27th Jun 2013 16:49
WS Atkins plc (the "Company" and the "Group") announces that, pursuant to Listing Rule 9.6.1, the following documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do.
- | The Company's Annual Report and Accounts (the "Annual Report") for the year ended 31 March 2013; |
- | Notice of Annual General Meeting (the "Notice of Meeting") to be held on 31 July 2013; |
- | Form of Proxy; and |
- | Notice of Availability for Documents on the Company's Website. |
The Annual Report and Notice of Meeting are also available electronically on the Company's investor relations website at www.atkinsglobal.com/investors.
Pursuant to Disclosure and Transparency Rule 6.3.5, a description of the principal risks and uncertainties, details of related party transactions and a responsibility statement are set out below in full unedited text. Condensed financial statements were appended to the Company's final results announcement issued on 13 June 2013, which also included an indication of important events that occurred during the year.
Page references below refer to page numbers in the Annual Report. References to notes to the financial statements refer to notes in the Annual Report.
PRINCIPAL RISKS AND UNCERTAINTIES
(Pages 40 to 43 of the Annual Report)
STRATEGIC
Risk (in alphabetical order) | Mitigation | Mitigating activities in action |
Economic outlook Continuing and increased government austerity measures impact our trading performance as spending on public sector infrastructure is reduced.
Worsening economic conditions lead to reduced levels of private sector infrastructure spend and adversely impact our clients' ability to pay for our services.
See pages 10-13 of the Annual Report for Our Strategy
|
We have increased our sector and geographic diversification to provide resilience at a time when many of our markets still experience uncertainty. We have a clear strategic priority to focus on sectors which have attractive growth prospects with good levels of funding.
We actively seek to redeploy staff around the Group to meet demand in growth markets and sectors, frequently moving work to people and people to work.
We perform client credit checks and maintain regular management reviews of credit terms, trade debtors and work in progress. |
We have already reshaped our business to target more than 50% of our revenue outside the UK. Our long term goal is to generate more than 75% of revenue from our non-UK and Energy businesses.
We continue to focus on funded markets in targeting growth and evaluating investment opportunities.
We have added resilience to our UK business through its ongoing support to non-UK projects.
See pages 16-19 of the Annual Report for our Business Review - UK |
Financial The deterioration of the Group's financial position limits our ability to invest in growth.
Adverse movements in liability assumptions or asset values result in a significant increase in the Group's defined benefit pension obligations, increasing the cash funding required to repay the deficit and reducing our ability to invest in further growth opportunities.
See Pages 36-39 of the Annual Report for our Business Review - Financial Performance
|
We review the Group's trading and funding position on an ongoing basis.
We have made good progress in implementing our strategy to continue to de-risk our defined benefit pension schemes. We will continue to actively manage the assets and liabilities of our pension schemes. |
In 2012 we announced the successful execution of the Group's debut issue in the US private placement market which has broadened the Group's sources of funding to support future growth.
During the year we completed an Enhanced Transfer Value (ETV) exercise for deferred members of the Atkins Pension Plan to reduce its ongoing liabilities and future volatility.
See Pages 44-49 of the Annual Report for our Human Resources Review |
Geo-political Political instability in the regions within which we operate has a negative impact on our ability to deliver contractual services, receive payment and endangers the safety of our staff.
|
We focus on geographies that have more stable trading environments.
We obtain the latest professional risk and security information before engaging in contracts in new geographies and continue to monitor the stability of the markets in which we trade. |
Our strategy process includes evaluation of the political stability of the regions and territories we operate, or propose to operate in. |
Market Worsening economic conditions lead to changes in contracts resulting in increased risk transfer from clients as competitors accept more onerous contract terms to win work.
Reductions in the amount of available work increase pricing pressure and reduce our operating margins. |
We have robust integrated review procedures, which include peer reviews, during the bidding and contracting stage of our projects.
We have focused our strategy on sectors with strong growth prospects, good levels of funding and high technical barriers to entry.
We have a strategic focus on operational excellence, winning and delivering work. |
We continue to drive operational performance across the Group to improve our margins.
We continue to embed our integrated project review procedures across our management and markets.
Initiatives such as our operational excellence programme, together with the increasing use of our Bangalore and Delhi operations, aim to deliver a competitive cost base.
See Pages 10-13 of the Annual Report for Our Strategy
|
Regulatory/Legal Legislation and regulations restrict our ability to operate in certain locations or perform certain activities leading to the need to exit these markets.
Breaches of regulation or legislation result in fines, imprisonment and reputational damage.
|
We seek ongoing external advice about new and/or changing trading restrictions, communicating these changes across our business.
We continue to invest in staff training and communication. |
Our bid review process reviews regulatory issues as we peer review bids in unfamiliar territories. |
OPERATIONAL
Risk (in alphabetical order) | Mitigation | Mitigating activities in action |
Crisis event A significant one-off event affecting a key business location, project or employees could interrupt service delivery, threaten life and/or cause reputational damage to our business.
|
We have a robust Group crisis management plan in place to respond quickly to such events. |
The robustness of our plan continues to be reviewed, tested and updated. |
Health, safety and environmental Shortcomings in our design or works' supervision result in a health, safety or environmental incident involving staff, clients or other third parties leading to injury, loss of life and/or significant damage to our reputation with all stakeholders.
|
Safety is part of our commitment to quality and reliability. Clear and explicit senior management leadership on health, safety and environmental matters is regularly reinforced via targeted campaigns.
We have implemented our safety standards worldwide.
We mandate accident and near miss reporting and provide a whistleblower hotline to enable staff to raise concerns confidentially.
We continue to invest in staff training and communication about the importance of safety and security in the work place. |
Our worldwide safety awareness programme, Safe by Choice, is just one example of our commitment to creating a leading health and safety culture.
The existence of our whistleblower hotline is communicated across the business with any issues arising from it being reported to the Audit Committee.
See Pages 50-57 of the Annual Report for Corporate Responsibility
|
Physical and data security Confidential client business and personal data is mishandled, resulting in breach of contract, the inappropriate release of commercially sensitive information or the loss of the personal information of our clients and/or employees.
Our business systems suffer an attack from hackers or viruses.
Political instability in the regions within which we operate threatens the safety of our employees.
|
We use appropriate physical security, secure networks and encryption in order to protect data.
We train staff on best practice in information assurance.
The Group security officer seeks to ensure best practice and raise the profile of security across the business.
We obtain independent professional risk and security information for countries we propose to operate in or travel to. |
We continue to provide information assurance training modules for our UK and non-UK based staff. |
Projects Poor management of projects leads to client dissatisfaction, damage to our reputation for technical excellence and a deterioration in the Group's financial performance.
|
We have augmented our Business Management Systems through the introduction of a new online project management system to drive consistently high standards across the Group.
We continue to invest in ongoing project management excellence training programmes for our staff.
We continue to improve project controls which include regular financial reviews of project performance. |
We continue to invest in project management capabilities across the Group (people, processes and systems).
See Pages 44-49 of the Annual Report for our Human Resources Review |
Staff recruitment and retention Failure to attract and retain the most talented, motivated professionals in their respective fields makes us unable to deliver on clients' expectations and respond to the most technically challenging and time critical projects thereby eroding our market share and damaging our financial performance. |
Regular management reports and business reviews evaluate a number of metrics including headcount, retention, vacancy levels and employee engagement.
Regular staff performance appraisals are performed identifying strengths, weaknesses, training needs and career development.
See Pages 44-49 of the Annual Report for our Human Resources Review
|
A new online platform (My Career) is being rolled out to all regions during 2013/14. This will support a consistent approach to staff performance reviews, training, career planning and development.
Engagement is essential in a people based business. We continue to use a variety of channels, including our annual Viewpoint survey, to communicate and engage with our employees. |
Technical delivery Design errors or omissions lead to client dissatisfaction, financial losses, damage to our technical reputation and market position.
|
We have robust review procedures during the bidding and contracting stage to ensure that the Group has the capability to deliver the scope of work.
Ongoing technical training and development is in place.
Network Chairs have been appointed to establish technical centres of excellence across the Group.
The Group has appropriate professional indemnity insurance in place. |
RELATED PARTY TRANSACTIONS
(Pages 158 to 159 of the Annual Report)
Details of the directors' shareholdings, share options and remuneration are given in the Remuneration Report (page 95), which forms part of these Financial Statements.
Transactions with the retirement benefit schemes are shown in note 30.
Details of the Company's principal subsidiaries are shown in note 40 and its principal joint ventures in note 41.
Provision of goods and services to and purchases of goods and services from related parties were made at the rates charged to external customers. The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provision has been made for doubtful debts in respect of amounts owed by related parties and £nil charged to income and expense (2012: £nil).
a) Group sales and purchases of goods and services
Group | ||
2013 £m | 2012 £m | |
Sales of goods and services to joint ventures | 40.0 | 40.5 |
Purchases of goods and services from joint ventures | - | - |
b) Group year end balances arising from sales/purchases of goods and services to/from joint ventures and loans provided to joint ventures
Group | ||
2013 | 2012 | |
£m | £m | |
Receivables from joint ventures (note 24) | 7.3 | 5.2 |
Receivables from joint ventures are shown net of contract-related provisions of £nil (2012: £nil).
Payables to joint ventures | - | - |
c) Group year end balances arising from loans provided to other related parties
Group | ||
2013 | 2012 | |
£m | £m | |
Receivables from related parties (note 22) | 20.0 | 18.2 |
d) Company sales/purchases of goods and services to/from subsidiaries
The Company did not sell any goods or services to subsidiaries during the year (2012: £nil). The Company did not purchase any goods or services from its subsidiaries during the year (2012: £nil).
e) Company year end balances with subsidiaries
Company | ||
2013 | 2012 | |
£m | £m | |
Receivables from subsidiaries (note 24) | 165.2 | 159.9 |
Payables to subsidiaries (note 28) | 82.0 | 84.5 |
Receivables from subsidiaries are shown net of impairment of £0.5m (2012: £9.5m), see note 24.
f) Key management compensation
Key management comprises the executive and non-executive directors, and certain senior managers who are members of the senior leadership team (SLT).
Group | ||
2013 | 2012 | |
£m | £m | |
Salaries and other short term employment benefits | 6.3 | 5.2 |
Post-employment benefits | 0.1 | 0.2 |
Share-based payments | 1.8 | 1.9 |
8.2 | 7.3 |
The deferred share award element of any bonus paid to key management is not included in the salaries and other short term employment benefits number as it is included in the share-based payment charge in subsequent years.
DIRECTORS' STATEMENT OF RESPONSIBILITY
(Pages 62 to 63 of the Annual Report)
The directors are responsible for preparing the Annual Report, the Remuneration Report and the Financial Statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. The directors have prepared the Group and Company Financial Statements in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Company and the Group for that period.
In preparing the Financial Statements, the directors are required to:
- | select suitable accounting policies and then apply them consistently |
- | make judgements and accounting estimates that are reasonable and prudent |
- | state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the Financial Statements |
- | prepare the Financial Statements on the going concern basis, unless it is inappropriate to presume that the Group and the Company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and that enable them to ensure that the Financial Statements and the Remuneration Report comply with the Act and, as regards the Group Financial Statements, Article 4 of the International Accounting Standard Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Each of the directors, whose names and functions are listed in this Annual Report (pages 58 and 59), confirms that, to the best of his/her knowledge:
- | the Directors' Report contained in the Annual Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces |
- | the Group Financial Statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group. |
Helen Baker
Acting Company Secretary
Telephone: +44 (0) 1372 726140
27 June 2013
CAUTIONARY STATEMENT
This announcement has been prepared for the shareholders of the Company as a whole and its sole purpose and use is to assist shareholders to exercise their governance rights. In particular, this announcement has not been audited or otherwise independently verified and no warranty is given as to its accuracy or completeness (other than any such warranty which is mandatorily implied by statute). The Company and its directors and employees are not responsible for any other purpose or use or to any other person in relation to this announcement and their responsibility to shareholders shall be limited to that which is imposed by statute.
This announcement contains indications of likely future developments and other forward looking statements that are subject to risk factors associated with, among other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These and other factors could adversely affect the Group's results, strategy and prospects. Forward looking statements involve risks, uncertainties and assumptions. They relate to events and/or depend on circumstances in the future which could cause actual results and outcomes to differ materially from those currently expected. No obligation is assumed to update any forward looking statements, whether as a result of new information, future events or otherwise.
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