2115302   27042012   proof 4
severfieldrowen plc
annu al re po rt  account s
for the year ended 31 d ecember 2011 2115302   27042012   proof 4
severfield–rowen plc is the largest specialist structural 
steelwork group in the uk with a growing presence in 
india and a reputation for performance and value
group strengths
	 operational performance and 
 customer service
	 multisector flexibility
	 early project design enhancement  
 programming and costing
	 product and service range
	 u k and overseas     
 manufacturing and network
	 factory and site efficiencies
	 people and skills
	 financial strength
	 scale and cost base
	 	 health safety and sustainability
for more information visit wwwsfrplccom
severfield—rowen plc annual report 2011 01 our business 01
2115304 270412   proof
our business
04 what we do
06 our operations
08 group at a glance
10 indian joint venture
14 year at a glance
16 chairman’s statement
18 chief executive’s review
22 financial review
27 key performance indicators
our gov ernance
30 directors and advisers
32 executive committee 
34 corporate objectives 
36 principal risks and uncertainties
38 directors’ report
42 corporate social responsibility
46 corporate governance
52 directors’ remuneration report
59 directors’ responsibilities 
statement
grou p accounts
62 independent auditor’s report
63 consolidated income statement
64 consolidated statement of  
comprehensive income
65 consolidated balance sheet
66 consolidated statement of 
changes in equity
67 consolidated cash flow 
statement
68 notes to the consolidated 
financial statements
99 five year summary
99 financial calendar
compan y accounts
102 independent auditor’s report
103 company balance sheet
104 notes to the company 
financial statements
x x  revenue steady at £2678m 2010 £2667m
x x  underlying group operating margin before results of 
associates at 53 2010 62
x x  underlying group profit before tax of £101m 2010 
£153m
x x  share of losses from indian joint venture of £25m 2010 
£04m
x x  profit after tax reflecting nonunderlying items of £58m 
2010 £76m
x x basic earnings per share of 652p 2010 858p
x x recommended final dividend per share of 35p giving total 
dividend of 50p 2010 75p
x x year end net debt of £313m 2010 £150m
x x march 2012 u k order book value £221m
x x  march 2012 jss l india order book value £43m
contents
financial highlights
revenue
£2678m
07 08 09 10 11
retained profit
after tax
£58m
07 08 09 10 11
underlying  
operating margin
53
07 08 09 10 11
underlying basic 
earnings per share
805p
07 08 09 10 11
underlying profit 
before tax
£101m
07 08 09 10 11
dividend per share
50p
07 08 09 10 11
 underlying is before
• the amortisation of acquired intangible assets — £27m 2010 £27m
• legal costs and provision movements — £06m charge 2010 £20m gain
•  share of preoperating losses of indian joint venture — £nil 2010 £14m 
• impairment in valuation of investment property — £nil 2010 £21m
•  the associated tax impact of the above and the effect of future corporation tax rate reductions — £20m gain 
2010 £07m gain 02 severfield—rowen plc annual report 2011
2115304 270412   proof
project 
the shard 
location 
london bridge 03 our business 03
2115304 270412   proof
our business
 
contents
04 what we do
06 our operations
08 group at a glance
10 indian joint venture
14 year at a glance
16 chairman’s statement
18 chief executive’s review
22 financial review
27 key performance indicators
commercial offices sector
project  
amex house
 
location 
brighton   
project 
cooperative 
headquarters
location   
manchester
project  
london bridge place
 
location   
london
project  
one new change
location   
london 04 severfield—rowen plc annual report 2011
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what we do
t he group proactively seeks to continue its industry 
leading position in the areas of health safety and 
sustainability t he group’s “steel futures” strategy 
promotes sustainable future safe future and zero 
carbon future
 
h eal th  saf ety                 qual ity                  innovation                                                                                                       competitive advantage                 scal e 
erection
 
h eal th  saf ety                 qual ity                  innovation                                                                                                       competitive advantage                 scal e 
design
fabrication
 
                                                                                                                          ef f ective contract management        
 
  xsustainabil ity           xsustainabil ity    x x x x x   xsustainabil ity    x x x x x x x   xsustainabil ity   
 
   xsustainabil ity    x x x x x  05 our business 05
2115304 270412   proof
competitive advantage 
t he group’s competitive advantages derive from its scale client focus 
flexibility experience cost base productivity supply chain strengths and 
integrated approach from design to erection
design 
t he design process offers clients alternative concepts and solutions  
by working closely with the consulting engineers at the concept of the  
project and with the assistance of the latest stateoftheart computer 
software for 2d and 3d analysis modelling and design at their disposal 
we are able to offer clients ‘value engineering’ for the most effective and 
efficient solutions advice on material choices fabrication fire protection 
surface treatment and erection techniques can often lead to significant 
project savings
erection 
t he group’s inhouse erection companies steelcraft and fisher 
engineering provide services for all of the other severfield–rowen group 
companies whilst only working within the group they are the largest 
structural steel erection businesses in the u k directly employing staff and 
owning plant
t hey are industry leaders in steel erection and construction methodology
fabrication 
operational investment has been significant and continuous over the 
years with many innovative features being developed and incorporated 
modern stateoftheart processing equipment has been employed with 
full consideration for design supporting layout logistics integration and 
erection
t he group provides a full inhouse service offering streamlined design 
fabrication and erection capability with multisector flexibility that is unparalleled 
in the industry
 
  xsustainabil ity           xsustainabil ity    x x x x x   xsustainabil ity    x x x x x x x   xsustainabil ity   
 
   xsustainabil ity    x x x x x  06 severfield—rowen plc annual report 2011
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our operations
t he group’s stateoftheart facilities provide clients with unrivalled 
services and value in the execution of their projects
power  energy 
power stations in the u k ireland and overseas have always 
been an important element for the group where its capability 
to deal with special construction and engineering requirements 
leads to its unrivalled success in this sector our experience and 
professionalism in delivering such projects enables the group to 
continue in its pivotal role in supply to this growing sector
market sec t ors
trans port bridges  car p arks 
t he group has a strong reputation for successful delivery 
of major transportation related projects both in the u k and 
overseas including airports and has extensive experience for 
all types of bridgework group successes include heathrow’s 
t erminal 5 gatwick pier 6 passenger bridge the multi award 
winning gateshead millennium bridge stratford city footbridge 
and the above t erminal 2a heathrow
commercial offices
performance benefits from fabsec and firebeam together with 
other initiatives have underpinned the group’s success in this 
sector example illustrated is cannon place london
distribution  i ndustrial
t he group’s competitive strengths including design capability 
supply chain coordination and fabricationerection speeds are 
key to its success in this sector group contracts include projects 
for t esco asda and morrisons t he project illustrated is the 
cooperative distribution facility andover
copyright balfour beatty and produced with the permission of baa plc 07 our business 07
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health 
many hospitals are specified with structural steel frames  
span length enhanced flexibility adaptability and speed of 
construction are key factors conferring advantages to the group 
in this sector example illustrated is queen elizabeth hospital 
birmingham
stadiums  leisure 
t he group has an unrivalled record in the design engineering 
and building of many of the u k’s best known stadiums and has 
provided timely and costeffective solutions for long spanning 
architecturally innovative structures group successes include 
arsenal’s emirates stadium wimbledon centre court excel 
exhibition centre london and the 2012 olympic stadium 
stratford
education 
group companies have extensive experience in the provision of 
structural steelwork for the education sector t he company has 
undertaken numerous school and further education projects 
leeds metropolitan university was awarded a commendation 
for its structural steel design
city centre  retail 
project management and supply chain linkage are vital aspects 
in the provision of successful execution in these challenging city 
centre and out of town projects example illustrated is westfield 
shopping centre stratford 08 severfield—rowen plc annual report 2011
2115304   020412   proof 3
group at a glance
t he combined resources of our group of companies have the design skills engineering 
skills and experience to handle complex projects over a diverse range of market sectors 
 
we can facilitate the production of a wide range of steelwork packages from projects 
requiring high added value engineering content to basic structural work
fis her
engineering
s everfield –rowen
structures
severfield –reeve 
international 
abu dhabi project office
jsw s everfield
structures
watson steel
structures
atlas ward
structures
engineering 
construction 
training
steelcraft erection 
services
heron tower london
s everfield–rowen 
structures ltd
located at dalton in north yorkshire this is the 
largest of the operating companies and is the hub 
of much of the group’s activity on its 55 acre site 
it has ten production lines where the manufacturing 
process is undertaken in a controlled environment
t he companys preconstruction services  division 
is based in south normanton derbyshire  
steelcraft the groups inhouse erection business is 
also based at dalton
watson steel
structures ltd
t his world famous business founded in 1933 is 
one of the larger u k structural steelwork companies 
in its own right it is internationally respected with  
a reputation for having specialist skills in relation  
to the design and engineering of high added  
value steelwork
arcelormittal orbit stratford 09 our business 09
2115304   020412   proof 3
distribution centre dunfermline
atlas ward  
structures ltd
located in sherburn near scarborough atlas 
ward is the leading design and build steelwork 
contractor for distribution warehouses in the u k 
atlas ward designs fabricates and erects structural 
steelwork principally for the warehouse industrial 
and distribution sectors and has a business skill base 
and client profile which is complementary to the rest 
of the group  
t he light steel division specialising in stairs and 
other ancillary products is also based at sherburn
derby civic centre derbyshire
fis her  
engineering ltd
located in northern ireland fisher engineering 
ltd is recognised to be one of europe’s leading 
constructional steel fabricators t he company has a 
highly skilled workforce and is equipped with the 
latest stateoftheart manufacturing processes
t he company has its own inhouse erection 
business
prestige shantiniketan bangalore
jsw severfield 
structures ltd
located adjacent to jsw steel’s plant at vidyanagar 
in the district of bellary karnataka india the plant 
consists of two fabrication lines and a plate line 
plant investment has been significant with many 
of severfield–rowen’s innovative features being 
incorporated into the joint venture t he company  
is involved in the design fabrication and erection  
of structural steelwork to principally service the 
indian markets 10 severfield—rowen plc annual report 2011
2115304 270412   proof
jsw severfield structures ltd
severfield–rowen’s joint venture and operations in india are of significant 
importance in achieving our strategic growth ambitions
2011 saw the first full year of our operations in india with 
many prestigious projects won including
x x t he air t raffic control t ower at mumbai airport
x x t wo power stations for siemens ltd 
x x t he jupiter mills commercial complex in mumbai  
for indiabulls and
x x t he shantiniketan commercial complex for  
prestige estates in bangalore 
‘value proposition’
jsw severfield structures ltd’s ‘value proposition’ to the 
india market provides clients with many advantages 
namely
x x a design and build service promoting and utilising the 
best advantages of steel for clients through enhanced 
steel design across a wide range of construction sectors
x x precision manufacturing providing accuracy consistency 
and reliability to clients for their construction projects
x x comprehensive design fabrication and erection 
methodology delivers design concepts to project reality 
thus providing maximum revenues and lower overall 
project costs to clients through short programme times 
and lower overall financing costs 
india  the future
t he indian market is growing and is enjoying considerable 
infrastructureconstruction spend steel is already used 
significantly in the power and infrastructure sectors
t he use of steel in construction is anticipated to become  
more widespread in the coming years as its overall value  
benefits are realised
severfieldrowen remains optimistic that the joint venture 
will continue to grow both through market growth and 
through market penetration as a result of the value it is 
offering to clients
india   11 our business 11
2115304 270412   proof
overview
x x 35000 tonnes capacity
x x t wo fabrication lines
x x  
line sections from plate
x x 427 employees
x x second jv for floor metal decking line in bellary
stateoftheart plant 
t he plant has been designed to optimise product 
range quality and productivity as befitting the 
demands of the construction industry in india
incorporating stateoftheart technology and 
processing equipment the plant is managed and 
operated by highly qualified experienced and 
dedicated people
bespoke plated products 
 
and 
 
are manufactured on site at bellary karnataka 
offering clients a range of benefits
t he plant is based in bellary and currently utilises 
26000m
2
 of workspace and 52000m
2
 of logistics 
and storage area
locations 
t he head office with sales operatives and project 
managers is based in mumbai
t here are also sales and project representatives 
across india to service the needs of clients
x x bellary  production plant
x x mumbai  head office
x x bangalore  sales representation and drawing
design office
x x delhi  sales representation 12 severfield—rowen plc annual report 2011
2115304 270412   proof
project  
prestige 
shantiniketan
 
client  
prestige estates
 
location 
bangalore
sector 
commercial
project  
indiabulls   
jupiter mills
 
client  
indiabulls
 
location 
mumbai
sector 
commercial
project  
crm 2
 
client  
jsw
 
location 
vidyanagar
sector 
industrial
jsw severfield structures ltd continued
proj ect galler y 13 our business 13
2115304 270412   proof
project  
382 mw gas power 
station
 
client  
siemens ltd
 
location 
surat gujarat
sector 
power
project  
mumbai airport  
atc
 
client  
ltgvkmial
 
location 
mumbai
sector 
airports
health  safety
jsw severfield structures ltd and its employees 
are emerging as leaders in health and safety
t he company recently received full accreditation 
to ohsas 18001 and through external 
verification was found to have rigorous standards 
policies and procedures in place t he company 
has a fully dedicated hs resource undertaking 
robust audits and training to promote an excellent 
health and safety culture
t he executive team also carry out periodic 
leadership assessments along with the joint 
venture partners
t he company’s health and safety performance 
has been good and the management remains 
committed to continuously strive to improve 
standards 14 severfield—rowen plc annual report 2011
2115304 270412   proof
year at a glance
despite difficult trading conditions during 2011 the group illustrates some of its 
significant highlights through the year
quarter 2 quarter 3 quarter 4 quarter 1
  
jan uar y
a pri l
july
oct ober
january
roll out of safety leadership teams “s lts” across all 
group companies
s lt’s progress is reported and reviewed by the group 
safety leadership t eam which is chaired by the ceo t his 
methodology is now firmly embedded across the group
april
leeds arena contract award for fisher engineering
a ward of contract for the construction of a stateoftheart 
13500 seater concert and entertainment venue in leeds 
it will be operated by sm g europe the largest operator of 
sports and entertainment venues
october 
key indian project milestone  
for j sw severfield
jsw severfield completed structural steel construction on 
their first commercial office project in india the prestige 
shantiniketan bangalore
july
awards
t he group received structural steel design a wards 
for cannon place london and the american express 
community stadium brighton
both st botolphs london and excel phase 2 london 
received commendations 15 our business 15
2115304 270412   proof
  
februar y march
may june
august sep tem ber
nov em ber decem ber
february
bmw contract award for atlas ward
a ward of contract with bmw for expansion of 
their cowley oxfordshire plant to service demand 
for the next generation of minis to be built at the 
site from 2013
marc h
group achievement of bes 6001  responsible 
sourcing of construction products breeam
severfieldrowen are the only u k structural steelwork 
supplier to have achieved this certification 
may
watson steel structures commences work on 
london cable car contract 
t he london cable car is a 1km long gondola link 
to be operated by t ransport for london opening in 
time for the 2012 london olympics watson’s were 
uniquely placed to provide the technical heavy steel 
requirements of this complex scheme
june
investor open day london 
t he group held a well attended open day for key investors which 
involved a tour of the 2012 olympic facilities and the westfield 
shopping centre stratford
november
successful refinancing
t he group renewed its banking facilities and 
entered in to a new five year £50m revolving 
credit facility with r bs and yorkshire bank a 
member of the national australia bank
december
award of arla dairy contract for severfieldrowen structures
t his stateoftheart dairy facility in aylesbury buckinghamshire will be 
the first zero carbon milk production facility in the world
august
award of the leadenhall building contract
122 leadenhall street the “cheesegrater” is an  
iconic 225 metre british land development designed 
by richard rogers scheduled for completion in 
2014 
september
receipt of iso14001 and iso18001 certifications  
at j sw severfield structures india
t hese are the first such certifications for a steelwork contractor in india 
and are testament to the rapid achievement of operational objectives 
and health and safety focus of the business   16 severfield—rowen plc annual report 2011
2115304 270412   proof
chairman’s statement
joh n dodds chairman
against the backdrop of a continued challenging  
u k trading environment i am very pleased with  
the company’s results for the year and with  
its progress and direction 
overview
t he year to 31 december 2011 was my 
first full year as a director with severfield–
rowen and included my appointment to 
the role of chairman in september 2011
against the backdrop of a continued 
challenging u k trading environment i am 
very pleased with the company’s results for 
the year and with its progress and direction 
our u k companies are market leaders in 
their respective fields and they work 
vigorously individually and collectively to 
sustain the group’s key competitive 
advantages
t he group’s view is that the u k market 
conditions over the coming years will 
remain lacklustre contrasting markedly with 
the increasing and exciting prospects for 
our joint venture company in india
results
t he group has made an underlying 
operating profit of £117m 2010 £162m 
on revenue of £2678m 2010 £2667m 
group profit after tax is £58m 2010 
£76m with basic earnings per share of 
652p 2010 858p both reflecting the 
impact of nonunderlying items
dividend
our u k markets remain challenging and 
consequently the group continues to adopt 
a cautious dividend policy we recommend 
a final dividend of 350p giving 500p for 
the full year 2010 750p which is 16 
times covered by underlying earnings per 
share
board changes
as we announced at the time of our interim 
results in august 2011 i was appointed 
chairman on 1 september 2011 in 
succession to t oby hayward who remains a 
nonexecutive director and chairman of 
the group’s audit committee
earlier in february 2011 derek randall 
executive director for business 
development and international including 
jsw severfield structures ltd in india 
joined the group’s board
jonathan rhodes was appointed as 
company secretary in june 2011
we were pleased that chris holt formerly 
chief executive of mj gleeson financial plc 
joined us as a nonexecutive director of the 
group in november 2011 succeeding 
david ridley who left his role after nine 
years of valued service
in response to new and emerging 
opportunities we continue to review the 
operation of the board in order to provide 
the group with the appropriate level of 
support as the shape and scale of the 
business changes
our people
our management teams and employees 
continue to operate very well in challenging 
market conditions which have now been in 
occurrence for a number of years t he 
expertise experience and dedication of our 
people is a major asset of the business and 
on behalf of the board i would like to thank 
them all for their continued support
during a visit to jsw severfield structures 
ltd in india in february this year i was able 
to see the outcome of our joint efforts which 
has resulted in an effective and highly 
motivated team of management and 
employees working in a modern and safe 
environment
outlook
notwithstanding the prevailing u k market 
conditions the board is confident that the 
business has the talent ambition and 
resource to achieve its strategic objectives 
both at home and abroad and i am very 
optimistic for its future 17 our business 17
2115304 270412   proof
project
cooperative headquarters 
location 
manchester
th e portf olio 18 severfield—rowen plc annual report 2011
2115304 270412   proof
chief executive’s review
tom haug h ey ch ief executi ve officer
in 2011 the u k structural steel sector endured a 
further year of slow demand and tough trading 
conditions against this background we were 
conditioned and prepared for the market and have 
produced resilient results and performance 
uk overview
in 2011 the u k structural steel sector 
endured a further year of slow demand and 
tough trading conditions which was 
exacerbated by diminishing confidence 
levels for business prospects in 2012 as a 
result of the economic environment
against this background we were 
conditioned and prepared for the market 
and have produced resilient results and 
performance encouragingly our u k 
businesses entered 2012 with a strong 
order book of good quality contracts having 
now successfully executed all of our 
olympic related work
while there is little evidence of imminent u k 
recovery either in the broad economy or 
the overall construction industry we are 
confident that our capabilities focus and 
relative financial strength will in the 
meanwhile sustain creditable results and 
enhance our competitive position
order book
t he u k order book at £221m march 
2012 is similar to the order book 12 
months previously march 2011 £226m 
which contained olympic related structures 
t he current order book contains a broad 
quality mix of london commercial offices 
industrial warehousing waste to energy 
projects t ransport including airports 
education and leisure
t he prospective u k projects which we have 
identified as appropriate opportunities for 
the group total some £510m and gives us 
confidence for the remainder of 2012 and 
beyond
costs
costs within the business continued to be 
managed tightly and are under constant 
review aided by the group’s new financial 
software and revised authority limits at all 
levels procurement related initiatives 
launched in 2011 are translating into 
benefits for 2012
prices and margins
prices remain generally tight in the u k 
market as surviving competitors seek to 
obtain a share of a smaller market
t he group is pleased with its margin 
achievements of 53 against a tough 
backdrop and anticipates that margins will 
remain stable in 2012
projects
some of the notable projects during 2011 
include those from the predicted key sectors 
of t ransporta viation commercial offices 
industrial distribution and powerenergy
x x heathrow airport
x x blackfriars bridge london
x x leadenhall street london
x x gatwick north t erminal
x x park house london 
x x ocado t amworth 
x x bmw oxford 
x x morrisons bridgwater 
x x marks  spencer cheshire oaks 
x x cooperative hq manchester 
x x t itanic quarter belfast 
x x howick place london 
x x paris philharmonic hall
x x sellafield building sa vs
x x london bridge place
x x t he shard london bridge
x x southmead hospital
x x amex house brighton
x x amazon dunfermline
x x warner bros leavesden
x x asda birkenhead
x x birmingham library
x x ineos runcorn
x x leeds arena 19 our business 19
2115304 270412   proof
project
heathrow terminal 2a 
location 
london
th e portf olio
business investment
u k investment was largely restricted to 
essential replacement and new financial 
systems t he company continues to invest in 
health and safety training and initiatives both 
in our factories and for our project sites
india
in the relatively short time since the plant in 
india was opened in november 2010 we 
have now clearly established strong 
foundations for a successful business 
capable of significant growth
t he order mix in 2010 was reflective of our 
entry into a new market with a new offering 
and a steep learning curve with some 
complex work which contributed to lower 
productivity and higher startup losses than 
planned
t he indian order book at £43m march 
2012 covers almost all of our production 
plans for 2012 and is strong in terms of 
quality and importantly product mix t he 
reduction in the size of the order book 
since november 2011 £61m is largely the 
result of a single contract cancellation which 
failed to conclude its project financing t he 
pipeline of potential orders continues to 
grow with some £80m of good 
opportunities being identified
as a result of these positive developments 
we are now in a position to consider 
extending our production capacity in india 
and will be evaluating this further during the 
course of the first half of this financial year
copyright balfour beatty and produced with the permission of baa plc 20 severfield—rowen plc annual report 2011
2115304 270412   proof
corporate social responsibility
in our 2010 statement we outlined our 
intention to proactively implement our 
strategy for continuous improvement 
through our steel futures programme
in 2011 we have been pleased with the 
significant progress that has been made 
across all of our operating companies
some highlights of progress are
x x rollout of the i os h directing safely to 
38 operational directors within the 
group to help underpin the desired 
leadership behaviours
x x t he rollout of our behavioural safety 
strategy through an innovative 
theatrebased learning programme 
working with our external consultants 
the group has engaged in excess of 
800 direct employees and subcontract 
supply chain
x x t he implementation and communication 
of our golden rules to help drive 
improved standards across all 
operations
x x t he implementation of focused safety 
leadership reviews across key aspects of 
our business design construction and 
factory operations
x x improved engagement of our 
employees through director safety 
briefings staff surveys and effective 
communications
x x a significant investment in improved 
technology and it solutions to maximise 
interaction communication and team 
collaboration t hrough our new 
workspace platform where we expect to 
see significant efficiencies that will help 
drive improvements in the worklife 
balance for our employees
x x t he external recognition from key 
clients of our inhouse training company 
engineering construction t raining ltd 
ectl t he development and 
application of new products to help 
reduce risk and improve safety 
standards within the group
x x positive recognition of jsw severfield 
structures ltd in india as being 
proactive in setting industryleading 
standards and achieving client awards 
and commendations for our 
performance
x x an intake of young apprentices to help 
sustain the skills necessary for the future 
success of the group
x x t he continued and sustained leadership 
position as the only steel fabrication 
contractor to have achieved the 
breeam standard of b es 6001 for the 
responsible sourcing of materials
we also have an ambitious plan for 2012 
and we expect to see further momentum as 
we continue our journey to be recognised 
as industry leaders
summary and outlook
given the uncertain economic outlook the 
u k market is likely to remain extremely 
challenging it is likely that more companies 
in our sector will exit their positions as 
pressures remain on their volumes costs 
and cash overall however we believe that 
it is unlikely that the balance of supply and 
demand in the u k will worsen
significant opportunities are evident for 
severfield–rowen plc in several important 
sectors including t ransporta viation  
power energy industrial commercial and 
others where the group is well positioned to 
challenge and compete
in india our joint venture is well established 
and has made progress in terms of 
operational outputs and market presence in 
2012 we anticipate a positive return on our 
investment and will seek to grow our scale 
of operations further
overall the group continues to perform  
in line with the board’s expectations despite 
the challenging conditions in the u k and 
we are encouraged by the competitive 
position of the business
chief executive’s review continued 21 our business 21
2115304 270412   proof
project
amex house  
location 
brighton
th e portf olio 22 severfield—rowen plc annual report 2011
2115304 270412   proof
financial review
al an dunsmore financia l direc t or
t he group’s results for 2011 reflect a steady 
performance in a trading environment which remains 
very challenging underlying operating margins 
before results of associates have compressed as 
expected to 53 but the order book remains strong 
and the group continues to operate at its current 
operating capacity
overview
t he group’s results for 2011 reflect a steady 
performance in a trading environment 
which remains very challenging underlying 
operating margins before results of 
associates have compressed as expected to 
53 but the order book remains strong 
and the group continues to operate at its 
current operating capacity
2011 represented the first full year of 
operations at the group’s indian joint 
venture business it was very much a year of 
establishing commercial and production 
foundations and the loss of £25m reflects 
this t hese foundations have now been 
established providing the basis for a more 
positive performance in future
as expected debt levels increased during the 
year and continue to be managed very closely 
in the current difficult trading environment 
t his is supported by the new bank facility 
which was agreed in november 2011
revenue and operating profit
revenue of £2678m was flat year on year 
2010 £2667m t his reflects stable 
production volumes in the year along with 
relative stability in underlying steel prices
t he underlying operating profit before 
results of associates of £142m was 14 
down on prior year 2010 £166m 
reflecting the expected operating margin 
compression from 62 to 53 although 
overall pricing stabilised during the year 
margins remain tight and there are still 
examples of uneconomic pricing from 
competitors
share of losses of associate 
companies
t he group’s share of losses from its indian 
joint venture was £25m for the year 2010 
£04m underlying t his has been generated 
from the first full year of operation at the 
business t he results reflect a gradual 
increase of production during the year but 
at levels which for most of the year were 
below the required breakeven position 
although the order book developed very 
well during the year a number of customer 
driven contractual delays were experienced 
which as well as impacting the production 
rampup also impacted the extent to which 
profit could be accounted for on some of 
the larger contracts t he position achieved at 
year end however provides a better 
platform for a more positive contribution 
from the joint venture during 2012
finance costs
net finance costs for the group amounted 
to £16m 2010 £09m t his reflects 
higher prevailing debt levels throughout the 
year along with some costs relating to the 
refinancing of the group’s bank facilities in 
november 2011
nonunderlying items
nonunderlying items reduced the profit 
before tax for the year by £33m 2010 
£42m and include the following
x x amortisation of acquired intangibles — 
£27m 2010 £27m
x x legal costs and provision movements 
— £06m 2010 £20m gain during 
the year some litigation involving the 
group expanded in scope resulting in 
additional costs of £06m a provision 
for future costs of £06m is also being 
retained
x x share of preoperating losses of indian 
joint venture — nil 2010 £14m
x x impairment in valuation of investment 
property — nil 2010 £21m 23 our business 23
2115304 270412   proof
taxation
t he underlying tax charge of £29m 
represents an effective rate of 232 on 
applicable profit which excludes results of 
associates compared with 266 in the 
previous year t his reflected a benefit from the 
satisfactory conclusion of some outstanding 
matters relating to previous years
t he total tax charge for the year was £10m 
which represents an effective tax rate of 
103 on applicable profit which excludes 
results of associates t his includes the 
additional deferred tax benefit from the 
reduction in u k corporation tax to 25 
t his is categorised as nonunderlying and is 
included in other items
earnings per share
underlying basic earnings per share was at 
805p a decrease of 36 over the previous 
year t his calculation is based on the 
underlying profit after tax of £72m and 
89251076 shares being the weighted 
average number of shares in issue during 
the year
basic earnings per share based on profit 
after tax after nonunderlying items is 652p 
2010 858p for 2011 there is no 
difference between basic and diluted 
earnings per share 2010 no difference
project
cable car
location 
london
th e portf olio 24 severfield—rowen plc annual report 2011
2115304 270412   proof
dividend
t he board recommends a final dividend of 
350p payable on 21 june 2012 to 
shareholders on the register at the close of 
business on 25 may 2012 t his will give a 
total dividend for the year of 500p
balance sheet
shareholders’ funds increased during the 
year from £1309m to £1323m t his 
equates to a total equity value per share at 
31 december 2011 of 1482p compared 
with 1467p at the end of 2010
goodwill on the balance sheet is valued at 
£547m 2010 £547m and is subject to an 
annual impairment review under ifrs 3 no 
impairment existed at either 31 december 
2011 or 2010
other intangible assets on the balance sheet 
are valued at £182m 2010 £205m t his 
represents the net book value of the intangible 
assets identified on the acquisition of fisher 
engineering in 2007 along with new software 
assets installed during 2011 t he amortisation 
charged in the year was £27m 2010 
£27m giving a total amortised at the 
yearend of £213m 2010 £185m
t he group has property plant and 
equipment and investment property totalling 
£836m 2010 £869m depreciation 
charged in the year amounted to £45m 
2010 £45m capital expenditure in the 
year was £21m 2010 £30m t his 
included investment in new financial systems 
and in valueadd equipment for the light 
steel division and plate profiling capability
during the year the group invested £01m 
2010 £29m as equity into the joint 
venture company in india
t he group’s capital expenditure in 2012 in 
the u k is not expected to be more than £3m
t he group’s atlas ward subsidiary has a 
defined benefit pension scheme which 
although closed to new members had an 
ias 19 deficit of £85m as at 31 december 
2010 at 31 december 2011 the deficit 
increased to £96m and is shown as a 
liability in the group balance sheet t he 
increase in the deficit is as a result of the 
changes in the assumptions made including 
a reduction in corporate bond yields and an 
increase in mortality rates partly offset by 
higher than expected returns on the 
scheme’s assets
cash flow
t here was an increase in net debt during 
the year of £163m to leave the yearend 
position at £313m 2010 £150m t his 
movement includes a cash outflow from 
operating activities of £90m and also 
includes dividends of £36m investment in 
capital expenditure of £21m and £37m of 
corporation tax payments an increase in the 
overall level of net debt was expected but 
the outflow from operating activities was 
higher than expected driven by the contract 
mix and phasing at the yearend coupled 
with greater tightness in customer 
settlements we expect the effects of the 
contract mix and phasing to start unwinding 
over the next 2–3 months
t he group secured new and increased 
credit facilities from r bs and yorkshire 
bank a member of national australia bank 
group in november 2011 it now has 
borrowing facilities of £50m a £10m 
increase over its previous facility t hese will 
remain in place until november 2016 and 
will enable the group to continue trading 
from a position of relative strength in its 
markets in what continues to be a tough 
environment
treasury
group treasury activities are managed and 
controlled centrally risks to assets and 
potential liabilities to customers employees 
and the public continue to be insured t he 
group maintains its low risk financial 
management policy by insuring all 
significant trade debtors
t he treasury function seeks to reduce the 
group’s exposure to any interest rate 
foreign exchange and other financial risks 
to ensure that adequate secure and 
costeffective funding arrangements are 
maintained to finance current and planned 
future activities and to invest cash assets 
safely and profitably
t he group continues to have some 
exposure to exchange rate fluctuations 
currently between sterling the euro and the 
us dollar in order to maintain the projected 
level of profit budgeted on contracts foreign 
exchange contracts are taken out to convert 
into sterling at the expected date of receipt
financial review continued 25 our business 25
2115304 270412   proof
project
arcelormittal orbit
location 
stratford
th e portf olio 26 severfield—rowen plc annual report 2011
2115304 270412   proof
financial review continued
going concern
in determining whether the group’s annual 
consolidated financial statements can be 
prepared on a going concern basis the 
directors considered all factors likely to 
affect its future development performance 
and its financial position including cash 
flows liquidity position and borrowing 
facilities and the risks and uncertainties 
relating to its business activities t he key 
areas of uncertainty considered by the 
directors were as follows
x x t he u k order book standing at £221m 
in march 2012 the pipeline of 
potential orders including the relative 
attractiveness of the market sectors 
which are feeding that pipeline and the 
anticipated conversion of this pipeline
x x t he implications of the continuing 
challenging economic environment on 
the group’s revenues and profits t he 
group undertakes forecasts and 
projections of trading and cash flows on 
a regular basis whilst this is essential for 
targeting performance and identifying 
areas of focus for management to 
improve performance and mitigate the 
possible adverse impact of a 
deteriorating economic outlook they 
also provide projections of working 
capital requirements
x x t he impact of the very competitive 
environment within which the group 
operates including pressures on 
margins and counterparty risks t his 
included an assessment of the current 
stage of the economic cycle of the 
construction industry the prospects for 
any recovery in the short to medium 
term and the potential development of 
the competitive environment
x x t he impact on our business of key 
suppliers being unable to meet their 
obligations to the group including the 
ability of the group to find alternative 
suppliers who could also enable the 
business to continue trading 
satisfactorily
x x t he potential mitigating actions that 
could be taken in the event that 
revenues are worse than expected to 
ensure that operating profit and cash 
flows are protected
x x t he committed finance facilities to the 
group including both the level of the 
facilities and the banking covenants 
attached to them t he group has access 
to £50m in credit facilities to meet 
daytoday working capital requirements 
which is available until november 2016 
t his facility provides the group with 
sufficient headroom both on the facility 
itself and on the bank covenants in place 
t his position is forecast to continue for 
the foreseeable future
having considered all the factors impacting 
the group’s business including downside 
sensitivities the directors are satisfied that 
the group will be able to operate within the 
terms and conditions of the group financing 
facilities for the foreseeable future
t he directors have a reasonable expectation 
that the company 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 
2011 annual report
summary
overall results for the year have been 
steady in a difficult trading environment  
t he group’s new banking facilities have 
reinforced our relative competitive strength 
in the current challenging market while the 
indian joint venture contributed a loss for 
the year strong foundations have now been 
established for the future and a positive 
contribution is expected in 2012
al an dunsmore
finance director 27 our business 27
2115304 270412   proof
th e group measures success th rough key 
perf ormance indicators kpis sh own bel ow 
th ese sh ould be reviewed in th e context o f 
market conditions and th e industry sector in 
wh ich th e group operates
u n derly ing  operating 
profit margin
t he operating margin is the principal measure 
used by the group to assess the success of 
its u k strategy it is the profit before non
underlying items such as the amortisation 
of intangible fixed assets expressed as a 
percentage of revenue
a reduction in 2011 to 53 2010 62 t he 
reduction has been the result of lower contract 
pricing as a result of overcapacity in the market 
continuing weakness in the u k market has led 
to continued margin weakness whilst the latter 
part of the year saw improved pricing this is still 
at very tight margins 
u n der lying basi c 
earnin gs  
per sh are
underlying basic earnings per share is taken as 
an overall indicator of performance it is basic 
eps before nonunderlying items
underlying basic earnings per share decreased 
by 445p to 805p 2010 1250p in the 
challenging market conditions a resilient 
performance
n et d ebt
cash is critical for providing the financial 
resources to develop the group’s business and 
to provide adequate working capital to operate 
smoothly t he group has a robust and detailed 
cash forecasting procedure that considers the 
group’s position on a contract by contract basis
net debt as at 31 december 2011 was £313 
million 2010 £150 million t he movement 
primarily reflects an outflow of cash from 
operating activities t his has been driven by 
higher working capital levels and an overall 
extension in customer payment cycles as weak 
market conditions persist
order book
t he order book provides visibility on future activity 
and allows the group to plan production and adapt 
accordingly it only includes future revenue from 
legally committed contracts comprising both ongoing 
and newly won work
whilst only the revenue within the order book is 
reported externally a key forward indicator of future 
profitability that is tracked internally is the margin 
inherent within the forward order book
t he order book march 2012 for the group 
excluding the indian joint venture is £221 million 
t his represents a strong position at a time of weak 
market conditions and also provides a good loading 
for the majority of the groups production facilities for 
the remainder of 2012
for ward prospec ts an d 
pipeline
t he groups prospect list and project pipeline 
provides longer term forward visibility on future 
orders and therefore production requirements  it 
only includes prospects with a good likelihood of 
conversion to orders in the near term
t he groups forward prospects for the u k stood 
at £510 million in march 2012 they are proving 
to be resilient in the current economic climate and 
reflecting the groups robust market position a 
significant portion are being converted
acci dent frequency 
rati o af r
t he af r is a key measure of the safe operation 
of our business and is one of a number of health 
and safety measures the group uses to monitor 
its activities t he af r is the number of ri ddor 
accidents to manhours worked multiplied by 
100000
t he af r rate for 2011 was 060  t he group 
recognises that all injuries are unacceptable 
and is committed to reducing injuries in our 
workforce we have commenced our cultural 
and behavioural change programme and believe 
this will bring significant benefits to the group in 
the future  
k pi comment performance in 2011
 underlying profit has been defined on page 1
key performance indicators 28 severfield—rowen plc annual report 2011
2115304 270412   proof
project 
runcorn w aste to 
energy
location 
runcorn 29
2115304 270412   proof
29 our go vernance
our governance
 
contents
30 directors and advisers
32 executive committee 
34 corporate objectives 
36 principal risks and uncertainties
38 directors’ report
42 corporate social responsibility
46 corporate governance
52 directors’ remuneration report
59 directors’ responsibilities 
statement
power  energy sector
project 
cleveland waste to energy
location 
billingham
project 
staythorpe power station
location 
newark
project 
west burton power 
station
location 
retford
project 
lakeside waste to energy 
location 
slough 30 severfield—rowen plc annual report 2011
2115304 270412   proof
directors and advisers
auditors
deloitte llp
chartered accountants 
and statutory auditor
1 city square
leeds ls1 2al
solicitors
ashurst llp
broadwalk house 
5 appold street
london ec2a 2ha
irwin mitchell
21 queen street  
leeds ls1 2t w
stockbrokers
jefferies hoare govett
vintners place
68 upper t hames street
london ec4v 3bj
registrars and  
transfer office
computershare investor services plc
po box 82 
t he pavilions bridgwater road
bristol bs99 7n p
public relations
pelham bell pottinger
6th floor holborn gate
330 high holborn
london wc1v 7qd
bankers
national australia bank ltd
yorkshire bank
94 albion street  
leeds ls1 6a g
the royal bank of scotland plc
3rd floor
2 whitehall quay
leeds ls1 4h r
secretary and  
registered office
jonathan d rhodes ba a ca
dalton airfield industrial estate 
dalton t hirsk
north yorkshire 
yo7 3jn
registered number
1721262
registered in england
advisers
1
4
7
2
5
8
3
6
9 31
2115304 270412   proof
31 our go vernance
4 alan dunsmore
finance direc t or
alan dunsmore joined the company in 
march 2010 from smiths group plc alan 
joined smiths group medical division in 
1995 holding various positions throughout 
the business and from 2004 was director of 
finance for smiths detection prior to joining 
smiths he was with coopers and lybrand in 
glasgow where he qualified as a chartered 
accountant in 1992
2 tom haughey
chief executi ve officer
t om haughey joined the company as group 
commercial director in february 2002 he 
graduated from strathclyde university in 1978 
and his career until joining the group was 
within corus formerly british steel where his 
last position was commercial director of corus 
construction and industrial in november 
2005 t om was appointed joint group 
managing director and in july 2007 was 
appointed chief executive officer
3 peter emerson
chief operati ng officer
peter emerson has worked in the specialist 
contracting industry since 1974 initially in the 
concrete contracting sector he joined rowen 
structures in 1984 as a quantity surveyor 
rising to deputy managing director in 1996 
peter was appointed group commercial 
director in april 1998 and in december 2001 
was appointed to the key role of managing 
director of watson steel structures ltd and 
also to chief operating officer in july 2007
7 toby hayward  
n onexe cutive d ire ct or an d
chairman of au dit co mmittee
t oby hayward was appointed nonexecutive 
chairman in june 2008 stepping down in 
september 2011 to become chairman of the 
audit committee he qualified as a chartered 
accountant with deloitte in 1984 and became 
an investment banker he was a director of 
corporate finance at singer  friedlander 
ltd and henry ansbacher  co ltd before 
working in the equity capital markets team 
at canaccord capital ltd he joined jefferies 
international ltd as managing director in 2005 
with responsibility for u k corporate broking 
and left jefferies in june 2008 to concentrate 
on consultancy and nonexecutive work
9 chris holt
n onexe cutive d ire ct or
chris holt joined the company as a non
executive director in november 2011
he retired in september 2010 from m j 
gleeson group plc after serving 2 years as 
chief executive and prior to that 3 years as 
group finance director chriss experience 
also includes 17 years with foster wheeler ltd 
as finance director and deputy chairman of 
the u k subsidiary company and 12 years with 
bechtel corporation chris is a graduate of 
leeds university a qualified accountant and 
has an mba from golden gate university san 
francisco 
8 geoff wright 
no nexe cutive d ire ct or
geoff wright was appointed as a nonexecutive 
director of the company in september 2006 
he retired from hammerson plc where he 
was director of project management and 
construction having worked there for  
37 years he is well known in the property 
and construction industries and was previously 
president of the chartered institute of building 
he is a nonexecutive director of waterman 
plc and several private companies
1 john dodds
chairman
john dodds joined the company as a  
nonexecutive director in october 2010 
becoming chairman in september 2011 he 
retired in march 2010 from kier group plc 
the construction and property services group 
after serving for seven years as group chief 
executive he worked for kier both in the u k 
and overseas for nearly 40 years and held a 
main board position through the employee 
buyout process in 1992 and the subsequent 
flotation of the group on the london stock 
exchange in 1996
john is a nonexecutive director of newbury 
racecourse plc and lagan construction 
holdings limited
5 derek randall
executive di r ector — i nte rna ti onal 
derek randall was appointed executive 
director business development in may 2008 
he is a master of business administration 
warwick business school doctor of business 
administration nottingham business school 
and the visiting professor of international 
management and development at 
birmingham city university’s business school 
before joining the group most of his career 
was with corus group latterly as commercial 
director of long products division derek has 
served on the executive council of t he steel 
construction institute
6   k eith elliott 
senior non executi ve direc t or
keith elliott joined the company as a non
executive director in october 1998 he retired 
in july that year from bechtel the international 
engineering and construction group where 
he was a partner in bechtel corporation 
and senior vicepresident responsible for its 
petroleum and chemical business he is a 
graduate chemical engineer and serves as non
executive chairman of keltbray group 32 severfield—rowen plc annual report 2011
2115304 270412   proof
executive committee
7
10
5
8
6
9 33
2115304 270412   proof
33 our go vernance
1 tom haughey ba
chief executi ve officer
2 peter emerson
chief operating officer 
3 alan dunsmore bacc ca
finance direc t or
4 derek randall mba dba
executive di r ector — i nte rna ti onal
5 paul thompson
exe cutive d ire ct or
severfield–rowen structures
paul t hompson joined the group as 
production director of watson steel in 
2002 and has 33 years of experience in the 
structural steel industry in 2005 paul was 
appointed deputy managing director of 
watson steel and in january 2010 became 
executive director group business operations  
in january 2011 paul was appointed 
executive director responsible for operations 
at severfieldrowen structures whilst also 
retaining his group position 
7 nigel pickard
mana ging direc t or
a tlas w ard structures
nigel pickard joined the group in 2005 
following the acquisition of atlas ward 
structures he has 30 years’ experience in the 
structural steelwork industry working both in 
the u k and overseas markets in 2000 nigel 
was appointed operations director of atlas 
ward where he took full responsibility for 
production appointed as managing director 
in october 2002 nigel transformed atlas 
ward’s business turning its substantial losses 
to profit and laid the foundations for further 
development in the future 
  
9 mike ashton
mana ging direc t or
steelcraft erection services
mike ashton has worked in the steel 
construction industry since 1977 and joined 
steelcraft erection services in 1994 mike 
was appointed erection director in 1998 and 
managing director in 2010 mike has a wealth 
of experience in steel construction and site 
management
6 steven day
mana ging direc t or
w atson steel structures
steven day joined the group in 2002 
following the acquisition of t ubemasters a 
business which he built and ran for 18 years 
previously until 2011 steven was commercial 
director within watson steel he was then 
appointed managing director responsible for 
operations at watson steel in january 2012 
with over 35 years of experience in the u k 
structural steelwork market at all levels he has 
considerable knowledge of the industry
8 ian cochrane
mana ging direc t or
fisher engineering
ian cochrane joined the group in 2007 
following the acquisition of fisher engineering 
ian has worked at fisher engineering for 
23 years starting in the drawing office and 
progressing to project management in january 
2004 he was appointed project director and 
in october 2007 managing director ian has 
a comprehensive understanding of all aspects 
of the business and has been involved in 
many major projects in the u k and ireland 
representing a range of market sectors
10 david larter
grou p direc t or
business sustainability
david larter joined the group in 2010 as 
group director – business sustainability david 
has worked in the construction industry for 28 
years and has held senior management and 
corporate strategic positions in international 
contracting and design consultancy businesses 
he brings a wealth of experience in design 
buildability and construction techniques on 
international major projects across a diverse 
range of sectors  34 severfield—rowen plc annual report 2011
2115304 270412   proof
corporate objectives
project
leeds arena 
location 
leeds
growth built on success
since becoming a public company in 1988 
severfield–rowen has grown to become 
market leader in the design fabrication and 
erection of structural steel our leading 
position provides competitive advantage 
through production capacity quality 
delivery the assumption of complexity and 
project management we will leverage this 
advantage through continuing investment in 
human and capital resources the application 
of emerging technologies and the constant 
refinement of our design production and 
erection processes — the cornerstones of our 
success 
geographic diversification
t hese process improvements will be applied 
at our production facilities and construction 
sites at home and overseas we will continue 
to seek out international opportunities which 
enhance growth and value for the group 
such investments will frequently be made in 
partnership with premier local companies 
who can provide value enhancement and 
established routes into our core markets 
around the world
contribution to community and 
environment
in all of our production centres and work 
sites we will operate within an overriding 
sense of commitment to our surroundings 
we will focus on training local people we 
will set new standards for health and safety 
our environmental policies will aim to 
surpass local requirements and we will 
introduce leading edge technologies to the 
regions in which we operate
enhanced shareholder value
t hrough these strategies we aim to grow in 
size and market value and continue to 
provide attractive returns to our 
shareholders as a unique player in the 
engineering sector and as a british 
manufacturing business we will offer a 
valuable diversification to many of our 
shareholders’ portfolios
th e portf olio 35
2115304 270412   proof
35 our go vernance
project
titanic signature building
location 
belfast
image courtesy of donal mccann photography
th e portf olio 36 severfield—rowen plc annual report 2011
2115304 270412   proof
t he group’s ongoing operations and growth plans are subject to a number of different risks and uncertainties risk management processes 
are put in place to assess manage and control these on an ongoing basis t he principal ones facing the business are set out below and are 
listed in no particular order
risk
peopleskills
steel price 
movements
t he group has established a 
market leading position over 
many years due in large part 
to the experience and skills of 
its key people
steel is the key material used 
within the business and the 
largest single cost within a 
contract steel prices can vary 
significantly in a short period 
of time
commercial 
and market 
environment
t he u k construction market 
within which the group 
operates is currently at the 
bottom of the economic cycle 
placing significant pressure on 
all parts of the supply chain 
from end customers through 
to material and subcontract 
suppliers 
weak demand is resulting in 
increased competition tighter 
margins and the transfer 
of commercial technical 
and financial risk down the 
supply chain through more 
demanding contract terms 
and longer payment cycles
loss of key people could 
adversely impact the group’s 
existing market position 
insufficient growth and 
development of its people 
and skill sets could restrict its 
growth ambitions both in the 
u k and overseas
such movements have 
the potential to impact 
the profitability of both 
individual contracts and the 
whole business significantly 
particularly given the long 
duration of many of its 
contracts
 x increased senior management review of 
technical and commercial risks within each 
contract before acceptance
 x strengthening of commercial functions to 
manage contract progress and variations
 x close engagement with both customers 
and suppliers and monitoring of payment 
cycles
 x continuing use of credit insurance to 
minimise impact of customer failure
 x t alent reviews undertaken regularly
 x development opportunities identified for 
staff to broaden their range of skills and 
experience
 x a staff appraisal process continues to align 
the short and long term needs and goals of 
the business with those of key staff
 x remuneration policy is regularly reviewed 
to ensure that it is competitive and strikes 
the appropriate balance between short and 
long term rewards and incentives
 x skills gaps are continually identified and 
actions put in place to bridge these by 
either training development or external 
recruitment
 x supply and pricing agreements with steel 
suppliers are negotiated to minimise 
individual contract risk
 x customer bids are structured to reflect the 
prevailing conditions within the market for 
raw steel
explanation impact mitigationcomment
principal risks and uncertainties 37
2115304 270412   proof
37 our go vernance
risk
health  
safety
indian joint 
venture
t he construction industry sets 
very high standards of health 
and safety which the group 
aims to exceed to maintain 
the health and wellbeing of 
its employees
t he group has invested in a 
joint venture in india where 
the growth prospects are 
believed to be substantial
interruption 
to fabrication 
facilities
t he group’s production 
facilities are at the core of 
its business and the group 
relies on smooth continued 
operation of them 
interruption could impact 
both the group’s performance 
on existing contracts and 
its ability to bid for future 
contracts thereby impacting 
its financial performance
construction activities can 
result in injury or death to 
employees with subsequent 
financial loss to the business 
potential loss of reputation 
where at fault and ultimately 
exclusion from future 
business
t he growth management and 
performance of this business 
will be a key element of the 
group’s development for the 
foreseeable future effective 
management of the joint 
venture is therefore key to the 
group’s continuing success
 x drive market leading standards for all 
employees at all times
 x director led safety leadership teams 
established to bring innovative solutions 
and to engage with all stakeholders 
to deliver continuous improvement in 
standards across the business and wider 
industry
 x priority board review of performance
 x achievement of challenging health and 
safety performance targets is a key element 
of management remuneration
 x robust joint venture agreement
 x t wo members of group board of directors 
are members of joint venture board
 x strong governance in place within the joint 
venture
 x regular formal and informal meetings held 
with both joint venture management and 
joint venture partners
 x key positions within joint venture 
management structure are occupied by group 
employees seconded to the joint venture
explanation impact mitigationcomment
 x t he group has four main production 
facilities so interruption at one facility could 
to some extent be absorbed by increasing 
capacity at a sister facility
 x a wide network of subcontract fabricators 
is used on a recurring basis both for short 
term peak capacity requirements and for 
more specialised fabrication t his network 
could also be used to mitigate disruption to 
the group’s own fabrication facilities
 x appropriate levels of business interruption 
insurance cover are maintained and 
reviewed regularly with the assistance of 
independent advisers and brokers
financial risks and uncertainties are separately described in the financial review on pages 24 to 26 and within note 21 of the consolidated financial 
statements 38 severfield—rowen plc annual report 2011
2115304 270412   proof
directors’ report
t he directors present their annual report 
and the audited financial statements for the 
year ended 31 december 2011
principal activity and business review
t he principal activity of the group continues 
to be the design fabrication and erection of 
structural steelwork specialist claddings and 
ancillary products
t he subsidiary and associated undertakings 
principally affecting the profits or net assets 
of the group in the year are listed in notes 
13 and 14 to the financial statements
a review of the group’s progress during the 
year and of its future prospects is contained 
in the chairman’s statement on page 16 
the chief executive’s review on pages 18 to 
20 and the financial review on pages
22 to 26
t he key performance indicators of the 
group are presented and discussed on
page 27
explanation of the group’s approach to 
financial risk management is given in the 
treasury section on page 24 and in note 21
a review of the group’s performance in the 
area of health and safety and its 
consideration of environmental and 
employment policies is given in the 
corporate social responsibility section on 
pages 42 to 45
results and dividends
t he profit of the group for the year after 
taxation amounted to £5822000 2010 
£7633000 details of which are set out in 
the consolidated income statement on  
page 63
an interim dividend of 150p net per share 
2010 500p was paid on 22 october 
2011 t he directors recommend a final 
dividend for the year of 350p net per share 
2010 250p payable on 21 june 2012 to 
shareholders on the register on 25 may 
2012
fixed assets
details of changes in the group’s fixed 
assets are given in notes 10 11 and 12
to the consolidated financial statements
employees
t he group’s principal employee policies are 
set out on page 43 within the corporate 
social responsibility section
branches
t he principal branches of the group are set 
out on pages 8 and 9
directors
t he present membership of the board is 
stated on page 31 n c holt was appointed 
as a director on 9 november 2011 d p 
ridley resigned on 7 october 2011  
all of the other directors served throughout 
the year
t he directors’ interests in the share capital of 
the company are set out on page 56 in the 
directors’ remuneration report
p a emerson n c holt and t j l hayward 
will retire at the annual general meeting in 
accordance with the articles of association 
and will offer themselves for reelection
directors’ and officers’ liability
directors’ and officers’ liability insurance 
has been purchased during the year
agreements with employees and 
significant agreements
t here are no agreements between the 
group and its directors or employees 
providing for compensation for loss of office 
or employment that occurs because of a 
takeover bid
t he group’s banking arrangements which 
expire in november 2016 can be 
terminated upon a change of control of the 
group
share capital
t he company has a single class of share 
capital which is divided into ordinary shares 
of 25p each
t hree resolutions are to be proposed at the 
forthcoming annual general meeting 
relating to or concerning share capital t he 
long stop date of 30 september 2013 for 
each resolution reflects the recently 
announced change in accounting reference 
date see later
significant shareholdings
as at 12 april 2012 the company had been notified of the following voting rights to the company’s shares in accordance with the 
disclosure rules and t ransparency rules of the u k listing authority
25p ordinary shares 
m  g investment management 11313568 1268
j o hambro capital management 6719299 753
a viva 6546968 734
t hreadneedle asset management 5635655 631
rathbone investment management 5090044 570
legal  general investment management 5025058 563
montanaro fund managers 3659084 410 39
2115304 270412   proof
39 our go vernance
i  t he directors of the company may only 
allot shares or grant rights to subscribe for 
or convert any security into shares if 
authorised to do so by shareholders t he 
authority granted at the last annual 
general meeting is due to expire at the 
conclusion of this year’s annual general 
meeting accordingly resolution 9 to be 
proposed at the annual general meeting 
will be proposed as an ordinary resolution 
to grant new authorities to allot shares and 
grant rights to subscribe for or convert 
any security into shares a up to an 
aggregate nominal amount of £743015 
and b in connection with a rights issue 
up to an aggregate nominal amount 
reduced by allotments which may be 
made under part a of the resolution of 
£1486030 
 t hese amounts represent approximately 
333 and approximately 667 
respectively of the total issued ordinary 
share capital of the company as at 13 
april 2012 the latest practicable date prior 
to publication of this document if given 
these authorities will expire at the annual 
general meeting of the company in 
2013 or on 30 september 2013 
whichever is the earlier
 t he directors have no present intention of 
issuing shares pursuant to this authority
 following ab i guidance published on
 31 december 2008 if the authority under 
resolution 9b to allot share capital up to 
an aggregate nominal value of 
£1486030 is given where allotments 
exceed £743015 and onethird of the 
issued share capital of the company that 
is it exceeds the authority under 
resolution 9a if given all the directors 
of the company will stand for reelection 
at the annual general meeting of the 
company in 2013
ii  t he directors of the company also 
require a power from shareholders to 
allot equity securities or sell treasury 
shares for cash and otherwise than to 
existing shareholders pro rata to their 
holdings t he power granted at the last 
annual general meeting is due to 
expire at this year’s annual general 
meeting accordingly resolution 10 to 
be proposed at the annual general 
meeting will be proposed as a special 
resolution to grant such a power apart 
from offers or invitations in proportion 
to the respective number of shares held 
the power will be limited to the 
allotment of equity securities for cash up 
to an aggregate nominal amount of 
£111564 being approximately 5 of 
the company’s issued ordinary share 
capital at 13 april 2012 the latest 
practicable date prior to publication of 
this document if given this power will 
expire at the conclusion of the annual 
general meeting of the company in 
2013 or on 30 september 2013 
whichever is the earlier to occur
iii  t he directors are requesting that 
pursuant to resolution 11 it be 
proposed at the annual general 
meeting they are given the authority to 
buy by way of market purchases up to 
10 of the issued share capital of the 
company representing a maximum of 
8925108 shares t he price to be paid 
will be no lower than 25p per share 
and no more than the higher of i 
105 of the average of the middle 
market quotations as derived from the 
london stock exchange daily official 
list for the five business days preceding 
the day on which the shares are 
purchased and ii the higher of the 
price of the last independent trade and 
the highest current independent bid on 
the london stock exchange as 
stipulated in article 51 of the buyback 
and stabilisation regulation 2003
 purchases would not be made in the 
close period preceding the 
announcement of the company’s 
interim or final results t his proposal 
does not indicate that the company will 
purchase shares at any particular time or 
price or imply any opinion on the part 
of the directors as to the market or other 
value of the company’s shares t his 
authority will expire at the end of the 
2013 annual general meeting or on 
30 september 2013 whichever is the 
earlier it is the present intention of the 
directors to seek a similar authority 
annually t he directors have no present 
intention of exercising this authority and 
will only do so at price levels which they 
consider to be in the interests of 
shareholders after taking account of the 
group’s overall financial position and 
which would lead to a beneficial impact 
on the earnings per share of the 
company
rights attaching to shares
t he rights attaching to the ordinary shares 
are defined in the company’s articles of 
association t he articles of association may 
be changed with the agreement of 
shareholders a shareholder whose name 
appears on the company’s register of 
members can choose whether his shares are 
evidenced by share certificates ie in 
certificated form or held in electronic ie 
uncertificated form in crest the electronic 
settlement system in the u k
subject to any restrictions below 
shareholders may attend any general 
meeting of the company and on a show of 
hands every shareholder or his 
representative who is present at a general 
meeting has one vote on each resolution 
and on a poll every shareholder or his 
representative who is present has one vote 
on each resolution for every ordinary
share of which they are the registered 
shareholder a resolution put to the vote of 
a general meeting is decided on a show of 
hands unless before or on the declaration of 
the result of a vote on a show of hands a 
poll is demanded by the chairman of the 
meeting or by at least five shareholders 
present in person or by proxy and having 
the right to vote or by any shareholders 
present in person or by proxy having at 
least 10 of the total voting rights of all 
shareholders or by any shareholders 
present in person or by proxy holding 
ordinary shares in which an aggregate sum 
has been paid up of at least onetenth of the 
total sum paid up on all ordinary shares
shareholders can declare final dividends by 
passing an ordinary resolution but the 
amount of the dividends cannot exceed the 
amount recommended by the board t he 
board can pay interim dividends on any 
class of shares of the amounts and on the 
dates and for the periods they decide the 
distributable profits of the company justify 
such payment 40 severfield—rowen plc annual report 2011
2115304 270412   proof
any dividend which has not been claimed 
for twelve years after it became due for 
payment will be forfeited and will then 
belong to the company unless the  
directors decide otherwise
if the company is wound up the liquidator 
can with the sanction of a special resolution 
passed by the shareholders divide among 
the shareholders all or any part of the assets 
of the company and he can value any 
assets and determine how the division shall 
be carried out as between the members or 
different classes of members t he liquidator 
can also transfer the whole or any part of 
the assets to trustees upon any trusts for the 
benefit of the members no shareholders 
can be compelled to accept any asset which 
would give them a liability
details of sharebased payment schemes are 
set out in note 22
voting at general meetings
any form of proxy sent by the company to 
shareholders in relation to any general 
meeting must be delivered subject to the 
provisions of the articles of association to 
the company whether in written form or in 
electronic form not less than 48 hours 
before the time appointed for holding the 
meeting or adjourned meeting at which the 
person named in the appointment proposes  
to vote
no shareholder is unless the board decides 
otherwise entitled to attend or vote either 
personally or by proxy at a general meeting 
or to exercise any other right conferred by 
being a shareholder if he or any person  
with an interest in shares has been sent a 
notice under section 793 of the companies 
act 2006 which confers upon public 
companies the power to require information 
with respect to interests in their voting 
shares and he or any interested person 
failed to supply the company with the 
information requested within 14 days after
delivery of that notice t he board may also 
decide where the shares represent at least 
025 in nominal value of the issued shares 
of the same class that no dividend is 
payable in respect of those default shares 
and that no transfer of any default shares 
shall be registered
t hese restrictions end seven days after 
receipt by the company of a notice of an 
approved transfer of the shares or all the 
information required by the relevant section 
793 notice whichever is the earlier
project
thameslink viaduct bridge  
location 
london
directors’ report continued
th e portf olio 41
2115304 270412   proof
41 our go vernance
transfer of shares
t he board may refuse to register a transfer 
of a share which is not fully paid provided 
that the refusal does not prevent dealings in 
shares in the company from taking place on 
an open and proper basis t he board may 
also refuse to register a transfer of a 
certificated share unless i the instrument of 
transfer is lodged duly stamped if 
stampable at the registered office of the 
company or any other place decided by the 
board accompanied by a certificate for the 
share to which it relates and such other 
evidence as the board may reasonably 
require to show the right of the transferor to 
make the transfer ii is in respect of only 
one class of shares and iii is in favour of 
not more than four transferees
t ransfer of uncertificated shares must be 
carried out using crest and the board can 
refuse to register a transfer of an 
uncertificated share in accordance with the 
regulations governing the operation of 
crest  
t here are no other limitations on the 
holding of ordinary shares in the company
variation of rights
if at any time the capital of the company is 
divided into different classes of shares the 
special rights attaching to any class may be 
varied or revoked either
i  with the written consent of the holders 
of at least 75 in nominal value of the 
issued shares of the class or
ii  with the sanction of a special resolution 
passed at a separate general meeting of 
the holders of the shares of the class
t he company can issue new shares and 
attach any rights to them if there is no 
restriction by special rights attaching to 
existing shares rights attaching to new 
shares can take priority over the rights of 
existing shares
general meetings
a resolution is to be proposed at the 
forthcoming annual general meeting that a 
general meeting of the company other 
than an annual general meeting can be 
called on not less than 14 clear days’ notice
crest
t he company’s ordinary shares are in 
crest the settlement system for stocks  
and shares
creditor payment policy
t he group’s current policy concerning the 
payment of its trade creditors is to agree 
terms and conditions for its transactions with 
suppliers and to abide by those terms 
subject to those terms and conditions being 
met by the supplier at 31 december 2011 
trade creditors of the group represented 62 
days of purchases 2010 52 days as 
reanalysed
charitable and political contributions
during the year the group made charitable 
donations of £51000 2010 £118000 
principally to local charities serving the 
communities in which the group operates 
no contributions were made to any political 
parties during the current or preceding year
going concern
after making enquiries the directors have 
formed a judgement at the time of 
approving the financial statements that there 
is a reasonable expectation that the group 
has adequate resources to continue in 
operational existence for the foreseeable 
future for this reason the directors continue 
to adopt a going concern basis in preparing 
the financial statements
t he key factors considered by the directors 
in making the statement are set out in the 
financial review on page 26
auditors
each director at the date of approval of this 
annual report confirms that
x x so far as the director is aware there is no 
relevant audit information of which the 
company’s auditors are unaware and
x x the director has taken all the steps that 
he ought to have taken as a director in 
order to make himself aware of any 
relevant audit information and to 
establish that the company’s auditors 
are aware of that information
t his confirmation is given and should be 
interpreted in accordance with the 
provisions of s418 of the companies 
act 2006
deloitte llp has expressed its willingness to 
continue in office as auditors and a 
resolution to reappoint it will be proposed at 
the forthcoming annual general meeting
annual general meeting
t he notice concerning the annual general 
meeting to be held at solberge hall hotel 
newby wiske northallerton north 
yorkshire dl7 9er at noon on wednesday 
13 june 2012 together with explanatory 
notes on the resolutions to be proposed and 
full details of the deadlines for exercising 
voting rights is contained in a circular to be 
sent to shareholders with this report
yearend change
t he board has decided to change the 
yearend of the group to 31 march with 
effect from 31 march 2013 t his is primarily 
to align the group’s reporting period with 
that of its indian joint venture which is 
expected to become an increasingly 
important element of the group’s financial 
performance in future years 
t he transitional 15 month period will consist 
of two six month interim reporting periods 
ending 30 june and 31 december and a 
15 month overall reporting period to 
31 march it is expected that a second 
interim dividend will be paid so that the 
impact of the change is neutral on overall 
dividends receivable by shareholders
approved by the board of directors and 
signed on behalf of the board
j d rhodes
company secretary
27 april 2012
dalton airfield industrial estate 
dalton t hirsk north yorkshire yo7 3j n
location 
london 42 severfield—rowen plc annual report 2011
2115304 270412   proof
corporate social responsibility
introduction
our corporate social responsibility agenda 
is key to the way we do business our 
people consider the safety environmental 
ethical and financial impacts of what we do 
and through our ‘steel futures’ continuous 
improvement programme we continue 
to create a point of differentiation for our 
business in the marketplace
in 2011 we have been pleased with the 
significant progress that has been made 
across all of our operating companies 
including
•	 development and implementation of 
our golden rules of health and safety
•	 rollout of our behavioural safety 
training programme
•	 focussed leadership reviews across our 
design construction and production 
activities 
•	 significant investment in improved 
technology and it solutions to 
maximise interaction communication 
and team collaboration
•	 increased intake of apprentices to help 
sustain the skills necessary for the 
future success of the group
•	 improved employee and workforce 
engagement
•	 development of our skills academy 
training centre to further enhance the 
professional skills of our employees
health and safety 
the group is committed to high standards 
of health and safety for all employees and 
promotes safety excellence through all its 
operations the executive committee has 
been working hard with our employees and 
supply chain partners throughout 2011 
the group’s network of safety leadership 
teams slts chaired by each business unit’s 
managing director with representation 
from unions and shopfloor employees have 
created a proactive environment for change 
and achieved some excellent progress slts 
work closely with our key clients to set a 
strategy for improving safety standards 
and this is bringing real recognition for the 
efforts and results our employees are now 
delivering
the group’s health and safety teams 
support operational directors across the 
group in developing and maintaining a 
positive health and safety culture for all 
aspects of our operations each operating 
company has a worker health and safety 
committee with direct access into the 
main board via monthly health and safety 
meetings
the group operates in challenging working 
environments and is proud of its good safety 
record 
in 2011 there has been specific focus on 
the development of leadership skills and 
behaviours of our employees and the 
engagement of our subcontractors to help 
deliver our improvement strategy
the group has invested significant time 
and resource during an intensive rollout 
of behavioural safety training and to date 
more than 900 employees and subcontractor 
construction teams have been through our 
innovative programme
our efforts are being recognised internally 
by our own staff and externally by our clients 
and the wider construction industry
the successful rollout and communication 
of our health and safety golden rules across 
all our factory and construction sites has 
reinforced our commitment to proactively 
addressing safety wherever we have a 
presence
•	 safety leadership
•	 behavioural safety
•	 safety ‘golden rules’
•	 health  wellbeing
•	 community  stakeholder engagement
•	 leadership  people development
•	 market leading innovation
•	 supply chain partnering
•	 carbon management  reduction
•	 transport policy  strategy
•	 renewable energy
•	 responsible sourcing of materials 43
2115304 270412   proof
43 our go vernance
employee and workforce engagement 
the group has worked hard to promote 
an inclusive culture with effective two 
way communications with employees and 
union representatives to support the overall 
performance of the business 
severfield–rowen employees are regularly 
informed of matters concerning the 
performance and future developments of the 
group with regular scheduled meetings
employees’ interests are taken into account 
when making decisions and the group 
has implemented a proactive engagement 
process to capture suggestions from 
employees aimed at improving performance
updates are provided through staff 
presentations on progress and strategy 
around the business
community engagement 
the group continued it’s long standing 
commitment to community involvement and 
proactively engaged with organisations both 
locally and nationally
during 2011 we actively supported and 
donated to the following local organisations 
butterwick hospice saint michael’s hospice 
and bolton hospice
the group companies recognise their 
duty as successful local employers and are 
involved directly with the local communities 
and residents many of which are directly 
employed by the business
below are just some of the charities the 
company made donations to during 2011
the christie 
charity
the prince’s 
trust
help for 
heroes
philip green 
memorial     
trust
ballinamallard 
youth football
macmillan 
cancer  
support
the chara 
foundation
british heart 
foundation 
northern
great ormond 
street hospital
rotary club the stroke 
association
barnados 
and ronald 
mcdonald 
charities
lighthouse 
club
cancer  
research
muscular 
dystrophy
st michael’s 
hospice
dalton village butterwick 
hospice
bolton house meningitis 
trust
multiple 
sclerosis
prince’s trust  people development
the group has been working closely with 
the princes trust to help make opportunities 
available for young people to enter the 
construction industry and support the 
prospects for a successful career path
janet seymour head of the prince’s trust 
team programme for the north west said 
“we are extremely grateful to watson steel 
for providing work placements for our 
young people which gives them vital work 
experience to help get them a job”
john bain who was on a prince’s trust 
course impressed so much on his work 
placement that he was given a permanent 
role at the firm demonstrating that 
placements can be a great way for 
companies to find new talent while helping 
to reduce levels of youth unemployment  
                                                                                                                                            
develop a ‘just culture’
                                  
suppliers  stakeholders
                                       
continuous improvement                                visible  taking action                                                                                                                                                                            aim for best practice
work 
environment commitment
leadership
engagement
behaviour
employees 
the group’s policy is to provide equal 
opportunities to all existing and prospective 
employees the group’s reputation is 
dependant on the quality effectiveness and 
skill base of its employees it is committed 
to the fair and equitable treatment of all 
its employees and specifically to prohibit 
discrimination on the grounds of race 
religion sex sexual orientation age 
nationality or ethnic origin
the group has also continued with its 
established policy of employing disabled 
persons where practicable and endeavours 
to ensure that they benefit from training 
and career opportunities in common with 
all employees in the event that employees 
become disabled every effort is made 
to ensure that their employment within 
the company continues with appropriate 
training and support 44 severfield—rowen plc annual report 2011
2115304 270412   proof
corporate social responsibility continued
apprentice training
at severfieldrowen we are keen to develop 
the skills of young people within our 
industry we have dedicated resource to 
provide the training and coaching necessary 
for success in this area
our apprentices undertake the necessary 
academic and practical training to help them 
become part of the teams for the future 
delivery of our projects
severfieldrowen plc
think saf e           act saf e           home saf e
date host  business unit venue address time
27th january atlas ward cedar court hotel denby dale road calder grove wakefield wf4 3qz 1000
28th january steelcraft cedar court hotel denby dale road calder grove wakefield wf4 3qz 0900
2nd february watsons
the mermaid 
conference centre
puddle dock blackfriars london ec4v 3db 1200
3rd february watsons
the mermaid 
conference centre
puddle dock blackfriars london ec4v 3db 0900
24th february fisher engineering manor house hotel killadeas co fermanagh ireland 1200
25th february fisher engineering manor house hotel killadeas co fermanagh ireland 0900
10th march severfieldreeve cedar court hotel denby dale road calder grove wakefield wf4 3qz 0900
the severfieldrowen group ‘steel futures’ 
continuous improvement strategy is entering the next 
phase of delivery
a key aim is to ensure that safety is at the 
forefront of all operations we undertake 
to achieve this we need to engage our 
employees our supply chain and all other 
stakeholders we work with
to support our objectives we are 
working with akt an industry leading 
behavioural safety consultancy that 
specialises in theatre based learning 
programmes
you andor your organisation will 
receive a personal invitation to 
attend one of our events and be 
encouraged to help us achieve a 
safe future
bringing change to our industry
behavioural safety
s
skills
academy
behavioural safety training
during 2011 we commenced the rollout of 
our behavioural safety training to engage 
with our construction employees and our 
subcontract site based supply chain on the 
health and safety agenda
these events have been well supported and 
the feedback has been very positive
the group has hosted several events around 
the uk to date over 900 people from 
our construction teams have attended the 
sessions
th eatre based  behavioural s af ety training
s
skills
academy
apprentice
coaching
training
the group has made a significant 
commitment to ensure our people and 
those engaged on our projects have the 
necessary skills and training to deliver the 
high standards and performance expected
the group’s inhouse training company 
engineering construction training ltd 
ectl creates and delivers bespoke people 
development programmes to upskill all 
areas of our operations
through our skills academy the group 
has the ability to target key areas of 
development and opportunities where we 
can work with our clients and other external 
organisations within the industry
the group has also engaged industry 
leading external consultants to help deliver 
innovative theatre based behavioural safety 
training to our people 45
2115304 270412   proof
45 our go vernance
carbon agenda 
the group continues to pursue a carbon 
agenda that differentiates us in the 
marketplace
in 2011 the decision was taken to proactively 
tackle our energy usage throughout the 
business 
as part of the first phase our watson 
business has negotiated its electricity supply 
to be from a renewable energy source 
enabling them to be climate change levy 
exempt 
at severfieldrowen structures ltd we 
took the decision to move to a low sulphur 
and reduced carbon heating oil while we 
negotiate an alternative renewable and 
possible selfgeneration solution
the group has commissioned a full strategic 
review of its energy usage and we expect 
further positive progress to be achieved in 
2012
skills development
the group is developing the lifelong 
learning skills of our shop floor employees 
over 50 of our factory staff are undertaking 
full nvq training this investment will 
underpin the successful delivery of current 
and future projects
environment  sustainability
the group is committed to minimising the 
impact of its business and its processes on 
the natural environment and the community 
at large by going beyond just complying 
with laws directives and regulations 
pertaining to its field of operations
the group has continued its successful 
accreditation to the standard of bes 6001 
for the responsible sourcing of materials 
and remains the only steel fabrication 
contractor to have achieved this industry 
leading standard
s
skills
academy
life long
learning 46 severfield—rowen plc annual report 2011
2115304 270412   proof
board
remuneration
committee
   audit
committee
nominations
committee
t otal number of meetings held 12 6 2 3
j dodds 11 6 2 3
t g haughey 12 — — —
p a emerson 11 — — —
a d dunsmore 12 — — —
d randall 11 — — —
j k elliott 12 6 2 3
t j l hayward 12 6 2 3
g h wright 12 6 2 3
n c holt
1
2 1 1 1
d p ridley
2
9 5 1 2
1
 full attendance at board and relevant committee meetings following appointment
2
 one nonattended board meeting prior to resignation
t he board is committed to the ongoing 
maintenance of high standards of corporate 
governance it is accountable to the company’s 
shareholders for good corporate governance
t his statement together with the directors’ 
remuneration report on pages 52 to 58 
describe how the company has applied and 
been in compliance with the principles set 
out in the 2010 corporate governance 
code including both the main principles 
and the supporting principles set out by the 
financial reporting council “the code”
directors
the board
t he company is controlled through the 
board of directors which currently 
comprises four executive and five non
executive directors all of which are 
considered as independent
j dodds became chairman on 1 september 
2011 
d p ridley resigned on 7 october 2011
n c holt was appointed as a replacement 
nonexecutive director from 1 november 
2011
t j l hayward previously chairman 
remains a nonexecutive director and has 
served as chairman of the audit committee 
since 1 september 2011
t he board has a separate chairman and 
chief executive in line with the code t he 
chairman is mainly responsible for the 
running of the board evaluating its 
performance and ensuring that all directors 
receive sufficient relevant information on 
financial business and corporate issues prior 
to meetings t he chief executive’s 
responsibilities focus on coordinating the 
company’s business and assessing and 
implementing group strategy
j k elliott is the senior independent non 
executive director and leads the performance 
review of the chairman taking into account 
the views of the executive directors  
all directors are able to take independent 
professional advice in furtherance of their 
duties if necessary
t he board considers that the balance of 
relevant experience amongst the various 
board members enables the board to 
exercise effective leadership and control of 
the group it also ensures that the decision 
making process cannot be dominated by 
any individual or small group of individuals
an executive committee consisting of the 
members indicated on page 33 was 
established in 2008 t his committee assists 
the main board by focusing on strategic and 
operational performance matters relating to 
the business and meets formally on a 
monthly basis
in addition a group health and safety 
committee comprising all members of the 
executive committee meets formally on  a 
monthly basis safety leadership t eams for 
each operating company report in to the 
health and safety committee
t g haughey has board level responsibility 
for health and safety and employment 
matters p a emerson has board level 
responsibility for corporate and social 
responsibilty matters
board effectiveness
t he board has a formal schedule of matters 
reserved for it it is responsible for overall 
group strategy acquisition and divestment 
policy approval of major capital expenditure 
projects and consideration of significant 
financing matters it monitors the exposure to 
key business risks including environmental 
and health and safety issues it reviews the 
strategic direction of individual trading 
subsidiaries codes of conduct annual 
budgets progress towards achievement of 
those budgets and significant capital 
expenditure programmes
t he board also considers employee issues 
and key appointments it also ensures that 
all directors receive appropriate training on 
appointment and then subsequently as 
appropriate other specific responsibilities 
are delegated to the board committees 
described below all directors in accordance 
with the code will submit themselves for 
reelection at least once every three years 
t he performance of individual directors is 
evaluated annually in conjunction with the 
remuneration review
t he board generally meets monthly and 
during the year met twelve times a formal 
agenda for each meeting is agreed with the 
chairman and is circulated in advance of the 
meeting to allow time for proper 
consideration together with relevant papers 
including key strategic operational and 
financial information  
corporate governance 47
2115304 270412   proof
47 our go vernance
project
southmead hospital 
location 
bristol
th e portf olio 48 severfield—rowen plc annual report 2011
2115304 270412   proof
attendance of individual directors during 
2011 at scheduled board meetings and at 
meetings of the remuneration audit and 
nominations committees is set out on 
page 46
nonattendance by directors at meetings was 
due to either conflicting commitments 
previously agreed or illness t he majority of 
the board meetings are held at the group’s 
head office in dalton north yorkshire 
however during the year three of the 
meetings were held at the offices of the 
group’s other operating subsidiaries 
providing nonexecutive directors the 
opportunity to increase their knowledge and 
understanding of the group’s operations
board committees
t he board has established three standing 
committees all of which operate within 
defined terms of reference which are 
available from the company secretary by 
request and will be available for inspection 
at the a gm
t he committees established are the audit 
committee the remuneration committee 
and the nominations committee t rading 
companies are managed by separate 
boards of directors any matters of a 
material nature concerning the trading 
companies are reported to the group board 
of directors on a monthly basis
j k elliott continues in his role as senior 
nonexecutive director for the immediate 
future notwithstanding that he has now 
served as a director for 13 years he also 
continues with his chairmanship of the 
remuneration committee t he board 
recognises that he is technically non
independent due to tenure but believes that 
he continues to act independently and 
recognises his high level of commitment 
and effective contribution to the board’s 
decision making process
audit committee
t he audit committee comprises the 
nonexecutive directors and since 1 
september 2011 has been chaired by t j l 
hayward both t j l hayward and n c holt 
are chartered accountants t he committee 
has written terms of reference which will be 
available for inspection at the annual 
general meeting meetings are held at least 
twice a year and additional meetings may 
be requested by the auditor
t he responsibility of the audit committee 
principally falls into the following areas
x x t o monitor the integrity of the financial 
statements and formal announcements 
and to review significant financial 
reporting judgements
project
olympia west hall
location 
london 
corporate governance continued
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49 our go vernance
x x t o review the company’s internal 
financial controls
x x t o make recommendations to the board 
in relation to the appointment and 
removal of the external auditor and to 
approve their remuneration and their 
terms of engagement 
x x t o review the nature of nonaudit 
services supplied and nonaudit fees 
relative to the audit fee
x x t o provide independent oversight over 
the external audit process through 
agreeing the suitability of the scope and 
approach of the external auditor’s work 
assessing their objectivity in undertaking 
their work and monitoring their 
independence taking into account 
relevant u k professional regulatory 
requirements and the auditor’s period in 
office and compensation
x x t o oversee the effectiveness of the 
external audit process particularly with 
regard to the quality and cost
effectiveness of the auditor’s work
x x t o consider the need for an internal 
audit function t he committee agrees 
with the directors’ opinion that the 
group is not of sufficient size and 
complexity to require an internal audit 
function 
consistent with exercising these 
responsibilities the committee has 
considered in detail both the final and 
interim results for 2011 specifically 
reviewing the appropriateness of significant 
accounting policies financial reporting issues 
and judgements and relevant reports from 
both management and the external auditor 
t hroughout the year the committee has 
continued to assist the board in achieving its 
obligations under the code in areas of risk 
management and internal control focussing 
particularly on areas of compliance with 
legal requirements accounting standards 
and the listing rules and ensuring that an 
effective system of internal financial and 
nonfinancial controls is maintained
t he committee recognises that given their 
knowledge of the business there are often 
advantages in using the auditor to provide 
certain nonaudit services t he committee is 
satisfied that the independence of the 
auditor has not been impaired by providing 
these services nonaudit services provided 
by the auditor during the year ended 
31 december 2011 included corporation 
tax compliance advice and advice in 
connection with the group’s banking 
arrangements t he committee has a policy 
of limiting fees to the auditor for nonaudit 
services to 100 of the audit fee and 
requiring competitive tender for all work 
with a fee over £30000 t here are no 
specific types of nonaudit work from which 
the auditor is specifically excluded but the 
committee may reserve the right to insist 
that the auditor be excluded from tendering 
for work that may present a potential conflict 
of interest t he auditor complies with the 
accounting practices board apb ethical 
standards applying to nonaudit services
details of the auditor’s fees are shown in 
note 4 on page 75
on invitation the finance director other 
executive directors executive committee 
members and the auditor attends meetings 
to assist the committee to fulfil its duties 
t he committee can access independent 
professional advice if it considers it 
necessary
during the course of the past year the audit 
committee has received external guidance 
in reviewing its effectiveness  following this 
review the scope and depth of its activities 
are expected to increase over the coming 
year
t he committee met on two occasions in 
2011 with full attendance
remuneration committee
t he remuneration committee operates 
under written terms of reference t hese 
terms of reference are available for 
inspection at the annual general meeting 
and are published on the company’s 
website t he committee comprises the 
nonexecutive directors and is chaired by  
j k elliott 
nominations committee
t he nominations committee comprises the 
nonexecutive directors and is chaired by g h 
wright t he principal task of the committee is 
to deal with key appointments to the board 
and related employment matters
t he committee is responsible for proposing 
candidates for appointment to the board 
having regard to the balance and structure 
of the board and will meet as and when 
required
t he committee met on three occasions 
during 2011 with full attendance to discuss 
chairman succession plans succession plans 
for other nonexecutive directors and the 
composition and chairmanship of board 
committees t he terms of reference for the 
nomination committee will be available for 
inspection at the annual general meeting
all directors are required to seek reelection 
by the members at the annual general 
meeting following their appointment 
nonexecutive directors are not appointed 
for a fixed term
t he terms and conditions of appointment of 
nonexecutive directors will be available for 
inspection at the annual general meeting
directors’ remuneration
t he directors’ remuneration report is set 
out on pages 52 to 58
accountabilit y and audit
financial reporting
t he performance and financial position of 
the company are provided in the chief 
executive’s review on pages 18 to 20 and 
the financial review on pages 22 to 26 
together with the chairman’s statement on 
page 16 and the directors’ report on pages 
38 to 41
t hese enable the board to present a 
balanced and understandable assessment of 
the company’s position and prospects t he 
directors’ responsibilities for the financial 
statements are described in the directors’ 
responsibilities statement on page 59
internal control
an ongoing process has been established 
for identifying evaluating and managing the 
significant risks faced by the group which 
involves working closely with independent 
risk management consultants t his process 
has been in place for the full financial year 
and up to the date of the approval of these 
financial statements and is regularly 
reviewed by the board t his process is in 
accordance with the guidance provided by 
the t urnbull report 50 severfield—rowen plc annual report 2011
2115304 270412   proof
t he board has formally acknowledged its overall 
responsibility for reviewing the effectiveness of internal 
control it believes that senior management within the 
group’s operating businesses should also contribute in a 
substantial way and this has been built into the process
t here are inherent limitations in any system of internal 
control and accordingly even the most effective system can 
provide only reasonable and not absolute assurance with 
respect to the preparation of financial information and the 
safeguarding of assets t he system is designed to manage 
rather than eliminate the risk of failure to achieve business 
objectives
in carrying out its review of the effectiveness of internal 
control in the group the board has taken into consideration 
the following key features of the risk management process 
and system of internal control
x x senior management from all key disciplines and 
subsidiary companies within the group are involved in 
the process of risk assessment in order to identify and 
assess group objectives key issues and controls a 
further review has been performed to identify those 
risks relevant to the group as a whole t his assessment 
encompassed all aspects of risk including operational 
compliance financial and strategic a risk register is in 
place and is updated on an ongoing basis and a control 
strategy has been determined for each of the significant 
risks
x x t he risk management committee chaired by t g 
haughey has the primary responsibility to identify 
monitor and control the significant risks to an acceptable 
level throughout the group t he committee receives 
information on relevant risk matters from line 
management and other sources on a regular basis
x x t he group operates a comprehensive budgeting and 
financial reporting system which as a matter of routine 
compares actual results with budgets management 
accounts are prepared for each subsidiary company and 
the group on a monthly basis material variances from 
budget are thoroughly investigated in addition a more 
detailed profitability forecast based on actual contracts 
secured is regularly prepared to monitor the performance 
of the main operating company of the group as the year 
progresses risks are identified and appraised throughout 
the annual process of preparing budgets t he board 
approves the group’s annual budget
x x a credit insurance committee comprising t g haughey 
p a emerson and a d dunsmore has been established 
to review matters when adequate credit insurance on 
the group’s customers cannot be purchased in the 
present economic climate
corporate governance continued
project
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location 
stratford
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51 our go vernance
project
a380 hangar modification 
location 
heathrow
cash flow forecasts are regularly prepared 
to ensure that the group has adequate 
funds and resources for the foreseeable 
future
standard financial control procedures 
operate throughout the group to ensure the 
integrity of the group’s financial statements
t he group operates a comprehensive 
“whistleblowing” policy which is available 
on the group’s website accordingly staff 
may in confidence raise concerns about 
possible improprieties in matters of financial 
reporting or other matters t he audit 
committee reviews adherence with this 
policy on an ongoing basis
subsidiary company meetings consider and 
report on risk on a monthly basis as part of 
the monthly business review process t his 
process is followed to ensure that as far as 
possible the controls and safeguards are 
being operated in line with established 
procedures and standards
safety health and environmental risks are 
continually monitored at all sites and are 
reviewed on a monthly basis by senior 
management and the board
steps have been taken to embed internal 
control and risk management into the 
operations of the business and to deal with 
areas of improvement which come to 
management’s and the board’s attention 
t his process is continuing to increase risk 
awareness throughout the group
relations with shareholders
t he company encourages twoway 
communication with both its institutional 
and private investors and attempts to 
respond quickly to all queries received 
verbally or in writing
j dodds t j l hayward t g haughey  
p a emerson and a d dunsmore attended 
several meetings with analysts institutional 
shareholders and retail investors in the  
year ended 31 december 2011 either at the 
time of the announcements of the company’s 
interim or final results or during visits to the 
company’s offices in north yorkshire
feedback from these meetings is reported 
to the board including the nonexecutive 
directors
direct discussions took place during the 
year between shareholders’ representatives 
and j k elliott with particular reference to 
the directors’ remuneration report
t he board has sought to use the annual 
general meeting to communicate with 
private investors and encourages their 
participation
compliance statement
t he board has applied and been in 
compliance with the principles set out  
in the code throughout the year ended  
31 december 2011 and up to the date  
of this report
th e portf olio 52 severfield—rowen plc annual report 2011
2115304 270412   proof
directors’ remuneration report
introduction
as an independent body this year our 
remuneration committee faced a 
challenging dichotomy the balancing of 
reward to executive management for strong 
performance in exceptionally difficult market 
conditions against reduced shareholder 
returns
in the aftermath of the u k recession 
starting in 2008 the u k construction 
industry has declined steadily year on year 
through 2011 both in public and private 
sector investment several competitors 
ceased trading in the past 12 months in 
contrast the group achieved its challenging 
profitability budget strengthened its market 
share ended the year with a strong order 
book managed its investment in india to 
provide significant returns in future years 
and renegotiated its banking facilities
t he market contraction combined with 
downward pressure on margins caused an 
inevitable decline in shareholder returns 
including dividend yield t he share price 
remained relatively stable reflecting we 
believe the market’s confidence in the 
strong management performance and our 
investment in the future
t he remuneration committee met several 
times throughout the past year seeking an 
equitable solution to the dichotomy our 
conclusions remain strictly within our 
published policies which are consistent with 
regulatory guidelines and best practice
t his report summarises our conclusions sets 
out the remuneration payable for 2011 and 
our forward planning
reporting regulations 
t his report approved by the board has been 
prepared in accordance with schedule 8 to 
the accounting regulations under the 
companies act 2006 and the listing rules of 
the financial services authority it also 
describes how the board has applied the 
principles relating to directors’ remuneration 
under the u k corporate governance code 
t he remuneration committee has also taken 
into consideration guidelines published by 
institutional investor advisory bodies such as 
the ab i and rrev as required by the legal 
regulations a resolution to approve this 
report will be proposed at the annual 
general meeting of the company at which 
time the financial statements will be 
approved 
t he regulations require the auditors to 
report to the group’s shareholders on the 
“auditable part” of the directors’ 
remuneration report and to state whether 
in their opinion that part of the report has 
been properly prepared in accordance with 
the companies act 2006 t he report has 
therefore been divided into separate 
sections for audited and unaudited 
information
unaudited inf ormation
remuneration committee
t he group has an established remuneration 
committee which is constituted in 
accordance with the recommendations of 
the u k corporate governance code t he 
committee comprises five nonexecutive 
directors j k elliott t j l hayward g h 
wright j dodds and c holt and is chaired 
by j k elliott t he committee met on six 
occasions during the year with full 
attendance c holt joined the board on 
1 november 2011 and attended all 
meetings subsequent to his appointment 
prior to his resignation in october 2011 d p 
ridley also served on the remuneration 
committee all members of the committee 
are considered to be independent no 
executive directors attended remuneration 
committee meetings or otherwise play a 
part in any discussion about their own 
remuneration
t he statements made herein regarding 
remuneration policy apply equally to four of 
the divisional directors who serve on the 
executive management committee and to 
the four executive directors who sit on the 
board of severfield–rowen plc 
t hroughout 2011 new bridge street a 
trading name of aon corporation served as 
an independent adviser to the remuneration 
committee neither new bridge street nor 
any other part of aon corporation provided 
other services to the group during the year
t he terms of reference for the remuneration 
committee are available from the company 
secretary and are published on the group’s 
website
remuneration policy
our policy objectives are unchanged 
designing executive remuneration to attract 
and retain executive directors of the highest 
calibre structured to reward excellent 
performance to provide longer term 
motivation to align directors’ interests with 
those of external shareholders and to 
rationalise directors’ pay policy with policy in 
the broader workforce
directors’ total remuneration
looking at the group of eight directors 
within the purview of the remuneration 
committee the recent history and current 
status of directors’ pay are as follows
2009 to 2010 payroll reduced by 
25 all directors took a 20 paycut on 
1 january 2010 t his has not been 
reinstated bonus payments declined by 
60 t otal remuneration was down by 41 
in aggregate a reduction of £15 million 
2010 to 2011 payroll remained 
unchanged bonus payments increased by 
29 overall remuneration was up by 9 
an increase of £195000 
2011 salaries remained at 80 of the 
2009 level bonuses at 50 and total 
remuneration at £24 million twothirds of 
that in 2009 a reduction of £12 million 
over two years
the future
future executive remuneration policy will 
continue to incorporate our established 
policies and strive for consistency with best 
practice guidelines in addition the following 
initiatives will be implemented in 2012 
1 on 1 january 2012 a base salary 
increment of 31 will be awarded to 
directors mirroring that paid in july 2011 
to the broader workforce
2 t he remuneration committee will 
commission a directors’ remuneration 
benchmarking survey paying particular  53
2115304 270412   proof
53 our go vernance
attention to the selection of companies in 
the comparator groups and generally 
using any data with due care
3 in addition the remuneration committee 
will undertake a general review of our 
existing remuneration policies including 
cash bonus awards and performance 
criteria long term incentive plans directors’ 
shareholding guidelines and directors 
benefits our terms of reference will 
include fitness for purpose market parity 
the balance between fixed and variable 
pay and adherence to best practice
4 changes to our policies based on the 
results of our review may be implemented 
in 2012 by the remuneration committee 
any such changes will of course be 
communicated fully to shareholders 
through our established reporting cycle
base salaries
other than in respect of d randall who was 
appointed as a main board director base 
salaries after allowance for increments to 
compensate for the introduction of a 
£50000 pension contribution cap in 2011 
were unchanged from the previous year
t hey will be increased by 31 on 1 january 
2012 mirroring a similar increase in 
workforce pay in july 2011
base salaries in 2011 originated in mid 
2007 with the restructuring of the company 
board since that time a 3 increment was 
awarded in january 2008 and a 20 
reduction in january 2010 as a result 
current base salaries are significantly below 
their levels five years ago parity with 
comparable market norms is to be 
evaluated
annual bonuses 
we employ a two tier approach for bonus 
assessment with 60 of the maximum 
bonus being awarded based on financial 
performance the profit before t ax pbt 
outturn versus the budgeted pbt and 40 
of the maximum bonus against a group of 
non financial performance targets aligned 
with corporate strategy such as health and 
safety and corporate and social 
responsibility targets and international 
diversification strategy t he non financial 
performance targets are established by the 
remuneration committee and are reset 
annually at the start of each year 
both the pbt 60 segment and the 
maximum bonus for the nonfinancial 
segment 40 are based on the following 
previously published formula
in 2011 our pbt budget was met but not 
exceeded t herefore for the financial 
segment of the bonus the ranges in the 
table at 100 of budget highlighted were 
applied
in accordance with our established policy 
setting of bonuses within the allowable 
ranges is at the discretion of the 
remuneration committee taking into 
account our assessment of individual 
contribution to financial results prevailing 
market conditions budget performance in 
difficult market conditions being better 
rewarded than in a seller’s market and 
contribution to the implementation of 
strategic initiatives which we anticipate will 
deliver profits in future years 
for the nonfinancial segment 40 the 
remuneration committee selected three 
subsets in 2011
x x development of health and safety  
strategies – 16
x x customer performance feedback from  
five customers with active projects in the 
year – 12
x x indian subsidiary production and 
efficiency goals – 12
t he results against each subset target were 
evaluated and consolidated using the above 
weightings resulting in a 7 out of 10 score 
for the nonfinancial segment t he most 
significant shortfall was in the india 
production targets which lagged the 
progress anticipated as discussed in the 
ceo’s statement in this report progress in 
development of hs strategies was 
excellent and feedback from all five 
customers showed a high level of client 
satisfaction with performance
t he 7 out of 10 score was applied against 
the 40 of the maximum allowable bonus 
for each director to compute entitlement to 
bonus awards in this segment
t he combination of the financial and 
nonfinancial assessments gave rise to total 
bonus awards from 39 to 64 of the 
maximum allowable for individual directors 
under the published ranges on average 
bonus awards represented 57 of base 
salary and 36 of total remuneration 
excluding pensions and benefits 
details of the resulting bonuses paid for 
2011 are set out in the table of directors’ 
emoluments t he bonus payments are not 
pensionable
bonus allowable –  base salary
performance pretax profit vs budget ceo coo
other plc
directors
divisional
directors
95 or below 0 0 0 0
100 or better 50 to 100 35–75 20–50 10–40
120 or better 100 to 150 75–125 50–100 40–75 54 severfield—rowen plc annual report 2011
2115304 270412   proof
directors’ remuneration report continued
project
park house 
location 
london
th e portf olio 55
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55 our go vernance
nonexecutive directors
t he remuneration of nonexecutive directors 
is considered by the executive directors and 
reflects the time that they commit to the 
company nonexecutive directors cannot 
participate in any of the annual bonus long 
term incentive or the company’s pension 
scheme
performance share plan psp
under the p s p rules shares are awarded at 
the start of a threeyear period which can 
vest in whole or in part at the end of the 
threeyear term subject to the achievement 
of a performance goal the performance 
condition pc participation is limited to the 
eight executive directors comprising the 
four main board directors and currently 
four divisional directors t he normal 
maximum limit for the value of shares 
comprising an award is 150 of salary in 
any year 
the performance condition pc 
t he pc is based on earnings per share 
eps assessed at the end of a threeyear 
performance period t he eps target ranges 
for each ps p award is set by the 
remuneration committee prior to grant 
with a threeyear look ahead 
vesting record  outlook
ps p awards made in 2008 and 2009 did 
not vest at the end of 2010 and 2011 due 
to the substantial contraction of the market 
and margins a wards made in 2010 are 
unlikely to vest at the end of 2012 
reflecting our overly optimistic assessment 
at that time of the timing and strength of 
the market recovery
as a result we expect three consecutive 
years of no vesting under the ps p t he pc 
established by the remuneration committee 
for awards at the start of 2011 will require  
a strong recovery over the next two years to 
deliver significant vesting at the end of 
2013 
forecasts vary widely on the timing and 
strength of the recovery and we find 
ourselves in markets where longer term 
forecasting is difficult and unreliable 
our role as remuneration committee 
includes the establishment of performance 
goals through long terms incentive plans 
which are challenging but achievable 
through superior performance thereby 
incentivising and rewarding success we try 
to set performance conditions in our rolling 
three year targets that achieve that balance 
and the difficulty in forecasting in the 
current unstable economic and political 
environment has heightened 
notwithstanding we have reset the 
performance condition and ps p awards as 
set out below 
performance condition for 2012 
awards based on performance in 
2014
at the lower threshold below which no 
awards will vest we have set a target eps of 
125p for 2014 representing approximately 
£15 million pbt  at the higher end the 
target eps is set at 225p equivalent to a 
pbt approaching £275 million t hese 
targets constitute annual growth rates in 
profitability between 14 pa and 40 pa 
over the three years 2012 through to 2014 
that is a forecast of between steady 
recovery and strong recovery 
psp award levels
attendant with setting the threeyear pc 
ps p awards will be granted at the start of 
2012 t he remuneration committee has 
elected to make awards in the range of 
100 to 145 of base salary versus 150 
maximum allowable in the ps p rules t he 
ceo will be granted 145 of base salary 
three main board directors will each be 
granted 125 and four divisional directors 
will each receive 100 awards t he award 
levels have been scaled back marginally this 
year in the context of some reduction in 
share price at the time of award each award 
will vest only on achievement of the 
threeyear performance condition a wards 
for an eps in 2014 within the target range 
are based on linear interpolation 
shareholding guideline
a policy was introduced in 2004 whereby 
executive directors will be required to retain 
shares acquired under long term incentive 
schemes until such time they have built up a 
holding equivalent in market value at the 
date of vesting to the executive’s base 
salary t hereafter the executive directors will 
be under a continuing obligation to maintain 
at least such a holding t he requirement 
underscores the committee’s policy to align 
executive director remuneration and 
shareholder interests
pensions
t he group contributes to each executive 
director’s money purchase pension fund 
contribution rates for each director are 
£50000 pa resulting in contribution levels 
in the range of 15–30 of base salary 
service contracts
t he service contracts of executive directors 
run on a rolling basis and are no longer 
than 12 months’ duration notice periods  
of 12 months are required to be given by  
all parties
full details of the contracts of each director 
including the date unexpired term and any 
payment obligations on early termination 
are available from the company secretary 
and at the annual general meeting  56 severfield—rowen plc annual report 2011
2115304 270412   proof
directors’ remuneration report continued
performance graph 
t he following graph shows the company’s performance measured by total shareholder return compared with the performance of the ftse 
small cap index it is based on the change in the value of a £100 investment made on 31 december 2006 over the fiveyear period ended 
31 december 2011
t his index was selected as it represents a broad equity market index and an appropriate comparator group of companies over the period
directors’ interests
t he directors and their families had the following beneficial interests in the share capital of the company
31 december
2011
25p ordinary
shares
31 december
2010
25p ordinary
shares
j dodds 10000 —
t g haughey 246611 246611
p a emerson 173312 160312
a d dunsmore 10000 10000
d randall 15000 —
j k elliott 200000 200000
t j l hayward 30000 30000
g h wright 4000 4000
n c holt 10572 —
 or date of appointment
t here have been no changes in the directors’ interests between the yearend and 19 april 2012
change in value of a £100 investment over 5 years
0
50
100
150
200
250
0
50
100
150
200
250
31 dec 2006 31 dec 2007 31 dec 2008 31 dec 2009 31 dec 2010 31 dec 2011
severﬁeld–rowen
ftse small cap index 57
2115304 270412   proof
57 our go vernance
audited inf ormation
aggregate directors’ remuneration
t he total amounts for directors’ remuneration were as follows
2011
£000
2010
£000
emoluments  — salaries bonus and taxable benefits 1755 1389
 — fees 296 197
 — compensation for loss of office — 287
money purchase pension contributions 211 219
2262 2092
directors’ emoluments 
details of the directors’ emoluments are as follows
basic
salary
£000
fees
£000
bonus
£000
t axable
benefits
£000
2011
total
£000
2010
t otal
£000
executive
t g haughey 325 — 295 26 646 568
p a emerson 260 — 170 25 455 421
a d dunsmore from 1310 216 — 105 25 346 311
d randall from 1111 205 — 80 23 308 —
nonexecutive
j dodds — 68 — — 68 15
j k elliott — 60 — — 60 48
t j l hayward — 83 — — 83 68
g h wright — 45 — — 45 36
n c holt from 11111 — 7 — — 7 —
d p ridley until 311011 — 32 — — 32 30
a ggregate emoluments 1006 295 650 99 2050 1497
t axable benefits include the provision of company cars fuel for company cars and private medical insurance 
a d dunsmore’s total remuneration for 2010 included £46000 in respect of relocation upon his appointment 58 severfield—rowen plc annual report 2011
2115304 270412   proof
directors’ pension entitlements
t he executive directors are members of the group’s money purchase pension schemes contributions paid by the company in respect of 
these schemes in the year are as follows
2011
£000
2010
£000
t g haughey 55 72
p a emerson 54 67
a d dunsmore from 1310 54 54
d randall from 1111 53 —
a ggregate entitlements 216 193
directors’ share options
t here are no share options outstanding at 31 december 2011 2010 none
t he market price of the shares at 31 december 2011 was 16700p and the range during the year was 15000p to 33350p
annual deferred bonus share scheme
under the terms of the severfield–rowen plc 1999 annual deferred bonus share scheme no deferred share awards as defined in the 
scheme rules were made in 2011
t here were no bonus shares outstanding at 31 december 2011
performance share plan
under the company’s performance share plan the following awards over shares in issue at 31 december 2011 will vest with the directors 
subject to achievement of the performance criteria described on pages 53 and 55
 
number of
shares vesting
in 2012
number of
shares vesting
in 2013
number of
shares vesting
in 2014
t otal
 number
of shares
t g haughey 252451 189338 194095 635884
p a emerson 201961 151471 155273 508705
a d dunsmore — 125613 111007 236620
d randall 117810 70686 111007 299503
total 572222 537108 571382 1680712
approval
t his report was approved by the board of directors and signed on behalf of the board
j k elliott
chairman of remuneration committee
27 april 2012
directors’ remuneration report continued 59
2115304 270412   proof
59 our go vernance
t he directors are responsible for preparing 
the annual report and the financial 
statements in accordance with applicable law 
and regulations
company law requires the directors to 
prepare financial statements for each 
financial year under that law the directors 
are required to prepare the group financial 
statements in accordance with international 
financial reporting standards i frss as 
adopted by the european union and article 
4 of the ias regulation and have elected to 
prepare the parent company financial 
statements in accordance with united 
kingdom generally accepted accounting 
practice united kingdom accounting 
standards and applicable law under 
company law the directors must not approve 
the accounts unless they are satisfied that 
they give a true and fair view of the state of 
affairs of the company and of the profit or 
loss of the company for that period 
in preparing the parent company financial 
statements the directors are required to
x x select suitable accounting policies and 
then apply them consistently
x x make judgements and accounting 
estimates that are reasonable and 
prudent
x x state whether applicable u k accounting 
standards have been followed subject 
to any material departures disclosed and 
explained in the financial statements 
and
x x prepare the financial statements on the 
going concern basis unless it is 
inappropriate to presume that the 
company will continue in business
in preparing the group financial statements 
international accounting standard 1 
requires that directors
x x properly select and apply accounting 
policies
x x present information including 
accounting policies in a manner that 
provides relevant reliable comparable 
and understandable information 
x x provide additional disclosures when 
compliance with the specific 
requirements in ifrss are insufficient to 
enable users to understand the impact 
of particular transactions other events 
and conditions on the entity’s financial 
position and financial performance and
x x make an assessment of the company’s 
ability to continue as a going concern
t he directors are responsible for keeping 
adequate accounting records that are 
sufficient to show and explain the 
company’s transactions and disclose with 
reasonable accuracy at any time the financial 
position of the company and enable them 
to ensure that the financial statements 
comply with the companies act 2006 t hey 
are also responsible for safeguarding the 
assets of the company and hence for taking 
reasonable steps for the prevention and 
detection of fraud and other irregularities
t he directors are responsible for the 
maintenance and integrity of the corporate 
and financial information included on the 
company’s website legislation in the united 
kingdom governing the preparation and 
dissemination of financial statements may 
differ from legislation in other jurisdictions
responsibility statement
we confirm that to the best of our 
knowledge
x x the financial statements prepared in 
accordance with the relevant financial 
reporting framework give a true and 
fair view of the assets liabilities financial 
position and profit or loss of the 
company and the undertakings 
included in the consolidation taken as a 
whole and
x x the management report which is 
incorporated into the directors’ report 
includes a fair review of the 
development and performance of the 
business and the position of the 
company and the undertakings 
included in the consolidation taken as a 
whole together with a description of the 
principal risks and uncertainties that they 
face
by order of the board 
t g haughey a d dunsmore
chief executive finance director
27 april 2012 
directors’ responsibilities statement 2115304   260412   proof 4
60 severfield—rowen plc annual report 2011
‘
project 
saica paper mill
location 
partington wharfside 2115304   260412   proof 4
61 group accounts 61
‘
group accounts 
contents
62 independent auditor’s report
63 consolidated income statement
64 consolidated statement of 
comprehensive income
65 consolidated balance sheet
66 consolidated statement of  
changes in equity
67 consolidated cash flow statement
68 notes to the consolidated financial 
statements
99 five year summary
99 financial calendar
di stribution  ind ustrial sectors
project
bombardier manufacturing 
assembly facility
location 
belfast
project
morrisons regional  
distribution centre
location 
bridgwater
project
ocado
location  
tamworth
project
distribution centre 
location 
dunfermline 2115304   260412   proof 4
62 severfield—rowen plc annual report 2011
we have audited the group financial statements of severfield–
rowen plc for the year ended 31 december 2011 which comprise 
the consolidated income statement the consolidated statement 
of comprehensive income the consolidated balance sheet the 
consolidated cash flow statement the consolidated statement 
of changes in equity and the related notes 1 to 32 the financial 
reporting framework that has been applied in their preparation 
is applicable law and international financial reporting standards 
ifrss as adopted by the european union
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 
the directors are responsible for the preparation of the group 
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 group 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 
ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to 
the group’s circumstances and have been consistently applied and 
adequately disclosed the reasonableness of significant accounting 
estimates made by the directors and the overall presentation of the 
financial statements
in addition we read all the financial and nonfinancial information in 
the annual report to identify material inconsistencies with the audited 
financial statements if we become aware of any apparent material 
misstatements or inconsistencies we consider the implications for 
our report
opinion on financial statements
in our opinion the group financial statements
x x give a true and fair view of the state of the group’s affairs as at 
31 december 2011 and of its profit for the year then ended
x x have been properly prepared in accordance with ifrss as 
adopted by the european union and
x x have been prepared in accordance with the requirements of the 
companies act 2006 and article 4 of the ias regulation
opinion on other matter prescribed by the 
companies act 2006
in our opinion
x x the part of the directors’ remuneration report to be audited 
has been properly prepared in accordance with the companies 
act 2006 and
x x the information given in the directors’ report for the financial 
year for which the financial statements are prepared is consistent 
with the group 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
x x certain disclosures of directors’ remuneration specified by law 
are not made or
x x we have not received all the information and explanations we 
require for our audit
under the listing rules we are required to review
x x the directors’ statement contained within the directors’ report 
in relation to going concern
x x the part of the corporate governance statement relating to 
the company’s compliance with the nine provisions of the uk 
corporate governance code specified for our review and
x x certain elements of the report to shareholders by the board on 
directors’ remuneration
other matter
we have reported separately on the parent company financial 
statements of severfield–rowen plc for the year ended 
31 december 2011
simon manning
senior statutory auditor
for and on behalf of deloitte llp
chartered accountants and statutory auditor 
leeds united kingdom
27 april 2012
independent auditor’s report 
to the members of severfield–rowen plc 2115304   260412   proof 4
63 group accounts 63
note
before
other
items
2011
£000
other
items
2011
£000
total
2011
£000
before
other
items
2010
£000
other
items
2010
£000
total
2010
£000
continuing operations
revenue 3 267778 — 267778 266692 — 266692
cost of sales 246889 590 247479 242568 2000 240568
gross profit 20889 590 20299 24124 2000 26124
other operating income 508 — 508 510 — 510
distribution costs 2756 — 2756 1937 — 1937
administrative expenses 4448 2749 7197 6127 4821 10948
movements in the valuation of 
derivative financial instruments — 4 4 — 39 39
operating profit before share 
of results of associates 14193 3335 10858 16570 2782 13788
share of results of associates 2522 — 2522 366 1394 1760
operating profit 4 11671 3335 8336 16204 4176 12028
investment income 6 27 — 27 55 — 55
finance charges 6 1581 — 1581 976 — 976
profit before tax 10117 3335 6782 15283 4176 11107
tax 7 2929 1969 960 4160 686 3474
profit for the period 
attributable to the equity 
holders of the parent 7188 1366 5822 11123 3490 7633
earnings per share 9
basic 805p 153p 652p 1250p 392p 858p
diluted 805p 153p 652p 1250p 392p 858p
other items relate to the amortisation of acquired intangibles movements in the valuation of derivative financial instruments movements 
in contract legal provisions and the associated tax impact of these items together with the impact of corporation tax rate reductions on the 
group’s deferred tax liability in 2010 other items also included preoperating losses of the group’s indian joint venture and the impairment 
of investment property these items have been disclosed separately in order to give an indication of the underlying earnings of the group
consolidated income statement
year ended 31 december 2011 2115304   260412   proof 4
64 severfield—rowen plc annual report 2011
note
2011
£000
2010
£000
total profit for the period attributable to equity holders of the parent 5822 7633
actuarial loss on defined benefit pension scheme 30 1369 440
tax relating to components of other comprehensive income 20 172 123
total comprehensive income for the year attributable to equity 
holders of the parent 4625 7316
consolidated statement of comprehensive income
year ended 31 december 2011 2115304   260412   proof 4
65 group accounts 65
note
2011
£000
2010
£000
assets
noncurrent assets
goodwill 10 54712 54712
other intangible assets 11 18227 20495
property plant and equipment 12 79594 82949
investment property 12 3960 4000
interests in associates 14 447 2857
156940 165013
current assets
inventories 15 9085 12633
trade and other receivables 17 89161 71861
cash and cash equivalents 2264 3589
100510 88083
total assets 257450 253096
liabilities
current liabilities
trade and other payables 18 66322 75868
financial liabilities — borrowings 21 33159 18629
financial liabilities — finance leases 101 —
financial liabilities — derivative financial instruments 21 104 108
tax liabilities 3883 5217
103569 99822
noncurrent liabilities
retirement benefit obligations 30 9552 8532
deferred tax liabilities 20 11177 13199
financial liabilities — finance leases 254 —
provisions 19 600 600
21583 22331
total liabilities 125152 122153
net assets 132298 130943
equity
share capital 23 2231 2231
share premium account 46152 46152
other reserves 24 469 169
retained earnings 83446 82391
total equity 132298 130943
the financial statements were approved by the board of directors on 27 april 2012 and signed on its behalf by
t g haughey a d dunsmore
director director
consolidated balance sheet
31 december 2011 2115304   260412   proof 4
66 severfield—rowen plc annual report 2011
note
share
capital
£000
share
premium
£000
other
reserves
£000
retained
earnings
£000
total
equity
£000
a t 1 january 2011 2231 46152 169 82391 130943
profit for the period attributable 
to equity holders of the parent — — — 5822 5822
a ctuarial loss on defined 
benefit pension scheme 30 — — — 1369 1369
deferred income taxes on 
defined benefit pension scheme 20 — — — 172 172
dividends paid 8 — — — 3570 3570
sharebased payments 22 — — 300 — 300
a t 31 december 2011 2231 46152 469 83446 132298
note
share
capital
£000
share
premium
£000
other
reserves
£000
retained
earnings
£000
total
equity
£000
at 1 january 2010 2215 46152 1065 83043 132475
profit for the period attributable 
to equity holders of the parent — — — 7633 7633
actuarial loss on defined 
benefit pension scheme 30 — — — 440 440
deferred income taxes on 
defined benefit pension scheme 20 — — — 123 123
dividends paid 8 — — — 8883 8883
sharebased payments 22 16 — 896 915 35
at 31 december 2010 2231 46152 169 82391 130943
consolidated statement of changes in equity
year ended 31 december 2011 2115304   260412   proof 4
67 group accounts 67
note
2011
£000
2010
£000
net cash outflow from operating activities 25 8968 11203
cash flows from investing activities
proceeds from sale of property plant and equipment 624 225
purchases of property plant and equipment 2139 3025
interest received 28 61
purchases of shares of associates 113 2884
net cash outflow from investing activities 1600 5623
cash flows from financing activities
finance charges incurred 2072 879
borrowings taken out 14530 18629
finance leases taken out 457 —
repayment of finance lease obligations 102 —
dividends paid 3570 8883
net cash inflow from financing activities 9243 8867
net decrease in cash and cash equivalents 1325 7959
cash and cash equivalents at beginning of period 3589 11548
cash and cash equivalents at end of period 2264 3589
consolidated cash flow statement
year ended 31 december 2011 2115304   260412   proof 4
68 severfield—rowen plc annual report 2011
1 significant accounting policies
 basis of accounting
 the financial statements have been prepared in accordance with 
international financial reporting standards ifrs the financial 
statements have also been prepared in accordance with ifrs 
adopted for use in the european union and therefore comply 
with article 4 of the eu ias regulation
 the financial statements have been prepared on the historical 
cost basis except for the revaluation of financial instruments 
the principal accounting policies adopted are set out below
 in 2011 several new revised and amended standards and 
interpretations became effective these are ias 24 revised 
“related party disclosures” ifrs 1 amendment “first time 
adoption financial instrument disclosure” ias 32 amendment 
“financial instruments presentation on classification of rights 
issues” ifric 19 “extinguishing financial liabilities with equity 
instruments” ifric 14 “prepayments of a minimum funding 
requirement” and improvements to ifrss 2010 the adoption 
of these standards and relevant interpretations has not had a 
material impact on the financial statements of the group
 
 going concern
 after making enquiries the directors have formed a judgement 
at the time of approving the financial statements that there is a 
reasonable expectation that the group has adequate resources 
to continue in operational existence for the foreseeable future 
for this reason the directors continue to adopt a going concern 
basis in preparing the financial statements the key factors 
considered by the directors in making the statement are set out 
within the financial review on pages 22 to 26
 basis of consolidation
 the consolidated financial statements incorporate the financial 
statements of the company and the entities controlled by the 
company made up to the reporting date each year control 
is achieved where the company has the power to govern the 
financial and operating policies of an investee entity so as to 
obtain benefits from its activities 
 where relevant the results of subsidiaries acquired or disposed 
of during the year are included in the consolidated income 
statement from the effective date of acquisition or up to the 
effective date of disposal as appropriate
 where necessary adjustments are made to the financial 
statements of subsidiaries to bring the accounting policies used 
into line with those used by the group
 all intragroup transactions balances income and expenses are 
eliminated on consolidation
  
 consolidated income statement disclosure
 in order to give an indication of the underlying earnings of the 
group certain items are presented in the middle column of the 
consolidated income statement entitled “other items” in 2011 
these comprise
x x amortisation of acquired intangibles
x x movements in the valuation of derivative financial 
instruments
x x costs provided in respect of a contract legal claim during 
the year 
x x release of a contract legal provision which was no longer 
required and
x x the associated tax impact of the above items together with 
the impact of future reductions in corporation tax rates 
on the group’s deferred tax liability
 in 2010 they also included
x x preoperating losses of the indian jv and
x x an impairment charge in relation to an investment property
 business combinations 
 the acquisition of subsidiaries is accounted for using the 
acquisition method the cost of the acquisition is measured at the 
aggregate of the fair values at the date of exchange of assets 
given liabilities incurred or assumed and equity instruments 
issued by the group in exchange for control of the acquiree plus 
any costs directly attributable to the business combination the 
acquiree’s identifiable assets liabilities and contingent liabilities that 
meet the conditions for recognition under ifrs 3 are recognised 
at their fair value at the acquisition date 
 investments in associates
 an associated company is an entity over which the group is 
in a position to exercise significant influence but not control 
through participation in the financial and operating policy 
decisions of the investee significant influence is the power to 
participate in the financial and operating policy decisions of the 
investee but is not control over those policies 
 a joint venture is an entity over which the group is in a position 
to exercise joint control  the group has chosen to adopt the 
equity method of accounting as discussed below for joint 
ventures and associated companies together “associates” in 
accordance with ias 31
 the results and assets and liabilities of associates are 
incorporated in these financial statements using the equity 
method of accounting unless it meets the exceptions described 
in ias 28 investments in associates are carried in the balance 
sheet at cost as adjusted by postacquisition changes in the 
group’s share of the net assets of the associate less any 
notes to the consolidated financial statements
year ended 31 december 2011 2115304   260412   proof 4
69 group accounts 69
impairment in the value of individual investments losses of the 
associates in excess of the group’s interest in those associates 
are not recognised unless and only to the extent that the 
group has incurred legal or constructive obligations on behalf of 
the associates
 any excess of the cost of acquisition over the group’s share of 
the fair values of the identifiable net assets of the associate at 
the date of acquisition is recognised as goodwill any deficiency 
of the cost of acquisition below the group’s share of the fair 
values of the identifiable net assets of the associate at the date 
of acquisition ie discount on acquisition is credited in the 
consolidated income statement in the period of acquisition
 the consolidated income statement includes the group’s share 
of associates’ profit less losses while the group’s share of the net 
assets of the associates is shown in the consolidated balance sheet
 goodwill
 goodwill which is recognised as an asset is reviewed for 
impairment at least annually any impairment is recognised 
immediately as a loss and is not subsequently reversed
 for the purpose of impairment testing goodwill is allocated to 
each of the group’s cashgenerating units expected to benefit 
from the synergies of the combination cashgenerating units 
to which goodwill has been allocated are tested for impairment 
annually or more frequently when there is an indication that the 
unit may be impaired if the recoverable amount of the cash
generating unit is less than the carrying amount of the unit the 
impairment loss is allocated first to reduce the carrying amount 
of any goodwill allocated to the unit and then to the other assets 
of the unit pro rata on the basis of the carrying amount of each 
asset in the unit an impairment loss recognised for goodwill is 
not reversed in a subsequent period
 on disposal of a subsidiary associate or jointly controlled 
entity the attributable amount of goodwill is included in the 
determination of the profit or loss on disposal
 goodwill arising on acquisitions before the date of transition 
to ifrs has been retained at the previous uk gaap amounts 
subject to being tested for impairment at that date goodwill 
arising prior to 1 january 1998 of £1122000 was taken 
directly to reserves in the year in which it arose such goodwill 
has not been reinstated on the balance sheet
 negative goodwill arising on acquisition is recognised 
immediately in the consolidated income statement
 revenue recognition
 revenue from construction contracts is recognised in accordance 
with the group’s accounting policy on construction contracts 
see below
 
 interest income is accrued on a time basis by reference to the 
principal outstanding and at the effective interest rate applicable
 dividend income from investments is recognised when the 
shareholders’ rights to receive payment have been established
 construction contracts
 profit is recognised on contracts if the final outcome can be 
assessed reliably by including in the income statement revenue 
and related cost as contract activity progresses revenue is 
calculated as the proportion of total expected contract value 
which corresponds to the proportion of costs incurred to date to 
total expected costs for that contract variations in contract work 
claims and incentive payments are included in revenue to the 
extent that there is appropriate certainty that they will ultimately 
be accepted by the customer and can be measured reliably
 where the outcome of a construction contract cannot be 
estimated reliably contract revenue is recognised to the extent 
contract costs have been incurred and it is probable they will be 
recoverable contract costs are recognised as expenses in the 
period in which they are incurred
 when it is probable that total expected contract costs will exceed 
total expected contract revenue the expected loss is recognised 
as an expense immediately
 leases
 leases are classified as finance leases whenever the terms of the 
lease transfer substantially all the risks and rewards of ownership 
to the lessee all other leases are classified as operating leases
 amounts payable under operating leases are charged to the 
income statement on a straightline basis over the lease term
 property plant and equipment acquired under finance leases 
are capitalised in the balance sheet at fair value and depreciated 
in accordance with the group’s accounting policy the capital 
element of the leasing commitment is included as obligations 
under finance leases the rentals payable are apportioned 
between interest which is charged to the income statement and 
capital which reduces the outstanding obligation
 operating profit
 operating profit is stated after charging any restructuring costs 
impairment and amortisation charges gains or losses arising 
on the fair value of foreign exchange derivative contracts and 
after the share of results of associates and the impact of any 
movements in legal provisions but before investment income 
and finance costs
 additionally we present a separate additional nonstatutory 
heading “operating profit before results of associates” to assist 
in isolating the impact of the group’s indian joint venture this 
also excludes the results of two other nonmaterial associates 2115304   260412   proof 4
70 severfield—rowen plc annual report 2011
1 significant accounting policies continued
 retirement benefit costs
 the group operates two defined contribution pension schemes 
and costs of these schemes are charged to the income statement 
in the period in which they are incurred
 in addition atlas ward acquired on 31 march 2005 has a 
defined benefit scheme which is now closed the liability in 
respect of this scheme is the present value of the defined benefit 
obligation at the balance sheet date less the fair value of the 
plan assets together with adjustments for actuarial gainslosses
 the finance cost of liabilities and expected return of assets are 
included within administrative expenses in the consolidated 
income statement
 the actuarial gain or loss is charged through the consolidated 
statement of comprehensive income and is made up of 
the difference between the expected return on assets and 
those actually achieved the difference between the actuarial 
assumptions for liabilities and actual experience in the period 
and any changes in the assumptions used in the valuations
 the pension scheme deficit is recognised in full and presented 
on the face of the consolidated balance sheet the associated 
deferred tax asset is recognised within the net deferred tax liability 
within noncurrent liabilities in the consolidated balance sheet
 taxation
 the tax expense represents the sum of the tax currently payable 
and deferred tax
 the tax currently payable is based on taxable profit for the year 
taxable profit differs from net profit as reported in the income 
statement because it excludes items of income or expense that 
are taxable or deductible in other years and it further excludes 
items that are never taxable or deductible the group’s liability 
for current tax is calculated using tax rates that have been 
enacted or substantively enacted by the balance sheet date
 deferred tax is the tax expected to be payable or recoverable on 
differences between the carrying amounts of assets and liabilities 
in the financial statements and the corresponding tax bases 
used in the computation of taxable profit and is accounted for 
using the balance sheet liability method deferred tax liabilities 
are generally recognised for all taxable temporary differences 
and deferred tax assets are recognised to the extent that it is 
probable that taxable profits will be available against which 
deductible temporary differences can be utilised such assets 
and liabilities are not recognised if the temporary difference 
arises from the initial recognition of goodwill or from the initial 
recognition other than in a business combination of other 
assets and liabilities in a transaction that affects neither the tax 
profit nor the accounting profit
 
 the carrying amount of deferred tax assets is reviewed at each 
balance sheet date and reduced to the extent that it is no longer 
probable that sufficient taxable profits will be available to allow 
all or part of the asset to be recovered
 deferred tax is calculated at the tax rates that are expected to 
apply in the period when the liability is settled or the asset is 
realised these are determined based on future changes in tax 
rates that have been enacted rather than simply future changes 
that have been proposed but not enacted deferred tax is 
charged or credited in the income statement except when it 
relates to items charged or credited directly to equity in which 
case the deferred tax is also dealt with in equity
 deferred tax assets and liabilities are offset when there is a 
legally enforceable right to set off current tax assets against 
current tax liabilities and when they relate to income taxes levied 
by the same taxation authority and the group intends to settle 
its current tax assets and liabilities on a net basis
 dividends
 dividends are recorded in the group’s financial statements in 
the period in which they are declared appropriately authorised 
and no longer at the discretion of the company
 property plant and equipment
 land and buildings held for use in the production or supply 
of goods or services or for administrative purposes and plant 
and machinery are currently stated at cost in the balance sheet 
depreciation on buildings is charged to income
 depreciation is provided on other property plant and 
equipment to write off the cost of each asset over its estimated 
useful life at the following rates
 freehold buildings
 investment properties 1 straightline
 plant and machinery 10 straightline
 fixtures fittings and
 office  equipment 10 written down value
 computer equipment 20 straightline
 motor vehicles  25 written down value
 site safety equipment 20 straightline
 
 assets held under finance leases are depreciated over their 
expected useful lives on the same basis as owned assets or 
where shorter over the term of the relevant lease
 the gain or loss arising on the disposal or retirement of an asset 
is determined as the difference between the sales proceeds and 
the carrying amount of the asset and is recognised in income
notes to the consolidated financial statements continued
year ended 31 december 2011 2115304   260412   proof 4
71 group accounts 71
 investment property
 investment property which is property held to earn rentals and
or for capital appreciation is stated at cost less provision for 
impairment depreciation will be charged annually based on 
the group’s stated depreciation policy together with an annual 
impairment review where properties have been impaired below 
cost and are being held at directors’ valuation the directors have 
taken appropriate external guidance on the likely current value 
of properties no investment properties have been subject to 
formal external valuation
 intangibles
 the group recognises intangible assets at cost less accumulated 
amortisation and impairment losses intangible assets acquired 
through acquisitions arise as a result of applying ifrs 3 which 
requires the separate recognition of intangible assets from 
goodwill on all business combinations from 1 january 2004
 other acquired intangible assets include software costs
 intangible assets are amortised on a straightline basis over their 
useful economic lives as follows
 amortisation 
period
 customer relationships 10 years
 brands 25 years
 knowhow 10 years
 software costs 7 years
 impairment of tangible and intangible assets 
 excluding goodwill
 at each balance sheet date the group reviews the carrying 
amounts of its tangible and intangible assets to determine 
whether there is any indication that those assets have suffered 
an impairment loss if any such indication exists the recoverable 
amount of the asset is estimated in order to determine the 
extent of the impairment loss if any where the asset does not 
generate cash flows that are independent from other assets the 
group estimates the recoverable amount of the cashgenerating 
unit to which the asset belongs an intangible asset with an 
indefinite useful life is tested for impairment annually and 
whenever there is an indication that the asset may be impaired
 the recoverable amount is the higher of 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 
which the estimates of future cash flows have not been adjusted
 if the recoverable amount of an asset or cashgenerating unit 
is estimated to be less than its carrying amount the carrying 
amount of the asset or cashgenerating unit is reduced to its 
recoverable amount an impairment loss is recognised as an 
expense immediately unless the relevant asset is carried at a 
revalued amount in which case the impairment loss is treated as 
a revaluation decrease
 where an impairment loss subsequently reverses the carrying 
amount of the asset or cashgenerating unit is increased to 
the revised estimate of its recoverable amount but so that the 
increased carrying amount does not exceed the carrying amount 
that would have been determined had no impairment loss 
been recognised for the asset or cashgenerating unit in prior 
years a reversal of an impairment loss is recognised as income 
immediately unless the relevant asset is carried at a revalued 
amount in which case the reversal of the impairment loss is 
treated as a revaluation increase
 inventories
 inventories are stated at the lower of cost and net realisable 
value cost comprises direct materials and where applicable 
direct labour costs and those overheads that have been 
incurred in bringing the inventories to their present location and 
condition net realisable value represents the estimated selling 
price less all estimated costs of completion and costs to be 
incurred in marketing selling and distribution
 financial instruments
 financial assets and financial liabilities are recognised on the 
group’s balance sheet when the group becomes a party to the 
contractual provisions of the instrument
 t rade receivables
 trade receivables are classified as loans and receivables and 
therefore measured at amortised cost using the effective interest 
method
 cash and cash equivalents
 cash and cash equivalents comprise cash in hand and demand 
deposits and other short term highly liquid investments that are 
readily convertible to a known amount of cash and are subject 
to an insignificant risk of changes in value 2115304   260412   proof 4
72 severfield—rowen plc annual report 2011
1 significant accounting policies continued
 bank borrowings
 interestbearing bank loans and overdrafts are recorded at the 
proceeds received net of direct issue costs finance charges 
including premiums payable on settlement or redemption and 
direct issue costs are accounted for in the income statement 
using the effective interest method and are added to the carrying 
amount of the instrument to the extent that they are not settled in 
the period in which they arise the effective interest method is a 
method of calculating the amortised cost of a financial liability and 
of allocating interest over the relevant period
 t rade payables
 trade payables are initially measured at fair value and are 
subsequently measured at amortised cost
 equity instruments
 equity instruments issued by the company are recorded at the 
proceeds received net of direct issue costs
 sharebased payment transactions
 the group issues equitysettled sharebased payments these 
sharebased payments are measured at fair value at the date 
of grant based on the group’s estimate of shares that will 
eventually vest the fair value determined is then expensed in 
the consolidated income statement on a straightline basis over 
the vesting period with a corresponding increase in equity 
details regarding the determination of the fair value of equity
settled sharebased transactions are set out in note 22
 provisions
 provisions are recognised when the group has a present 
obligation as a result of a past event and it is probable that 
the group will be required to settle that obligation provisions 
are measured at the directors’ best estimate of the expenditure 
required to settle the obligation at the balance sheet date and 
as appropriate are discounted to present value where the effect 
is material
 derivative financial instruments
 the group enters into certain foreign exchange forward 
contracts to manage its exposure to currency movements 
further details of derivative financial instruments are disclosed in 
note 21 to the financial statements
 derivatives are initially recognised at fair value at the date 
a derivative contract is entered into and are subsequently 
remeasured to their fair value at each balance sheet date the 
resulting gain or loss is recognised in profit or loss
2 critical accounting judgements and key sources of 
estimation uncertainty
 key sources of estimation  uncertainty
 the key assumptions concerning the future and other key 
sources of estimation uncertainty at the balance sheet date that 
have a significant risk of causing a material adjustment to the 
carrying amounts of assets and liabilities within the next financial 
year are also discussed below
 revenue and margin recognition
 the group’s revenue recognition and margin recognition are 
central to the way the group values the work it has carried 
out in each financial year these policies require forecasts to 
be made of the outcomes of long term construction contracts 
which require assessments and judgements to be made on 
recovery of precontract costs changes in work scopes contract 
programmes and maintenance liabilities
 the group applies rigorous internal control procedures over 
the determination of each of the above variables to ensure that 
profit take as at the balance sheet date and the extent of future 
costs to contract completion are reasonably and consistently 
determined
 retirement benefit obligations
 details of the group’s defined pension scheme are set out in 
note 30 the scheme has been valued in accordance with ias 
19 “employee benefits” at 31 december 2011 the defined 
benefit obligation recognised on the group’s balance sheet was 
£9552000 the benefit obligation is calculated using a number 
of assumptions including increases in pension benefits mortality 
rates and inflation and the future investment returns from the 
scheme’s assets the present value of the benefit obligations is 
calculated by discounting the benefit obligation using market 
rates on relevant aa corporate bonds at the balance sheet date
 the scheme’s assets are valued at market rates at the balance 
sheet date effects of changes in the actuarial assumptions 
underlying the benefit obligation discount rates and the 
difference between expected and actual returns on the scheme’s 
assets are classified as actuarial gains and losses
notes to the consolidated financial statements continued
year ended 31 december 2011 2115304   260412   proof 4
73 group accounts 73
 critical judgements in applying the group’s  
 accounting policies
 in the process of applying the group’s accounting policies 
which are described in note 1 management has made the 
following judgements that have the most significant effect on 
the amounts recognised in the financial statements those 
judgements involving estimations are dealt with below
 impairment of goodwill and intangible  assets arising  
 from acquisitions
 determining whether goodwill or associated intangible assets 
are impaired requires an estimation of the value in use of the 
cashgenerating units to which these assets have been allocated 
the value in use calculation requires the entity to estimate the 
future cash flows expected to arise from the cashgenerating 
unit and a suitable discount rate in order to calculate present 
value the carrying amount of goodwill at the balance sheet 
date was £54712000 and of intangible assets arising from 
acquisitions was £18227000 no impairment adjustment has 
been made for the year ended 31 december 2011
 impairment of investment property
 in the absence of a formal valuation determining the carrying 
value of the group’s investment property requires an 
assessment of fair value the key factors considered by the 
directors in determining fair value are the possible open market 
valuation and rental yields on the property the written down 
value of the group’s investment property as at the balance sheet 
date was £3960000 this reflects the impact of an impairment 
charge of £2073000 made during 2010 as well as an ongoing 
depreciation charge of £40000 in 2011 2115304   260412   proof 4
74 severfield—rowen plc annual report 2011
3 revenue and segmental analysis
revenue
an analysis of the group’s revenue is as follows
2011
£000
2010
£000
revenue from construction contracts 267778 266692
total revenue 267778 266692
other operating income 508 510
interest received 27 55
total income 268313 267257
 segmental results
 following adoption of ifrs 8 the group has identified its operating segments as those upon which the executive committee regularly 
assesses performance
 the group has deemed it appropriate to aggregate its operating segments into one reported segment the constituent operating 
segments have been aggregated as they have businesses that have similar products and services production processes types of 
customer methods of distribution regulatory environments and economic characteristics
 revenue which relates wholly to construction contracts and related activities in both years originated from the united kingdom
revenues by product group
 all revenue is derived from construction contracts is related assets
geographical information
 the group’s revenue from external customers are detailed below
2011
£000
2010
£000
revenue by destination
united kingdom 261158 260528
republic of ireland and mainland europe 990 3632
other countries 5630 2532
267778 266692
 all revenue originated from the united kingdom and all noncurrent assets of the group are located in the united kingdom
information about major customers
 included in revenues is approximately £792 million 2010 £931 million in relation to sales from two 2010 three customers who 
individually contributed over 10 to combined group revenue in the relevant years
notes to the consolidated financial statements continued
year ended 31 december 2011 2115304   260412   proof 4
75 group accounts 75
4 operating profit
operating profit for the year has been arrived at after crediting
2011
£000
2010
£000
rent receivable 495 487
unrealised gains on derivative financial instruments 4 39
gain on sale of property plant and equipment 20 —
and after charging
amortisation of intangible assets note 11 2749 2749
depreciation on owned assets note 12 4413 4503
depreciation on assets held under finance lease 51 —
depreciation and impairment of investment properties note 12 40 2135
loss on sale of property plant and equipment — 165
auditor’s remuneration
— audit 154 167
— other services 121 103
rentals under operating leases
— hire of plant and machinery 4142 2542
— other operating leases 1045 2068
staff costs note 5 52430 52166
 the analysis of auditor’s remuneration is as follows
2011
£000
2010
£000
fees payable to the company’s auditor for the audit of the company’s 
annual accounts 16 16
fees payable to the company’s auditor and their associates for other 
services to the group
— the audit of the company’s subsidiaries pursuant to legislation 138 151
total audit fees 154 167
tax services
— advisory and compliance services 91 103
corporate finance advice 30 —
total nonaudit fees 121 103 2115304   260412   proof 4
76 severfield—rowen plc annual report 2011
notes to the consolidated financial statements continued
year ended 31 december 2011
5 directors and employees
 details of directors’ remuneration for the year are provided in the audited part of the directors’ remuneration report on pages  
57 and 58
 the average number of persons employed by the group including executive directors during the year was
2011
number
2010
number
production 963 927
site 191 204
sales and administration 53 48
1207 1179
 the aggregate payroll costs of these persons were as follows
2011
£000
2010
£000
wages and salaries 45157 44973
social security costs 5239 5199
other pension costs 2034 1994
52430 52166
employee remuneration costs under share based payment schemes are set out in note 22
6 investment income and finance charges
2011
£000
2010
£000
investment income — interest receivable 27 55
finance charges — interest and other costs in relation to bank borrowings 1581 976
net finance charges 1554 921 2115304   260412   proof 4
77 group accounts 77
7 tax
 a the tax charge comprises
2011
£000
2010
£000
current tax
uk corporation tax charge at 265 2010 280 based on profits for the year 3730 5161
adjustments to prior years’ tax provision 920 586
total current tax 2810 4575
deferred tax
current year credit note 20 954 746
impact of reduction in future years’ tax rates 1085 488
adjustments to prior years’ provision 189 133
total deferred tax 1850 1101
total tax on profit on ordinary activities 960 3474
 b tax reconciliation
 the charge for the year can be reconciled to the profit per the income statement as follows
2011
£000
2010
£000
profit before tax 6782 11107
tax on group profit on ordinary activities at standard
uk corporation tax rate of 265 2010 280 1797 3110
expenses not deductible for tax purposes 311 215
tax effect of share of results of associates 668 493
unprovided deferred tax movement — 2
impairment of fixed assets — 599
adjustments to prior years’ provisions 731 453
rate differences 1085 488
income tax expense for the year 960 3474
 rate differences arise through the enacted reduction as at 31 december 2011 in corporation tax rates from 260 to 250 effective 
april 2012 reducing the level of the group’s deferred tax liabilities this item is treated as nonunderlying
8 dividends
2011
£000
2010
£000
amounts recognised as distributions to equity holders in the period
second interim dividend for the year ended 31 december 2010 of nil per share 2009 50p — 4430
final dividend for the year ended 31 december 2010 of 25p 2009 nil per share 2231 —
interim dividend for the year ended 31 december 2011 of 15p 2010 500p per share 1339 4453
3570 8883
proposed final dividend for the year ended 31 december 2011 of 35p 2010 25p per share 3124 2231 2115304   260412   proof 4
78 severfield—rowen plc annual report 2011
notes to the consolidated financial statements continued
year ended 31 december 2011
9 earnings per share
 the calculation of the basic and diluted earnings per share is based on the following data
 earnings
2011
£000
2010
£000
earnings for the purposes of basic earnings per share being net profit attributable 
to equity holders of the parent company 5822 7633
earnings for the purposes of underlying basic earnings per share being underlying 
net profit attributable to equity holders of the parent company 7188 11123
number number
number of shares
weighted average number of ordinary shares for the purposes of basic earnings per share 89251076 88973821
effect of dilutive potential ordinary shares
sharebased payments scheme — —
weighted average number of ordinary shares for the purposes of diluted earnings per share 89251076 88973821
basic earnings per share 652p 858p
underlying basic earnings per share 805p 1250p
diluted earnings per share 652p 858p
underlying diluted earnings per share 805p 1250p
reconciliation of earnings
2011
£000
2010
£000
net profit attributable to equity holders of the parent company 5822 7633
other items 1366 3490
underlying net profit attributable to equity holders of the parent company 7188 11123
 further details of others items are given in the consolidated income statement 2115304   260412   proof 4
79 group accounts 79
10 goodwill
the carrying value of goodwill is allocated to cashgenerating units cgus as follows
£000
on the fisher engineering acquisition in 2007 47980
on the atlas ward acquisition in 2005 6571
on the watson steel structures acquisition in 2001 161
54712
 the group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired
 the recoverable amounts of goodwill are determined from value in use calculations the key assumptions for the value in use  
calculations are those regarding the discount rates growth rates and expected changes to selling prices and direct costs during the 
period the directors estimate discount rates using pretax rates that reflect current market assessments of the time value of money and 
the risks specific to the cgus changes in selling prices and direct costs are based on past practices and expectations on future changes 
in the market it is anticipated that sales volumes in the uk will not increase materially over the next three years
 the group prepares forecast cash flows based on the following years’ operating budget approved by the directors together with cash 
flows based on budgets for the following two years which are derived from the directors’ views on revenue prospects to the end of 2014 
this equates to a compound annual growth rate from budgeted 2012 levels of 2 after this period the growth rate applied to the 
cash flow forecasts is the projected economic growth rate for the industry the cash flow forecasts have been discounted using a pretax 
discount rate of 9 2010 9
 the group has conducted a sensitivity analysis on the impairment test for the fisher engineering goodwill a reduction in growth rates  
to 0 in 2012–13 and flat thereafter would result in the recoverable amount of goodwill being reduced to its carrying value of  
£480 million
 the group has also undertaken an assessment of the atlas ward position and no requirement for impairment has been identified 2115304   260412   proof 4
80 severfield—rowen plc annual report 2011
11 other intangible assets
intangible assets
acquired on
acquisition
£000
other
intangible 
assets 
acquired
£000
total
£000
cost
at 1 january 2010 39000 — 39000
additions — — —
at 1 january 2011 39000 — 39000
additions — 481 481
a t 31 december 2011 39000 481 39481
amortisation
at 1 january 2010 15756 — 15756
charge for the year 2749 — 2749
impairment loss — — —
at 1 january 2011 18505 — 18505
charge for the year 2749 — 2749
a t 31 december 2011 21254 — 21254
carrying amount 
a t 31 december 2011 17746 481 18227
at 31 december 2010 20495 — 20495
 the intangible assets acquired on acquisition arise as a result of applying ifrs 3 which requires the separate recognition of acquired 
intangibles from goodwill during 2007 the acquisition of fisher engineering limited resulted in intangible assets as follows
 
customer relationships
£000
brands
£000
order book
£000
knowhow
£000
total
£000
cost 
a t 1 january 2010 and 
31 december 2011 25800 3200 9600 400 39000
amortisation
at 1 january 2010 5780 286 9600 90 15756
charge for the year 2581 128 — 40 2749
at 1 january 2011 8361 414 9600 130 18505
charge for the year 2581 128 — 40 2749
a t 31 december 2011 10942 542 9600 170 21254
net book value
a t 31 december 2011 14858 2658 — 230 17746
at 31 december 2010 17439 2786 — 270 20495
 amortisation of acquired intangibles is included in the consolidated income statement as part of administrative expenses and is classified 
within the middle column entitled “other items”
 the amortisation period for each category of intangible asset is disclosed in the statement of significant accounting policies on page 71
notes to the consolidated financial statements continued
year ended 31 december 2011 2115304   260412   proof 4
81 group accounts 81
12 property plant and equipment including investment property
investment
property
£000
freehold and
long leasehold
land and
buildings
£000
plant and
machinery
£000
fixtures 
fittings
and office
equipment
£000
motor
vehicles
£000
total
£000
cost 
at 1 january 2010 6197 65611 36662 1797 2800 113067
additions — 9 2414 222 288 2933
disposals — — 857 — 785 1642
at 1 january 2011 6197 65620 38219 2019 2303 114358
additions — 26 940 234 496 1696
disposals — 263 7526 673 609 9071
a t 31 december 2011 6197 65383 31633 1580 2190 106983
a ccumulated depreciation 
depreciation 
at 1 january 2010 62 1415 18098 1201 1249 22025
charge for the year 62 468 3522 174 339 4565
impairment loss 2073 — — — — 2073
disposals — — 764 — 490 1254
at 1 january 2011 2197 1883 20856 1375 1098 27409
charge for the year 40 468 3452 177 367 4504
disposals — — 7405 673 406 8484
a t 31 december 2011 2237 2351 16903 879 1059 23429
carrying amount
a t 31 december 2011 3960 63032 14730 701 1131 83554
at 31 december 2010 4000 63737 17363 644 1205 86949 2115304   260412   proof 4
82 severfield—rowen plc annual report 2011
12 property plant and equipment investment property continued
 the net book value of the group’s plant and machinery includes £438000 2010 £nil in respect of assets held under finance leases
 the investment property represents land and buildings held in leeds the group is receiving rental income on this property until the end 
of 2012 at a current rate of £378000 per annum this has been subject to an annual depreciation charge at 1 as required under the 
group’s depreciation policy during 2010 the carrying value of this property was written down to £4000000 reflecting the continued 
poor state of the property market and the approaching end of the lease following soundings over future divestment and leasehold 
potential the current carrying value of £3960000 is considered appropriate no independent valuation by an appropriately qualified 
surveyor has been obtained
13 subsidiaries
 the company has investments in the following significant subsidiary undertakings all of the companies listed are registered in england
 severfield–rowen structures ltd — steel fabrication
 watson steel structures ltd — steel fabrication
 atlas ward structures ltd  — steel fabrication
 fisher engineering ltd  — steel fabrication and erection
 steelcraft erection services ltd — erection of steel fabricated within the group
 the company owns the whole of the issued share capital of the subsidiaries noted above
14 interests in associates
 the company has an interest in two associated companies and a joint venture as follows
associated companies holding  class of capital
kennedy watts partnership ltd — cadcam steelwork design 251 preferred ordinary
fabsec ltd — development of fire beam 250 ordinary
joint venture
jsw severfield structures ltd — structural steelwork serving the indian market 500 ordinary
 on 17 november 2008 a formal agreement was signed in india with jsw building systems ltd a subsidiary of jsw steel ltd of india 
to form a 5050 joint venture jsw severfield structures limited to create a structural steelwork business in bellary and mumbai india 
serving primarily the indian market as set out in pages 10 to 13 the joint venture is now established and now undertaking contracts 
serving the indian market
 jsw severfield structures limited is registered in india and during the year the group invested a further £113000 2010 £2884000 
in the joint venture
notes to the consolidated financial statements continued
year ended 31 december 2011 2115304   260412   proof 4
83 group accounts 83
group
goodwill
£000
share of net
assets
liabilities
£000
loans to
associate
undertaking
£000
total
£000
at 1 january 2010 570 1092 71 1733
losses retained — 1760 — 1760
net assets acquired 319 3203 — 2884
at 1 january 2011 251 2535 71 2857
net assets acquired — 112 — 112
losses retained — 2522 — 2522
a t 31 december 2011 251 125 71 447
 the group’s share of the retained profitloss for the year of the associates is made up as follows
kennedy watts
partnership
ltd
£000
fabsec
ltd
£000
jsw severfield
structures ltd
£000
total
£000
share of results 1 22 2545 2522
 summarised financial information in respect of the group’s associates is as follows
2011
£000
2010
£000
total assets 39122 34125
total liabilities 37730 29423
net assets 1392 4702
group’s share of associates’ net assets 871 2535
revenue 22567 1313
loss after tax 4998 3582
group’s share of associates’ loss after tax for the period 2522 1760
 during the year ended 31 december 2005 the board reviewed the investment of long term loans outstanding from fabsec ltd of 
£614000 and concluded that there was an element of doubt over the collection of this loan in the short to medium term consequently 
after considering the net liabilities of fabsec ltd a provision of £543000 was made against the debt this provision remains in place at 
31 december 2011
 in 2006 severfield–reeve structures ltd entered into a 5050 joint venture agreement with murray metals group ltd to form steel 
uk ltd a company involved in steel buying activities to date both parties have continued to purchase steel through the individual 
companies and no trade has passed through steel uk ltd the share capital invested by the group is a nominal sum of £50 steel uk 
ltd is registered in england
15 inventories
2011
£000
2010
£000
raw materials and consumables 3991 3518
workinprogress 5094 9115
9085 12633 2115304   260412   proof 4
84 severfield—rowen plc annual report 2011
notes to the consolidated financial statements continued
year ended 31 december 2011
16 construction contracts
2011
£000
2010
£000
contracts in progress at balance sheet date
amounts due from construction contract customers 
included in trade and other receivables 78095 65488
amounts due to construction contract customers 
included in trade and other payables 299 1545
77796 63943
contract costs incurred plus recognised profits less 
recognised losses to date 569763 699742
less progress billings 491967 635799
77796 63943
17 trade and other receivables 
2011
£000
2010
£000
amounts due from construction contract customers note 16
— current amounts receivable in respect of progress billings 71104 52522
— retentions due within one year 4133 10281
— retentions due after one year 2858 2685
total 78095 65488
other receivables 6731 3028
prepayments and accrued income 3493 2620
amounts due from associates 842 725
89161 71861
 the average credit period taken on revenue calculated on a countback basis to make appropriate allowance for monthly revenue 
phasing is 83 days 2010 70 days no interest is charged on receivables
 the directors consider that the carrying amount of trade and other receivables approximates their fair value
 before accepting any new customer the group uses an external credit rating to assess the potential customer’s credit quality and defines 
credit limits by customer it is group policy that adequate credit insurance is taken out on all customers to manage the exposure that may 
arise as the contractual work proceeds accordingly no bad debt provisions are held or expenses incurred the group’s credit insurance 
committee reviews situations where adequate credit insurance on the group’s customers cannot be purchased in the present economic 
climate as required
 due to the nature of the business involving applications for payment contractually overdue amounts within trade and other receivables 
are limited to retentions the group has rigorous procedures in place for monitoring and obtaining settlement of retentions in a prompt 
manner 
 amounts overdue at 31 december 2011 in respect of retentions were £189000 2010 £227000 2115304   260412   proof 4
85 group accounts 85
18 trade and other payables
2011
£000
as reanalysed
2010
£000
trade creditors 54332 42269
other taxation and social security 4434 3795
other creditors and accruals 7124 28084
payments in advance note 16 299 1545
amounts owed to associates 133 175
66322 75868
 the directors consider that the carrying amount of trade payables approximates their fair value
 the 2010 position has been reanalysed with amounts payable to subcontractors previously captured within other creditors and accruals 
now being captured within trade creditors
 the average credit period taken for trade purchases after allowance for the above reanalysis of the 2010 position calculated on a count
back basis to make appropriate allowance for monthly revenue phasing is 62 days 2010 52 days
19 provisions
2011
£000
2010
£000
contract legal provisions 600 600
 contract legal provisions relate to provisions on contracts including fault and warranty provisions and associated legal costs and are 
expected to be utilised within three years provision is made for the directors’ best estimate of known legal claims in progress the 
movement in the year comprises the following
£000
balance as at 1 january 2011 600
release of provision 600
additional cost provisions 1190
utilisation of provision 590
balance as at 31 december 2011 600
20 deferred tax liabilities
 
 the following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and 
prior reporting period
2011
£000
2010
£000
deferred tax liabilities 13833 15969
deferred tax assets 2656 2770
net deferred tax liability 11177 13199 2115304   260412   proof 4
86 severfield—rowen plc annual report 2011
notes to the consolidated financial statements continued
year ended 31 december 2011
20 deferred tax liabilities continued 
 the net deferred tax liability is made up as follows
2011
£000
2010
£000
excess capital allowances 9293 10312
other timing differences 139 314
intangible assets on acquisition of subsidiary 4437 5534
forward exchange contracts 26 29
on retirement benefit obligations 2388 2304
net deferred tax liability 11177 13199
 the movement during the year in net deferred tax liability is as follows
2011
£000
2010
£000
at 1 january 13199 14516
current year credit 954 746
impact of reduction in future years’ tax rates 1085 488
adjustment in respect of prior years 189 40
deferred tax in relation to pension scheme losses 172 123
at 31 december 11177 13199
 the deferred tax assets reducing the deferred tax liability relate to 25 2010 27 of the group’s deficit on its defined benefit 
retirement scheme of £9552000 the valuation of financial instruments and other timing differences
 unprovided deferred tax amounted to £59000 2010 £71000
 the government announced in march 2011 that it intended to reduce the rate of corporation tax from 27 to 25 and the finance 
act 2011 which was substantively enacted on 5 july 2011 included provisions to reduce the rate of corporation tax to 25 with 
effect from 1 april 2012 accordingly deferred tax balances have been revalued to the lower rate of 25 in these accounts which has 
resulted in a credit to the consolidated income statement of £1085000 and the consolidation statement of comprehensive income of 
£191000
 the government has announced in march 2012 a further reduction in the rate of corporation tax to 24 with effect from 1 april 2012 
and then by a further 1 each year to 22 by 1 april 2014 as this legislation was not substantively enacted by 31 december 2011 
the impact of the anticipated rate change is not reflected in the tax provisions reported in these accounts if the deferred tax assets and 
liabilities of the group were all to reverse after 1 april 2014 the effect of the changes from 25 to 22 would be to reduce the net 
deferred tax liability by approximately £1341000 to the extent that the deferred tax reverses more quickly than this the impact on the 
net deferred tax liability will be reduced
21 financial instruments
capital risk management
 the group manages its capital to ensure that entities in the group will be able to continue as going concerns while maximising the 
return to stakeholders the capital structure of the group consists of debt which includes borrowings cash and cash equivalents and 
equity attributable to equity holders of the parent comprising issued capital reserves and retained earnings
gearing ratio
 the board reviews the capital structure of the group on a semiannual basis as part of this review it considers the cost of capital and the 
risks associated with each class of capital
 the gearing ratio at the year end is as follows 2115304   260412   proof 4
87 group accounts 87
2011
£000
2010
£000
borrowings 33159 18629
cash and cash equivalents 2264 3589
finance leases 355 —
net debt 31250 15040
equity 132298 130943
net debt to equity ratio 236 115
 equity includes all capital and reserves of the group attributable to equity holders of the parent there are no externally imposed capital 
requirements
significant accounting policies
 details of the significant accounting policies and methods adopted including the criteria for recognition the basis of measurement and 
the basis on which income and expenses are recognised in respect of each class of financial asset financial liability and equity instrument 
are disclosed in note 1 to the financial statements
 categories of financial instruments
carrying value
2011
£000
2010
£000
financial assets
cash and cash equivalents 2264 3589
amounts due from construction contract customers 78095 65488
financial liabilities
trade creditors 54332 42269
other payables 11857 33424
borrowings 33159 18629
derivative financial instruments 104 108
finance leases 355 —
 the group is required to analyse financial instruments that are measured subsequent to initial recognition at fair value grouped into 
levels 1 to 3 based on the degree to which the fair value is observable
x x level 1 fair value measurements are those derived from quoted prices unadjusted in active markets for identical assets or liabilities
x x level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable 
for the asset or liability either directly ie as prices or indirectly ie derived from prices and
x x level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not 
based on observable market data unobservable inputs
 derivative financial instruments are the only instruments valued at fair value through profit or loss and are valued as such on initial 
recognition these relate to foreign currency forward contracts measured using quoted forward exchange rates and yield curves matching 
the maturities of the contracts these derivative financial instruments are categorised as level 2 financial instruments except for derivative 
financial instruments the carrying amounts of financial assets and financial liabilities are recorded at amortised cost in the financial 
statements and are considered to approximate their fair value
cash and cash equivalents
 this comprises cash held by the group and short term deposits with an original maturity of three months or less the carrying amount of 
these assets approximates their fair value 2115304   260412   proof 4
88 severfield—rowen plc annual report 2011
21 financial instruments continued 
general risk management principles
the board has overall responsibility for the establishment and oversight of the group’s risk management framework a formal risk 
assessment and management framework for assessing monitoring and managing the strategic operational and financial risks of the 
group is in place to ensure appropriate risk management of its operations internal control and risk management systems are embedded 
in the operations of the divisions
financial risks and management
 the group has exposure to a variety of financial risks through the conduct of its operations risk management is governed by the 
group’s operational policies which are subject to periodic review by the board of directors
credit risk
 the group’s primary exposure to credit risk arises from the potential for nonpayment or default from construction contract debtors 
the degree to which the group is exposed to this credit risk depends on the individual characteristics of the contract counterparty 
and the nature of the project the group’s credit risk is also influenced by the general macroeconomic conditions the group does 
not have significant concentration of risk in respect of amounts due from construction contract customers at the reporting date with 
them being spread across a wide range of customers due to the nature of the group’s operations it is normal practice for customers 
to hold retentions in respect of contracts completed retentions held by customers at 31 december 2011 were £6991000 2010 
£12966000
 the group manages its exposure to credit risk through the application of its credit risk management policies which specify the minimum 
requirements in respect of the creditworthiness of potential customers assessed through reports from credit agencies and the timing 
and extent of progress payments in respect of contracts in addition before accepting any new customer adequate credit insurance 
is taken out as reported in note 17 where credit insurance is difficult to acquire the credit insurance committee comprising t g 
haughey p a emerson and a d dunsmore convenes to determine the appropriate exposure for the group to take with a customer
 the group manages the collection of retentions through its postcompletion project monitoring procedures and ongoing contact with 
customers so as to ensure that potential issues that could lead to the nonpayment of retentions are addressed as soon as they are 
identified
 amounts outstanding from construction contract customers are due with reference to the payment terms for each particular contract but 
the majority would be receivable within four months from the end of the reporting period amounts due for settlement after 12 months 
are disclosed in note 16
liquidity risk
 liquidity risk is the risk that the group will not be able to meet its financial obligations as and when they fall due the ultimate 
responsibility for liquidity risk rests with the board
 the group generates cash through its operations and aims to manage liquidity by ensuring that it will always have sufficient liquidity to 
meet its liabilities when due under both normal and stress conditions without incurring unacceptable losses or risking damage to the 
group’s reputation forecast and actual cash flow is continuously monitored
 borrowings represent the group’s revolving credit facility from the royal bank of scotland and yorkshire bank a member of national 
australia bank group jointly which provides credit support of up to £50 million at an interest rate of between 190 and 265 above 
libor subject to the ratio of group net debt to ebitda this facility was renewed in november 2011 and is available for five years 
ending november 2016
 as at december 2011 £40 million was drawn down on this facility with £10 million of further facility not drawn but available up to  
£10 million of this facility is available by way of an overdraft
 borrowings outstanding net of associated issue costs at 31 december 2011 amounted to £33159000 2010 £18629000
notes to the consolidated financial statements continued
year ended 31 december 2011 2115304   260412   proof 4
89 group accounts 89
liquidity risk continued
 ifrs 7 requires disclosure of the maturity of the group’s remaining contractual financial liabilities the tables below detail the group’s 
remaining contractual maturity for its financial liabilities and assets
2011 analysis
maturity analysis
current liabilities
balance sheet
value
£000
less than
3 months
£000
3 months
to 1 year
£000
1–2
years
£000
2–5
years
£000
total
£000
trade and other payables 66322 62566 3692 64 — 66322
financial liabilities — borrowings
1
33159 — — — 33159 33159
financial liabilities — finance leases 355 25 79 104 147 355
financial liabilities — derivative
financial instruments
2
104 104 — — — 104
total 99940 62695 3771 168 33306 99940
current assets
cash and cash equivalents
3
2264 2264 — — — 2264
total 2264 2264 — — — 2264
grand total 97676 60431 3771 168 33306 97676
2010 analysis
current liabilities
trade and other payables 75693 52023 21468 1942 260 75693
financial liabilities — borrowings
1
18629 — — 18629 — 18629
financial liabilities — derivative 
financial instruments
2
108 72 36 — — 108
total 94430 52095 21504 20571 260 94430
current assets
cash and cash equivalents
3
3589 3589 — — — 3589
total 3589 3589 — — — 3589
grand total 90841 48506 21504 20571 260 90841
 1
 details of the conditions applying to these borrowings are given above
 2
  the group has no gross settled derivative financial instruments and therefore solely the pay leg has been disclosed within liabilities
 3
 cash and cash equivalents have also been disclosed in order to present a full analysis of the group’s financial assets 2115304   260412   proof 4
90 severfield—rowen plc annual report 2011
notes to the consolidated financial statements continued
year ended 31 december 2011
21 financial instruments continued
market risk
 the group’s activities expose it primarily to the financial risks of changes in credit risks described above in foreign currency exchange rates 
and interest rates the group has entered into a variety of derivative financial instruments to manage its exposure to foreign currency risk
 market risk exposures are monitored and are supplemented by sensitivity analysis there has been no change to the group’s exposure 
to market risks or the manner in which it manages and measures the risk
foreign currency risk management
 the group undertakes certain transactions denominated in foreign currencies hence exposures to exchange rate fluctuations arise 
exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts
 the group seeks to minimise the effects of currency risks by using derivative financial instruments when appropriate to hedge these 
risk exposures against contracted sales the use of financial derivatives is governed by the group’s policies approved by the board 
of directors the group does not enter into or trade financial instruments including derivative financial instruments for speculative 
purposes
 the carrying value of the group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows
liabilities assets
2011
£000
2010
£000
2011
£000
2010
£000
euro 36 97 1426 2065
us dollar — — 959 1348
36 97 2385 3413
foreign currency sensitivity analysis
 the group is only significantly exposed to the euro and us dollar
 the following table details the group’s sensitivity to a 10 increase and decrease in sterling against the relevant foreign currencies  
ten per cent is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents 
management’s assessment of the reasonably possible change in foreign exchange rates the sensitivity analysis includes only outstanding 
foreign currency denominated monetary items and derivative financial instruments and adjusts their translation at the period end for 
a 10 change in foreign currency rates a positive number below indicates an increase in profit and other equity where the sterling 
strengthens 10 against the relevant currency for a 10 weakening of the sterling against the relevant currency there would be an 
equal and opposite impact on the profit and other equity and the balances below would be negative
us dollar currency impact euro currency impact
2011
£000
2010
£000
2011
£000
2010
£000
profit or loss and equity 8 414 331 91
 the group’s sensitivity to euros has decreased in 2011 due to the reduced amount of work in the republic of ireland
 at present the group’s translation exposure to the indian rupee via its indian joint venture is not significant going forward as the 
business grows this exposure is expected to become more significant
forward foreign exchange contracts
 it is the policy of the group to enter into forward foreign exchange contracts to cover future euro and us dollar currency receipts on 
relevant contracts
 at 31 december 2011 the group had forward exchange contracts held for the sale of 490 million euros 2010 120 million euros  
and 104 million us dollars 2010 849 million us dollars at an average exchange rate of 1189 euros£ 2010 1166 euros£ and  
1544 us dollars£ 2010 1572 us dollars£ to the pound and maturing within 12 months of the year end 2115304   260412   proof 4
91 group accounts 91
interest rate risk management
 the group is exposed to interest rate risk as described under the borrowings paragraph earlier in this note the group does not 
currently hedge any of its interest rate exposure
interest rate sensitivity analysis
 the sensitivity analysis below has been determined based on the exposure to interest rates at the balance sheet date for floating rate 
liabilities the analysis is prepared assuming the gross amount of liability outstanding at balance sheet date was outstanding for the whole 
year a 05 increase or decrease is used when reporting interest rate risk internally to key management personnel and represents 
management’s assessment of the reasonably possible change in interest rates
 if interest rates had been 05 higher and all other variables were held constant the group’s profit for the year ended 31 december 
2011 and the group’s equity at that date would decrease by £180000 2010 £150000 this is attributable to the group’s exposure to 
interest rates on its variable rate borrowings if the £50 million facility is fully utilised the exposure increases to £250000
 the group’s sensitivity to interest rates has increased during the current period due to the increase in the level of borrowings in the year 
current indications are that the level of group borrowings will reduce during 2012 reducing this exposure accordingly
22 sharebased payments
 the group operates a sharebased incentive scheme open to all employees of the group although the current intention is that  
only the company’s executive directors being both main board directors and certain members of the executive committee and selected 
senior employees will participate in the scheme further details are given in the directors’ remuneration report on pages 52 to 58 the 
group recognised a total charge of £145000 in the year 2010 charge of £nil with a corresponding entry to reserves
performance share plan
 the vesting of awards is subject to performance conditions set by the remuneration committee three outstanding awards had been 
granted to 31 december 2011 a further two have now expired
x x during 2009 the remuneration committee granted 599151 ordinary shares of 25p each at nil value to the executive directors 
the vesting of these awards will be dependent on the company’s earnings per share performance over the three year period from 
1 january 2009 to 31 december 2011 with the following vesting schedule to apply
company’s eps performance for year ending 31 december 2012  of award vesting
equal to less than 250p 0
equal to 300p 25
equal to 400p or better 100
between 250p and 300p pro rata between 0 and 25
between 300p and 400p pro rata between 25 and 100
 the black–scholes pricing model has been used to measure the fair value of the shares granted the assumptions used in the model are 
as follows
share price on date of grant £153
exercise price nil
expected volatility using historic performance 50
riskfree rate 5
dividend 150p
expected percentage options exercised versus granted nil
actual life three years
  granted on 4 february 2009
 the black–scholes model produced using the above assumptions an annual charge of £nil 2115304   260412   proof 4
92 severfield—rowen plc annual report 2011
22 sharebased payments continued
 
x x during 2010 the remuneration committee granted a further 793072 ordinary shares of 25p each at nil value to the executive 
directors the vesting of these awards will be dependent on the company’s earnings per share performance over the three year 
period from 1 january 2010 to 31 december 2012 with the following vesting schedule to apply
company’s eps performance for year ending 31 december 2012  of award vesting
equal to less than 250p 0
equal to 350p or better 100
between 250p and 350p pro rata between 0 and 100
 the black–scholes pricing model has been used to measure the fair value of the shares granted the assumptions used in the model are 
as follows
share price on date of grant £204
exercise price nil
expected volatility using historic performance 50
riskfree rate 5
dividend 100p
expected percentage options exercised versus granted nil
actual life three years
  granted on 5 march 2010
 the black–scholes model produced using the above assumptions an annual charge of £nil
x x during 2011 the remuneration committee granted a further 720408 ordinary shares of 25p each at nil value to the executive 
directors the vesting of these awards will be dependent on the company’s earnings per share performance over the three year 
period from 1 january 2011 to 31 december 2013 with the following vesting schedule to apply
company’s eps performance for year ending 31 december 2013  of award vesting
equal to less than 125p 0
equal to 250p or better 100
between 125p and 250p pro rata between 0 and 100
 the black–scholes pricing model has been used to measure the fair value of the shares granted the assumptions used in the model are 
as follows
share price on date of grant £245
exercise price nil
expected volatility using historic performance 50
riskfree rate 5
dividend 100p
expected percentage options exercised versus granted nil
actual life three years
 
  granted on 14 april 2011
 the black–scholes model produced using the above assumptions an annual charge of £145000
share incentive plan
 during 2010 the group implemented a share incentive plan for group employees as part of the scheme 202384 new ordinary shares 
of 25p were issued which are being held in trust for a threeyear period on behalf of 973 group employees the vesting of these awards 
will be subject to continued employment for each of the relevant employees options are forfeited if the employee leaves the group 
before the options vest the share price on the date of issue of the shares 29 october 2010 was £241 and the fair value was measured 
based on the market price of the shares at the date of grant the aggregate of the estimated values of the awards granted in 2010 is 
£488000 a charge of £155000 2010 £35000 was recognised in the current year in relation to the share incentive plan
notes to the consolidated financial statements continued
year ended 31 december 2011 2115304   260412   proof 4
93 group accounts 93
23 share capital
2011
£000
2010
£000
authorised
108000000 ordinary shares of 25p each 2700 2700
issued and fully paid
89251076 ordinary shares of 25p each 2231 2231
 there are no share options outstanding as at 31 december 2011 2010 nil
 on 29 march 2010 440816 ordinary shares of 25p each were issued in relation to the vesting of shares under the company’s 
performance share plan on 29 october 2010 202384 ordinary shares of 25p each were issued in relation to the group employee 
share incentive plan
24 other reserves
sharebased
payment reserve
£000
other
reserves
£000
total
£000
balance at 1 january 2010 926 139 1065
sharebased payments in year 896 — 896
balance at 1 january 2011 30 139 169
sharebased payments in year 300 — 300
balance at 31 december 2011 330 139 469
 the movement in the sharebased payment reserve comprises the following components
 
2011
£000
2010
£000
shares issued under share incentive plan — 5
sharebased payments charge 300 35
vesting of shares under share performance plan — 926
total 300 896
25 notes to the cash flow statement
2011
£000
2010
£000
operating profit from continuing operations 8336 12028
adjustments for
provision releases and charges — 2000
share of results of associates 2522 1760
depreciation of property plant and equipment 4464 4503
depreciationimpairment of investment property 40 2135
pension movements 349 317
gainloss on disposal of property plant and equipment 20 165
sharebased payments 300 35
amortisation of intangible assets 2749 2749
movement in valuation of derivative financial instruments 4 39
operating cash flows before movements in working capital 18038 21019
increasedecrease in inventories 3548 2823
increase in receivables 17301 17212
decrease in payables 9592 6794
cash generated by operations 5307 5810
tax paid 3661 5393
net cash flow after tax from operating activities 8968 11203 2115304   260412   proof 4
94 severfield—rowen plc annual report 2011
notes to the consolidated financial statements continued
year ended 31 december 2011
26 analysis of net fundsdebt
at
1 january
2011
£000
cash
flow
£000
borrowings
£000
a t 31
december
2011
£000
cash at bank and in hand 3589 1325 — 2264
borrowings 18629 — 14530 33159
finance leases — — 355 355
net fundsdebt 15040 1325 14885 31250
27 capital commitments
2011
£000
2010
£000
contracted for but not provided in the financial statements 150 361
28 contingent liabilities
 the company and its subsidiaries have provided unlimited multilateral guarantees to secure any bank overdrafts and loans of all 
other group companies at 31 december 2011 these amounted to £40000000 2010 £30000000 the group has also given 
performance bonds in the normal course of trade
29 operating lease arrangements
the group as lessee
 the group leases a number of its premises under operating leases which expire between 2010 and 2032
 the total future minimum lease rentals are as follows
2011
£000
2010
£000
minimum lease rentals due
— within one year 1361 1297
— after one year and within five years 5331 5436
— after five years 12308 11484
19000 18217
 the group also leases certain items of plant and machinery and vehicles whose total future minimum lease rentals are as follows
2011
£000
2010
£000
minimum lease rentals due
— within one year 1155 1923
— after one year and within five years 1486 1142
— after five years — 133
2641 3198
the group as lessor
 property rental income earned on owned properties during the year was £406000 2010 £399000 the properties are expected 
to generate rental yields of 65 on an ongoing basis the properties held have committed tenants for the next one to eight years all 
operating lease contracts contain market review clauses in the event that the lessees exercise the options to renew the lessees do not 
have an option to purchase the property at the expiry of the lease period 2115304   260412   proof 4
95 group accounts 95
 as at the balance sheet date the group had contracted with tenants for the following future minimum lease payments
2011
£000
2010
£000
— within one year 542 407
— after one year and within five years 447 492
— after five years — 21
989 920
30 retirement benefit schemes
defined contribution schemes
 the group operates two defined contribution retirement benefit schemes the assets of the schemes are held separately from those of 
the group in funds under the control of trustees
 the total cost charged to income of £1435000 2010 £1458000 represents contributions payable to these schemes by the group 
at rates specified in the rules of the plans as at 31 december 2011 contributions of £237000 2010 £118000 due in respect of the 
current reporting period had not been paid over to the schemes
defined benefit schemes
 atlas ward has a defined benefit scheme which is now closed to new members 
 the most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 5 april 
2008 by mr christopher hunter fellow of the institute of actuaries the present value of the defined benefit obligation the related 
current service cost and past service cost were measured using the projected unit credit method
2011

2010

key assumptions used
discount rate 490 550
expected return on scheme assets 450 510
expected rate of salary increases — —
future pension increases 260 320
 when considering mortality assumptions a male life expectancy to 85 at age 65 has been used in 2011 2010 84
 impact on scheme liabilities of changes to key assumptions
assumption change in assumption impact on scheme liabilities
discount rate increasedecrease by 05 decreaseincrease by 82
rate of mortality increase by 1 year increase by 26
amounts recognised in income in respect of these defined benefit schemes are as follows
2011
£000
2010
£000
interest cost 1333 1343
expected return on scheme assets 823 807
510 536
 the charge for the year has been included in administrative expenses actuarial gains and losses have been reported in the statement of 
comprehensive income the cumulative actuarial gains and losses recognised amount to a loss of £5424000 2010 £4227000
 the actual return on scheme assets was a gain of £1066000 2010 £773000 2115304   260412   proof 4
96 severfield—rowen plc annual report 2011
notes to the consolidated financial statements continued
year ended 31 december 2011
30 retirement benefit schemes continued
 the amount included in the balance sheet arising from the group’s obligations in respect of the atlas ward defined benefit retirement 
scheme is as follows
2011
£000
2010
£000
present value of defined benefit obligations 26800 24610
fair value of scheme assets 17248 16078
deficit in scheme 9552 8532
liability recognised in the balance sheet 9552 8532
 the major categories of scheme assets as a percentage of the total scheme assets are as follows
2011

2010

equities 183 227
bonds and gilts 593 85
cash 109 656
property 95 —
other 20 32
1000 1000
 when investments are held in bonds and cash the expected long term rate of return is taken to be the yields generally prevailing on 
such assets at the balance sheet date a higher rate of return is expected on equity investments which is based more on realistic future 
expectations than on the returns that have been available historically the overall expected long term rate of return on assets is then the 
average of these rates taking into account the underlying asset portfolio of the pension plan 
 movements in the present value of defined benefit obligations were as follows
2011
£000
2010
£000
at 1 january 24610 23459
interest cost 1333 1343
actuarial losses 1612 406
benefits paid 755 598
a t 31 december 26800 24610
 movements in the fair value of scheme assets were as follows
2011
£000
2010
£000
at 1 january 16078 15052
expected return on scheme assets 823 807
actuarial gains 243 34
contributions from the sponsoring companies 859 851
benefits paid 755 598
a t 31 december 17248 16078
 none of the scheme’s assets were invested in atlas ward or property occupied by atlas ward
 the group expects to contribute £69000 per month to its defined benefit pension scheme in the year to 31 december 2012 2115304   260412   proof 4
97 group accounts 97
 history of experience of gains and losses
2011 2010 2009 2008 2007
experience gains and losses on scheme assets £000 243 34 377 1674 105
percentage of scheme assets 14 02 25 121 07
experience gains and losses on scheme liabilities 
£000 512 1013 223 198 373
percentage of the present value of scheme liabilities 19 41 10 10 18
total amount recognised in the consolidated  
statement of comprehensive income £000 1369 440 2091 190 285
percentage of the present value of scheme liabilities 51 18 89 09 13
31 related party transactions
 the remuneration of the directors who are the key management personnel of the group is provided in the audited part of the directors’ 
remuneration report on pages 57 and 58
 in addition to the company’s executive directors members of the executive committee are also considered as key management personnel 
of the group information about the remuneration of the additional directors who belong to the executive committee is as follows
2011
£000
2010
£000
short term employee benefits 1091 1419
contributions into pension schemes 121 199
1212 1618
 short term employee benefits include salary bonus the provision of company cars fuel for company cars and private medical insurance
 the charge in relation to sharebased payments is provided in note 22 and relates to executive directors and members of the executive 
committee
 transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation and are not 
disclosed in this note transactions between the group and its associated undertakings are disclosed below
 during the year the group purchased services in the ordinary course of business from kennedy watts partnership ltd at a cost of 
£531000 2010 £751000 the amount outstanding at 31 december 2011 was £97000 2010 £179000
 loans outstanding from fabsec ltd at 31 december 2011 amounted to £574000 2010 £594000 the directors continue to have 
doubts regarding the collectability of these loans and consequently a provision of £543000 which was made in 2005 is still in place 
leaving a balance at 31 december 2011 of £31000 2010 £51000 during the year the group purchased services in the ordinary 
course of business from fabsec ltd at a cost of £165000 2010 £132000 the amount outstanding at 31 december 2011 was 
£36000 2010 £47000
 during the year the group incurred additional operating costs in relation to the setting up and establishment of the joint venture in india 
of £1051000 2010 £1004000 those costs were recharged to the joint venture company during the year and £841000 remained 
outstanding at 31 december 2011 2115304   260412   proof 4
98 severfield—rowen plc annual report 2011
32 general information
 severfield–rowen plc is a company incorporated in the united kingdom under the companies act 2006 the address of the registered 
office is given on page 30 the nature of the group’s operations and its principal activities are set out on pages 4 to 9 these financial 
statements are presented in pounds sterling because that is the currency of the primary economic environment in which the group 
operates
 at the date of authorisation of these financial statements the following new or amended ifrs accounting standards and interpretations 
which have not yet been adopted by the group were in issue but not yet effective and in some cases had not yet been adopted by 
the eu
x x ifrs 7 amended – disclosures – transfers of financial assets
x x ifrs 9 – financial instruments
x x ifrs 10 – consolidated financial instruments
x x ifrs 11 – joint arrangements
x x ifrs 12 – disclosure of interests in other entities
x x ifrs 13 – fair value measurement
x x ias 1 amended – presentation of items of other comprehensive income
x x ias 12 amended – deferred tax recovery of underlying assets
x x ias 19 revised – employee benefits
x x ias 27 revised – separate financial statements
x x ias 28 revised – investments in associates and joint ventures
 the directors do not expect that the adoption of these standards and interpretations will have a material impact on the financial 
statements of the group in future periods 
notes to the consolidated financial statements continued
year ended 31 december 2011 2115304   260412   proof 4
99 group accounts 99
five year summary
ifrs
2011
£000
2010
£000
2009
£000
2008
£000
2007
£000
results
revenue 267778 266692 349417 394325 300656
underlying operating profit 14193 16204 51828 55107 42684
underlying profit before tax 10117 15283 50814 52479 42950
nonunderlying items 1366 3490 5118 9885 4590
profit attributable to equity holders 
of severfield–rowen plc 5822 7633 31313 23976 26434
assets employed
noncurrent assets 156940 165013 170731 177987 173279
net current liabilities 3059 11739 12732 33355 35615
noncurrent liabilities 21583 22331 25524 24869 20835
net assets 132298 130943 132475 119763 116829
key statistics
earnings per share
basic — underlying 805p 1250p 4000p 4220p 3574p
basic 652p 858p 3534p 2706p 3177p
diluted — underlying 805p 1250p 3980p 4215p 3570p
diluted 652p 858p 3516p 2702p 3173p
dividends per share 500p 750p 1500p 2000p 2000p
dividend cover times — underlying basis 16 13 27 21 18
share price — high 33350p 31320p 24300p 46000p 62000p
 — low 15000p 17720p 11950p 13125p 34475p
key statistics for prior years have been restated to reflect the 41 share capital in october 2007
  the basis of stating results on an underlying basis is set out on page 1
financial calendar
preliminary announcement of full year results 20 march 2012
publication of annual report 30 april 2012
annual general meeting 13 june 2012
payment of final dividend 21 june 2012
announcement of interim results provisional 21 august 2012 2115304   260412   proof 4
100 severfield—rowen plc annual report 2011
project 
stratford city link footbridge
location 
london 2115304   260412   proof 4
101 company a ccounts 101
company accounts 
contents
102 independent auditor’s report
103 company balance sheet
104 notes to the company financial statements
transport brid ges  car parks sector
project
blackfriars bridge deck 
location 
london
project
dublin airport terminal 2
location 
dublin
project
gatwick airport north    
terminal extension 
location  
london
project
terminal 2b                
heathrow airport
location 
london 
copyright balfour beatty and produced with the permission of baa plc 2115304   260412   proof 4
102 severfield—rowen plc annual report 2011
we have audited the parent company 
financial statements of severfield–rowen 
plc for the year ended 31 december 2011 
which comprise the company balance sheet 
and the related notes 1 to 15 the financial 
reporting framework that has been applied 
in their preparation is applicable law and 
united kingdom accounting standards 
united kingdom 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 the directors are 
responsible for the preparation of the parent 
company 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 parent company 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 
ethical standards for auditors
scope of the audit of the financial 
statements
an audit involves obtaining evidence about 
the amounts and disclosures in the financial 
statements sufficient to give reasonable 
assurance that the financial statements 
are free from material misstatement 
whether caused by fraud or error this 
includes an assessment of whether the 
accounting policies are appropriate to the 
parent company’s circumstances and have 
been consistently applied and adequately 
disclosed the reasonableness of significant 
accounting estimates made by the directors 
and the overall presentation of the financial 
statements
in addition we read all the financial and 
nonfinancial information in the annual 
report to identify material inconsistencies 
with the audited financial statements if we 
become aware of any apparent material 
misstatements or inconsistencies we consider 
the implications for our report
opinion on financial statements
in our opinion the parent company financial 
statements
x x give a true and fair view of the state of 
the parent company’s affairs as at  
31 december 2011 and of its loss for 
the year then ended
x x have been properly prepared in 
accordance with united kingdom 
generally accepted accounting practice 
and
x x have been prepared in accordance with 
the requirements of the companies act 
2006
opinion on other matters prescribed 
by the companies act 2006
in our opinion the information given in the 
directors’ report for the financial year for 
which the financial statements are prepared 
is consistent with the parent company 
financial statements
matters on which we are required to 
report by exception
we have nothing to report in respect of the 
following matters where the companies act 
2006 requires us to report to you if in our 
opinion
x x 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
x x 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
x x certain disclosures of directors’ 
remuneration specified by law are not 
made or
x x we have not received all the information 
and explanations we require for our 
audit
other matter
we have reported separately on the group 
financial statements of severfield–rowen 
plc for the year ended 31 december 2011 
and on the information in the directors’ 
remuneration report that is described as 
having been audited
simon manning  
senior statutory auditor
for and on behalf of deloitte llp
chartered accountants and statutory 
auditor
leeds united kingdom
27 april 2012
independent auditor’s report 
to the members of severfieldrowen plc 2115304   260412   proof 4
103 company a ccounts 103
note
2011
£000
2010
£000
fixed assets
tangible assets 4 61376 62064
intangible assets 481 —
investments 5 100729 106117
162586 168181
current assets
debtors 6 54305 49426
cash at bank and in hand — 41
54305 49467
creditors — amounts falling due within one year 7 163543 160523
net current liabilities 109238 111056
total assets less current liabilities 53348 57125
capital and reserves
calledup share capital 9 2231 2231
share premium account 10 46152 46152
other reserves 11 319 55
profit and loss account 12 4646 8687
equity and total shareholders’ funds 53348 57125
the financial statements were approved by the board of directors on 27 april 2012 and signed on its behalf by
t g haughey a d dunsmore
director director
severfield–rowen plc
registered in england no 1721262
company balance sheet
31 december 2011 2115304   260412   proof 4
104 severfield—rowen plc annual report 2011
1 significant accounting policies
basis of accounting
 the separate financial statements of the 
company are presented as required by 
the companies act 2006 they have 
been prepared under the historical cost 
convention and in accordance with 
applicable uk accounting standards uk 
gaap
going concern
 after making enquiries the directors 
have formed a judgement at the time 
of approving the financial statements 
that there is a reasonable expectation 
that the group has adequate resources 
to continue in operational existence for 
the foreseeable future for this reason 
the directors continue to adopt a going 
concern basis in preparing the financial 
statements the key factors considered 
by the directors in making the statement 
are set out within the financial review 
on pages 25 to 26
profit and loss account
 in accordance with the exemption 
allowed by section 408 of the 
companies act 2006 the company has 
not presented its own profit and loss 
account
cash flow
 the company is exempt from the 
requirements of financial reporting 
standard no 1 revised “cash flow 
statements”
tangible fixed assets
 freehold and long leasehold land is held 
at cost and not depreciated
 depreciation is provided on other fixed 
assets to write off the cost of each asset 
over its estimated useful life at the 
following rates 
 freehold buildings 1 straightline
intangible fixed assets
 intangible fixed assets relate to 
capitalised software costs
 these are in relation to systems that 
as at 31 december 2011 were in the 
commissioning phase and accordingly 
to date no amortisation has been 
charged
 going forward amortisation will be 
applied over the following periods
 software costs  7 years 
investments
 fixed asset investments are shown at 
cost less provision for impairment
taxation
 current tax including uk corporation 
tax and foreign tax is provided 
at amounts expected to be paid or 
recovered using the tax rates and laws 
that have been enacted or substantively 
enacted by the balance sheet date
 deferred tax is provided in full on 
timing differences which result in an 
obligation at the balance sheet date 
to pay more tax or a right to pay less 
tax at a future date at rates expected 
to apply when they crystallise based 
on current tax rates and law timing 
differences arise from the inclusion 
of items of income and expenditure 
in taxation computations in periods 
different from those which they are 
included in financial statements
 deferred tax is not provided on timing 
differences arising from the revaluation 
of fixed assets where there is no 
commitment to sell the asset or on 
unremitted earnings of subsidiaries 
and associates where there is no 
commitment to remit these earnings 
deferred tax assets are recognised 
to the extent that it is regarded as 
more likely than not that they will be 
recovered deferred tax assets and 
liabilities are not discounted
sharebased payments
 sharebased payments are accounted 
for as described in the group 
accounting policies on page 72
related party transactions
 the company has taken advantage of 
the exemption granted by paragraph 
3b of frs 8 related party disclosures 
not to disclose transactions with other 
wholly owned group companies
notes to the company financial statements
year ended 31 december 2011 2115304   260412   proof 4
105 company a ccounts 105
2 operating profit
 the auditor’s remuneration for audit services to the company was £16000 2010 £16000
 the company has no employees other than the directors whose remuneration was borne by subsidiary undertakings
3 profit of the company
 the company has taken advantage of section 408 of the companies act 2006 and consequently its profit and loss account is not 
presented as part of these accounts the loss of the company for the financial year amounted to £471000 2010 profit £1385000 
dividends paid and proposed are disclosed in note 8 to the consolidated financial statements
4 tangible fixed assets
freehold and
long leasehold
land and
buildings
£000
motor 
vehicles total
cost
at 1 january 2011 63890 298 64188
additions — 161 161
disposals 264 165 429
a t 31 december 2011 63626 294 63920
depreciation
at 1 january 2011 2005 119 2124
provided in year 455 62 517
disposals — 97 97
a t 31 december 2011 2460 84 2544
net book value
at 31 december 2010 61885 179 62064
a t 31 december 2011 61166 210 61376
 the company’s freehold and long leasehold land and buildings includes those which are occupied and used by some of the company’s 
subsidiary undertakings
5 investments
2011
£000
2010
£000
investment in subsidiaries 94754 100254
investment in associated companies 535 535
investment in joint ventures 5440 5328
100729 106117 2115304   260412   proof 4
106 severfield—rowen plc annual report 2011
5 investments continued
investment in subsidiaries
 the company has investments in the following significant subsidiary undertakings all of the companies listed are registered in england
 severfield–rowen structures ltd — steel fabrication
 watson steel structures ltd — steel fabrication
 atlas ward structures ltd  — steel fabrication
 fisher engineering ltd  — steel fabrication and erection
 steelcraft erection services ltd — erection of steel fabricated within the group
 the company owns the whole of the issued share capital of the subsidiaries noted above
 following the annual testing for impairment the carrying value of the company’s investment in action merchants limited the holding 
company for fisher engineering limited was impaired by £5500000 2010 £7300000 reducing the carrying value accordingly
£000
cost
a t 1 january 2011 and 31 december 2011 107554
provision for impairment
at 1 january 2011 7300
additional amounts provided 5500
a t 31 december 2011 12800
net book value
a t 31 december 2011 94754
at 31 december 2010 100254
investment in associates
 the company has an interest in associated companies as follows
holding  class of capital
kennedy watts partnership ltd — cadcam steelwork design 251 preferred ordinary
fabsec ltd — development of fire beam 250 ordinary
£000
cost
at 31 december 2010 and 31 december 2011 535
investment in joint ventures
 on 17 november 2008 a formal agreement was signed in india with jsw building systems ltd a subsidiary of jsw steel ltd of india 
to form a 5050 joint venture jsw severfield structures limited to create a structural steelwork business in bellary and mumbai india 
serving primarily the indian market
 jsw severfield structures limited is registered in india and during the year the company invested indirectly £113000 2010 
£2884000 in the joint venture the investment is carried in severfield–rowen mauritius limited a wholly owned subsidiary of the 
company
£000
cost
at 1 january 2011 5328
invested in year 112
at 31 december 2011 5440
notes to the company financial statements continued
year ended 31 december 2012 2115304   260412   proof 4
107 company a ccounts 107
6 debtors
2011
£000
2010
£000
other debtors 1610 659
amounts owed by subsidiary undertakings 52207 47872
deferred tax asset note 8 189 115
corporation tax recoverable 299 780
54305 49426
7 creditors — amounts falling due within one year
2011
£000
2010
£000
bank borrowings 40693 29704
other creditors and accruals 3074 2425
amounts owed to subsidiary undertakings 119776 128394
163543 160523
 borrowings represent the group’s revolving credit facility from the royal bank of scotland and national australia bank jointly as disclosed 
in note 21 to the consolidated financial statements the facility is available until november 2016
8 deferred tax
amount provided amount unprovided
2011
£000
2010
£000
2011
£000
2010
£000
excess capital allowances 77 115 — —
short term timing differences 112 — — —
189 — — —
deferred taxation — movement for the year
£000
at 1 january 2011 note 6 115
current year credit 89
impact of reduction in future years’ rate 15
a t 31 december 2011 note 6 189
9 share capital
2011
£000
2010
£000
authorised
108000000 ordinary shares of 25p each 2700 2700
issued and fully paid
89251076 ordinary shares of 25p each 2010 89251076 2231 2231
 there are no share options outstanding as at 31 december 2011 2010 nil
  2115304   260412   proof 4
108 severfield—rowen plc annual report 2011
10 share premium account
2011
£000
2010
£000
balance at 1 january and 31 december 46152 46152
11 other reserves
2011
£000
2010
£000
balance at 1 january 55 951
sharebased payment movements in year 300 896
other reserve movement 36 —
balance at 31 december 319 55
 the movement in the sharebased payment reserve comprises the following components
2011
£000
2010
£000
shares issued under share incentive plan — 5
sharebased payments 300 35
vesting of shares under share performance plan — 926
300 896
12 profit and loss account
2011
£000
2010
£000
balance at 1 january 8687 15270
dividends paid 3570 8883
net profitloss for the year 471 1385
sharebased payments — 915
balance at 31 december 4646 8687
13 movement in shareholders’ funds
2011
£000
2010
£000
balance at 1 january 57125 64588
dividends paid 3570 8883
net profitloss for the year 471 1385
sharebased payments — 915
increase in share capital — 16
other reserve movement 36 —
movement in sharebased payment reserve 300 896
balance at 31 december 53348 57125
14 capital commitments
2011
£000
2010
£000
contracted for but not provided in the financial statements 127 265
15 contingent liabilities
 the company has provided an unlimited guarantee to secure any bank overdrafts and loans of all other group companies at 
31 december 2011 these amounted to £nil 2010 £nil
notes to the company financial statements continued
year ended 31 december 2012 2115302   27042012   proof 4
severfieldrowen structures ltd
dalton airfield industrial estate
dalton
thirsk
north yorkshire
yo7 3jn
tel 01845 577 896
fax 01845 577 411
atlas ward structures ltd
sherburn
malton
north yorkshire
yo17 8pz
tel 01944 710 421
fax 01944 710 387
steelcraft erection services ltd
dalton airfield industrial estate
dalton
thirsk
north yorkshire
yo7 3jn
tel 01845 577 896
fax 01845 578 477
severfield–rowen structures ltd   
preconstruction services
17 maisies way
the village
south normanton
derbyshire
de55 2ds
tel 01773 860 086
fax 01773 814 077
fisher engineering ltd
ballinamallard
enniskillen
co fermanagh
bt94 2fy
tel 0286 638 8521
fax 0286 638 8706
engineering construction training ltd
dalton airfield industrial estate
dalton
thirsk
north yorkshire
yo7 3jn
tel 01845 576 807
fax 01845 577 942
watson steel structures ltd
lostock lane
lostock
bolton
lancashire
bl6 4bl
tel 01204 699 999
fax 01204 694 543
jsw severfield structures ltd
office no 302 naman centre
3rd floor plot no c–31
gblock bandra kurla complex
bharat nagar bandra east
mumbai 400 051
india
tel 91 22 6731 7000
fax 91 22 2651 2685
severfieldreeve international ltd
po box 519
abu dhabi
united arab emirates
tel 971 2 644 2600
fax 971 2 644 2387
jsw severfield
structures
severfield–rowen
structures
atlas ward
structures
watson steel
structures
fisher 
engineering
steelcraft 
erection
services
engineering  
construction  
t raining
severfield–reeve
international  
project office abu dhabi
severfield–rowen plc
dalton airfield industrial estate
dalton
thirsk
north yorkshire
yo7 3jn
tel 01845 577 896
fax 01845 577 411 wwwsfrplccom
6 2115302   27042012   proof 4
dalton airfield industrial estate 
dalton thirsk north yorkshire yo7 3jn
tel 01845 577896  fax 01845 577411
wwwsfrplccom
our olympic legacy
severfieldrowen plc


Summary:
 16 severfield—rowen plc annual report 2011
2115304 270412   proof
chairman’s statement
joh n dodds chairman
against the backdrop of a continued challenging  
u k trading environment i am very pleased with  
the company’s results for the year and with  
its progress and direction 
overview
t he year to 31 december 2011 was my 
first full year as a director with severfield–
rowen and included my appointment to 
the role of chairman in september 2011
against the backdrop of a continued 
challenging u k trading environment i am 
very pleased with the company’s results for 
the year and with its progress and direction 
our u k companies are market leaders in 
their respective fields and they work 
vigorously individually and collectively to 
sustain the group’s key competitive 
advantages
t he group’s view is that the u k market 
conditions over the coming years will 
remain lacklustre contrasting markedly with 
the increasing and exciting prospects for 
our joint venture company in india
results
t he group has made an underlying 
operating profit of £117m 2010 £162m 
on revenue of £2678m 2010 £2667m 
group profit after tax is £58m 2010 
£76m with basic earnings per share of 
652p 2010 858p both reflecting the 
impact of nonunderlying items
dividend
our u k markets remain challenging and 
consequently the group continues to adopt 
a cautious dividend policy we recommend 
a final dividend of 350p giving 500p for 
the full year 2010 750p which is 16 
times covered by underlying earnings per 
share
board changes
as we announced at the time of our interim 
results in august 2011 i was appointed 
chairman on 1 september 2011 in 
succession to t oby hayward who remains a 
nonexecutive director and chairman of 
the group’s audit committee
earlier in february 2011 derek randall 
executive director for business 
development and international including 
jsw severfield structures ltd in india 
joined the group’s board
jonathan rhodes was appointed as 
company secretary in june 2011
we were pleased that chris holt formerly 
chief executive of mj gleeson financial plc 
joined us as a nonexecutive director of the 
group in november 2011 succeeding 
david ridley who left his role after nine 
years of valued service
in response to new and emerging 
opportunities we continue to review the 
operation of the board in order to provide 
the group with the appropriate level of 
support as the shape and scale of the 
business changes
our people
our management teams and employees 
continue to operate very well in challenging 
market conditions which have now been in 
occurrence for a number of years t he 
expertise experience and dedication of our 
people is a major asset of the business and 
on behalf of the board i would like to thank 
them all for their continued support
during a visit to jsw severfield structures 
ltd in india in february this year i was able 
to see the outcome of our joint efforts which 
has resulted in an effective and highly 
motivated team of management and 
employees working in a modern and safe 
environment
outlook
notwithstanding the prevailing u k market 
conditions the board is confident that the 
business has the talent ambition and 
resource to achieve its strategic objectives 
both at home and abroad and i am very 
optimistic for its future 17 our business 17
2115304 270412   proof
project
cooperative headquarters 
location 
manchester
th e portf olio