PV Crystalox Solar plc (PVCS) 2011年年度報告「LSE」.pdf

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1、PV Crystalox Solar PLC Annual Report and Accounts 2011The key to solar powerPV Crystalox Solar has navigated a very difficult 2011,which was a very challenging year for thePV industry.Worldwide production capacity continued to increase dramatically,particularly from companies in China,which led to s

2、harp falls in pricing across the PV value chain and drove wafer sales prices below production costs.The Board has taken action tomanage the business through these difficult times and in particular to conserve the Groups cash.Production output wassignificantly reduced at our ingot and wafer operation

3、s in the UnitedKingdom and Germany and polysilicon production was suspended atourfacilityin G PV Crystalox Solar PLC Annual Report and Accounts 20111Consolidated financial statementsCorporate governanceBusiness reviewOverviewOverview IFC About us 1 Highlights 2 Quick read 4 Chairmans statementBusine

4、ss review 6 Operational review 8 Operational review:Our strategy 12 Financial review 16 Principal risks and uncertainties 18 Corporate social responsibilityCorporate governance 20 Directors 22 Directors report 26 Corporate governance statement 32 Directors remuneration reportConsolidated financial s

5、tatements 40 Statement of directors responsibilities 41 Independent auditors report 42 Consolidated statement of comprehensive income 43 Consolidated balance sheet 44 Consolidated statement of changes in equity 45 Consolidated cash flow statement 46 Notes to the consolidated financial statementsComp

6、any financial statements 69 Statement of directors responsibilities 70 Independent auditors report 71 Accounting policies 72 Company balance sheet 73 Notes to the company financial statementsShareholder information 76 AdvisorsContentsMarket overview 2011 global module installations estimated at 27.7

7、GW up 70%from 2010 Unprecedented wafer spot pricing reduction of 69%during 2011Overview of results Wafer shipments 384MW(2010:378MW)Revenues 210.4m(2010:252.6m)EBIT before exceptional items of 4.1m(2010:33.3m)Exceptional impairment of plant of 27.9m Exceptional inventory writedown of 22.8m Exception

8、al onerous contract charge and provisions of20.9m EBIT loss of 67.5m(2010:profit of 33.3m)EBT loss of 67.1m(2010:profit of 33.7m)Net cash 22.6m(2010:54.8m)Revenues210.4m2010:252.6mOperating cash flow1.6m2010:11.3mNet cash(cash less external loans)22.6m2010:54.8mEBIT(earnings before interest and taxa

9、tion)before exceptional items4.1m2010:33.3mCompany financial statementsVisit us The directors submit to the members their Annual Report and Accounts of the Group for the year ended 31 December 2011.Pages 4 to 40,including theChairmans Statement,Operational Review,Financial Review,Directors,Directors

10、 Report,Principal Risks andUncertainties,Corporate Social Responsibility,Corporate Governance Statement,Directors Remuneration Report and the Statement ofDirectorsResponsibilities form part oftheReportofthe D2PV Crystalox Solar PLC Annual Report and Accounts 2011PV Crystalox Solar is a leading suppl

11、ier to the worlds major photovoltaic companies,producing multicrystalline silicon wafers for use in solar electricity generation systems.Our customers,the worlds leading solar cell producers,process these wafers into solar modules to harness the clean,silent and renewable power from the sun.We are p

12、laying a central role in making solar power cost competitive with conventional hydrocarbon power generation and,as such,continue to seek to drive down the cost of production whilst increasing solar cell efficiency.Who we are:Leading through experience and continual innovationPV Crystalox Solar focus

13、es onthe first three major stagesconcerned with silicon processing technologies,areas inwhich we possess extensive expertise and experience.Overview:Quick read20 yearsManufacturing experience in the PV industry750 MW2012 production capacity PV Crystalox Solar operates its in-house polysilicon produc

14、tion plant in Bitterfeld theheart of Germanys solar valley The facility is unique in Europe,being the first touse modifications tothe established Siemens process,where operations have been optimised for the exclusive production of solar grade polysilicon The Groups ingot production facilities are ba

15、sed in Oxfordshire,UK,where four production plants are in operation Multicrystalline silicon ingots are directionally solidified,under carefully controlled conditions,from molten,high-purity polysilicon,in production systems designed and manufactured by Crystalox Limited Continual innovation and dev

16、elopment ensuresPV Crystalox Solars leadership in the manufacture of superior quality silicon ingots1How we operate:PV Crystalox Solar focuses on thefirst three segments of the PVvalue chain.Our extensive experience inthese areas gives usinternational recognition asaleading multicrystalline siliconw

17、afer manufacturer.2Externally supplied raw materialsExternally supplied polysiliconCrystalox Limited Abingdon,UKPV Crystalox Solar Silicon GmbHBitterfeld,GermanySolar grade polysilicon productionIngot production3 PV Crystalox Solar PLC Annual Report and Accounts Corporate governanceBusiness reviewOv

18、erviewOxfordshire,UKErfurt,GermanyBitterfeld,Germany JapanManufacturing facilitiesKey and current markets The sectioning of ingots into blocks is carried out at the Groups facilities in the United Kingdom andby PVCrystalox Solars partners in Japan Quality checks are carried out throughout ingot and

19、block production resulting in consistent,high performance multicrystalline wafers Wafering of the blocks takes place at theGroups wafering facility,PV Silicon inErfurt,Germany,and in Japan by our wafering subcontractors Wafers are manufactured to meet the higheststandards PV Crystalox Solar supplies

20、 multicrystalline silicon wafers to major PV companies in Europe and Asia from its wafering facilities inGermany and Japan.From these strategic locations,PV Crystalox Solar collaborates closely with its customers to ensure standards are maintained and that any technological developments are passed o

21、n quicklyCrystalox Limited Abingdon,UKJapanese subcontractors345PV Silicon GmbHErfurt,GermanyJapanese subcontractorsWhere we operate:Crystalox LimitedAbingdon,UKPV Silicon GmbHErfurt,GermanyPV Crystalox SolarKKTokyo,JapanBlock productionWafer productionExternal salesGeographical sales profile 2010 (

22、%)Japan 31.1 China 30.7 Rest of the world 13.1 Germany 9.8 USA 15.3Geographical sales profile 2011 (%)Japan 29.2 China 31.9 Rest of the world 19.6 Germany 15.9 USA 3.4Geographical sales profile 2010 (%)Japan 31.1 China 30.7 Rest of the world 13.1 Germany 9.8 USA 15.3Company financial statements Cons

23、olidated financial statements4PV Crystalox Solar PLC Annual Report and Accounts Overview:Chairmans statement“We remain committed to the solar industry and believe that the long-term outlook for solar installations remains positive.In the medium-term we expect that market conditions will return to le

24、vels that allow companies to operate profitably.”Summary of Chairmans Statement PV Crystalox Solar has navigated a very difficult 2011,which was a very challenging year for the PV industry.Sharp falls in pricing across thePV value chain drove wafersales prices below production costs.The Board has ta

25、ken action tomanage the business through these difficult times and in particular to conserve the Groups cash.The Board will continue to takethe decisions necessary tomaximiseshareholder value.PV Crystalox Solar has navigated a very difficult 2011,which was a very challenging year for the PV industry

26、.Worldwide production capacity continued to increase dramatically,particularly from companies in China,which led to sharp falls in pricing across the PV value chain and drove wafer sales prices below production costs.Despite the problems faced by the industryduring 2011,growth in the global PV marke

27、t was significantly above industry expectations,with strong demand in the second half of the year driven by the 40%fall in module prices and the continuing market incentive programmes in Europe.The European Photovoltaic Industry Association(“EPIA”)estimates that global installations grew to around 2

28、7.7GW in 2011,which represents a 70%increase overthe previous year.In response to the challenging market environment,the Board has taken action tomanage the business through these difficult times and in particular to conserve the Groups cash.Production output was significantly reduced at our ingot a

29、nd wafer operations in the United Kingdom and Germany and polysilicon production was suspended at our facility in Germany.Employment costs were reduced through the introduction ofshort-time working,areduction in the number of temporary workers in Germany and,regrettably,redundancies in the United Ki

30、ngdom.The Groups shipment volumes of 384MW in2011 were slightly above the 378MW achieved in 2010.However,Group revenue was 17%lower at 210.4 million due to theeffect of lower average selling prices which impacted profitability leading to earnings before interest and taxes(“EBIT”),before exceptional

31、items,of 4.1 million,representing a margin of 1.9%.As a result of the dramatic reduction in wafer and polysilicon spot prices and the challenging market environment,the Group recognised exceptional charges of 71.6 million in 2011.These comprised:a 27.9 million impairment charge in relation to the Gr

32、oups polysilicon facility at Bitterfeld;a22.9 million inventory writedown;and a20.9 million writedown in relation toonerous contracts with our external suppliers.Once these exceptional items aretaken into account,total EBIT loss was67.5 million for the year.5 PV Crystalox Solar PLC Annual Report and

33、 Accounts OverviewBusiness reviewCorporate governanceConsolidated financial statementsCompany financial statementsThe loss after taxes was 60.9 million,equating to a loss per share of 15.0 Euro cents.The Group retained a positive net cash position of 22.6 million at the yearend.In view of the curren

34、t challenging market conditions that continue to be experienced in the first three months of 2012,the Board has decided not to declare a dividend.TheBoard continues to recognise the importance of dividends to shareholders andthe directors will review the potential toreinstate dividends based on the

35、future performance and prospects of the Group.We remain committed to the solar industry and believe that the long-term outlook for solar installations remains positive.In the medium-term we expect that market conditions will return to levels that allowcompanies to operate profitably.Maarten Henderso

36、nIn parallel the Group will accelerate its costreduction programmes and continue its cash conservation strategy,whilst preserving the Groups operational capabilities.The Board will continue totakethe decisions necessary tomaximiseshareholder value.Maarten HendersonChairman27 March 2012“The Group wil

37、laccelerate itscostreduction programmes and continue its cash conservation strategy,whilst preserving the Groups operational capabilities.”6PV Crystalox Solar PLC Annual Report and Accounts Business review:Operational review“2011 has been an extremely challenging year for the global PV industry.We b

38、elieve that our cash conservation measures and internal cost reduction programme are the most appropriate approaches to protect shareholder value inthecurrent turbulent environment.”Summary of Operational Review Our wafer shipment volumes of384MW in 2011 were marginally above 2010.Fierce price compe

39、tition resulted in the market pricing falling below our production costs in the second half of theyear.Overall global PV installations grew by 70%in 2011 to reach27.7GW.SummaryPV market conditions in 2011 were extremely challenging,with a combination of increasing industry production capacity and hi

40、gh inventory levels leading to pressure on pricing,which grew in intensityas the year progressed.Our wafer shipment volumes of 384MW in2011 were marginally above the 378MW achieved in 2010.Although our long-term wafer supply contracts provided some protection from the worst of the market pressures,a

41、verage sales prices(“ASPs”)fellby 18%and adversely impacted our margins.Fierce price competition resulted in the market pricing falling below our production costs in the second half of theyear and has resulted in inventory writedowns,onerous contract provisions and impairment of assets.The Group has

42、 responded to market oversupply and lower selling prices by adopting a cash conservation strategy.Accordingly,in December 2011 production was suspended at our polysilicon facility inBitterfeld and production output was significantly reduced at our United Kingdom ingot andGerman wafer operations.Mark

43、etOverall global PV installations grew by 70%in 2011 to reach 27.7GW according to the European Photovoltaic Industry Association(“EPIA”),with Europe continuing to be the major market and accounting for 75%of theinstalled capacity.PV end-market demand was sluggish inthefirst half of the year,particul

44、arly in thetwo key markets of Germany and Italy.PVinstallations in Germany,hitherto the largest global market,were only around half the level installed in the same period in2010.In Italy,uncertainty due to delays infinalising revisions to feed in tariffs(“FIT”)froze demand during the first half ofth

45、eyear.In the second half both markets rebounded strongly,stimulated by lower pricing,and showed remarkable growth with Germany installing 3.0GW in December alone to reach a full year total of 7.5GW,slightly above the 2010 level.Italy overtook Germanyto become the largest market withinstallations of

46、9.0GW in 2011.The turbulent times in the PV industry have created difficulties for many PV companies as market prices for cells and modules also fell below production costs.Spot prices across the value chain remained stable untilApril 2011 but had fallen by 40%for modules,69%for wafers and 59%for po

47、lysilicon by the year end.The turmoil hastaken its toll on PV companies both in Europe and in the USA,with several filing for bankruptcy including SpectraWatt,oneof our long-term contract customers ina key strategic market.Operational review of 2011In light of the weak pricing environment,inOctober

48、the Board decided to take action to conserve the Groups cash.Accordingly 7 PV Crystalox Solar PLC Annual Report and Accounts OverviewBusiness reviewCorporate governanceCompany financial statements Consolidated financial statementsDr Iain Dorritythe Group reduced production output at itsUnited Kingdo

49、m ingot and German wafer operations and also suspended production temporarily at its polysilicon facility in Bitterfeld,Germany.Regrettably,these actions led to redundancies in the United Kingdom,short-time working in Germany and a reduction in temporary workers inboth countries.In addition,the Grou

50、p continued to have discussions with its suppliers in order to reduce costs and willcontinue to seek further methods ofachieving greater efficiencies within theGroups operations.During 2007-2008,Group companies entered into a number of long-term agreements with customers to supply wafers at prices w

51、hich are considerably above todays market levels.In most cases we have been able to reach agreement withour customers to continue supply ofcontracted volumes,albeit at reduced prices.However,the Group has been unable to reach any agreement with two customers who no longer wish to take delivery of wa

52、fers and so resolution is being sought under the jurisdiction of the International Court of Arbitration.If these actions are successful,they will result in significant cash settlements in the Groups favour,during the latter part of 2012.While the Group was successful in managing the effect of the di

53、fficult market environment during the first half of the year,the more intense pressure during the second half impacted pricing and to a lesser extent volumes.Demand for our products continued to bestrong during the first four months of theyear and although demand weakened during May and June,shipmen

54、t volumes for the first half of 2011 totalled 204MW,a 23.6%increase on the 165MW shipped in the same period in 2010.Our ASP during the first half was approximately 9%below that reported for the full year 2010 but the impact on margins was offset by the accelerated progress in our wafering and intern

55、al polysilicon production cost reduction programmes.Our ASPs fell more sharply during the second half as market pressures intensified but shipment volumes of 180MW were only 11.8%down on the first half.This represented a creditable performance in the context of the unprecedented 69%decline inwafer s

56、pot market prices which was seen during the year.The Group continues to respond to the global shift in PV manufacturing to Asia.Shipments to customers in Asia exceeded 80%(2010:75%)with China overtaking Japan to become our largest geographical market.Sales to customers in Taiwan also grew significan

57、tly and were up by almost 50%on those in 2010.However,shipments to this region were predominately achieved during the first half as sales were lower during the second half as market conditions and pricing deteriorated sharply.8PV Crystalox Solar PLC Annual Report and Accounts Business review:Operati

58、onal review continuedOur strategyThe interim Group strategy focuses on cash conservation andretention of capabilities,at the expense of emphasis ongrowth.Wewill review this strategy on a regular basis while monitoring market conditions.The chart below shows how our priorities are being adapted to ad

59、dress thecurrent marketconditions.Our long-term strategyContinued focus on operating cost reductionsRetaining flexibility ofproductionContinued focus on major PVcompaniesFocus on further developments of the leading silicon processing technologyCash conservationOur visionOur vision is to remain one o

60、f the PVindustrys costleaders and to supply quality wafers9 PV Crystalox Solar PLC Annual Report and Accounts OverviewBusiness reviewCorporate governanceCompany financial statementsConsolidated financial statementsCurrent prioritiesPrevious priorities temporary suspension of production at Bitterfeld

61、;negotiate improved polysilicon pricing;other supplier price reductions;production efficiencies;and higher yields.diversity in sourcing polysilicon supply;and diversity in wafer production.enhanced relationships with existing customers;and new customers to retain operational capabilities.operating B

62、itterfeld polysilicon facility atfull capacity;production efficiencies;and higher yields.diversity in sourcing polysilicon supply;and diversity in wafer production.enhanced relationships with existing customers;and new customers in the majormarkets ofTaiwan andKorea.working with customers to increas

63、e product quality and develop the next generation ofwafer technology.working with customers to increase product quality anddevelopthe next generation of wafer technology.temporary reduction in production output;trading excess polysilicon;and working capital management.The Group remains committed to

64、systematically enhancing its position in thePVindustry as anindependent producer of multicrystalline silicon wafers.Byfocusingon the wafer and not competing with our customers in cell production,weare able to develop strong relationships with solar cell producers.It is our intention to remain one of

65、 the PV industrys cost leaders and to supply quality wafers.10PV Crystalox Solar PLC Annual Report and Accounts “Wafer and ingot production volumes will be maintained at reduced levels,consistent with the retention of our operating capabilities,andwe will maintain a strong focus on costcontrol and i

66、nventory management including tradingof excess polysilicon.”Business review:Operational review continuedBitterfeld Further progress was made at our internal polysilicon production facility in Bitterfeld where improvements in both electricity and SiCl4 consumption per kg Si were achieved.Since operat

67、ion started in July 2009 production has ramped up steadily and asignificant increase in output to 1,218MT was achieved during 2011(2010:823MT).However,output of the plant was restricted to some extent by a bottleneck identified in part of the plant and has led us to reduce the name-plate capacity fr

68、om 1,800MT to 1,600MT.The fully loaded production cost remained below the average price of our contracted polysilicon from external suppliers throughout 2011.The Groups decision to cut back on ingot and wafer production and the associated reduction in internal polysilicon requirements necessitated a

69、 temporary suspension of production from December2011 onwards.After taking thisunscheduled shutdown intoaccount,annualised output in 2011 was equivalent to1,330MT per annum or 83%ofthe current nameplate capacity.It should be noted thatfurther investment of 4m onde-bottlenecking would enable capacity

70、 tobeexpanded to 2,000MT.No expenditure is under consideration whilst current market conditions persist.Flexibility in productionThe Group maintains its strategic focus on its core technology and undertakes all ingot production in-house but retains flexibility with regard to polysilicon and wafering

71、.TheGroup has invested in the Bitterfeld facility to produce its own polysilicon but also retains relationships with external polysilicon suppliers and obtains significant quantities of polysilicon from them.Whilstproduction at Bitterfeld has been temporarily suspended the Group has theflexibility t

72、o restart production should market conditions be favourable.The Group wafers its ingots through acombination of its in-house wafering facilityat Erfurt,Germany and wafering sub-contractors in Japan.Capacity expansionThe expansion of the Groups ingot production capacity is approaching completion and

73、following implementation of productivity improvements,the capacity will reach 750MW during Q2 2012 rather than the originally planned 670MW.The Group had earlier indicated an intention to expand capacity further to reach 1GW by 2013 butthis capital expenditure has been postponed untilthere is a reco

74、very in market conditions.Cash conservation focus in 2012The Group will continue with its cash conservation strategy while current marketconditions persist.Wafer and ingot production volumes will be maintained at reduced levels,consistent with the retention of our operating capabilities,and maintain

75、 Summary of Operational Review In October the Board decided totake action to conserve theGroups cash.We will accelerate ourcostreduction and efficiencyprogrammes.The Groups cash conservation measures are expected tocontinue for the foreseeablefuture.11 PV Crystalox Solar PLC Annual Report and Accoun

76、ts OverviewBusiness reviewCorporate governanceCompany financial statementsConsolidated financial statementsastrong focus on cost control and inventory management including trading of excess polysilicon.At the same time we will prioritise our own internal cost reduction programmes.The decision to res

77、tart production at our polysilicon facility in Bitterfeld will depend on the development of market wafer pricing,the Groups internal polysilicon requirements and on polysilicon pricing.The Group has long-term contractual commitments for purchase of polysilicon but has been successful in negotiating

78、improved pricing for deliveries in the first half.Price reductions have also been negotiated with other key suppliers including wafering subcontractors which will enable direct wafer production costs to be reduced significantly(in excess of 20%)during the first half of the year.OutlookThere continue

79、s to be great uncertainty regarding short-term market developments and most industry forecasts predict little ifany growth in global PV demand in 2012.Increases in installations are expected in China,where the Government has recently increased its PV target from 1015GW by 2015 and also in Japan wher

80、e a feed in tariffwill be introduced in July 2012.However,these increases are expected to be offset by reduced demand following policy adjustments in keymarkets in Europe.Pressure on pricing is expected to continue,resulting inan intensely competitive environment.Accordingly we will accelerate our c

81、ost reduction and efficiency programmes.With the difficult trading conditions expected to persist throughout 2012,theGroups cash conservation measures areexpected to continue.Production outputiscurrently running at around 40%ofaverage 2011 levels.Shipments to customers have been reduced accordingly

82、and are expected to be in the range 80-100MW in the first half.ASPs are expected to be considerably above spotprice levels.The Group is trading excess polysilicon inorder to optimise inventory levels.Thesuccess of the strong focus onworking capital management is demonstrated by theimprovement of our

83、net cash balance,which at the end ofFebruary 2012 was markedly higher thanatthe end of 2011.Dr Iain DorrityChief Executive Officer27 March 201212PV Crystalox Solar PLC Annual Report and Accounts Business review:Financial review“The Board believes the cash conservation strategy will enablethe Group t

84、o sustain adequate cash resources fortheforeseeable future.”Summary of Financial Review In 2011 Group revenue decreased by 16.7%to 210.4million mainly duetothe18%fall in ASP.Earnings after tax were a loss of60.9million producing earnings per share at a loss of0.15.Results generated net cashinflows f

85、rom operating activities of 1.6 million.The Groups capital expenditure in the year gave a net cash outflow of20.8 million.The Groups net cash position atyear end was 22.6 million.The base plans indicate that the Group will be able to operate within its net cash reserves forthe foreseeable future.In

86、2011 Group revenue decreased by 16.7%to 210.4 million(2010:252.6 million)although total wafer shipments were marginally higher than in 2010 at 384MW(2010:378MW).The decline was mainly dueto the 18%fall in ASPs during theyear.This impact was more significant in the second half of 2011 when ASPs were

87、29%lower than in the firsthalf.During the year the Group generated EBIT(before exceptional items)of 4.1 million(2010:33.3 million).Actual EBIT(including exceptional items)was a loss of 67.5 million(2010:profit of 33.3 million).This reduction in underlying profitability was driven primarily by the se

88、vere decline in average selling prices during the second half of 2011.In addition,the relatively strong Japanese Yen had a negative impact on Group EBIT due tohigher raw material andsub-contracting costs in Japan.Net interest income of 0.5 million(2010:0.4 million)was almost the same as that in the

89、previous year due to continuing low global interest rates.The Groups net cash position at year end was 22.6 million(2010:54.8 million).In the first half the main impact on cash was the completion of the planned capital expenditure programme and a balancing advance payment to an external supplier of

90、polysilicon.During thesecond half the cash position was impacted by the effect of the poor trading environment on inventory levels and to a lesser extent,the pressure on margins.Earnings after tax were a loss of 60.9million(2010:profit of 23.3 million)producing earnings per share at a loss of0.15(20

91、10:profit of 0.06).These financial results generated net cashinflows from operating activities of1.6 million(2010:11.3 million)andfree cash outflow of 20.0 million(2010:6.3 million).Free cashflow is defined using the cash flow statement asnet cash from operating activities plus cash from/(used in)in

92、vesting activities less interest received.The net operating cash flow was impacted by the absorption of 6.8million into working capital(2010:23.5 million).Poor sales atthe end of the year led to cash being absorbed into higher inventories,although non cash writedowns of closing inventory led to clos

93、ing inventory levels being slightly lower than at the previous year end.This was offset to some extent by a reduction in debtors due to lower sales inQ4 2011 and improved payment terms,resulting from the change in the geographical mix ofcustomers.The Groups capital expenditure in the year of 21.9 mi

94、llion(2010:19.9 million)was offset by grants received of 1.1 million(2010:3.3 million),giving a net cash outflow of 20.8 million compared against 2010 when the net cash outflow was 16.5 million.Investment grants received were allin respect of the German operations as capital expenditure in the Unite

95、d Kingdom does not qualify for such grants.13 PV Crystalox Solar PLC Annual Report and Accounts OverviewBusiness reviewCorporate governanceConsolidated financial statementsCompany financial statementsDr Peter FinneganNet capital expenditureOperating cash flowNet cash20.8m1.6m22.6m2009201020112009201

96、02011200920102011There was a small movement of Japanese Yenloans of a net 0.3 million(2010:11.1million).These loans were utilised asa hedge against movements in the Japanese Yen and its effect on assets heldin that currency.Dividends totalling 8.1million were paid in respect of the 2010profit in Jun

97、e 2011(2010:12.1 million).The Groups directors have put in place acash conservation strategy to enable theGroup to manage its operations whilst market conditions remain difficult.The following passage sets out the rationale behind this strategy and why the Board believes it will enable the Group to

98、sustainadequate cash resources fortheforeseeable future.Going concernA description of the market conditions,thereduction in spot prices of wafers during2011 and the Groups actions toconserve cash are included in the Operational Review.As part of its normal business practice,theGroup regularly prepar

99、es both annual and longer-term plans which are based onthe directors expectations concerning key assumptions.The assumptions around contracted sales volumes and prices and contracted purchase volumes and prices are based on managements expectations and are consistent with the Groups experience in th

100、e first part of 2012.There are several long-term wafer supply contracts for unexpired periods of up to three years and accordingly the Group is able to sell wafers at prices that are above current market spot prices despite the difficult market environment.Wafer sales to customers without long-term

101、contracts are assumed in the longer-term plans at values close to spot prices.In addition the Group isnegotiating compensation for the termination of certain wafer supply contracts and these are expected to generate a significant cash inflow within thenext twelve months.Likewise,the Group has long-t

102、erm contracts with suppliers of our main raw material polysilicon for unexpired periods of between two and four years.Polysilicon used in theGroups wafer production comes fromtwo external suppliers and from the Groupsplant at Bitterfeld.The Groups management has been successful in working with these

103、 suppliers to secure periodic contract amendments through acombination of adjusted prices and volumes.As a result,these amendments have brought the terms more in line with current market pricing.To manage inventory levels the Group will sell excess polysilicon and has been successful in this respect

104、 during the first quarter of 2012.The nature of the Groups operation means that it can vary production levels to match market requirements.As part of the cash conservation measures and the associated planning assumptions,production output has been reduced to match expected demand.At the same time pr

105、oduction capacity has been retained.In line with theGroups strategy of retaining flexibility inproduction levels,production can be brought back on stream when market conditions allow.Employment costs have been reduced following the reduction incontract labour,redundancies in theUnited Kingdom and Go

106、vernment supportedshort-time working in Germany.The Group expects to reduce other costs through negotiation with suppliers and byachievinggreater efficiencies within theGroups operations.(1.3)16.520.83.511.31.670.154.822.614PV Crystalox Solar PLC Annual Report and Accounts Business review:Financial

107、review continuedGoing concern continuedAs a result of these modelling assumptions the base plans indicate that the Group willbe able to operate within its net cash reserves for the foreseeable future.On 31 December 2011 there was a net cash balance of 22.6 million,comprising cash or cash equivalents

108、 of 71.6 million and short-term loans of 49.0 million.The borrowings are in Japanese Yen and aresubject to certain covenants on the Japanese subsidiary company(including interest cover,profitability,restrictions onGroup dividends and debtor cover).TheGroups plans are based upon remaining within its

109、net cash balance andare not dependent upon these short-term borrowings.Therefore,whilst any consideration of future matters involves making a judgement at a particular point in time about future events that are inherently uncertain,the directors,after careful consideration and after making appropria

110、te enquiries,are of the opinion that the Group has adequate resources tocontinue in operational existence for atleast twelve months from the date ofapproval ofthe financial statements.Thusthe Group continues to adopt the going concern basis ofaccounting in preparing the annual financial statements.I

111、mpairmentThe Board has assessed the carrying values of the Groups property,plant and equipment for impairment as at 31 December 2011.Asaresult of this assessment,an impairment charge has been recognised to reduce the carrying values of plant by 27.9 million.Theimpairment charge has been recognised i

112、n the Income Statement.As an impairment of fixed assets it had no impact on the Groups cash flow.On 31 December 2011 the Group had invested approximately 100 million in itspolysilicon plantat Bitterfeld and had received grants of 23 million.The current difficulties in thephotovoltaic industry dictat

113、ed that an impairment test should be carried out todetermine whether the plant should beimpaired.The recoverable value of Bitterfeld plant is estimated to amount to47.9 million,based on an estimate of itsvalue in use.This has been derived from aforecast of potential cash flows from the plant.These c

114、ash flows were discounted ata post tax cost of capital of 9.67%,whichwas determined by calculating the Groups cost of capital using the CAPM(capital asset pricing model).The resultant(discounted cash flow)analysis determined the net present value of the plant.The potential future cash flows have bee

115、n estimated on the assumption that the plant is brought into production in the second Summary of Financial Review continued During the year the Group generated EBIT(before exceptional items)of 4.1million.An impairment charge has beenrecognised to reduce thecarrying values of plant by27.9 million.The

116、 Group wrote down its inventories by 22.9 million.Onerous contract charge and provisions of20.9 million.Actual EBIT(including exceptional items)was alossof67.5 million.15 PV Crystalox Solar PLC Annual Report and Accounts OverviewBusiness reviewCorporate governanceConsolidated financial statementsCom

117、pany financial statementshalfof 2012 and produces at full capacity thereafter.This analysis assumes that salesof polysilicon are at prices based onmanagements expectations backed up bythe forecast from an external consultant that has a high level of experience of the photovoltaic industry.Plant runn

118、ing costs were obtained from the Groups internal planning system.The level of impairment of the assets ofourplant is predominantly dependent uponjudgements used in arriving at futuremarket prices,plant maintenance costs,future growth rates,the discount rateapplied to cash flow projections andsuccess

119、fully operating the plant at Bitterfeld.The estimates and judgement used in the aforementioned assessment represents managements best estimate based on current experience and information available,which may be different from the actual results in the future due to changes in the Groups business and

120、the external environment.Anysignificant changes in the market priceof polysilicon,$/exchange rate,orplant maintenance costs might leadtofurther impairment of some or allofthecapitalisedassets.The sensitivity of the valuation to these parameters is as follows:5%increase/decrease in the sales pricefor

121、ecast decreases/increases theimpairment by 14 million;5%reduction/increase in the direct cost of production forecast decreases/increases the impairment by 9 million;and 1%change in the cost of capital changes the impairment by 6 million.Other exceptional itemsThe exceptional items in the year are se

122、t outin note 35 to the accounts.In addition tothe above mentioned impairment of 27.9 million,the Group wrote down its inventories by 22.9 million and made onerous contract charge and provisions of20.9 million.The inventory writedown was made to adjust inventory carrying values to realisable value.Th

123、e onerous contract provision was made in respect ofcontracts with external suppliers of rawmaterials.These contracts run for the unexpired period of between two and fouryears.The provision relates to future losses that are likely to be made if the Group processes or sells the material committed toun

124、der the contracts,although adjustments have been made to purchase prices according to the directors estimates of how contract prices are likely to be renegotiated.Dr Peter FinneganChief Financial Officer27 March 201216PV Crystalox Solar PLC Annual Report and Accounts Business review:Principal risks

125、and uncertaintiesDuring 2011 the Group was exposed to several risks that had been identified in the 2010 Annual Report.One of the key mitigating strategies was the adoption of the cashconservation measures described in the Operational Review on pages 6 to 11.Thepossibility remains that certain of th

126、e risks described below which the Group areexposed to will continue or worsen.Principal risksNature of riskMitigating actionsPrice of wafers on the spot market remain below cash cost of productionChanges in spot prices forpolysilicon affect our competitiveness and the viability of our plant atBitter

127、feldThe Group has previously soldwafers under long-term contracts and at spot prices.Aspricing on the spot market decreased during 2011 we cooperated with our long-term contract customers and offered lower prices but at a premium to spot prices.However,during 2011 spot pricing fell below our product

128、ion costs and so selling to customers without any contractual commitment wasnolonger attractive.Historically the long-term contract prices with our polysilicon suppliers were below the spot prices.Our polysilicon plant at Bitterfeld was designed to have production costs below our historic contract p

129、rices.However,when spot prices dropbelow contract prices,anycompetitors who buy on the spotmarket are at a competitive advantage and can produce wafers at a lower cost than us.The loss of a major long term contract customer might adversely impact the Groups financial performanceOur reliance on key s

130、uppliers could adversely impact our financial performanceSales to a small number ofcustomers represent a substantial portion of the Groups revenues and the loss ofany major customer either to a competitor or through its own business circumstances might impact significantly on the Groups financial co

131、ndition.Where a long-term contract isinplace the Group is able toachieve a higher selling pricethan through sales at spotmarket prices.The Group is reliant on certain key suppliers.Evonik supply silicon tetrachloride for our polysilicon production at Bitterfeld.Polysilicon feedstock is purchased fro

132、m two suppliers and we sub-contract the wafering of 70%of our output inJapan.Only selling on the spot market when prices are above production cashcosts.Lowering production costs.Temporary reduction in ingot and wafer production.Temporary suspension of production at our polysilicon facility in Bitter

133、feld.Adopting and continuing cash conservation measures.Maintaining a strong balance sheet which gives the Group the strength to weather any medium-term price squeeze.We negotiate with our suppliers to achieve polysilicon prices atorbelow the spot price where possible.We have temporarily suspended p

134、roduction at Bitterfeld and this willcontinue until spot pricing moves above our cash costs.We concentrate on customers that are financially strong with a clear strategic vision for the PV industry and accordingly have the potential tobe long-term major players in the industry.We work with our custo

135、mers to ensure that the quality,specifications and efficiency of our wafers are suitable for their current and futureneeds.We are working actively to broaden our customer base.We have long-term contracts in place to ensure access to the goods and services provided by our key suppliers:with Evonik,wi

136、th our polysilicon suppliers and with our wafering subcontractors.We look to obtain flexibility in terms of price,volume and timing of deliveries by negotiating amendments to the terms of our long-term contracts with our suppliers.We have built our own polysilicon production facility at Bitterfeld t

137、o give the Group its own source of polysilicon feedstock.17 PV Crystalox Solar PLC Annual Report and Accounts OverviewBusiness reviewCorporate governanceConsolidated financial statementsCompany financial statementsPrincipal risksGovernment incentives,support and legislation are crucial to stimulate

138、the take up of solar electricityNature of riskMitigating actions We work with various PV industry bodies which seek to encourage governments to support solar electricity generation.We focus on supplying those major PV companies with superior market shares and operating efficiencies,which are better

139、equipped,therefore,to sell product into their markets.We ensure that the Group operates internationally thus spreading risk among several markets.We focus on cost reduction and efficiency enhancement strategies toreduce the need for Government support in the long-term.Loss of a key production facili

140、ty could disrupt ourability to deliver contracted wafer volumesThe Group only sells wafers buthas operations at different stages in the value chain.Theloss of a facility at any stagewould impact the Groups abilityto fulfil contracted wafer volumes thereby reducing sales.We are currently producing at

141、 levels considerably below capacity due to our cash conservation activities.We use two different polysilicon feedstock suppliers and have our own internal polysilicon production in Bitterfeld,Germany.Ingot manufacturing is carried out in the United Kingdom in four separate facilities.Wafering is car

142、ried out at our internal facility in Germany and at sub-contractors in Japan.We have health and safety,fire prevention and security procedures inplace at all facilities.We have comprehensive property damage and business interruption insurance in place.Over capacity in the PV industry reduces module

143、prices and adversely impacts on profitabilityOver capacity in the PV industry has caused significant reductions in module prices during 2011.This reduction in module prices has led to a reduction in wafer prices.Further capacity is still coming on stream and it could be several years before the supp

144、ly/demand capacity comes into balance.The reduction in price has led to reduced profitability across thevalue chain.Since H22011 the Group has generated operating losses.With take or pay polysilicon contracts and ever reducing spot wafer prices this situation is worsening.We work with our customers

145、to maintain contract volumes.Where we have long-term contracts we are able to obtain prices atapremium to spot prices.In the last resort we can enforce contract terms through arbitration.We focus on cost reduction and efficiency enhancement strategies.We have a strong balance sheet which gives the G

146、roup the strength toweather any medium-term price squeeze.We have adopted a cash conservation strategy to survive into the medium term due to the expectation of low prices over the next 1218 months byminimising production and maintaining core competencies.Exchange rate fluctuations might create earn

147、ings and balance sheet fluctuationsThe Group reports in Euros,but trades internationally andhas operating subsidiaries reporting in Sterling,Euros and Yen and is therefore subject to currency fluctuations arising on transactional foreign currency exposures and the translation ofsubsidiaries balance

148、sheets.We strive for a natural hedging position at operating level by sourcing raw materials and other direct materials and services(where possible)in the same currencies as sales revenues are derived.This has become increasingly difficult particularly with the reduction in activity in H2 2011 and a

149、s expected in 2012.Accordingly,the exposure to currency imbalances is being reviewed so that currency assets continue to be broadly matched with equivalent liabilities in the same currencies.We have been working to balance exposure to currency due to debtor balances by matching these with equivalent

150、 liabilities in the same currencies.The Group has large balances in Yen in respect of accounts receivable and has taken out borrowings in Yen to reduce the impact ofany changes in the Yen exchange rate.The Group might be affected by a number of risks,which may have a material adverse effect on our r

151、eputation,operations and/or financial performance.The risks associated with the Groups financial instruments are detailed in note 30 in the Notes to the Consolidated Financial Statements.The Group is exposed to a number of other risks,some of which may have a material impact on its results.It is not

152、 possible to identify or anticipate every risk that may affect the Group,some of which may not be known or may not have been assessed.Our overall success as a global business depends,in part,upon our ability to succeed in different economic,social and political environments and manage and mitigate s

153、uch risks.The solar industry is dependent onthe support of individual governments to encourage the installation and use of solar electricity within their territories.Without such support the increased uptake ofsolar electricity may reduce or be slow to develop.18PV Crystalox Solar PLC Annual Report

154、and Accounts Business review:Corporate social responsibilityThe environment Our productThe Group is a major producer of multicrystalline silicon wafers for the production of solar cells.These cells are processed into solar systems used for the generation of renewable electricity with a lifetime in e

155、xcess of 25 years.As technology improvements increase the efficiency of solar cells,it is expected that the lifespan ofthe solar modules will lengthen,providing electricity for a known starting cost and little maintenance.Depending on the systems location,it has been estimated that all the energy us

156、ed in the production of a silicon solar system will be repaid within two to three years.In our position as a producer of silicon wafers,for the generation of electricity,freeof carbon emissions,our focus on our environmental responsibilities is evident.Our processesIt is the Groups policy to:seek to

157、 eliminate and,where this is notpracticable,to minimise negative environmental impacts from the pursuit of all business interests while continuing to produce high quality products which meet customer requirements;comply with all statutory environmental legislation as a minimum and to aim toimprove u

158、pon the standards set by thelocal regulatory authorities;and foster an informed and responsible approach to all environmental concerns and encourage the involvement of employees,customers and suppliers.Regulatory authorities are consulted andinformed at all appropriate times.Waste and recyclingThe G

159、roup has effective environmental management and health and safety systems in place,in support of,and to complement,its quality assurance systems.Across all its sites in the United Kingdom and Germany aproactive approach is taken to the pre-treatment of waste as required by the EU Landfill Directive.

160、The purpose of this treatment requirement is to reduce the impact of waste sent to landfill and to increase the amount of waste that is recycled.For instance,within the Group,allsilicon carbide used in the sawing of blocks and wafers is continually treated andrecovered for reuse.Crystalox in the Uni

161、ted Kingdom is amember of compliance schemes whichfulfil local legislation requirements such as The Producer Responsibility Obligations(Packaging Waste)Regulations 2007.This scheme setstargets for British industry for therecovery and recycling of packaging waste,seeking to ensure that discarded prod

162、ucts are environmentally treated through recycling and recovery rather than being disposed of in landfill.A similar scheme exists in Germany where PV Silicon received an award from the State of Thuringia for participating successfully in the sustainability programme“koprofit”;a voluntary programme c

163、arried out by industrial companies that first analyses the impactof their industrial production onthe environment and then reduces wastematerials,packing materials,consumption of water,use of energy andemissions.In 2011 we reduced our packaging materials for wafers by 30%.All plastics,wood,paper,pol

164、ythene,cardboard,metals,etc.are recycled,either by being sold to recycling companies or under localcouncil arrangements,removed for recycling.The Group endeavours to recycle all recyclable packaging materials to conform to current packaging legislation and thereby minimise waste to landfill across a

165、ll its sites.Environmental management systemsWe recognise the need to establish,formalise and apply an environmental management system at each of our manufacturing sites.Therefore,in order tofurther enhance its already effective environmental and health and safety management systems:Crystalox in the

166、 United Kingdom has made a good start on its programme toachieve environment and health andsafety accreditations;and the site in Erfurt,Germany,has been carrying out an environmental audit forthe last five years,focusing on the consumption of water,electricity and onthe emission of waste materials.T

167、hese high standards complement and consolidate Crystalox and PV Silicons ENISO 9001 status;further fulfilling ourresponsibility to the environment andhealthand safety.BitterfeldWith the introduction of environmental andenergy management system targets toreduce waste material,consumption ofwater and

168、energy,the Bitterfeld site inGermany plans to apply for DIN EN ISO 9001 Quality Management System,DIN EN ISI 14001 Environmental Management System and DIN EN ISO 50001 Energy Management System.The production of solar-grade polysilicon atBitterfeld necessitates a heightened focus on health and safety

169、.Therefore,priorto commencing production,Hazard and Operability Studies(“HAZOP”)were performed and thereafter,regular HAZOP meetings are held by the management with an external safety expert,where any issues are discussed and improvements defined.For all planned and realised changes in the productio

170、n process and in the construction of the plant,safety aspects have to be considered and HAZOP studies are performed if applicable.Bitterfelds focus on safety and high standards was affirmed by a successful Safety Management System Audit in 2011.The construction and operation of the Bitterfeld plant

171、requires it to comply withthe German Emissions Control Act.This requires that every emission source beidentified and that all emissions are monitored periodically by the authorities.Waste,energy and water consumption haveto be minimised;waste is recycled orrecovered;excess energy from the production

172、 process is used for heating and hot-water in the office buildings;and coolant used in production(water)is re-used.An environmental compatibility study wasperformed and we were able to reduce electric power consumption for solar-grade silicon production.This was achieved mainly through improvements

173、to the high-temperature processes for silicon deposition and hydrogenation of Chlorosilanes.In addition,working with a chemical processing plant nearby we were able to employ a more energy efficient waste water treatment.Our staffThe Groups policy is to provide equal opportunities to all existing an

174、d prospective employees.The Group recognises that itsoperation and reputation depends upontheskills and effectiveness of its employeesand is committed to the fair andequitable treatment of all and to prohibit discrimination on the grounds of age,sex,religion,sexual orientation,race,nationality or et

175、hnic origin.It is the Groups policy to give sympathetic consideration to the recruitment,continuing employment,training,career development and promotion of disabled persons.In the event that a person became disabled he orshe would continue to be employed,wherever possible,in the same job.Ifthedegree

176、 of disablement made this impractical,every effort would be made tofind suitable alternative employment and togive any appropriate training.The Groups policy on training and career progression applies equally to everyone within the Groupwhether or not disabled.19 PV Crystalox Solar PLC Annual Report

177、 and Accounts OverviewBusiness reviewCorporate governanceConsolidated financial statementsCompany financial statementsDuring the last quarter of 2011,in light of the ongoing adverse market conditions the Board resolved to take appropriate actions to manage the business through the difficult times fa

178、cing the Group and the industry and to conserve the Groups cash.In the short term this led to reduced production output atits United Kingdom ingot and German wafer operations and the Board suspended production temporarily at its polysilicon facility in Bitterfeld,Germany.Regrettably these actions le

179、d to significant job losses inthe United Kingdom,with 45 redundancies,and short-time working in Germany at both Bitterfeld andErfurt.The Boards actions were a necessary response,designed to preserve the capabilities within the business.The Group continues to believe in the importance of protecting t

180、he Groups capabilities and cash for the future and maintains that the medium-term outlook for solar installations is positive.TrainingThe Group recognises that a key factor in itssuccessful operations is its personnel.Thecontinued expansion of operations andthe parallel increase in the workforce has

181、 meant that managements top priority hasbeen to provide a safe and secure work environment for all.To this end,health andsafety training has been of paramount importance.Initial in-house health and safety induction training for all personnel joining is supported by external specialist trainers for o

182、ccupation specific training.During 2011 fire safety training and comprehensive training for firemarshals was undertaken by selected staff at each site.A number of staffwere externally trained as first-aiders,thereby helping to ensure maximum first-aid coverto all staff.As part of its ongoing respons

183、ibility to comply with health andsafety legislation,refresher training was provided to all forklift operators.In Bitterfeld we introduced a special web based training tool for all personnel to improve further the safety record at the plant where there were no chemical processing related accidents re

184、corded during 2011.In Erfurt we introduced a voluntary health management programme for all staff.The Group is committed to the ongoing training and development of its personnel.Particular skills-based training is provided to individuals when identified and seen as beneficial to the overall operation

185、 of the Group.The introduction of new technologies and new and efficient working methods,has resulted in personnel being trained to both develop and hone their knowledge and skills.A flexible work environment has meant that personnel are given the chance to work in different departments,thereby help

186、ing them maximise their potential and sense of fulfilment.In Germany we run an apprenticeship programme where we currently have 16young people in Erfurt and nine young people in Bitterfeld enrolled in technical and administrative jobs.The intention isthat after a three year period these apprentices

187、have the chance to become permanent members of staff.We are running programmes for some of the apprentices enabling them to continue withtheir studiesto obtain a degree inengineering.Health and safetyThe Group recognises its responsibilities under health and safety legislation in each country of ope

188、ration to ensure,so far as it isreasonably practicable,the health,safety and welfare of all its employees.Group policy is to take all reasonable precautions to prevent accidents and dangerous occurrences and for the creation of working conditions which safeguard employees.TheGroup attaches the great

189、est importance to health and safety,considering this to beamanagement responsibility.To this endthe Group will allocate the necessary resources and enlist the active support of all employees upon whom duties are also imposed by health and safety legislation.The Group regards the standards set by the

190、various relevant statutory provisions astheminimum standards which must be achieved and endeavours to improve upon these where reasonably practicable.Our communityWe have been running local events in Erfurtfor several years to demonstrate thepossibilities of solar electricity.During 2011 we particip

191、ated in the local event“Long Night of the Sciences”where our apprentices demonstrated and explained our technology to all interested citizens ofErfurt from 6.00pm until midnight.Wealso worked with the local power provider to carry out the annual solar car race programme with local students.The feed-

192、in tariff which we receive from our 30 KW solar system mounted to building in Erfurt,which feeds electricity directly into the local grid,isused to finance these projects.The Group is an initiator and participant inthe five year long project“SolarValley Mitteldeutschland”.This is a research and deve

193、lopment cluster in the German states of Thuringia,Sachsen-Anhalt and Saxony.Dr Hubert Aulich,the Groups Director ofGerman operations,is the chairman oftheproject.It involves 35 companies,fiveuniversities and nine research institutes working on the entire crystalline silicon value chain with the aim

194、of reducing thecost of solar electricity to below that ofconventional power and accelerating market introduction.This is the largest worldwide PV cluster with 98 projects andan overall 150 million budget over fiveyears which is funded 50%by the Government and 50%by industry.Within the United Kingdom

195、,Crystalox sponsors the annual Photovoltaic Science,Application and Technology(“PVSAT”)conference and exhibition organised by theUnited Kingdoms Solar Energy Society whose goal it is to advance the utilisation ofthe suns energy through research and public education.20PV Crystalox Solar PLC Annual Re

196、port and Accounts Corporate governance:Directors1.2.3.4.5.6.21 PV Crystalox Solar PLC Annual Report and Accounts OverviewBusiness reviewCorporate governanceCompany financial statements Consolidated financial statements1.Maarten HendersonChairmanMaarten Henderson,a Dutch national,graduated in economi

197、cs from Hamburg University.He started his career at multinational electronics company Philips in1972,where he held various commercial and financial positions,ending asmember of the board of management and chief financial officer of Philips Kommunikations Industrie AG in1996.After that,he was chief f

198、inancial officer and member of the board of management of Schmalbach Lubeca AG,an international packaging company listed in Germany,from 1996 to 1999,of KPN N.V.,the Dutch telecommunications incumbent listed in Amsterdam and New York from 2000 to 2004,and of Nuon N.V.,a Dutch energy company,from 200

199、4 to2006.In 2006 and early 2007,he worked for mobile service provider debitel AG as interim chief financial officer andhead of the divestment team.From April2007 to October 2007 heworked as member of the board of management and chief financial officer forGetronics N.V.,an international ICT services

200、company listed inAmsterdam.In 2008 he also worked as a“B”director on the management board of Hagemeyer NV,a company then listed in Amsterdam.InJuly 2009 Maarten Henderson was appointed as a member of the supervisory board and in July 2011 he was appointed aschairman of the supervisory board of freen

201、et AG,the biggest network-independent telecommunications provider in Germany.2.Dr Iain DorrityChief Executive OfficerIain Dorrity has a PhD in Physical Chemistry from Exeter University.Hejoined the Company in 1986 and became responsible for sales and marketing in 1988.He was a member of the MBO team

202、 that acquired theCrystalox business in 1994 and was appointed to the Boards of both Crystalox Limited and Crystalox Solar Limited at thattime.Subsequently,following the merger of PV Silicon GmbH and Crystalox Limited,he became a member of the Board of PVCrystalox Solar GmbH in 2002 and a director o

203、f the Company onits formation in December 2006.Dr Dorrity has over 25years experience in crystal growth and semiconductor materials with anemphasis latterly on multicrystalline silicon technology.Prior tojoining Crystalox,he spent eight years working in research andinindustry with General Electric C

204、ompany.3.Dr Peter Finnegan(DBA,MBA,FCMA)Chief Financial OfficerPeter Finnegan has a Doctorate in Corporate Finance from Henley Business School,an MBA from Manchester Business School and isa Fellow of the Chartered Institute of Management Accountants.He has been involved in the Groups management sinc

205、e 1985 whenhe became Company Secretary of Crystalox whilst he was Financial Director of its holding company at that time,Elkem(Holdings)Limited.He was appointed to the Board of Crystalox Solar Limited in 1994 and was a director of Crystalox Limited from 1994 to 2009.He was appointed as a director of

206、 the Company on itsformation in December 2006.Dr Finnegan has overall Group responsibility for finance,accounting,planning,financial control,legal matters and investor relations.Prior to joining the Group heheld a number of senior managerial positions in large international manufacturing companies.4

207、.Dr Hubert AulichExecutive Director,German OperationsHubert Aulich has a PhD in Physical Chemistry from NYU,New York City,USA.DrAulich founded PV Silicon GmbH in 1997 with his partner Dr Friedrich Wilhelm Schulze.In 2002 he became a member of the Board of PV Crystalox Solar GmbH where he had respons

208、ibility for theGerman operations including the production and sales of wafers and was appointed as a director of the Companyon 21 May 2007.In 2008 he became chairman of the five year long project SolarValley Mitteldeutschland which involves 35 companies,five universities and nine research institutes

209、 working on the entire crystalline silicon value chain with the aim of reducing the cost of solar electricity to below that of conventional power.Prior to founding PV Silicon GmbH,DrAulich worked for Siemens Solar Group.DrAulich joined the Central Research Laboratories of Siemens AG in Munich,German

210、y,in 1974where he worked in various positions in the field of optical fibre communication and photovoltaics.From 1988 to 1991 he was managing director at PV Electric,a joint venture of Siemens Solar GmbH,Germany,and Arco Solar,USA,where he was responsible forthe commercialisation of amorphous silico

211、n thin film technology.In 1992 he became managing director at Siemens Solar GmbH where he was responsible for technology of thin film and crystalline silicon solar cells.He was senior vice president for technology and research for the Siemens Solar Group responsible for research and development in t

212、hin film and crystalline silicon solar cells as well asfor systems application for Germany,USA and Japan.5.Michael D Parker CBE Non-executive DirectorMike Parker was born in Liverpool and has a Bachelors degree inChemical Engineering from the University of Manchester and anMBA from the Manchester Bu

213、siness School.He began his career with Dow in 1968 andbecame president and chief executive officer of The Dow Chemical Company in Midland,Michigan,USA from November 2000 to December 2002 and a member of the companys board of directors from 1995 to February 2003.During his time atDow he gained extens

214、ive international experience with over 30years of living and working in the USA,United Kingdom,Switzerland and Hong Kong.He was appointed as group chief executive of British Nuclear Fuels Limited on 1 August 2003;attheend of June 2009 he finished this role following the successful dismantling and pr

215、ivatisation of the business.He joined the Invensys plc board as anon-executive director in May 2006 and subsequently became the senior independent director in December 2006.InApril2008 he became chairman of Liverpools new economic development and regeneration company,Liverpool Vision.He joined the B

216、oard at the Royal Society for the Prevention of Accidents as atrustee inDecember 2009.In September 2010 he was appointed tothe board ofdirectors of the Canadian based SNC-Lavalin Group.InJune 2011 hewasappointed as chairman of Street League.6.John SleemanNon-executive DirectorJohn Sleeman graduated

217、in Physics from the University of Durham and started his career at Deloitte&Touche in 1970 where he qualified as a Chartered Accountant before moving in 1975 to Samuel Montagu where hequalified as a Chartered Banker and held various corporate and projectfinance advisory roles,becoming adirector in 1

218、989.Following its acquisition by HSBC,heheld directorships with a number of companies within the HSBC Group,and from 2000 to 2003 was managing director,headof international team,corporate finance.After that,John was an independent director of OSJC Power Machines(from 2003 to 2008),the Russian power

219、generation equipment manufacturer 25%owned by Siemens AG,an independent director of JSC Open Investments(from 2005 to2009),the Russian real estate group,and was an advisor for two years toEmerging Markets Group,specialising in structured financial solutions and strategic advice.Since 2006 he has bee

220、n afounding partnerof S.P.Angel CorporateFinance LLP.22PV Crystalox Solar PLC Annual Report and Accounts Corporate governance:Directors reportThe directors are pleased to present their report together with the consolidated audited financial statements of the Group for the year ended 31 December 2011

221、.Principal activitiesPV Crystalox Solar PLC is a holding company which owns,directly or indirectly,investments in the companies constituting the PVCrystalox Solar Group of companies.The principal subsidiaries are listed in note 1 on page 73.The principal activity of the Group is the production and s

222、upply of multicrystalline silicon wafers to the worldwide photovoltaic market.The Group supplies multicrystalline silicon wafers to some of the major photovoltaic cell makers in the world.The Chairmans Statement,Operational Review and Financial Review contain a review of these activities and comment

223、s on the future outlook.Results for the yearThe Consolidated Statement of Comprehensive Income for the year ended 31 December 2011 is shown on page 42.The Consolidated Statement of Changes in Equity for the year is shown on page 44 and segmental information is shown in note 8 on pages 55 and 56.Divi

224、dends paid and proposed The directors have not recommended a final dividend in respect of the current financial year and no interim dividend was paid during 2011.The total dividend for 2010 was 0.03 per ordinary share.Business reviewThe Group is required by the Companies Act 2006 to set out in this

225、report a fair review of the business of the Group during the financial year ended 31 December 2011 and of the position of the Group at the end of the year(Business Review)and a description of the Principal Risks and Uncertainties facing the Group.The information concerning the Business Review can be

226、 found in the Operational Review on pages 6 to 11,the Financial Review on pages 12 to 15 and the description of the Principal Risks and Uncertainties on pages 16 and 17.TheBusiness Review also includes details of expected future developments in the business of the Group.Future developments for the b

227、usiness/outlookThe Boards assessment and evaluation of future development and the outlook for the business is discussed in the Operational Review which can be found on pages 6 to 11.Exceptional itemsExceptional items are discussed in the Financial Review which can be found on pages 12 to 15.Summary

228、of key performance indicatorsThe Group monitors the performance of each of its business units through detailed monthly operational and financial reporting,with comparisons to plan.Updated business forecasts are regularly made.In addition,the Group maintains regular reviews and dialogue witheach of t

229、he Groups operational business units.At Board level,the most important key performance measures are:megawatts peak output equivalent from wafers produced;revenue;EBIT;EBIT excluding exceptional items;net cash from operating activities;free cash flow,defined using the Cash Flow Statement as net cash

230、from operating activities less cash used in investing activities less interest received;EBIT excluding currency gains and losses and exceptionals as a percentage of revenue(EBIT margin excluding currency gains);and basic earnings per share.Comparative performance in the current year and prior year i

231、s summarised as follows:20112010Megawatt peak output equivalent 384MW378MWRevenue210.4m252.6mEBIT(67.5)m33.3mEBIT excluding exceptional items4.1m33.3mNet cash from operating activities1.6m11.3mFree cash flow*(20.0)m(6.3)mNet cash22.6m54.8mEBIT margin(excluding currency gains and exceptionals)1.25%13

232、.7%Basic earnings per share(“EPS”)(Euro cents)(15.0)5.7*Free cash flow is defined using net cash from operating activities less cash used in investment activities less interest received.23 PV Crystalox Solar PLC Annual Report and Accounts OverviewBusiness reviewCorporate governanceConsolidated finan

233、cial statementsCompany financial statements OverviewBusiness reviewEnvironmental policyThe environmental policy is discussed in the Corporate Social Responsibility statement which can be found on pages 18 to 19.DirectorsThe directors who served throughout the year to 31 December 2011 are:Dr Hubert A

234、ulichExecutive Director,German OperationsDr Iain DorrityChief Executive Officer and Executive DirectorDr Peter FinneganChief Financial Officer and Executive DirectorMaarten Henderson*ChairmanChairman of the nomination committeeMember of the remuneration committeeMember of the audit committeeMichael

235、Parker*Member of the nomination committee Member of the remuneration committeeMember of the audit committeeJohn Sleeman*Senior Independent DirectorChairman of the audit committeeChairman of the remuneration committeeMember of the nomination committee*Nonexecutive directors.Biographical details of th

236、e directors are set out on page 21.There have been no changes since the year end.Retirement and reelection of directors The Companys Articles of Association require all directors to seek reelection by shareholders at least once every three years.Inaddition,any directors appointed by the Board must s

237、tand for reelection at the first AGM following his or her appointment.Anynonexecutive directors who have served for more than nine years are subject to annual reelection.Last year the Board of Directors approved the annual reelection of directors in line with the United Kingdom Corporate Governance

238、Code(June 2010).Accordingly,at the 2012 AGM all directors will retire and,being eligible,will offer themselves for reelection.Directors interests and remunerationThe Remuneration Report,which includes details of service agreements and the directors interests in PV Crystalox Solar PLC shares,isset ou

239、t on pages 32 to 39.Beneficial interests in significant contracts None of the directors has a material interest in any contract of significance to which the Group or any of its subsidiaries were party during the year.Substantial shareholdersAs at 9 March 2012 the Group had been notified,or is aware,

240、of the following shareholdings amounting to 3%or more of the issued ordinary share capital of the Company:Number ofordinaryshares%of issuedordinarysharesSchroder Investment Management Limited65,401,85615.69Dr Iain Dorrity44,085,97410.58Barry Garrard41,881,64210.05Stuart Oldham26,718,7506.41TD Direct

241、 Investing16,365,5983.93Barclays Stockbrokers Limited14,431,5613.46Graham Young 14,037,1103.3724PV Crystalox Solar PLC Annual Report and Accounts Directors indemnity and insuranceAs at the date of this report and throughout the period under review,the Company has provided to all the directors an ind

242、emnity in accordance with the Articles of Association(to the extent permitted by the Companies Act 2006)in respect of liabilities incurred as a result of their office and the Company has taken out an insurance policy in respect of those liabilities.This indemnity is a qualifying indemnity provision

243、for the purposes of Sections 232 to 234 of the Companies Act 2006.Neither the indemnity nor insurance provides cover in the event that the director is proved to have acted dishonestly or fraudulently.Share capitalThe authorised share capital and allotted,called up and fully paid share capital of the

244、 Company is shown in note 28.There were no changes to the number of shares during the year and up to the date of this report.As at the date of this report,416.7 million ordinary shares of 2 pence each were allotted,called up and fully paid with an aggregate nominal value of 12.3 million.The Company

245、has a single class of share capital,which are ordinary shares of 2 pence each,and full details of rights accorded to the holders of these ordinary shares are set out in the Articles of Association.Holders of ordinary shares have the rights accorded to them under United Kingdom Company law,including

246、the right to receive the Companys Annual Report and Accounts,attend and speak at general meetings,appoint proxies and exercise voting rights.The Company operates an employee benefit trust to hold shares pending employees becoming entitled to them under the Companys employee share plans.The trust has

247、 an independent trustee which waives its rights to dividends on the shareholding.Details of employee share schemes and shares held by the PV Crystalox Solar PLC Employee Benefit Trust are set out in note 29.In respect of the Companys share capital there are no restrictions on the transfer of shares,

248、no limitations are placed on the holding ofshares and prior approval is not required from the Company or from other holders of shares for a transfer.Subject to the provisions of the Companies Act 2006 and of the Articles of Association,the Company may by ordinary resolution declare dividends to be p

249、aid to members according to their respective rights and interests in the profits of the Company.However,no dividend shall exceed the amount recommended by the Board.The Board may declare and pay such interim dividends as appears to the Board to be justified by the profits of the Company available fo

250、rdistribution.All dividends shall be apportioned and paid pro rata according to the amount paid up on the shares.The Company was given authority at the 2011 AGM to allot further shares up to a maximum of 2,778,169,which was approximately 33%of the issued share capital on 21 April 2011 and to allot a

251、n additional number of ordinary shares up to a maximum of 2,778,169 which is approximately a further 33%of the issued share capital on 21 April 2011 by way of a rights issue in which the new shares are offered to existing shareholders in proportion to their existing shareholdings.No ordinary shares

252、were allocated during the period from the AGM tothe date of this report.This authority will expire at the 2012 AGM and approval will be sought from shareholders at that meeting for asimilar authority to be given for a further year.The Company was given authority at the 2011 AGM to make market purcha

253、ses of up to 41,672,533 of its own ordinary shares.This authority will expire at the 2012 AGM and approval will be sought from shareholders at that meeting for a similar authority to be given fora further year.The Company did not make any purchases of its own ordinary shares during the period from t

254、he AGM to the date of thisreport.Approval will be sought from shareholders at that meeting for a similar authority to be given for a further year.Going concernGoing concern is discussed in the Financial Review which can be found on pages 12 to 15.Policy on the payment of creditorsIndividual companie

255、s within the Group operate different creditor payment policies.In Germany it is policy to take advantage of prompt payment discounts where offered,which are typically discounts of 2%or 3%for payment within ten days,otherwise standard terms are an average of 30 days net.In the United Kingdom(includin

256、g PV Crystalox Solar PLC)and Japan payment is made in line with standard terms,which are an average of 45 days.DonationsDuring the period under review the Group made charitable donations of 3,150(2010:11,841).It is the Groups policy not to make general political donations.No political donations were

257、 made in the period(2010:nil).Research and developmentThe Group spent 6.4 million(2010:11.1 million)on research and development during the year in the field of continuous production process optimisation and improvement and adaptation of products to market requirements.Corporate governance:Directors

258、report continued25 PV Crystalox Solar PLC Annual Report and Accounts OverviewBusiness reviewCorporate governanceConsolidated financial statementsCompany financial statements Change of control There are a number of agreements that take effect,alter or terminate upon a change of control of one of the

259、Group subsidiary companies such as commercial supplier and customer contracts.There is no individual contractual arrangement that is considered to be essential to the continuing operation of the Group.All of the Companys share schemes contain provisions relating to a change of control.Outstanding op

260、tions and awards normally vest and become exercisable on a change of control,subject to the satisfaction of any performance conditions at that time.Disclosure of information to the auditorsThe directors who held office at the date of approval of this Directors Report confirm that,so far as they are

261、each aware,there is no relevant audit information of which the Groups auditor is unaware;and each director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Groups auditor is aware of that information.I

262、ndependent auditors PricewaterhouseCoopers LLP have indicated that they are willing to continue in office.A resolution to reappoint PricewaterhouseCoopers LLP as auditors for the ensuing year will be proposed at the AGM.Annual General MeetingThe AGM will be held at 3 More London Riverside,London SE1

263、 2AQ on Thursday 24 May 2012 at 2.00pm.The Letter from the Chairman and Notice of Meeting document give full details of the AGM and the resolutions to be proposed.By order of the BoardMatthew WetheyGroup Secretary27 March 2012 26PV Crystalox Solar PLC Annual Report and Accounts ComplianceThe Board i

264、s firmly committed to ensuring that high standards of corporate governance are maintained by the Group.Throughout theyear ended 31 December 2011,the Group complied with the provisions set out in the United Kingdom Corporate Governance Code(June2010)(“the Code”)except that the Group did not comply wi

265、th certain provisions relating to board and committee composition duringthe year,namely sections B.1.2,C.3.1 and D.2.1.Under the Code a smaller company is defined as one that is below the FTSE 350 throughout the year immediately prior to the reporting year.The Company was a member of the FTSE 350 un

266、til 16 March 2010 and as such is not considered a smaller company for the 2011 reporting year.However,the Company will be considered to be a smaller company for the 2012 reporting year.As a smaller company theCompany would be fully compliant with the Code.Section B.1.2 states that except for smaller

267、 companies,at least half of the Board,excluding the Chairman,should comprise nonexecutive directors determined by the Board to be independent.A smaller company should have at least two independent nonexecutive directors.The Board recognises that during the year,the Group did not have a majority of i

268、ndependent nonexecutive directors.The Board consisted of three executive directors,two independent nonexecutive directors and the Chairman who is a nonexecutive director and was deemed to be independent on appointment but is not considered to be independent under the Code.Thedirectors consider the c

269、urrent structure appropriate having regard to the size of the organisational structure of the Group.Section C.3.1 states that the Board should establish an audit committee of at least three,or in the case of smaller companies two,independent nonexecutive directors.In smaller companies the company ch

270、airman may be a member of,but not chair,the committee inaddition to the independent nonexecutive directors,provided he or she was considered independent on appointment as chairman.Theboard should satisfy itself that at least one member of the audit committee has recent and relevant financial experie

271、nce.All three nonexecutive directors are members of the audit committee,however only two are considered independent under the Code.The Chairman is one of the members and was considered to be independent on appointment.The directors at present consider the current structure appropriate having regard

272、to the size of the organisational structure of the Group.Section D.2.1 states that the Board should establish a remuneration committee of at least three,or in the case of smaller companies two,independent nonexecutive directors.In addition the Company Chairman may also be a member of,but not chair,t

273、he committee if he or she was considered independent on appointment as Chairman.All three nonexecutive directors are members of the remuneration committee,however only two are considered independent under the Code.The Chairman is one of the members and was considered tobe independent on appointment.

274、The directors at present consider the current structure appropriate having regard to the size of the organisational structure of the Group.Board of directorsThe Board is primarily responsible for the success of the Group by providing leadership within a framework of prudent and effective controls wh

275、ich enables risk to be assessed and managed.The Board sets the Groups strategic aims,ensures that the necessary financial and human resources are in place for the Group to meet its objectives and reviews management performance.The Board setsthe Groups values and standards and ensures that its obliga

276、tions to its shareholders and others are understood and met.Matters reserved for the BoardThe Board has a formal schedule of matters reserved to it for its decision.This schedule is reviewed annually and includes approval of:Group objectives,strategy and policies;business planning;substantial transa

277、ctions,contracts and commitments;review of performance;risk assessment;dividends;appointments to the Board and as Group Secretary;and senior management appointments and succession plans.Other specific responsibilities are delegated to Board committees,which operate within clearly defined terms of re

278、ference.Details of the responsibilities delegated to Board committees are given on pages 28 to 39.Board balance and independenceThe Board comprises the nonexecutive Chairman,two nonexecutive directors and three executive directors.With the exception oftheChairman,who is presumed under the Code not t

279、o be independent,the Board considers all the nonexecutive directors to be independent.John Sleeman is the recognised Senior Independent Director who is available to shareholders if they have any relevant issues or concerns.Brief biographical details of all members of the Board are set out on page 21

280、 and further information concerning theappointments is set out in the Directors Report.The nonexecutive directors bring a wide range of commercial and financial experience and knowledge and are independent ofmanagement and any business or other relationship that could interfere with the exercise of

281、their judgement.This provides abalancewhereby an individual or small group cannot dominate the Boards decisionmaking.Corporate governance:Corporate governance statement27 PV Crystalox Solar PLC Annual Report and Accounts OverviewBusiness reviewCorporate governanceConsolidated financial statementsCom

282、pany financial statements Board balance and independence continuedThe nonexecutive directors entered into arrangements for initial three year periods and their appointments continue subject to reelection at each AGM or six months notice in writing from either party.The terms and conditions of appoin

283、tment of the nonexecutive directors can be inspected at the Companys registered office and will be available for inspection at the Annual General Meeting.MaartenHenderson and John Sleeman were appointed on 11 June 2007 and Michael Parker was appointed on 1 January 2010.The Board has established a se

284、parate nomination committee and details of its responsibilities and activities are on pages 28 and 29.Board meetingsThe Board meets at least six times per annum and at other times according to business requirements.During 2011 there were tenmeetings,including two meetings in May 2011 and in October

285、2011,where the Board met offsite to consider the Groups strategy andtoreview key business issues.Meetings are held in central London and at the Groups operating subsidiaries:at Abingdon in the UnitedKingdom;and at Erfurt and Bitterfeld in Germany.When the Board meets at the Groups operating subsidia

286、ries the Board will have adetailed presentation from the subsidiary directors at that location and an opportunity to review the operation and to meet local management.During 2011 the number of Board and committee meetings with individual attendances was as follows:BoardAuditRemunerationNominationHub

287、ert Aulich10343Iain Dorrity10343Peter Finnegan10343Maarten Henderson*10343Michael Parker*10343John Sleeman*10343*Nonexecutive directors.Board supportAll directors have access to advice and services from the Group Secretary.The appointment and removal of the Group Secretary is a matter for the Board

288、as a whole.The Group Secretary is responsible for advising the Board on all governance matters,ensuring Board procedures are followed and applicable rules and regulations are complied with.The directors are free to seek any further information they consider necessary and directors can obtain indepen

289、dent professional advice at the Groups expense.Information,induction and professional development The Chairman,assisted by the Group Secretary,is responsible for ensuring that the Board receives appropriate and timely information onall relevant matters.On appointment to the Board,new directors recei

290、ve background reading about the Group and details of Board procedures and other governance related matters.In addition,the directors participate in a comprehensive induction programme,including site visits to the Groups operations and meetings with the executive directors and senior management acros

291、s the Group.The Chairman regularly reviews and agrees with each director their training and development needs as part of the succession planning process.Directors receive ongoing training and updates on relevant issues as appropriate,taking into account their individual qualifications and experience

292、.The Group Secretary helps directors undertake any other professional development they consider necessary to assist them in carrying out their duties.Chairman and Chief ExecutiveThe roles of Chairman and Chief Executive Officer are separated and their responsibilities are clearly established.The Cha

293、irman isresponsible for the leadership and workings of the Board and ensuring its effectiveness and the Chief Executive Officer together withtheexecutive directors are responsible for the implementation of strategy and policies and the daytoday decisionmaking andadministration.Other significant comm

294、itments of the Chairman,Maarten Henderson,are set out in the Directors section on pages 20 and 21.TheBoard issatisfied that these commitments do not restrict him from carrying out his duties as Chairman effectively.Performance evaluationThe directors believe that an effective Board is vital to the s

295、uccess of the Group and,as a result,undertake a thorough evaluation each year in order to assess how well the Board,its committees,the directors and the Chairman are performing.The aim is to improve the effectiveness of the Board,its committees and ultimately the Groups performance.The process is le

296、d by the Chairman and is supported by the Group Secretary and the Senior Independent Director.The Board believes that a combination of external reviews every third/fourth year with internal reviews in the other intervening years is the most appropriate method for evaluating effectiveness.The Board c

297、onducted an external evaluation for the 2008 Annual Report and intends to carry out an external review for the 2012 Annual Report.The performance of individual directors was evaluated by the Chairman and the other nonexecutive directors.Following the review process,the Chairman concluded that each d

298、irector continues to make an effective contribution to the work of the Board,is well prepared and informed concerning items to be considered by the Board,has a good understanding of the Groups businesses and thattheir commitment to the role remains strong.The Senior Independent Director together wit

299、h Michael Parker and the Chief Executive Officer evaluated the performance of the Chairman and concluded that the Chairman operated effectively in his role.28PV Crystalox Solar PLC Annual Report and Accounts Performance evaluation continuedThe Board carried out an internal evaluation of its effectiv

300、eness during a structured discussion at a board meeting in February 2012.Theprocess was led by the Chairman with the assistance of the Group Secretary.The discussion focussed on:the Boards roles and responsibilities;the Boards culture and dynamics;the Boards processes;and the role of the Chairman.Th

301、e review concluded that theBoard was operating in an effective manner.It identified a number of significant strengths and it also identified some areas where changes could be made to improve longerterm effectiveness.These areas identified in the review are to be addressed in 2012 by anaction plan de

302、veloped by the Board.The audit,nomination and remuneration committees carried out internal evaluations of their effectiveness at meetings in February and March 2012.The process for each review was similar to that used for the Boards effectiveness review.The reviews concluded that each committee was

303、operating in an effective manner.Each review identified a number of strengths and some areas where changes could bemade to improve longerterm effectiveness.Relations with shareholdersThe Board values the views of its shareholders and recognises their interest in the Groups strategy and performance,B

304、oard membership and quality of management.The AGM is used to communicate with investors and documents are sent to shareholders at least 20 working days before the meeting.The Chief Executive makes a presentation there on the Groups progress.The Chairman,Chief Executive,Chief Financial Officer,Execut

305、ive Director German Operations and the chairmen of the audit committee and remuneration committee are available to answer relevant questions.Separate resolutions are proposed on each substantial issue so that they can be given proper consideration and there is a resolution to receive and consider th

306、e Annual Report and financial statements.The Group counts all proxy votes and will indicate the level of proxies lodged on each resolution,after it has been dealt with by a show of hands.The totals of proxy votes on each resolution,including details of any votes withheld,are announced at the meeting

307、 after each resolution has been dealt with on a show of hands and the full proxy voting results are announced through a regulatory news service and on the Companys website.In the event of a close result as indicated by the proxies held by the chairman of the meeting,the chairman would call a poll bu

308、t this has not proved necessary at any of the AGMs to date.The Board believes that the immediacy of voting on a show of hands with the proxy votes immediately being announced,rather than a laborious process of conducting a formal poll on every resolution,is appreciated by the shareholders who attend

309、 the meeting.During the year the executive directors maintained a regular programme of visits and presentations to major institutional shareholders both in the United Kingdom and overseas.The Chairman and the Senior Independent Director,who participate in this programme as appropriate,met with a num

310、ber of major shareholders to discuss the introduction of the performance share plan before the 2011 AGM and reported the views of these shareholders to the Board.All directors receive copies of analysts reports on the Groups and are updated by the Groups financial advisors on investors perceptions o

311、f PV Crystalox Solar.There were formal presentations following the preliminary and interim results and in addition the Group released Interim Management Statements in May and October 2011 and a trading update in June 2011.Key announcements,financial reports,the presentations referred to above and ot

312、her information about the Group can be found on the Groups website at .AccountabilityThe Board aims to present a balanced and understandable assessment of the Groups position and prospects in all reports and other price sensitive disclosures,reports to regulators and information required to be prese

313、nted by statute.The responsibilities of the directors as regards the financial statements are described on page 40 and that of the auditors on page 41.A statement on going concern appears on pages 13 and 14.Remuneration committeeThe Directors remuneration report and details of the activities of the

314、remuneration committee are on pages 32 to 39.It sets out the Groups policy and the full details of all elements of the remuneration package of each individual director.Nomination committeeThe nomination committee of the Board comprises Maarten Henderson,Chairman of the Committee,John Sleeman and Mic

315、hael Parker.Itis appointed by the Board and is made up of at least three members,a majority of whom should be independent nonexecutive directors.The Chief Executive Officer,the Chief Financial Officer,other directors and external advisors may be invited to attend meetings as and when appropriate.The

316、 Group Secretary acts as the Secretary of the committee.The terms of reference of the nomination committee are available to members of the public upon request and are available on the Groups website at .Thenomination committee meets not less than twice a year and is required to report formally to th

317、e Board on its proceedings.The main responsibilities of the nomination committee are to:review regularly the structure,size and composition(including the skills,knowledge,experience and diversity)required of the Board compared to its current position and make recommendations to the Board with regard

318、 to any changes;give full consideration to succession planning for directors and other senior executives in the course of its work,taking into account the challenges and opportunities facing the Group and what skills and expertise are therefore needed on the Board in the future;be responsible for id

319、entifying and nominating for the approval of the Board candidates to fill Board vacancies as and when they arise;Corporate governance:Corporate governance statement continued29 PV Crystalox Solar PLC Annual Report and Accounts OverviewBusiness reviewCorporate governanceConsolidated financial stateme

320、ntsCompany financial statements Nomination committee continued before appointment is made by the Board,evaluate the balance of skills,knowledge,experience and diversity on the Board and,inthelight of this evaluation,prepare a description of the role and capabilities required for a particular appoint

321、ment;for the appointment of a chairman,the committee should prepare a job specification,including the time commitment expected.Aproposed chairmans other significant commitments should be disclosed to the board before appointment and any changes tothechairmans commitments should be reported to the bo

322、ard as they arise;prior to the appointment of a director,the proposed appointee should be required to disclose any other business interests that may result in a conflict of interest and be required to report any future business interests that could result in a conflict of interest;keep under review

323、the leadership needs of the Group,both executive and nonexecutive,with a view to ensuring the continued ability ofthe organisation to compete effectively in the marketplace;review the results of the board performance evaluation process that relate to the composition of the board;keep up to date and

324、fully informed about strategic issues and commercial changes affecting the Group and the market in which itoperates;review annually the time required from nonexecutive directors.Performance evaluation is used to assess whether the nonexecutive directors are spending enough time to fulfil their dutie

325、s;and ensure that on appointment to the Board,nonexecutive directors receive a formal letter of appointment setting out clearly what isexpected of them in terms of time commitment,committee service and involvement outside Board meetings.The nomination committee is also required to make recommendatio

326、ns to the Board concerning:the formulation of plans for succession for both executive and nonexecutive directors and in particular for the key roles of Chairman and Chief Executive Officer;suitable candidates for the role of Senior Independent Director;membership of the audit and remuneration commit

327、tees,in consultation with the chairmen of those committees;the reappointment of any nonexecutive director having given due regard to their performance and ability to continue to contribute tothe Board in the light of the knowledge,skills and experience required;any matters relating to the continuati

328、on in office of any director at any time including the suspension or termination of service ofanexecutive director as an employee of the Company subject to the provisions of the law and their service contract;and the appointment of any director to executive or other office other than to the position

329、s of Chairman and Chief Executive Officer.The nomination committee met three times during the year.Details of attendance are shown in the Corporate Governance Statement onpage 27.During the year the main items considered were:review of the structure,size and composition of the Board;organisational c

330、hanges and senior appointments within the Group;succession planning for directors and senior managers within the Group;the nomination committee effectiveness review;a review and recommendation of changes to the terms of reference of the nomination committee to the Board;and a review of the knowledge

331、,skills and experience of the directors proposed for annual reelection at the AGM.Audit committeeThe audit committee of the Board is chaired by John Sleeman and is to be made up of a minimum of two members where a majority ofthe members shall be independent nonexecutive directors,at least one of who

332、m shall have recent and relevant financial experience.Thecommittee is made up of three members,the two independent nonexecutive directors,John Sleeman and Michael Parker and Maarten Henderson,the Chairman of the Board,who was considered to be independent on appointment.John Sleeman is a Chartered Ac

333、countant and a Chartered Banker who since 2006 has been a founding partner of S.P.Angel Corporate Finance LLP.Maarten Henderson is a finance professional who has held several CFO roles.He was chairman of the audit committee until his election tochairman of the Board of freenet AG in July 2011 and his most recent executive role as a CFO ended in October 2007.The Board considers that these two membe