials
record results
continuing ambition
the morgan crucible company plc  annual report 201 1
the morgan crucible company plc
quadrant 5557 high street 
windsor berkshire sl4 1lp
tel 44 01753 837000 
fax 44 01753 850872
wwwmorgancruciblecom


Summary:
  22 the morgan crucible company plc  annual report 2011
chie f exec utive off ice r’s review
group results
t he group’s continuing strategy of focusing on 
the right growth markets and the right growth 
geographies with innovative differentiated 
addedvalue products drove revenue and 
operating profit to record levels in 201 1  
as one of the world’s leading advanced 
materials companies innovation and 
differentiation in our product offerings are  
the bedrock of our longterm profitable  
growth aspirations i am therefore very 
encouraged by the success we achieved in  
201 1 in commercialising an increasing number 
of new products and technologies such as our 
growing range of offerings to renewable energy 
markets our environmentally friendly range of 
low biopersistent superwool
®
 hightemperature 
insulating fibres and our piezoceramic 
components being sold into the hard disk drive 
hdd  endmarket each of these new 
products and technologies along with the 
many others which are highlighted in case 
studies throughout this annual report reflect 
the benefits of the investment in research and 
development innovation and differentiation 
that morgan c rucible has been making over 
recent years t he strong levels of revenue 
growth in 201 1 are the commercial results of 
seeds planted in previous years now beginning 
to blossom and bear fruit
our continued expansion into the dynamic
growth economies of the world such as china 
india and l atin america also made significant 
strides in 201 1 with our revenue to non
w estern world markets growing substantially 
yearonyear up by nearly 20 versus 2010  
at the same time our w estern world 
businesses also delivered good growth  
with revenue to n orth america and europe 
excluding n p aerospace up by 75 and 
98 respectively w hilst we strongly believe 
that the true test of a longterm sustainable 
highquality business is one which is able to 
deliver profitable longterm organic topline 
growth we are equally committed to a 
mindset of continuous improvement to  
drive yearonyear operational efficiencies  
as a result during 201 1 we continued to 
increase our production in lowcost locations 
to improve our unit costs of manufacturing  
in particular our three factories in mexico  
are playing a growing role in the supply of 
products to our markets in the united states 
and increasingly other parts of the world 
t here have also been some significant 
improvements to our operating efficiencies  
in w estern world plants most notably in  
the new hightemperature products from  
our morgan amt business as we rampup 
into larger commercial volumes and  
in doing so find additional ways to improve  
our manufacturing processes
overall therefore the healthy levels of topline 
growth achieved in 201 1 allied to continuous 
improvement initiatives on our cost base  
meant that our profit increased substantially 
with group underlying pbt up by 581 
compared to 2010
divisional highlights
t he morgan c eramics d ivision had a very 
strong year in 201 1 with reported revenue  
up 125 versus 2010 137 on a constant 
currency basis both the t echnical and 
t hermal c eramics businesses registered 
doubledigit topline growth rates with  
excellent performance in the dynamic growth 
economies and healthy growth also in the 
w estern world t echnical c eramics revenue 
grew by 140 161 on a constant currency 
basis compared to 2010 with t hermal 
c eramics delivering 1 14 growth  
122 on a constant currency basis
i am also pleased to report very good progress 
during 201 1 in realising the benefits of the 
merger of the t echnical c eramics and t hermal 
c eramics businesses that was announced  
in the summer of 2010 t his was undertaken 
with the aim of increasing the potential topline 
growth rate of each business through 
leveraging their respective strengths that of 
t hermal c eramics’ deep and wellestablished 
presence in the dynamic growth economies 
and that of t echnical c eramics in identifying 
distinctive advanced material competencies  
in secular growth higher margin endmarkets 
revenue growth initiatives are by their  
nature focused on a medium to longerterm 
timeframe but the early signs are encouraging 
from both businesses for example we have 
now put in place dedicated t echnical c eramics 
sales and application engineering expertise into 
t hermal c eramics locations around the world 
to open up new potential geographic markets 
in both asia and l atin america with a resultant 
i am pleased to report that 201 1 was  
a record breaking year of revenue and 
operating profit for the group
overview business review governance financial statements
mark robertshaw chief executive officer annual report 2011  the morgan crucible company plc 23
increase in the flow of new business prospects 
coming into our pipeline on the t hermal 
c eramics side significant progress has been 
made in our strategy and plans for global  
hightemperature insulating fibre products 
fibre products represent some 20 of total 
group revenue and i am delighted to say  
that our efforts in research and development  
now mean that we are have a full range of  
low biopersistent fibres superwool
®
 products  
to offer to the market w e believe that the 
environmentally friendly credentials of the  
new superwool
®
 range combined with their 
technical performance leave us wellplaced  
to deliver profitable growth in this important 
business area over the coming years
t he cost synergies of the d ivisional merger 
– which relate primarily to shared management 
and administration costs – have been delivered 
as planned during the year with circa £6 million 
of benefits in 201 1 which we anticipate will  
rise to a fullyear benefit of £8 million pa from 
2012 onwards
another highlight of the year in the morgan 
c eramics d ivision has been the successful 
commercial rampup of our hard disk drive 
hdd  business t he operational demands of 
such a significant stepup in volumes have been 
handled admirably by the t echnical c eramics 
team with excellent global coordination of 
production activities both in n orth america 
and asia revenue from this product increased 
from circa £6 million in 2010 to over  
£15 million in 201 1 and we are optimistic  
about further revenue growth potential in  
this business during 2012
t he combination of strong topline growth 
allied to the benefits of cost reduction initiatives 
mean that d ivisional ebit a for the morgan 
c eramics d ivision increased by 347 from 
£688 million to £927 million with d ivisional 
ebit a margin improving from 1 13 to 135 
d ivisional ebit a for the t echnical c eramics 
business was up 268 from £340 million  
to £431 million with the d ivisional ebit a 
margin improving from 136 to 151 
t hermal c eramics’ d ivisional ebit a  
was up by 425 from £348 million to  
£496 million with operating profit margin 
improving from 97 to 124
t he morgan engineered materials d ivision  
also delivered good d ivisional ebit a margin 
progression during the year from 1 12  
in 2010 to 134 in 201 1 in this d ivision  
the topline growth was 19 28 on a 
constant currency basis as the anticipated 
reduction in ministry of d efence spending  
on personal and vehicle ballistic protection 
following the surge of troops and equipment 
into afghanistan during 2007 to 2009 was 
continued from 2010 into 201 1 as a result  
n p aerospace which provides ballistic 
protections solutions into this market  
saw revenue decline from £1209 million in 
2010 to £930 million in 201 1 encouragingly 
our initiatives to take n p aerospace’s 
differentiated lightweight vehicle armour 
solutions to international markets made 
progress during the year h aving established  
an n p aerospace office in the us a in the 
summer of 2010 n p aerospace won a first 
prototype order for vehicle armour in the  
early part of 201 1 which was then successfully 
converted into a full production order later  
in the year for delivery in the first half of 2012 
w hilst only small scale at this point this first 
production order reinforces our view that  
n p aerospace has an attractive range of 
technologies and solutions with commercial 
potential well beyond the traditional uk market
t he rest of the morgan amt business 
delivered healthy revenue growth in 201 1  
up 1 19 versus 2010 at reported rates  
131 on a constant currency basis t he most 
notable driver of this was strong performance 
from our growing range of carbongraphite 
insulating materials for hightemperature 
applications such as photovoltaic and led 
processing markets sales into these markets 
have benefited from significant research and 
development initiatives to develop innovative 
differentiated products that set industryleading 
levels of performance in terms of their energy 
efficiency and purity characteristics as a result 
sales of hightemperature products increased 
from circa £12 million in 2010 to circa  
£27 million in 201 1 as production levels have 
ramped up in the hightemperature business 
we have been able to drive operational 
improvements in our manufacturing processes 
to improve yields and reduce our unit costs  
of production elsewhere the morgan amt 
business has continued to increase the use  
of lowcost manufacturing locations which  
has also had a beneficial impact on our 
operating costs
t he combination of robust revenue growth 
allied to the cost efficiencies has driven strong 
d ivisional ebit a margin progression from 
90 in 2010 to 127 in 201 1 for morgan 
amt excluding n p aerospace with ebit a 
increasing 584 over the period from  
£221 million to £350 million
similarly strong performance has also been 
delivered in the molten metal systems mms 
business where revenue increased 159 
yearonyear 176 at constant currency  
with good growth across all regions with the 
asian businesses performing particularly well 
mms d ivisional ebit a improved 222 from 
£63 million to £77 million with d ivisional 
ebit a margins rising from 156 in 2010 to 
165 in 201 1
looking forward
t he macroeconomic outlook as we enter  
2012 remains uncertain particularly with the 
ongoing risks to the eurozone and indeed the 
global economy due to sovereign debt issues  
in several countries h owever we believe  
that unless there is a major and pronounced 
global downturn morgan c rucible remains 
wellplaced in 2012 to make further progress 
against the threeyear financial goals that we 
announced in early 201 1 w e have an exciting 
pipeline of innovative differentiated new 
products and technologies w e have a strong 
and growing presence in the dynamic growth 
economies of the world above all we have  
a talented and committed workforce around 
the world who have shown themselves to be 
nimble imaginative and tenacious in driving  
the group’s business forward once more in 
201 1 i would like to take this opportunity to 
thank them all for their efforts in making 201 1  
a recordbreaking year of revenue and 
operating profit and know they will be equal  
to the challenge of trying to make our 2012 
performance even better once again
mark robertshaw
c hief executive officer
overview business review governance financial statements