3rd Jul 2009 16:22
WS Atkins plc (the "Company") announces that, pursuant to Listing Rule 9.6.1, the following documents have been submitted to UK Listing Authority and will shortly be available for inspection at the UK Listing Authority's Document Viewing Facility:
Annual Report and Accounts (the "Annual Report") for the year ended 31 March 2009;
Notice of Annual General Meeting to be held on 9 September 2009;
Form of Proxy; and
Notice of Availability for Documents on the Company's Website.
The UK Listing Authority's Document Viewing Facility is situated at:
UK Listing Authority
The Financial Services Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS
The Annual Report and Notice of Annual General 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 17 June 2009, 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
(Page 37 of the Annual Report)
In order to achieve our business objectives the Group must respond effectively to the associated risks. The Group has established risk management procedures, involving the identification and monitoring of strategic and operational risks at various levels of management. The Board regularly reviews material risks identified and risk management is embedded in our annual budgeting and strategic planning processes. It is, however, not possible to fully mitigate all risks that the Group encounters. In addition to market risk, credit risk and liquidity risk, which are covered under Treasury policies and objectives above, the principal key risks for the Group have been assessed as follows:
Economic environment
A decrease in GDP as a result of a world economic slowdown could have an adverse impact on workload for both private and public sector clients. The Group mitigates this risk by monitoring economic indicators and sentiment in the markets in which we operate, as well as by maintaining a strong balance sheet, working in a diverse portfolio of sectors and markets and by building flexibility into future plans.
Competition
In common with all companies, the Group faces competition from others in all of our markets. Some of the markets in which the Group works serve limited clients and barriers to entry are high. In other markets, such as architectural design and environment, there are numerous competitors and barriers to entry are lower. To ensure that the Group continues to win work, we work hard to develop long-term relationships with our clients at multiple levels. A measure of this success is our work in hand, which measures our secured workload over the next year. Our overall work in hand is 54%, representing over six months of 2009/10 revenue that is already contractually committed.
Matching staffing levels to workload
The Group balances resources (staffing) to workload to control the level of non-productive time. There is a risk, in an economic downturn, that there is insufficient work to match current resources in some parts of our business. This risk is managed by working in a diverse portfolio of sectors and markets, and the redeployment of staff from those parts of the business where the workload is reducing to other parts of the business where the workload is strong. The risk can also be managed by selective restructuring and downsizing.
Project management
Managing clients' and our own projects is core to our business. Inadequate project management skills could lead to financial loss and reputational damage. The Group mitigates these risks by encouraging adherence to internal processes augmented by ongoing training and selective recruitment.
Changes to the contracting environment resulting from market developments
The ways in which business is conducted inevitably change over time. The nature of the contracting environment is especially important for companies like Atkins. The trend remains one where clients increasingly seek to transfer risk to consultants; contractors will also seek to share risks. There is a possibility that, in securing new work, the Group accepts risks that are insufficiently understood or evaluated, with ensuing financial loss. We actively
mitigate this risk via a range of internal review procedures that enable contract terms to be subject to appropriate scrutiny and manageable risks to be reduced.
Pandemic influenza
An influenza pandemic could affect a significant number of our staff who maybe unable to report for work either because they are personally unwell or because they need to care for dependents. The risk is heightened this year due to the current swine flu pandemic. This risk is closely monitored and advice is taken from the governments and medical authorities in the countries in which we operate as well as from our own private medical and travel advisors. Contingency plans are in place to limit the spread of infection within our offices and to enable continuity of work commitments through home and remote working.
Recruitment and retention of sufficient high-calibre staff
The Group's staff are its key resource and the recruitment and retention of top quality people are crucial to our future success. Failure to do so would constrain the growth of the business and prevent the Group from achieving its potential. Whilst the current recession has reduced the recruitment pressure in some areas, failure to retain key staff is still a risk. Also, the skills needed in some parts of our business are still in short supply and the Group has to compete with a large number of other organisations to secure the best staff. The Group expends a great deal of management effort and resource in this area, a summary of the approach being shown in the Human Resources Review.
Health, safety and environment
The Group's business is concerned with the built environment and this entails significant health, safety and environmental risks. Should the Group's policy or practice in this area prove inadequate, there is a consequent risk to employees, clients, contractors and third parties. The Group takes health, safety and environment issues seriously and ensures that all staff are appropriately trained and that procedures are continuously reviewed and improved. We look to take a leadership role on health and safety matters in our sector and we have representation on a number of committees. Many of our clients insist on the Group attaining appropriate standards in health and safety and environment. We are regularly independently audited by external consultants against these industry standards.
Reputation risk
Our reputation for delivering complex projects relies on the perception of our clients and how this is portrayed in the public arena. There is a risk that a major failure from poor design, poor project management or delivery could impact our ability to win future work. We mitigate this risk by ensuring we have robust cost and project management systems linked to our internal quality processes. These are regularly independently audited by external consultants against industry standards.
RELATED PARTY TRANSACTIONS
(Page 115 of the Annual Report)
Details of the directors' shareholdings, share options and remuneration are given in the Remuneration Report, which forms part of these Financial Statements.
Transactions with the retirement benefit schemes are shown in note 29.
Details of the Company's principal subsidiaries are shown in note 40 and principal Joint Ventures in note 41.
a) Group sales and purchases of goods and services to/from Joint Ventures
|
2009 £m |
Group 2008 £m |
|
|
Sales of goods and services to Joint Ventures |
26.4 |
43.6 |
|
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
|
2009 £m |
Group 2008 £m |
|
|
Receivables from Joint Ventures |
7.8 |
9.7 |
Receivables from Joint Ventures are shown net of contract-related provisions of £23.1m (2008: £22.6m) which were previously held within amounts recoverable on contracts.
|
Payables to Joint Ventures |
- |
- |
c) Company sales/purchases of goods and services to/from subsidiaries
The Company did not sell any goods or services to subsidiaries during the year (2008: £nil). The Company did not purchase any goods or services from its subsidiaries during the year (2008: £nil).
d) Company year-end balances with subsidiaries
|
2009 £m |
Group 2008 £m |
|
|
Receivables from subsidiaries |
11.4 |
8.4 |
|
Payables to subsidiaries |
57.4 |
23.8 |
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 (2008: £nil).
Receivables from subsidiaries are shown net of impairment of £111.5m (2008: £121.0m).
e) Key management compensation
Key management comprises the executive and non-executive directors, and certain senior managers who are members of the Group Executive.
|
2009 £m |
Group 2008 £m |
|
|
Salaries and other short-term employment benefits |
5.1 |
4.9 |
|
Post-employment benefits |
0.2 |
0.3 |
|
Share-based payments |
1.3 |
1.0 |
|
6.6 |
6.2 |
STATEMENT OF DIRECTORS' RESPONSIBILITIES
(Page 51 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 (IFRS) as adopted by the European Union. The Financial Statements are required by law to 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 Group for that period.
In preparing those Financial Statements, the directors are required to:
select suitable accounting policies and then apply them consistently
make judgements and estimates that are reasonable and prudent
state that the Financial Statements comply with IFRS as adopted by the European Union
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, in which case there should be supporting assumptions or qualifications as necessary.
The directors confirm that they have complied with the above requirements in preparing the Financial Statements.
The directors are responsible for keeping proper accounting records that 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 applicable company law and, as regards the Group Financial Statements, Article 4 of the IAS 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.
Richard Webster
Company Secretary
Telephone: +44 (0)1372 726140
3 July 2009
CAUTIONARY STATEMENT
This announcement has only 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. 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 press release.
This announcement contains indications of likely future developments and other forward looking statements which were made in good faith based on information available on 16 June 2009, being the date of approval of the Annual Report. They 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. No obligation is assumed to update any forward looking statements, whether as a result of new information, future events or otherwise.
Related Shares:
ATK.L