Royal Mint Annual Report 1999-2000

Royal Mint

Management Board 1999-2000

As at 31 March 2000 Roger Holmes 1 Deputy Master and Comptroller (Chief Executive)

EXECUTIVE DIRECTORS Review Review of the Year Keith Cottrell Director of Sales Allan Pearce Director of Human Resources and Corporate Affairs Graham Davies Director of Finance Alan Wallace Director of Collector Coin Geoff Payne Director of Engineering Services

NON-EXECUTIVE DIRECTORS Gisela Burg CBE Contents Sidney Taylor Review of the Year Lyndon Haddon Deputy Master’s Report 3 Jan Smith Financial Summary 8 David Stark United Kingdom Circulating Coinage 9 Overseas Circulating Coins and Export Blanks 10

Bankers Bank of England Collector Coins 12 People 16 Auditors Comptroller and Auditor General Medals 20 PricewaterhouseCoopers Royal Mint Advisory Committee, 1999-2000 21 Secretariat Royal Mint, Llantrisant CF72 8YT Telephone: 01443 623060/1 Royal Mint Trading Fund E-mail: [email protected] Financial and General Reports 24 Website: www.royalmint.com Statement of Trading Fund’s and Accounting Officer’s London Office Royal Mint, 7 Grosvenor Gardens Responsibilities 26 London SW1W 0BD Corporate governance - Telephone: 020 7592 8600/1 Statement on the system E-mail: [email protected] of internal financial control 26 The Certificate and Report The Accounts of the Royal Mint Trading Fund of the Comptroller and as at 31 March 2000 together with the Certificate Auditor General to the and Report of the Comptroller and Auditor Houses of Parliament 27 General thereon at pages 24-36 are prepared Operating Account 28 pursuant to section 4(6) of the Government Balance Sheet 30 Trading Funds Act 1973. (In continuation of House of Commons Paper No 500 of 1998-99.) Cash Flow Statement 31 Presented pursuant to Act 1973, c.63, s.4(6). Notes to the Accounts 32

590 Ordered by the House of Commons to be printed 20 July 2000.

Libraries Actof 1850, designed 1850, Actof Libraries Left: Deputy MasterandComptroller commemorating the 150th the commemorating Below: and the hands of the clock the of hands the and of the Millennium Crown,Millennium the of showing the British Isles British the showing anniversary of the Public the of anniversary by Mary Milner Dickens. Milner Mary by h ivrpofversion proof silver The highlighted in gold. in highlighted The 50 pence piecepence 50 The Roger HolmesRoger (Chief Executive) and ourConsortiumotherpartners patience onthepartofmanyourcustomers products. due particularlytohighdemandforits objectives fell shortofitscustomerservice but financialreturns, sales andsatisfactory other hand,delivered ahealthygrowth of end. Thecollectorcoinbusiness,onthe these areas wasevidenttowards theyear- r production areas. Agradual especially inthecirculation coin disruption costsofthischangeprogramme, 1999-2000 reflected thepressures and world. future successinahighlycompetitive programmes designedtosecure theMint’s throughas wecarry fundamental the mostdifficult periodsinitsrecent the Minthasbeguntoemerge from display theiryearofmanufacture. Thirdly, used andthelongest-lastingobjectswhich coins beingperhaps themostfrequently- collecting coinsoroffering themasgifts, has proved tobeapopulartimefor the transitionfrom oldtonewmillennium existence spanningthree millennia.Secondly, an ninth century, theMintcancelebrate the as far backas trace acontinuoushistory British manufacturinginstitution 1999-2000. First,aspossiblytheonly disappointingfinancialperformancein very significance fortheRoyalMint,inspiteofa special has The dawnofanewmillennium Report Master’s Deputy This periodhascalledbothforexceptional infinancialresults for The downturn ecovery in ecovery and blank which can change one of history, in themonthsandyearstocome. benefits ofthesechangestoourcustomers the entire Mintteamtodeliveringthe may Ireiterate mycommitmentandthatof ways ofworking.Inexpressing mygratitude, and adaptingtonewequipment effectivechanges the employees inmaking determination onthepart of the Royal Mint throughout theworldandforexceptional worldwide. exporting mintforcoinsandblanks itspositionastheleading maintained reduce profi competitive pressures havecontributedto Although thestrength ofsterlingand were produced forfifty-ninecountries. total sales.Coinsorready-for-striking blanks Princess ofWales Memorial Committee. to theprojects recommended bytheDiana, versions ofthiscoinare beingcontributed proceeds from bothstandard andcollector ofDiana,PrincessWales,memory andthe issue aUnitedKingdom£5coinin1999 other developedeconomiessuchastheUSA. coins -aphenomenonnoticeablealsoin the publictore-circulate low-denomination also related tothereduced propensity of (especially intheretail sector)butseems due totherevival ineconomicactivity continue ataround thislevel,waspartly in demand,whichisnowforecast to more denominations.Thissharpincrease excluding yearswithrecoinages ofoneor The volumeofissueswasanall-timerecord, agreed betweentheMintandbanks. previous yearand28%abovetheforecast of 1,986millionwere 47%uponthe of collectorcoinsrose by23%. on theprevious year, whereas production circulation coinsandblankswas2%down million). Production of3,751million slightly higherthanin1998-99(£91.4 Sales of£95.6millionin1999-2000were Trading of Review Overseas businessaccountedfor54%of The Mintwaspleasedtobeauthorised United Kingdomcirculation coinissues tability, theMintsuccessfully

Review of the Year 3 1999-2000

Above: and 50 euro centcoins,eurobeing 50 and Left: transferred into the holding thetransferred into chosen alloy for the 10, 20 10, the for alloy chosen ol fcsnri gold. castnordic of Coils furnace prior to casting.to furnaceprior Molten nordic gold, the gold, nordic Molten Mlnu Associates) (Molyneux Associates) (Molyneux supply chainmanagement. Around £1million made duringtheyearinmanyaspects ofour page eight. targetscustomer service issetouton achievement againsteachofitspublished in suppliesofnewpackaging.TheMint’s these problems were accentuatedbydelays orders withinthetarget times,and delivery caused problems infulfillingcustomer in theUKandoverseas.However, italso has expandedtheMint’s customerbaseboth millennium crown forDomevisitors. specially mintmarkedversionofthe up intheMillenniumDometoproduce a Society. Acoiningpress hasalsobeenset in partnershipwiththeBritishArtMedal collection andamillenniummedalcreated MillenniumMasterpiececoin 24-country the UnitedKingdommillenniumcrown, a of millenniumproducts, whichincluded followed bystrong demandforourrange coin fortheRugbyWorld Cupwas economic growth. Thesuccessofthe£2 advantage ofthemillenniumfactorand products enablingtheMinttotake 1998-99, thankstoanattractiverangeof hand, recovered strongly compared with Mint’s fullcapacityformostoftheyear. depressed production levelswellbelowthe changes describedinlastyear’s report, programme andthepackageofoperational Mint’s exceptionallyheavyinvestment Thesefactors,arisingfrompatterns. the or revised workingmethodsandshift in manyareas becomefullyeffective innew training andprocess control thatemployees production process; andtoensure through full production; totacklebottlenecksinthe refurbish olderequipmentandrestore itto optimum levelsofefficiency andquality;to year tobringadditionalcapacityup time thanexpectedwasneededduringthe was theperformanceoffactory. More profitability incirculating coinsandblanks Despite packagingproblems, progress was The popularityoftheseandotherproducts Collector coinactivity, ontheother The biggestinfluenceontheMint’s paid totheTreasury. £0.5m inrespect of1999-2000hasbeen was £0.7m,andaccordingly adividendof financial target of14.6%.Profit afterinterest 0.5% compared withtheMint’s published The netprofit onnetassetswastherefore compared with£5.8millionin1998-99. was broadly unchanged. land andbuildings.Networkingcapital due inparttoanupward revaluation of Mint’s fixedassetbaseincreased substantially, plating plantinmid-1999.Neverthelessthe with thecommissioningofathird copper production capacitywaslargely concluded year astheexpansionofMint’s blank a substantialreduction from theprevious well aheadoftarget. of valueformoneysavingswassecured, total effective copper platingcapacityupto copper platingfacilitiesbrought the Mint’s and therefurbishment oftheoldestour plating, where theopening ofanewplant programme in1999-2000wascopper action planswhichinclude: has beenmadewiththeimplementationof circulation coinsandblanks.Goodprogress of 1999)andchangeprogrammes in 50% betweentheendof1997and of thecapacityexpansion(approximately ofthebenefits depends mainlyonthedelivery improvementThe necessary ofprofitability future the to Looking Operating profit fellto£0.3million Capital expenditure totalled£6.1million, The mainfocusofthecapitalexpenditure levels through teamworking. initiative whichinvolvesemployeesatall the Total Productive Manufacturing equipment utilisation,particularlythrough systematic approach toimproving scrap andre-work; ‘ quality assurance; reorganisation ofblanksortingand productivity improvements; management changes; right firsttime programme toreduce ’

Review of the Year 5 1999-2000 advertising, the site is attracting 20,000 visits per month, and sales of collector coins over the Internet grew sharply, well ahead of target. Highlights in the Mint’s extensive research and development programme have included: nordic gold, the material chosen for the 10, 20 and 50 euro cents, being successfully cast and processed into ready-for-striking blanks in bulk volumes; the first phase of equipment for imparting new security devices on to coins being ordered, for installation and trial in 2000-2001; the Mint’s first coins to bear holograms being produced as the silver piedfort version of the United Kingdom £2 coin celebrating the Rugby World Cup in 1999.

A new high energy burnishing 15,000 tonnes per annum by the year-end. The Mint is devoting substantial resources machine, installed to improve The Royal Mint is now the largest supplier the quality of blanks. to planning and achieving compliance with (Molyneux Associates) in the world for copper-plated steel, which environmental, health and safety regulations is the chosen material for the three lowest as they become progressively more stringent denominations for the euro coinage as well and as the use of chemicals within the as for the UK (1p and 2p) and many other Mint’s processes grows with the expansion countries. Other major projects included a of plating capacity. In particular, the Mint’s new annealing furnace and additional systems and procedures are being upgraded blank finishing equipment to relieve a (with the support of expert consultants) to critical bottleneck. ensure that the minimum requirements of Investment in information technology has the Control of Major Accident Hazards continued at a high rate. The Y2K threat Regulations 1999 are exceeded. was handled successfully at a very modest cost, not only because of the skills and People dedication of the relevant Mint staff but The Total Productive Manufacturing (TPM) also because the bulk of the Mint’s systems initiative has developed strongly during were up-to-date and already Y2K compliant. 1999-2000 to involve more employees at The Mint is now engaged in the progressive all levels in the factory and to begin introduction of an Enterprise Resource delivering benefits in terms of improved Planning System, TROPOS, initially into equipment utilisation and in a cleaner, Collector Coin and Master Tools, which tidier workplace. By April 2000 nineteen will generate substantial business and TPM teams were engaged on improvement customer service benefits. An extensive work in all of the major parts of the factory, upgrade of PCs to run the Microsoft NT and all factory areas had achieved satisfactory operating system was completed. results in audits of their progress towards The Mint’s website (www.royalmint.com) sustained good housekeeping. has been enhanced for the greater The Mint retained its accreditation as an convenience of users. Even without Investor in People after the required triennial These salvers proved a popular proveda salvers These Medal salver presented to the to presented salver Medal ChristopherLawrence sales item during the year. the during item sales admire the silverWaterloo the admire (left) ueb h oa Mint. Royal the Dukeby h ueo Wellington of Duke The and the silversmiththe and (right) in mostoftheproduction departments. Productivity improvements were recorded in blankproduction andprocessing. make fulluseofthe50%capacityincrease activity inCollectorCoinsandthedriveto 2000. Thisreflected thehigherlevelof 1030 on31March 1999to1126on31March employees attheRoyalMintrose from compared withtheprevious year. fall of17%sicknessabsencein1999-2000 excessive overtimewere rewarded witha performance appraisalandpaysystems. 2000-2001 bydiscussionsonharmonising employees. Thisistobefollowedduring covering bothindustrialandnon-industrial development ofaunifiedjobstructure year inaSteeringGroup tooverseethe representatives workedtogetherduringthe package, managementandtradeunion in October1998. from therestructuring packageintroduced of themulti-skillingprogramme arising continued atahighlevel,primarilybecause appraisal.Trainingexternal expenditure The totalnumberoffull-timeequivalent Efforts toreduce absenceandeliminate Building ontheteamworkthemeofthis the Committeewillbegreatly missed. His activeanddistinguishedguidanceof covered ingreater depthonpages21to23. his retirement, afterforty-sevenyears,are the Committeeandoccasionmarking Committee.Hiscontributionto Advisory Edinburgh, asPresident oftheRoyalMint Highness ThePrincePhilip,Dukeof the yearwasretirement ofHisRoyal role astheRoyalMint’s 100%shareholder. outtheir Panel toadvisethemincarrying time theTreasury appointedaShareholder Jan SmithandDavidStark.Atthesame to itsManagementBoard inMarch 2000- welcomed twonewnon-executivedirectors covered inlastyear’s Report,theMint review oftheRoyalMintwhichwas Deputy Master( Holmes Roger over thecomingyear. improvement performance ofourinternal foundations havebeenlaidforasubstantial factors,butIbelievethatthe and external dependsonavarietyofinternal This inturn the circulation coinsandblanksbusiness. depends more of criticallyontherecovery the Mint’s overallprofitability, however, Treasury review. Reversing thedeclineof commercial freedom promised inlastyear’s few yearswiththebenefitofextra implement agrowth strategyoverthenext profitability initscore activitiesandto is expectedtomaintainahealthylevelof The collectorcoinsandmedalsbusiness Prospects The mostsignificantindividualeventof Following theoutcomeofTreasury Chief Executive )

Review of the Year 7 1999-2000 Financial Summary 1999-2000

8 1999-2000 1998-99 1997-98 1996-97 1995-96 £’000 £’000 £’000 £’000 £’000 MODIFIED HISTORICAL COST BASIS: United Kingdom sales 43,444 33,714 48,842 37,805 35,026

Review Review of the Year Overseas sales 52,129 57,643 63,045 53,761 55,816

95,573 91,357 111,887 91,566 90,842

Operating profit 345 5,821 13,036 7,602 9,297 Profit for the year 668 6,289 13,567 7,679 9,949 Dividend 500 - 7,000 3,000 9,500 Retained profit for the year 168 6,289 6,567 4,679 449 Capital employed at 31 March 70,445 66,960 60,640 56,256 51,679 Operating profit/sales 0.4% 6.4% 11.7% 8.3% 10.2%

UNITED KINGDOM / OVERSEAS SALES £’000

111,887 Key Ministerial Targets

95,573 91,357 91,566 90,842 Proposed 1999-2000 1998-99 1997-98 2000-2001 Target1 To achieve an average rate of return of 14.6% on net assets not yet over the period 1 April 1999 Target 14.6% 14.0% 14.0% confirmed to 31 March 2000 Outturn 0.5% 9.1% 22.3% -

99-00 98-99 97-98 96-97 95-96 Target2 UK circulating coin Target 96.0% 95.0% 95.0% 97.0%

OPERATING PROFIT Accepted orders from UK banks within within within within £’000 and Post Office to be delivered 11 days 12 days 12 days 11 days 13,036 within eleven working days Outturn 99.6% 99.8% 98.0% - 5,821 7,602 9,297 345 Target3

99-00 98-99 97-98 96-97 95-96 UK collector coin Orders from individual UK Target 95.0% 95.0% 95.0% 95.0% customers to be delivered within within within within within OPERATING PROFIT/SALES twenty-five days from receipt 25 days 28 days 28 days 25 days of order or published issue date Outturn 68.0% 94.0% 73.0% - 11.7% 10.2% 6.4% 8.3% Target4

0.4% Medals Orders delivered by agreed Target 97.0% 95.0% 95.0% 97.0%

99-00 98-99 97-98 96-97 95-96 delivery date Outturn 97.2% 99.2% 96.0% - Target5

FINANCIAL OBJECTIVE RATIO Quality Collector products accepted by Target 99.70% 99.65% 99.65% 99.7% 22.3% individual UK customers Outturn 99.65% 99.70% 99.65% - 18.3% 14.1% 9.1%

0.5%

99-00 98-99 97-98 96-97 95-96 United Kingdom Circulating Coinage 1999-2000

Issues 9 Issues of United Kingdom coins were at What is more gratifying is that the ESTIMATED NUMBER OF COINS IN CIRCULATION 31 December 1999 record levels and almost reached 2 billion number of £2 coins in circulation doubled

Number pieces during the financial year 1999-2000. in the year to 132 million. This is heartening

Denomination Face Value of Pieces This in part reflected an unexpected evidence of popular acceptability of an Review of the Year (£m) (Millions) £2 263.66 132 continuation of demand between January innovative coin, an acceptability made £1 1,089.43 1,089 and Easter, traditionally a quiet period when explicit by the writer of a letter to the 50 pence 270.83 541 coins are returning to banks after Christmas. London Evening Standard who, likening the 20 pence 359.37 1,797 A high level of demand seems likely to coin to a piece of burnished Celtic 10 pence 149.84 1,498 continue and has revitalised discussions jewellery, described the sight of it as 5 pence 176.49 3,530 with the banks about improving the ability something that lifted the spirits. The edge 2 pence 102.05 5,102 to predict requirements, thereby enabling inscription STANDING ON THE 1 penny 84.60 8,459 the inevitable peaks and troughs to be less SHOULDERS OF GIANTS continues to Total 2,496.27 22,148 disruptive to levels of production. Whatever intrigue those not familiar with the Isaac the long term future, for the moment coins Newton quotation, and the words gained ISSUES OF UNITED KINGDOM CIRCULATING COINS 1999-2000 clearly seem certain to remain a major form extra currency when they inspired the title of payment in the personal sector. of an album by the pop group Oasis. Less Number Denomination Face Value of Pieces As in recent years, issues were dominated helpful was a silly rumour, entirely without (£m) (Millions) by 2p and 1p pieces, with the latter again foundation, that misled members of the £2 104.07 52 £1 9.39 9 accounting for almost half the coins required public into believing that the £2 coins of 50 pence 22.02 44 during the year. Demand for 10p pieces 1997 bearing the previous portrait of the 20 pence 21.10 106 picked up substantially after a quiet Queen by Raphael Maklouf were rare and 10 pence 7.74 78 1998-1999, while the number of 5p pieces were accordingly of extra value. 5 pence 16.04 321 doubled to 321 million. Issues of the £1 2 pence 9.21 460 coin increased towards the end of the year. Commemorative Coins 1 penny 9.16 916 Three commemorative coins were Total 198.73 1,986 Number of Coins in Circulation successfully issued through banks and post With new issues at record levels, the number offices during the year: the Diana, Princess of coins estimated to be in circulation had of Wales memorial crown, the millennium risen to more than 22 billion at 31 December crown, and a bi-colour two-pound coin to 1999. In theory more than 60 per cent of celebrate the Rugby World Cup. Issues of these coins are 2p and 1p pieces, but many the two crowns had reached approximately must be in private hoards, whether for five million pieces by the end of the year, The edge inscription on savings purposes or simply through but it is not of course expected that these the circulating £2 coin unwillingness to carry them around. If they coins will appear in circulation in significant has generated a great deal of interest. could circulate more actively, the demand numbers, if at all. The two-pound coin, on for new coins could thereby be reduced, the other hand, for which issues reached a but it is interesting to note that similar figure of five million, should find its a similar phenomenon is way into circulation and will, it is hoped, apparent in relation to low- promote public interest in the coinage. denomination coins in other Before the end of the year collector versions countries, such as the USA. became available of a fifty pence piece to commemorate the 150th anniversary of the Public Libraries Act of 1850 but circulating coins will not be released at face value through banks and post offices until August. Overseas Circulating Coins and Export Blanks

The fifty-nine countries where the Royal Mint supplied coins to monetary authorities or ready-for-striking blanks to mints were spread across every continent and also covered a very wide spectrum in terms of size, level of development and scope of their requirements. This was in spite of very competitive market conditions and a continuing weakness in coinage demand in many parts of Asia and South America. Whilst Hong Kong was, once more, our most important single customer, the most notable development during the year was the further extension of the Mint’s business within Europe, particularly for coinage blanks. The Mint has now established a customer base of over twenty European countries, many of which had been previously dominated by domestic suppliers. One of many crates of euro blanks euro of crates many of One struck during the year includedyearthe during struck onre o hmciswere coins whom for Countries being prepared for despatch.preparedfor being Bahrain, Guernsey,Bahrain,Jamaica, Mlnu Associates) (Molyneux Latvia and Malawi.and Latvia its QualityAssurance Planundertheeuro in July1999theMintreceived approval for under theISO9001qualitystandard, and coins worldwidehasbeenfirmly established. as aleadingexporterofblankswell supplied tonon-EUcountries,itsposition ready-for-striking blankswhichtheMinthas companies. Taking accountalsoofthe against majorprivatesectorinternational In theblanksmarket,Mintiscompeting for thebi-colour1euro and2euro coins. and proved itscapacitytosupplyouterrings material forthe10,20and50euro centcoins) shipping blanksinnordic gold(thechosen During 1999-2000,theMintalsobegan denominations (1,2and5euro cents). plated steelblanksforthethree lowesteuro as oneoftheleadingsupplierscopper- mintswiththeir c) toassistotherEU fromb) tolearn thefirst-waveeuro a) toparticipatewithintherelevant has beenthreefold: coins. TheRoyalMint’s role inthisprocess of producing some50,000millionnew are advancingsteadilyinthemammothtask in thelaunchofeuro 2002 cashon1January attempted. Theelevencountriesparticipating which represents thelargest re-coinage ever market hasbeenprompted bytheeuro, The Minthasretained itsaccreditation The RoyalMintquicklyestablisheditself coinage dies. supplying blanksandinsomecases production requirements, principallyby Changeover Plan;and framework oftheOutlineNational withinthe as coinsare concerned, planning andpreparation process, sofar responsibilities toguidetheUK’s countries inorder todischarge our system forproducing theeuro coinage; specifications andqualitymanagement finalising thedetailedtechnical European Union’s institutionsin This majorchangeintheEuropean its majorcompetitiveadvantages,embracing: and capabilitiescontinuestorankamongst produce euro coinsifrequired. quality managementsystem,enablingitto the thirty-fifthyearofitsexistence. maintain theConsortium’s effectiveness in contributions duringtheyearhelpedto Birmingham MintLimited,andtheir relationship withDeLaRueplcandThe activities are undertakeninaConsortium significant dividendtoitsparent organisations. several newprojects andwasabletopaya year. RMSisnowfocusingitseffort on Venezuela wasaparticularhighlightofthe and commissioningofanewmintin De LaRueplc)incompletingtheinstallation achievement ofRMS(ajointventure with were activeduring1999-2000.The The breadth oftheMint’s product range worldwide network;and which are marketedthrough theMint’s collectorcoinprogrammesinternational recruitment ofcountriestojoin base andprecious metals; striking ofcollectorcoinsandmedalsin with technicalsupportifrequired; supply ofcoiningtoolstoothermints, melting attheMint; purchase ofwithdrawncoinsforsecure metallic compositionandpackaging; feasible combinationofsize,shape,colour, circulation coinsandblanksinevery Most oftheRoyalMint’s exporting All oftheseelementsinourportfolio or refurbishment ofanexistingmint. (RMS), forthesettingupofanewmint equipment, through RoyalMintServices consultancy andmanufacturing 11 Review of the Year 1999-2000

Collector Coins 1999-2000

United Kingdom Coins 13 For both the collector and souvenir buyer, its most evident with the Millennium 1999 was always going to be a milestone Masterpiece Collection, a collection of year with the approach of a new millennium twenty-four coins from around the world

and the issue of the first 2000-dated coins. and in which each coin portrayed a feature Review of the Year At the beginning of the year the interest unique to its country of origin. Kiribati and in coins bearing the 1999 date was quickly Samoa, for instance, combined to issue a evidenced by sales of the annual proof and two-part coin since their location either brilliant uncirculated sets. Centrepiece of the side of the international date line meant proof set was the Diana, Princess of Wales that they were the first and the last to commemorative coin which, understandably, welcome the millennium. The New Zealand enhanced sales by appealing to those coin, with a part-plated design feature, members of the public who wished to tested printing and plating techniques, acquire an appropriate tribute to the late while nearer to home Guernsey issued two Princess. A brilliant uncirculated version of coins, a collar and a nugget, that fitted the crown, housed in a special presentation together to become one. The collection not folder, was well received in all markets, only challenged existing processes and while special gold and silver limited editions required new processes to be developed, it attracted worldwide interest, notably in the also offered collectors a truly unusual series Far East and especially in Japan. The 7,500 of coins and they have responded well issue limit of the gold version was very since the initial launch in September 1999. quickly fully subscribed. Additional evidence of the Royal Mint’s During the summer, as Wales prepared readiness to embrace new technology was to play host to the Rugby World Cup, came provided by the silver piedfort version of the issue of a special two-pound coin - the the Rugby World Cup two-pound coin. Here, third to mark a sporting occasion following for the first time in the history of the United the Commonwealth Games in Scotland in Kingdom coinage, the central feature of the 1986 and, more recently, the 1996 European reverse design was reproduced in the form Football Championship hosted by England. of a hologram. This ground-breaking coin, The innovative hologram was an attractive feature of the As on these previous occasions, although with an issue limit of 10,000, was heavily silver piedfortversion of the there was some interest overseas, the over-subscribed within days of being made Rugby World Cup £2 coin. (Allsport - Dave Rogers) domestic market was the prime target, with available to Royal Mint Coin Club Members. the innovative souvenir pack containing the coin struck to brilliant uncirculated Markets standard attracting the greatest interest. The diversity of the product range led to Finally, to celebrate the new millennium strong demand throughout all markets, with a special United Kingdom crown was the Coin Club handling record volumes as authorised bearing, on the reverse, a design orders in the domestic market increased by Jeffery Matthews of a symbolic clock from 234,000 to 275,000. Membership of face with the hands set at the twelve o’clock the Coin Club in the United Kingdom position between the dates 1999 and 2000. increased by 30 per cent, while in the United Demand for the coin was strong, particularly States membership more than doubled, as the new millennium drew closer. reflecting the success of customer acquisition programmes built around the new coins Technical Innovation issued in 1999. The challenge for the The millennium provided the opportunity immediate future is to ensure that these to demonstrate that the Royal Mint is at the new customers are converted into repeat forefront of minting technology. This was at purchasers, and initial signs are encouraging. 1999-2000

14 Following last year’s success of the website robust control systems and flexible working (www.royalmint.com) a web specialist was arrangements, it is expected that many of recruited to improve control and to speed the problems experienced will be resolved development. During the year the site was during the coming year.

Review Review of the Year significantly improved both in terms of its One of the major developments in content and its ease of use, and visitors and improving customer service is the project, numbers of sales have increased significantly now well under way, to develop a modern over the last year. Without advertising, the integrated planning and scheduling system. site is now attracting some 20,000 visits per Sales order processing and master tools month and has been recognised as a key planning were introduced during the year expanding market. It is therefore planned to and further implementations are intended develop the site further and to test advertising. which will progressively improve A new market was created by the sale at responsiveness to customer requirements. the Millennium Dome in Greenwich of The system has already improved stock millennium crowns struck by the coining accuracy and enabled stock levels to be press which has been installed there. A lowered. special globe mintmark on the reverse signifies that the coin was actually struck Developing Partnerships by the press, and its attraction for collectors and Products and souvenir buyers alike is enhanced by During the year existing partnerships the fact that it is the only commemorative continued to be strengthened, including product to be manufactured at the Dome. joint ventures with Debden Security Printing Sales of the special coin pack have grown in the issue of special coin and banknote steadily and it now ranks as one of the sets to mark the millennium, and also with Dome’s best-selling items. the British Philatelic Bureau in a number of The marketing of United Kingdom coin coin and stamp first-day covers, culminating sets through Post Office Counters branches in the very successful millennium issue at has developed well, the network of offices the turn of the year. Associations with new now stocking Mint products having increased companies have also been developed as the by 30 per cent. With so many individual product portfolio has extended into more outlets, there is a corresponding logistical diverse areas. challenge to provide a regular supply to Several projects were undertaken to Pages from the upgraded each branch. generate interest outside as well as inside Royal Mintwebsite the coin collecting world and were (www.royalmint.com). Customer Service successfully completed. Items produced Success, indeed, is not without its problems. and sold included a hip flask incorporating With order levels of all products, including a Rugby World Cup two-pound coin, an the wider product portfolio, exceeding Edinburgh Crystal clock combined with a forecasts, additional pressure for packaging millennium crown, and a Wedgwood plate and special products was put on the Royal featuring Philip Nathan’s standing Britannia Mint’s suppliers, whose other customers had design. These novel items proved very also become more demanding. This resulted popular and, somewhat perversely, demand in a shortfall of packaging material and, in exceeded supply to the extent that their consequence, a disappointing reduction in success contributed to the decline in service levels from 94 per cent of orders achieving customer service targets. New fulfilled within the delivery promise last jewellery pieces were also offered during year to 68 per cent this year. Valuable the year featuring, for the first time, an lessons have been learned and, with more overseas coin - a tiny one thirtieth of an Waterloo Salver,developed ChristopherLawrence. h ihysuccessful highly The in collaborationwithin Battle ofWaterloo. Around theedgeof medal commissionedtocommemoratethe Pistrucci’s beautifulreverse designforthe electrotype reproduction ofBenedetto Salver. Atthecentre ofthesalverisan most spectacularproduct yet,theWaterloo production andsell-outofarguably the Christopher Lawrence continuedwiththe necklace andabracelet. which wassuccessfullyoffered ina ounce goldcoinfrom theCookIslands- The relationship withthesilversmith the future. will bedevotedtodevelopingthisarea in Mint’s operatingremit, additionalresources and giventhedecisiontoextendRoyal magnificently, alsoingold. The salverwasavailableinsilverand, Lion, whichstandsoverlookingthebattlefield. the DukeofWellington andtheWaterloo linked bydelicatetracery, are theArmsof salver, and intervals flutedatalternate Following thesuccessoftheseproducts, 15 Review of the Year 1999-2000 People 1999-2000

16 Employee Relations equivalent employees as at 31 March 2000 During 1999-2000 further progress was was 1126, also a significant increase over the made in the practical implementation of figure of 1030 a year earlier. These increases the concept of partnership in the Mint’s reflect the completion of recruitment for the

Review Review of the Year employee relations, building on the package new shift patterns (and concomitant reduction of reforms negotiated and introduced in in levels of overtime working in the

Roger Holmes 1998-99. Circulation Coin Business) together with Deputy Master and Comptroller (Chief Executive) In 1999 a two-year partnership agreement the extra labour required for the successful was reached between management and the Collector Coin sales promotions over the AEEU on behalf of the industrial workforce, Millennium period. The end-year employment EXECUTIVE DIRECTORS which incorporated both a linkage of an figure included ninety-one casuals, reflecting element of pay to improved customer the need for flexibility in response to satisfaction and the introduction of the seasonal and other variations in workload. concept of assessment and appraisal of employee performance for industrial Recruitment/Retention employees. The Mint’s management team was Significant progress has been achieved significantly strengthened during the year Keith Cottrell towards harmonisation between industrial by a combination of successful recruitment Director of Sales and non-industrial employees. Local from the private sector and internal representatives and full-time officers of reorganisation. As regards specialist functions, the AEEU, IPMS and PCS have jointly the work of the last few years has addressed participated with management in the the turnover problems suffered in critical Project Team and Steering Group, which craft and technician areas in the past, but over the last nine months have developed Y2K pressures on key IT skills have not a unified broad band job structure eased to the extent which would see this Allan Pearce Graham Davies area of concern resolved. Director of Human Resources Director of Finance incorporating all of what were previously and Corporate Affairs industrial and non-industrial jobs. A joint Another busy year saw forty external exercise to share the work undertaken with recruitment programmes and 103 all employees via a major briefing and appointments. Nevertheless the target of feedback programme has been planned. an average four-week lead-time between agreeing a job description for recruitment Numbers Employed and offering an appointment was achieved. The average number of employees reached The Internet was successfully used for

Alan Wallace Geoff Payne 1084 for 1999-2000, compared with 994 advertising job vacancies for the first time. Director of Collector Coin Director of Engineering Services in 1998-99. The total number of full-time All appointments are made on merit and on the basis of fair and open competition. Band of Post Candidates Recruited This is ensured by the Mint’s human Male Female Ethnic Origin Disabled resources systems, which conform to Non-industrial Band C 2 - 1 German - 2 Male (1 German) statutory requirements and are audited by Band D 3 - - - 3 Male the Civil Service Commission. Band F 2 - - - 2 Male Band G 2 4 - - 2 Male / 2 Female Band H 3 - - - 3 Male Development and Training Band J 2 3 - - 2 Female Building competitive advantage through Band K 4 16 1 Indian - 2 Male (1 Indian) 10 Female people remains at the core of the Mint’s Industrial plans. Investor in People status, first achieved Semi Skilled 10 6 - - 6 Male / 4 Female in 1996, was successfully retained after an Mint Skilled 61 13 - - 49 Male / 8 Female external appraisal in 1999. A high level of Craft 10 - - - 8 Male commitment to training was maintained. 1999-2000

NON-EXECUTIVE DIRECTORS Overall, the average number of training Succession planning during the next 17 days per employee (including on-the-job three to five years will form a significant training) rose to 14.2, compared with 12.4 element of the Development and Training last year and the Mint’s minimum Plan. Individuals are being identified and

commitment of 5 per year. development put in place to ensure via Review of the Year The Mint’s Corporate Plan calls for a better planning that the Mint does not multi-skilled and flexible workforce that lose key skills or suffer skills degradation,

Gisela Burg CBE can respond to the changing demands of taking account of an employee age profile its international customers. The ability of indicating a large number of retirements the Mint’s workforce to respond to fully over the next five to ten years. The Mint competitive levels of service and quality has maintained its policy of taking on six and the right first time initiative, introduced people for multi-skilled apprenticeships in Circulating Coin, is underpinned by each year. the Development and Training Plans for 2000-2001. Communication and Involvement Sidney Taylor Lyndon Haddon A number of milestones have been The Mint has reinforced its commitment reached during the last year contributing to to direct communication with employees, the change in culture the Mint requires for briefing the strategic plans for each of its the twenty-first century. businesses, updating employees every month Craftsmen from Production departments on key results and distributing Mint Condition across the Mint have qualified and been our monthly internal employee newsletter. assessed as competent in a range of The Mint’s collaborative programme of

Jan Smith David Stark multi-skill tasks from outside their core research with Bath University, surveying discipline. This will lead to greater employee attitudes and perceptions whilst flexibility, help to reduce downtime and the major change programmes unfold, has hence increase productivity. been completed and has produced some Team leaders from both Circulating Coin interesting findings. For example, whilst and Collector Coin have all attended 65% of employees surveyed felt they were A Royal Mintcraftsman (left) Development Centres, and personal working harder, 88% said they enjoyed receiving congratulations development plans for these key employees working as hard as they do. Feedback from on achieving full multi- skilling accreditation. are currently being implemented. the research has helped to improve and refine the management of change and has strengthened the emphasis on better communications at all levels. The 17% reduction in sickness absence which the Mint achieved compared with the previous year bears testimony not only to a pro-active employee welfare function but also to the positive impact of teamworking and greater employee involvement. It reflects, too, the commendable desire of employees to contribute to the recovery of the Mint’s business results.

The year’s activities reflected the great interest in the millennium. As well as the issue of commemorative coins and a Royal Mintpresence in the Millennium Dome, souvenir medals were very popular. This was especially the case with schools, witnessed here by four fortunate recipients at Netherton Infants and Nursery School. (Huddersfield Daily Examiner) Medals 1999-2000

20 Official Medals Demand for mounted medals for the armed The design was obtained as a result of a services continued at the reduced level of public competition promoted and organised last year. with the enthusiastic co-operation of the

Review Review of the Year Two new medals, however, were struck British Art Medal Society. From the hundreds for the Volunteer Reserves. The first of these, of entries the distinguished panel of judges the Volunteer Reserves Service Medal, selected the designs by Felicity Powell, rationalises and replaces five existing long with those submitted by Dhruva Mistry as service awards and follows the traditional runner-up. The winning designs appeared oval shape of these medals. The second first on a bronze medal at 63 millimetres, medal, the Queen’s Volunteer Reserves and this quickly reached its issue limit of Medal, is an entirely new award for 1000. A reduced-size version was then meritorious service and is to be issued in offered to schools and other organisations, extremely limited numbers. with the option of combining the dandelion It was agreed that the reverse designs obverse with a customised design on the should take the form of an inscription and other side, and proved especially popular Mrs Caroline Webb, an artist specialising in with schools. Well over 200 orders have lettering, was accordingly invited to prepare already been received, totalling nearly drawings. These were discussed with 100,000 medals, and these figures are still representatives of the Ministry of Defence growing as orders continue to arrive. and the Cabinet Office before being submitted An additional version, made in much to the Royal Mint Advisory Committee smaller size in silver, has been prepared for Rugby World Cup commemorative medal. and, from the designs subsequently sale in the form of a necklace, while recommended by the Committee, models Dhruva Mistry’s second-placed designs are

Felicity Powell’s winning were prepared under Mrs Webb’s supervision now available as a cast medal in bronze. designs for the Millennium by a member of the Royal Mint Engraving Medal, with (below) the Commercial Medals second-placed designs Department. Both medals have now been by Dhruva Mistry. struck and issued. Medals continued to be supplied for commercial customers and other clients, Millennium Medals often with the most pressing of deadlines The millennium provided a welcome and for completion. Particularly noteworthy unexpectedly large increase in the demand were the medals struck for the opening of for commemorative medals, with the Royal the Scottish Parliament, those presented to Mint’s efforts centred around Felicity Powell’s players in the Rugby World Cup Final, and charmingly simple but highly appropriate those given to guests at the opening night dandelion design. ceremonies at the Millennium Dome. The Royal Mint centenary medal series, which each year since the late 1980s has commemorated a prominent centenary of one kind or another, was thought to have run its course and has been discontinued. It will be replaced by other medal projects and, in the light of the success enjoyed by the millennium medal, the Royal Mint hopes that, with the right subject and with attractive designs, the commercial future for medals may be bright. Royal Mint Advisory Committee, 1999-2000 1999-2000

The Committee, which operates truly remarkable period of service. 21 independently of the Royal Mint and To acknowledge his outstanding whose full title is the Royal Mint Advisory contribution a special lunch was arranged Committee on the Design of Coins, Medals, to follow the meeting of the Committee at

Seals and Decorations, was established in St James’s Palace on 24 November. In the Review of the Year 1922 with the personal approval of King presence of invited guests, who included George V. Its original purpose was to raise no fewer than seven ex-Chancellors of the the standard of numismatic art and this Exchequer as well as former members of remains its primary concern, being charged the Committee, the Rt Hon Gordon Brown, on behalf of the Chancellor of the MP, Chancellor of the Exchequer, publicly Exchequer as Master of the Mint with the thanked His Royal Highness for his wise examination of all new designs for United counsel and leadership over such an Kingdom coins and official medals. extended period. At the conclusion of the lunch the longest Retirement of the President serving member of the Committee, Mr The year was marked by the retirement of His John Porteous, eloquently acknowledged Royal Highness The Prince Philip, Duke of the debt that members felt to His Royal Edinburgh, as President of the Committee. Highness, emphasising that he had been His Royal Highness had been appointed the captain and not merely the figurehead. to the specially created post of President as He spoke, too, of the zest and humour that long ago as 1952, shortly after the accession had enlivened meetings and of the of Her Majesty The Queen. He attended his encouragement to respond to imaginative first meeting on 21 March 1952 and was at ideas and to innovation. On behalf of the once fully involved in the important task of Royal Mint he then presented His Royal selecting designs for the coins of the new Highness with a sculpture by the Mint reign. Since then His Royal Highness has engraver Robert Evans featuring the portrait been present at all but four of the regular of His Royal Highness and reproductions meetings of the Committee, dealing of some of the coins designed during his with subjects that have ranged from Presidency. new circulating coins to official medals, from commemorative coins Meetings to government seals. Probably the The lunch in honour of His Royal Highness greatest demands were placed on had been preceded earlier that morning by His Royal Highness at the time of the Committee’s first formal meeting of the decimalisation, when he skilfully guided year and the last to be held with His Royal A medal by the late John Lobban, the Committee towards the adoption of the Highness in the chair. Miss Rosalind Savill prepared for the seventieth anniversary of the Advisory Committee in 1992, series of reverse designs still in use today. and Sir Peter Michael attended for the first provided the theme for the lunch at Throughout these many years His Royal time since their appointment in March 1999. StJames’s Palace on 24 November. Highness presided over the Committee with At this meeting the Committee considered good humour and tact, proving himself an how best to proceed with the preparation of enormously effective chairman in securing designs for two new commemorative coins consensus among the conflicting aesthetic for 2001, one a crown marking the centenary judgements of members as distinguished as of the death of Queen Victoria and the end of Lord Clark and Dame Elisabeth Frink, Sir the Victorian era and the other a two-pound John Betjeman and Sir Hugh Casson. It coin celebrating the first long-distance was therefore with great sadness that the wireless transmission by Marconi. In both Committee learned of the wish of His Royal cases the Committee decided on a very Highness to retire and to bring to an end a limited competition involving in each

1999-2000

instance no more than three artists, who competition involving eight experienced 23 would be offered a higher than usual fee to portrait sculptors, produced the pleasing submit drawings in the hope that this, along combination from a stylistic point of view with a fuller briefing, would encourage of an obverse and reverse designed by the

them to devote more time for research and same artist, the current coinage portrait of Review of the Year the generation of ideas. On the basis of Her Majesty The Queen being also the portfolios previously submitted by a number work of Mr Rank-Broadley. of artists, the Committee then selected those who were to be approached for designs and Membership agreed that in each case an invitation to The Chancellor of the Exchequer has compete could be extended to a member of announced that, as a tribute to the special the Royal Mint Engraving Department. contribution made by His Royal Highness, The drawings received from these artists a successor will not be sought for the post were examined when the Committee next met of President. Instead a Chairman will be on 30 March 2000, assembling at Goldsmiths’ appointed for a fixed term, with the Deputy Hall under the acting chairmanship of the Master acting in the interim as Chairman, a Deputy Master. The Committee selected a title he has always held though in practice design for the Victorian memorial crown conceding the chair to His Royal Highness. for recommendation to the Chancellor of One new member joined the Committee the Exchequer and this design is currently during the year, when, in February, the being modelled by the artist. For the Rt Hon Lord Camoys GCVO, the Lord Marconi two-pound coin the Committee Chamberlain, was appointed by Her reduced the entries to a short list of three Majesty The Queen on the recommendation and reaffirmed the decision that it had of the Chancellor of the Exchequer. made at the previous meeting to put these designs out for public consultation before MEMBERSHIP making a final recommendation. This OF THE COMMITTEE consultation process is still under way, (with date of appointment) having been launched after the year end. Mr Roger Holmes (Deputy Master of the Royal Mint As well as these two formal meetings, and ex officio Chairman) urgency required the reverse design for a January 1993 fifty pence piece commemorating the 150th Mr John Porteous, OBE July 1968 Mr Michael Harvey February 1991, anniversary of the Public Libraries Act of re-appointed January 1998 1850 to be dealt with by post. Designs were Mrs Philomena Davidson Davis March 1994 invited from three artists and from these Mr Mark Jones March 1994 designs a majority of the Committee Mr Peter Gwynn-Jones, CVO January 1996 favoured a drawing submitted by Mary Mr Stuart Devlin, AO, CMG January 1998 Miss Katharine Eustace January 1998 Milner Dickens showing the façade of a Sir Peter Michael, CBE March 1999 classical library building surmounted by Miss Rosalind Savill, CBE March 1999 the turning pages of a book. This design The Rt Hon Lord Camoys, GCVO February 2000 subsequently received royal approval. In addition, the Committee’s consideration of designs for the reverse of a crown piece to celebrate the Queen Mother’s centenary year was completed with the formal Photographs taken at St James’s Palace on 24 November, including approval of a model by the sculptor Ian one of the Advisory Committee at Rank-Broadley, FRBS, FSNAD. This the start of the last meeting to be attended by His Royal Highness. outcome, achieved as a result of a limited 24 Royal Mint Trading Fund 1999-2000 iaca n eea Reports General and Financial ()tomanagethefundedoperations so ‘(a) fund theduty: lays upontheMinisterresponsible structure specifictotheRoyalMint. employees haveaperformancerelated pay during 1998-99,whilenon-industrial have beenintroduced forindustrialemployees andpaystructures Revised workingpatterns prescribed fortheCivilService. of service andare subjecttoconditions civil servants Deputy MasterandComptroller. Accounting Officer oftheRoyalMintis of theExchequer. TheChief of thebusinessactivity. collector coinsrepresent animportantpart customers. Theproduction andsaleof and diesforbothofficial andcommercial overseas countries,itprovides seals,medals coinage fortheUnitedKingdomand In additiontoproducing circulating coins tocountriesthroughout theworld. reputation forqualityandtodayexports 1988. February announced bythethenPrimeMinisterin Executive Agencyundertheinitiative manufacture orsupply. incidental orconducivetosuch seals andsimilararticlesanyoperation manufacture andsupplyofcoins,medals, provided forunderthisorder are the 1973. TheoperationsoftheRoyalMint Tradingunder theGovernment FundsAct 1975No.501)made Fund Order 1975(S.I. accordance withtheRoyalMintTrading Trading Fundsince1April1975in The RoyalMinthasbeenoperatingasa Introduction The Government TradingThe Government FundsAct Objective Financial another, tomeetoutgoings than sufficient, takingone that therevenue ofthe fundisnot less The employeesoftheRoyalMintare The MasteroftheMintis The RoyalMinthasbuiltupahigh On 1April1990theMintbecamean Executive and which are year with for each Chancellor 1973 Royal Mintfortheperiodfrom 1April2000. objective desirableofachievementbythe yet todetermineanyfurtherfinancial (b) toachievesuchfurtherfinancial incurred intheyear. and £0.168milliontransferred toreserves. the ConsolidatedFundon30June2000 cost and0.4%ontotalsalesvalue. average netassetsatmodifiedhistorical r a million, representing profit fortheyearbefore £52.1 million(54%)tooverseascustomers. Sales intheyearof£95.6millioninclude Review Financial prices andforeign currency. are from movementsincommoditymetal operations. Themainrisks,asinthepast, market risksthatarisefrom itsbusiness instruments tomanageitsexposure to policy andusesvarioustypesoffinancial The RoyalMintoperatesaprudenthedging instruments financial Derivative The ChancelloroftheExchequerhas be desirableofachievement.’ Minister (withTreasury concurrence) to been determinedbytheresponsible House ofCommons,indicateashaving time totime,byminutelaidbefore the objectives astheTreasury mayfrom account; and properly chargeable torevenue Capital expenditure of£6.1millionwas A dividendof£0.5millionwaspaidto The modifiedhistoricalcostoperating Royal Mintseeks tohedgeitsexposure contract ororder isaccepted.The basis ofthemarketpricesat date a selling pricesisdeterminedonthe are volatile.Themetal elementof Exchange andwhoseprices,therefore, which are tradedontheLondonMetal Mint’s rawmaterialsconsists ofmetals A significantproportion oftheRoyal prices Metal eturn of0.5%on eturn interest was£0.3 disruption or malfunction since the turn of disruption ormalfunction sincetheturn The RoyalMinthasexperienced no General commitments (see‘Metalprices’ above). other metalstocksare inrespect ofsales liability isincludedintradecreditors. All reflected instockandthecorresponding capital ofgoldandsilver. Theloansare to financetheRoyalMint’s working addition, precious metalloansare used L.M.E. pricesat31March 2000.In is includedatavaluationbasedonthe base stockofcopperandnickelwhich The RoyalMint’s metal stocksincludea stocks Metal transactions andcashflows. fluctuations inexchangeratesonfuture policy istominimisetheeffect of options. Theobjectiveofthehedging contracts andpurchased currency future tradingcashflowsusingforward The RoyalMinthedgesitsexpected exchange Foreign to marketfluctuationsinmetalprices. its financialperformanceisnotexposed Mint’s objectivethat,asfarpossible, managed inorder toachievetheRoyal directors andtheforward coveris taken isdeterminedbytheexecutive and cashflows.Thelevelofcover in metalpricesonfuture transactions minimising theimpactoffluctuations metal loanswiththeobjectiveof using forward contractsorprecious activities, appropriate hedgesare secured Royal Mint’s marketingandpromotions manufactured forsalethrough the movements inmetalprices. performance shouldnotbeaffected by policy isthattheRoyalMint’s financial selling price.Theobjectiveofthis acquire themetalatcommitted prices bysecuringforward contractsto to subsequentmovementsinmetal Similarly, where collectorcoinsare 1973, itwasestablished thirty daysortheagreed period. 91% ofinvoiceswere paidwithineither with theBetterPaymentPracticeCode. computer hardware andsoftware systems. our ongoingprogramme ofupgradingour not significantandwassubsumedwithin to ourcomputerhardware andsoftware was 1998 and1999. hardware andsoftware carriedoutduring modifications toorreplacement ofsuspect the analysisofrisksandconsequential systems andequipmentisattributableto reliant computerchips. system orequipmentwithembeddeddate- the yeararisingfrom itsowncomputer Report whichincludestheauditedaccounts. employee receives acopyoftheAnnual meetings involvingallemployees.Each a monthlynewsletterandregular feedback programme andincludetheissueof integral elementoftheTotal Quality 31 March 2000was1126. disability buttheirexperienceandskills. in mindnotonlytheirhandicapor there are jobswhichtheycando,bearing to continuetheiremployment,provided employees becomedisabledweendeavour aptitudes andabilitiesallow. Where training disabledpersons,wherever respects. and Edinburgh inall were satisfactory Offices inLondon,Birmingham,Sheffield ofthefourAssay methods and procedures 3 July2000 Accounting Officer Holmes Roger nacrac ihteHlmrigAct In accordance withtheHallmarking The policyofpayingcreditors complied The totalcosttocompletemodifications The lackofdisruptionfrom itsown Employee communicationsare an The numberofpeopleemployedat and The policycontinuedofemploying that theassay their 25 Royal Mint Trading Fund 1999-2000 26 Royal Mint Trading Fund 1999-2000 procedures includingthesegregation ofduties,andasystemdelegationaccountability. Inparticular, itincludes: period. and properly recorded, andthatmaterialerrors orirregularities are eitherprevented orwouldbedetectedwithinatimely maintained andoperatedbytheRoyalMint. As AccountingOfficer, Iacknowledgemyresponsibility for ensuringthataneffective financialcontrol systemofinternal is control financial internal of system the on Statement Corporategovernance - profit, totalrecognised gainsandlossescashflowsforthefinancialyear. are prepared onanaccrualsbasisandmustgiveatruefairviewoftheAgency’s stateofaffairs attheyear-end andofit statement ofaccountsforeachfinancialyearintheformandonbasissetoutdirection. Theaccounts TradingUnder section4(6)oftheGovernment FundsAct1973theTreasury havedirected theRoyalMinttoprepare a Responsibilities AccountingOfficer’s and TradingFund’s of Statement in accordance withguidancetobeissued bythem. comply withtheTreasury’s requirement control forastatementofinternal tobeprepared fortheyearended31March 2002, As AccountingOfficer, Iamaware oftherecommendations oftheTurnbull CommitteeandIamtakingreasonable stepsto auditor.the AuditCommitteewhichoverseestheirwork,andcomments madebytheexternal responsibility forthedevelopmentandmaintenanceoffinancial control framework,theworkofPricewaterhouseCoopers, twice ayear)andare reported totheFinance Director andmyself. They undertaketwoauditvisitsperannumandtheresults oftheauditsare presented totheAuditCommittee(whomeet by theTreasury andpublishedin which heisanswerableandforthekeepingofproper records, are setoutintheAccountingOfficers’ Memorandum,issued responsibilities asAccountingOfficer, includinghisresponsibility forthepropriety andregularity ofthepublicfinancesfor The system of internal financialcontrolThe systemofinternal isbasedonaframeworkofregular managementinformation,administrative The systemcanprovide onlyreasonable andnotabsoluteassurancethatassetsare safeguarded, transactionsauthorised In preparing theaccountsAgencyisrequired to: make judgementsandestimatesonareasonable basis; and applysuitableaccountingpoliciesonaconsistentbasis; theaccountsdirection issuedbytheTreasury,observe includingtherelevant accountinganddisclosure requirements, PricewaterhouseCoopers undertakeareview onanannualbasisoftheRoyalMint’s financialcontrol. systemofinternal as appropriate, formalproject managementdisciplines. clearly definedcapitalinvestmentcontrol guidelines setting targets tomeasure financialandotherperformance against theforecasts regular reviews bytheExecutiveBoard ofperiodicandannualfinancialreports whichindicatefinancialperformance comprehensive budgetingsystemswithanannualbudgetwhichisreviewed andagreed bytheExecutiveBoard The Treasury hasappointedtheChiefExecutiveofRoyalMintasAccountingOfficer fortheAgency. Hisrelevant continue inoperation. prepare basis,unlessitisinappropriate thefinancialstatementsongoingconcern topresume thattheAgencywill in thefinancialstatements; state whetherapplicableaccountingstandards havebeenfollowed,andtodiscloseexplainanymaterialdepartures My review oftheeffectiveness financialcontrol ofthesystem internal isinformedbytheexecutivemanagerswhohave Government Accounting Government . Accounting Officer Roger Holmes Roger 3 July2000 s The Certificate and Report of the Comptroller and

Auditor General to the Houses of Parliament 1999-2000

I certify that I have audited the financial statements on pages 28 to 36 under the Government Trading Funds Act 1973. 27 These financial statements have been prepared under the historical cost convention as modified by the revaluation of certain fixed assets and stocks and the accounting policies set out on page 32.

Respective responsibilities of the Royal Mint, the Chief Executive and Auditor As described on page 26, the Royal Mint and Chief Executive are responsible for the preparation of the financial statements and for ensuring the regularity of financial transactions. The Royal Mint and Chief Executive are also responsible for the Royal Mint Trading Fund preparation of the other contents of the Annual Report. My responsibilities, as independent auditor, are established by statute and guided by the Auditing Practices Board and the auditing profession’s ethical guidance. I report my opinion as to whether the financial statements give a true and a fair view and are properly prepared in accordance with the Government Trading Funds Act 1973 and Treasury directions made thereunder, and whether in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. I also report if, in my opinion, the Foreword is not consistent with the financial statements, if the Royal Mint has not kept proper accounting records, or if I have not received all the information and explanations I require for my audit. I read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. I consider the implications for my certificate if I become aware of any apparent misstatements or material inconsistencies with the financial statements. I review whether the statement on page 26 reflects the Royal Mint’s compliance with Treasury’s guidance ‘Corporate governance: statement on the system of internal financial control’. I report if it does not meet the requirements specified by Treasury, or if the statement is misleading or inconsistent with other information I am aware of from my audit of the financial statements.

Basis of Opinion I conducted my audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts, disclosures and regularity of financial transactions included in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Royal Mint and Chief Executive in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Royal Mint’s circumstances, consistently applied and adequately disclosed. I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by error, or by fraud or other irregularity and that, in all material respects, the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. In forming my opinion I have also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion In my opinion: the financial statements give a true and fair view of the state of affairs of the Royal Mint at 31 March 2000 and of the profit, total recognised gains and losses and cash flows for the year then ended and have been properly prepared in accordance with the Government Trading Funds Act 1973 and directions made thereunder by the Treasury; and

in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. I have no observations to make on these financial statements.

John Bourn National Audit Office Comptroller and Auditor General 157-197 Buckingham Palace Road 6 July 2000 Victoria, London SW1W 9SP Operating Account for the year ended 31 March 2000 1999-2000

28 Notes 1999-2000 1998-99 £’000 £’000 £’000 TURNOVER 2 95,573 91,357 Change in stocks of finished goods and work in progress (3,043) (948)

Royal Mint Trading Fund Own work capitalised 120 248 Other operating income 129 243 Raw materials and consumables (39,950) (31,083) Other external charges (7,022) (12,522) Staff costs 4 (27,915) (24,288) Depreciation and other amounts written off tangible fixed assets 6 (4,259) (3,498) Other operating charges (13,288) (13,688) (95,228) (85,536)

OPERATING PROFIT 3 345 5,821 INTEREST RECEIVABLE AND SIMILAR INCOME 460 595 INTEREST PAYABLE AND SIMILAR CHARGES 5 (137) (127) PROFIT FOR THE YEAR 668 6,289 DIVIDEND PAYABLE TO THE CONSOLIDATED FUND (500) - RETAINED PROFIT FOR THE YEAR 168 6,289

No activities have been discontinued during the year.

The notes on pages 32 to 36 form part of the modified historical cost accounts. rfi o h er186,289 168 6,473 1,016 3,460 2,712 (393) (439) 488 92 HISTORICAL COSTPROFITSANDLOSSES Total recognised gainsandlossesrelating totheyear Unrealised surplus/(deficit)onrevaluation ofuncommittedmetal Unrealised surplus/(deficit)onrevaluation ofplantandmachinery Unrealised surplusonrevaluation ofproperty Profit fortheyear STATEMENT OFTOTAL RECOGNISEDGAINSANDLOSSES sa 1Mrh20 ,0 ,9 70970,130 57,039 6,091 66,670 7,000 56,678 238 2,992 6,527 The notesonpages32to36formpartofthemodifiedhistoricalcostaccounts. 7,000 193 361 As at31March 6,289 2000 168 Movements intheyear: As at1April1999 MOVEMENTS INCAPITAL ANDRESERVES Funds) (Government Historical costprofit fortheyear on therevalued amount and theactualdepreciation charge fortheyearcalculated Difference betweenthehistoricalcostdepreciation charge Reported profit fortheyear rfi o h er--18168 168 - - 193 - (193) - Reclassification ofdistributablereserves Profit fortheyear Revaluations tcs-48-488 - 2,804 - 488 2,804 - - Stocks Fixed Assets iiedRvlainandLoss Revaluation Dividend aia eev con Total Account Reserve Capital ulcProfit Public ’0 ’0 ’0 £’000 £’000 £’000 £’000 9920 1998-99 1999-2000 1998-99 1999-2000 ’0 £’000 £’000 £’000 £’000 29 Royal Mint Trading Fund 1999-2000 30 Royal Mint Trading Fund 1999-2000 mut aln u ihnoeya 3,3)(34,506) (39,134) ASSETS CURRENT NET Amounts fallingduewithinoneyear CREDITORS ASSETS CURRENT ASSETS FIXED mut aln u fe n er835290 315 The notesonpages32to36formpartofthemodifiedhistoricalcostaccounts. 8 RESERVES AND CAPITAL Amounts fallingdueafteroneyear CREDITORS BY: FINANCED LIABILITIES CURRENT LESS ASSETS TOTAL Balance Sheet etr ,5 10,329 43,217 3,458 9,558 44,462 45,818 49,126 5,077 6 Cash atbankandinhand Debtors Stocks Tangible Assets eauto eev ,9 2,992 56,678 7,000 6,091 57,039 7,000 Profit andLossAccount Revaluation Reserve Public dividendcapital as at 31 March2000 31 at as oe 001999 2000 Notes 13922,498 21,319 7 04357,004 60,453 ’0 ’0 £’000 £’000 £’000 04566,960 66,670 70,445 70,130 66,960 70,445 Accounting Officer Roger Holmes Roger 3 July2000 a RECONCILIATION OFOPERATING PROFITWITHTHE (a) INCREASE/(DECREASE) INCASHTHEYEAR FINANCING CASH (OUTFLOW)BEFOREFINANCING MANAGEMENT OFLIQUIDRESOURCES OF LIQUIDRESOURCES CASH (OUTFLOW)BEFOREMANAGEMENT EQUITY DIVIDENDSPAID CAPITAL EXPENDITURE RETURN ONINVESTMENTSANDSERVICING OFFINANCE NET CASHINFLOWFROMOPERATING ACTIVITIES b RECONCILIATION OFNETCASHFLOWTO (b) c ANALYSIS OFNET FUNDS (c) CashFlow Statement L hr emla eevd200- 2,000 12,000 - (153) 627 NET CASHINFLOWFROMOPERATING ACTIVITIES (13,656) (142) (6,536) 437 NLF Shorttermloanreceived Decrease inNationalLoansFundDeposit Purchase oftangiblefixedassets Interest paid Interest received MOVEMENT INNETFUNDS prtn rfi 4 5,821 3,498 345 4,259 Movements in Depreciation charge Operating profit L hr emla 200 - 3,458 (2,000) 3,458 5,077 15,940 3,077 - (12,482) 3,458 (381) (2,000) (482) (12,000) 1,619 NLF Shorttermloan - Cash atBankandinhand Net fundsat31March Net fundsat1April Movement innetfunds Increase inborrowings Cash (outflow)from (decrease) inliquidresources Increase (Decrease) incashtheyear etr 9 (5,327) 4,401 794 (2,113) (693) 2,575 Creditors (excludingdividend) Debtors Stocks for the year ended 31 March2000 31 ended yearthe for oe ’0 £’000 £’000 Notes b ,1 (482) 1,619 (b) a ,6 7,700 5,860 (a) 9920 1998-99 1999-2000 9920 1998-99 1999-2000 1998-99 1999-2000 ,6 7,700 5,860 ,7 3,458 3,077 ’0 £’000 £’000 £’000 £’000 31 (482) (381) (12,482) (381) 9 474 295 (7,000) - 31 Royal Mint Trading Fund 1999-2000 32 Royal Mint Trading Fund 1999-2000 Notes to the Accountsthe to Notes (i) Pension Scheme (h) Insurance (g) Foreign Exchange StocksandWork inProgress (f) (e) Depreciation (d) Tangible FixedAssets Value AddedTax (c) Turnover (b) (a) Basis of Accounting PRINCIPAL ACCOUNTINGPOLICIES 1 Note attributable totheliabilitiesand their discharge. who havebeenemployedinthe fundedoperationsandinrespect oftheadministrative expenses representing accruingliabilities oftheTreasury inrespect ofpensionsandothersimilarbenefits forpersons Payment ismadebytheTrading FundintotheConsolidatedofsuchsumsasmaybe appropriate as The RoyalMintaccountsforinsuranceclaimsasandwhentheyarise. No outsideinsuranceiseffected againstfire, explosion,commonlaw, third party, theftandsimilarrisks. balance sheetdate. currencies notcovered byforward optioncontracts are translatedattherateofexchangeruling contract are translatedattherateofexchangerulingon thedateofconversion.Balancesheldinforeign Revenue andexpenditure incurred inforeign currencies whichare notcovered byaforward option obsolescent, slowmovinganddefectivestocks. appropriate, thecostofconversionfrom itsexistingstatetoafinishedcondition. Provision ismadefor stock canberealised inthenormalcourseofbusinessafterallowingforcostsrealisation and,where London MetalExchangepricesrulingat31March 2000.Netrealisable valueisthepriceatwhich 2 progress lesscommitmentstoandadvancesreceived from customershasbeenrevalued onthebasisof production overheads. Thenetcurrent replacement costofthemetalelementstocksandworkin materially different) andestimatednetrealisable value.Costconsistsofdirect materials,labourand Stocks andworkinprogress are valuedatthelowerofcost(ornetcurrent replacement costwhere 5-10 No depreciation isprovided inrespect ofland. Plant andmachinery Buildings The principalratesusedforthispurposeare: is provided onthevalueoffixedassetsastraightlinebasisovertheirexpectedusefullives. Depreciation charged represents thevaluetobusinessoffixedassetsconsumedinyearand No accountistakenoftheRoyalMintcollectioncoinsandmedalswhichinestimablevalue. are statedattheircostupratedbyindicespublished ii. PlantandMachinery i. LandandBuildingsare statedattheopenmarketcurrent usevaluationor, inthecaseof The valuationisbaseduponthefollowing: Tangible fixedassetsare includedattheirvaluetothebusinessbyreference tocurrent cost. is charged totherelevant or, expenditure category ifappropriate, capitalisedwithadditionstofixedassets. Income andexpenditure are shownnetofrecoverable Value AddedTax. Irrecoverable Value AddedTax Authorities andValue AddedTax. supplied,excludingpaymentstoIssuing This consistsoftheinvoicedpricegoodsandservices Standards Board asfarthoserequirements are appropriate. requirements oftheCompaniesAct1985andaccountingstandards issuedoradoptedbytheAccounting fixed assetsandstocksofuncommittedmetal.Theyconformwiththeaccountingdisclosure The accountsare prepared underthehistoricalcostconventionmodifiedbyrevaluation oftangible by theOffice forNationalStatistics. specialist buildings,depreciated replacement cost. % xctv ietr g ’0 ’0 £’000 £’000 £’000 Age Executive Directors ydnHdo 85-10 5-10 5-10 58 0-5 65 0-5 60 52 Fees(£’000) 60 Age Jan Smith(Appointed 1March 2000) David Stark(Appointed1March 2000) Lyndon Haddon Sidney Taylor Gisela Burg CBE Non-Executive Directors and provision includedintheaccountsforfuture payments. Included inMrGoulden’s isapaymentmadeinlieuofnotice.Hispensionhasbeenenhancedtoage60 salary Mint. Theexpenses(gross oftax)inrespect oftheyearended 31March 2000were £15,552. Mint’s Londonoffice and Llantrisant. Theseexpensesare subjecttoincometaxandtheispaidbyRoyal In additiontheChiefExecutiveisreimbursed histravel andsubsistenceexpensesfortravelbetweentheRoyal Remuneration includessalary, performancepayandallotherbenefits. Gareth Goulden(Retired 31.5.99) Geoff Payne Alan Wallace Graham JDavies 57,643 Allan EPearce 52,129 33,714 Keith RCottrell 43,444 Roger Holmes andpensionentitlementsoftheChiefExecutiveDirectors wereThe salary asfollows. EMPLOYMENT AND REMUNERATION 4 Note Operating profit isstatedaftercharging: PROFIT OPERATING 3 Note Overseas United Kingdom Turnover iswhollyattributabletothemanufacture ofcoinsandsimilararticles. TURNOVER 2 Note ietro niern evcs5 05 -. 20-25 20-25 25-30 15-20 0-2.5 0-2.5 0-2.5 0-2.5 5-10 50-55 20-25 20-25 50-55 50-55 0-2.5 56 0-2.5 54 56 54 60-65 0-5 80-85 51 Director ofCirculating CoinProduction 52 Director ofEngineeringServices 0-2.5 Director ofCollectorCoin 55-60 Director ofFinance 50 Director ofHumanResources andCorporateAffairs Director ofSales Chief Executive ui es6 67 62 84 106 12,438 6,916 Hire ofplantandmachinery Audit fees Sub-contracted workandsemi-processed material eueainicuigRa nraeTotal accrued RealIncrease Remuneration including efrac a npninpension inpension pay performance 9920 1998-99 1999-2000 1998-99 1999-2000 55391,357 95,573 ’0 £’000 £’000 £’000 £’000 0@60 @ 60 33 Royal Mint Trading Fund 1999-2000 34 Royal Mint Trading Fund 1999-2000 t3 ac 00-3,9 35,698 35,698 44,462 31,895 - 49,126 31,069 31,895 33,126 13,393 - 84,824 16,000 Chartered Surveyors. 68,824 PropertyInternational 76,357 cost asatthatdateinthecaseofbuildingsaspecialistnature. Land andbuildingsare statedatopenmarketcurrent usevaluation at31March 2000 ordepreciated replacement 16,000 62,964 Office forNationalStatistics. grossThe hasbeencalculatedonthe basisofindicespublishedbythe current costofplantandmachinery 13,393 Net bookvalueat1April1999 Net bookvalueat31March 2000 127 At 31March 2000 137 At 1April1999 Depreciation: At 31March 2000 At 1April1999 Valuation ASSETS FIXED TANGIBLE Note 6 On loansrepayable withinfiveyears PAYABLEINTEREST Note 5 COSTS STAFF TOTAL 4 Note The totalnumberofpersonsemployedat31March 2000was1,126. EMPLOYED NUMBER AVERAGE ipsl 78 (738) 282 (738) 586 4,259 - (738) 3,955 (304) 3,086 6,119 (738) 304 678 5,920 - 2,408 199 Revaluation Disposals Charge foryear Revaluation Disposals Additions diitain10149 777 68 150 863 71 2,036 1,587 20,665 2,409 1,758 23,748 Administration Sales andMarketing Production Other pensioncosts Social securitycosts Wages andsalaries (continued) Consultants plcinaccordance withtheguidelinesissuedbyRoyal Institutionof reodln Plantand Freehold land n ulig ahnr Total Machinery and Buildings This valuationwasprovided byChesterton ’0 ’0 £’000 £’000 £’000 9920 1998-99 1999-2000 1998-99 1999-2000 1998-99 1999-2000 79524,288 27,915 ,8 994 1,084 ’0 £’000 £’000 £’000 £’000 replacement costofotherstocksandworkinprogress is notsignificantlydifferent from thebalancesheetvalues. million) inrespect£12.146 ofprecious metalheldforthird partiesandreflected in trade creditors. Thecurrent net realisable valueof£3.223millionat31March 2000(1999: £2.735million)and£18.645million(1999: Metal stocksof£28.379million(1999:£20.667million)include abasestockofcopperandnickelwith ASSETS CURRENT NET amountsfallingduewithinoneyear Creditors: Cash 42,462 44,515 30,257 Debtors 32,415 12,205 12,100 Stocks Current assets ASSETS CURRENT NET 7 Note Net bookvalueat1April1999 Net bookvalueat31March 2000 At 31March 2000 If fixedassetshadnotbeenrevalued theywouldhavebeenincludedatthefollowingamounts: 6 Note te rdtr 51 (443) (610) (718) (19,100) - - 7 57,004 (13,635) 3,451 60,453 (541) (26,082) (769) (1,261) 192 (7,981) (2,000) (500) 1 10,055 5,076 82 16,131 Dividend payabletotheConsolidatedFund 20,667 1,162 Accruals anddeferred income 8,000 Taxation andsocialsecurity 2,115 Payments received onaccount Other creditors Trade creditors 396 8,434 ShortTerm Loan 4,304 NLF 28,379 Current Assets 2,225 Cash inhand Cash atbank 6,780 Prepayments andaccruedincome Other debtors Trade debtors Finished goods Stores andpackingmaterials Work inprogress (excludingmetal) Metal stocks ot1,5 76473,441 57,684 15,757 (28,926) (25,269) (3,657) Accumulated Depreciation Cost (continued) reodln Plantand Freehold land n ulig ahnr Total Machinery and Buildings ’0 ’0 £’000 £’000 £’000 ’0 ’0 £’000 £’000 £’000 3,3)(34,506) (39,134) 13922,498 21,319 43,217 45,818 ,7 3,458 5,077 10,329 9,558 001999 2000 35 Royal Mint Trading Fund 1999-2000 36 Royal Mint Trading Fund 1999-2000 omtet nrseto otat ,6 3,142 1,767 11 Note Commitments inrespect ofcontracts APPROVED EXPENDITURE CAPITAL 10 Note enhanced asforwidow(er)pensions. In thiscasepensionsare brought intopaymentimmediatelywithoutactuarialreduction andwithservice andcannotexceed10years.Medicalretirementlength ofservice ispossibleintheeventofseriousill-health. and alsoprovides enhancementoncomputingthespouse’s aservice pension.Theenhancementdependson half themember’s theschemepaysalumpsumbenefitoftwicepensionablepay pension.Ondeathinservice, spouse atarateof payment inlinewiththeRetailPriceIndex.Ondeath,pensionsare payabletothesurviving payable onretirement. Pensionsincrease in Memberspaycontributionsof1.5%pensionableearnings. Inadditionalumpsumequivalentto3years’ pensionis foreachyearofservice. 1/80th ofpensionablesalary which provides basisatanormalretirement benefitsona‘finalsalary’ ageof60.Benefitsaccrue attherateof Pension benefitsare provided scheme through PensionScheme.Thisisastatutory thePrincipalCivilService For 1999-2000theserateswere between12%and18.5%. andadvisedbytheTreasury.Paymaster Generalatratesdeterminedfrom Actuary timetobytheGovernment and 1972subsequentamendmentsapply. For1999-2000contributionsof£2.409millionwere paidtothe towhomtheconditionsofSuperannuationActs1965 All employeesoftheRoyalMintare civilservants COSTS PENSION 9 Note CREDITORS: 8 Note the followingexposures: As explainedintheFinancialandGeneralReportsonpages24 25,theRoyalMint’s policyistohedge Hedges NUMERICAL DISCLOSURESINRESPECTOFDERIVATIVE FINANCIALINSTRUMENTS 12 Note undertaken anytransactionswiththeRoyalMint. During theyearnoneofBoard Members,membersofkeymanagementstaff orotherrelated partieshas ofDefenceandHomeOffice.these transactionshavebeenwiththeMinistry Departments.Mostof In additiontheRoyalMinthashadanumberoftransactionswithotherGovernment with thatDepartment. Treasury isregarded asarelated party.HM Duringthe year, theRoyalMinthashadanumberoftransactions The RoyalMintisanExecutiveAgencyandTrading Fund. RELATED PARTY TRANSACTIONS retired earlyuntiltheyattainnormalpensionableage. Provision hasbeenmadefortheliabilityonTrading Fundtopaythepensionsofemployeeswhohave are allduetomature duringtheyearending31March 2001. (1999: £0.6million).Allofthese contracts are inrespect oftransactions orcommitmentsoftheRoyalMintandthey £17.3 million).Ifthesecontracts were translatedattheyear-end rate,there wouldhavebeenalossof£0.3million The forward exchangecontractswhichwere outstanding at31March 2000amountedto£7.2million(1999: manufacturing process. The metalcontractsrelate entirely tothepurchase ofrawmaterialsforusebytheRoyalMintinits eso omtet 1 290 315 Pension commitments currency risk. metal pricerisk amounts fallingdueafteroneyear ’0 £’000 £’000 ’0 £’000 £’000 001999 2000 001999 2000

Royal Mint, Llantrisant CF72 8YT, United Kingdom