2nd Jul 2010 16:24
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 2010;
·; Notice of Annual General Meeting (the "Notice of Meeting") to be held on 9 September 2010;
·; 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 Meeting are also available electronically on the Company's investor relations website at www.atkinsglobal.com/investors.
The Notice of Meeting includes a resolution to adopt new Articles of Association (the "New Articles"). Pursuant to Disclosure and Transparency Rule 6.1.2, copies of the proposed New Articles have been submitted to the UK Listing Authority and will also be available for inspection at the Document Viewing Facility. The purpose of the proposed adoption of the New Articles is to ensure that they fully reflect company law and current practice. In particular, changes to reflect the implementation of the Shareholder Rights Directive in the UK in August 2009 and the remaining provisions of the Companies Act 2006 and certain amendments to the Uncertificated Securities Regulations 2001 in October 2009 are incorporated into the New Articles where appropriate. A summary of the key differences between the New Articles and the existing Articles of Association of the Company is set out in an appendix to the Notice of Meeting.
Copies of the existing and the proposed New Articles are also available for inspection at the registered office of the Company during normal business hours and will be available for at least 15 minutes prior to and at the Annual General Meeting. Copies will also be available during normal business hours at the offices of Slaughter and May at One Bunhill Row, London EC1Y 8YY.
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 2010, 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 34 to 35 of the Annual Report)
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Risk |
Mitigation |
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Competition The Group faces competition in all of its markets. Some of the markets in which we operate serve a limited number of 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.
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To ensure that the Group continues to win work, we work hard to develop long-term relationships with our clients. We have also taken measures to reduce our cost base to ensure that we remain competitive. In addition, our robust processes for monitoring bidding activity seek to ensure that Atkins bids reflect the competitive environment in which we are working and that the contracts deliver appropriate returns. A measure of this success is our work in hand; this measures our secured workload over the coming year. Our overall work in hand is 54%, representing over six months of 2010/11 revenue that is already contractually committed.
See pages 18 to 31 of the Annual Report for our segmental performance
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Changes to the contracting environment The contracting environment in which we operate continues to evolve. 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.
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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. Our service delivery process, which forms an important internal control within our governance framework, is continually enhanced to address these issues.
See page 60 of the Annual Report for more information about our governance framework
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Matching staffing levels to workload The Group balances staff resources against workload to control the level of non-productive time. In an economic downturn there is a risk that there is insufficient work to match current resources.
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This risk is managed by working in a diverse portfolio of sectors and markets, and by 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. Productivity is a key internal measure and is constantly monitored across the Group, with selective restructuring and headcount reduction undertaken as necessary. This approach has been successfully implemented during the last year to maintain levels of productivity.
See pages 36 to 41 of the Annual Report for our Human Resources Review
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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.
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The Group mitigates these risks via the internal controls within our governance framework, ongoing training, knowledge-sharing and selective recruitment.
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Pensions The Group's defined benefit pension funds have a material deficit. The Group has previously agreed measures to reduce this deficit; however the deficit is exposed to the risk of changes in interest rates and asset values, as well as inflation and the life expectancy of the members.
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The Group's defined benefit pension funds are closed to new members. Future accruals ceased in October 2007. The Group actively monitors the funds position, taking professional actuarial advice, assessing liabilities, and is implementing inflation swaps to reduce future volatility. The next actuarial valuation is under way, following which the Group will agree appropriate contributions into the fund to reduce the deficit over an agreed period of time.
See pages 107 to 114 of the Annual Report for note 29 to the Financial Statements
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Market position and reputation Our reputation for delivering complex projects relies on the perception of our clients and how the Group is portrayed publicly. There is a risk that a major failure from poor design, poor project management or delivery could impact our ability to win future work.
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We mitigate this risk by ensuring our governance framework includes robust cost, project management and other internal controls. These are subject to regular independent audit against industry standards.
See page 60 of the Annual Report for more information about our governance framework
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Health, safety and the 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 and also a risk of reputational damage to the Group.
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The Group takes these issues very seriously, and ensures all staff are adequately trained in health, safety and environmental issues; indeed we lead our sector on health and safety matters. Procedures in this area are central to our governance framework and are continually reviewed and improved. We also undertake regular independent audits against industry standards.
See pages 42 to 50 of the Annual Report for our Corporate Responsibility Review
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Data security There is a risk that Atkins might mishandle client, commercial or staff data. Such an event could expose the Group financially and have a significant impact on our reputation.
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Data security is taken very seriously, and we have in place procedures on how to handle clients' and staff data, including the use of secure networks and encryption. Appropriate building security is in place to protect confidential data, and offsite storage of client data and use of cyber protection of both hardware and software applications have been implemented. In addition, training our staff so that they understand their responsibilities is an important mitigating measure.
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Recruitment and retention of sufficient high-calibre staff The recruitment and retention of the best people is crucial to our future success. Failure to do so would constrain the growth of the business and prevent us from delivering our strategy. |
The Group expends a great deal of management effort and resource in this area, and further details of our staff controls are given in the Human Resources Review and Corporate Governance Report.
See pages 36 to 41 of the Annual Report for our Human Resources Review
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Crisis event A crisis event at an Atkins site or one affecting staff could lead to loss of staff or interruption to service delivery. |
The Group's business continuity strategy requires business continuity plans (BCPs) for all major global offices. Staff awareness and testing of BCPs is a key mitigating measure, and the resilience of our back-up systems for IT infrastructure is regularly tested.
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Global political, economic, legal and regulatory risks Atkins works in selected countries around the world, potentially exposing the Group to political, economic, legal and regulatory risks. Political instability could threaten our operations, an economic slowdown could have an adverse impact on workload for both our private and public sector clients, and the Group could fail to adequately address legal and regulatory risks in unfamiliar jurisdictions.
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The Group mitigates these risks by monitoring economic indicators and sentiments in the markets in which we operate, as well as maintaining a strong balance sheet, working in a diverse portfolio of business sectors and markets and by building flexibility into future plans. We look to remain cash-positive on projects and negotiate commercially favourable payment terms on contracts. Our service delivery process seeks to identify legal and regulatory risks during bidding and through the lifecycle of projects.
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RELATED PARTY TRANSACTIONS
(Pages 119 to 120 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 39 and principal Joint Ventures in note 40.
a) Group sales and purchases of goods and services to/from Joint Ventures
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2010 £m |
Group 2009 £m |
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Sales of goods and services to Joint Ventures |
20.6 |
26.4 |
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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
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2010 £m |
Group 2009 £m |
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Receivables from Joint Ventures |
3.2 |
7.8 |
Receivables from Joint Ventures are shown net of contract-related provisions of £nil (2009: £23.1m).
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Payables to Joint Ventures |
- |
- |
c) Group year end balances arising from loans provided to other related parties
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2010 £m |
Group 2009 £m |
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Receivables from related parties (note 21) |
7.9 |
- |
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 (2009: £nil). The Company did not purchase any goods or services from its subsidiaries during the year (2009: £nil).
e) Company year end balances with subsidiaries
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2010 £m |
Company 2009 £m |
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Receivables from subsidiaries |
11.3 |
11.4 |
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Payables to subsidiaries |
42.2 |
57.4 |
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 (2009: £nil).
Receivables from subsidiaries are shown net of impairment of £75.4m (2009: £111.5m).
f) Key management compensation
Key management comprises the executive and non-executive directors, and certain senior managers who are members of the Group Executive.
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2010 £m |
Group 2009 £m |
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Salaries and other short-term employment benefits |
6.5 |
5.1 |
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Post-employment benefits |
0.3 |
0.2 |
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Share-based payments |
1.6 |
1.3 |
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8.4 |
6.6 |
STATEMENT OF DIRECTORS' RESPONSIBILITIES
(Pages 56 to 57 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 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, whose names and functions are listed in this Annual Report (pages 52 and 53), confirm that, to the best of their knowledge:
·; they have complied with the above requirements in preparing the Financial Statements
·; the Directors' 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 Financial Statements, 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 of the Group and the Company.
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.
Richard Webster
Company Secretary
Telephone: +44 (0)1372 726140
2 July 2010
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 2010, 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.
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