22nd Mar 2013 15:33
Date of notification: 22 March 2013
BBA Aviation plc (the "Company")
Annual Financial Report and Notice of AGM
Further to the release of the Company's Final Results announcement on 1 March 2013, the Company announces that it has today published its Annual Financial Report 2012 ("Annual Report 2012").
The Company also announces that it has today posted to shareholders notice of an Annual General Meeting to be held at 10.30am on Friday 10 May 2013 at the Royal Aeronautical Society, No. 4 Hamilton Place, London W1J 7BQ.
The Annual Report 2012 can be viewed at or downloaded from the Company's website at: http://www.bbaaviation.com/media/433821/bba_annual_report_2012.pdf
The Notice of Annual General Meeting 2013 can be viewed at or downloaded from the Company's website at:
http://www.bbaaviation.com/media/433827/bba_chairmans_letter_notice_agm_2013.pdf
Copies of the documents listed below have also been submitted to the National Storage Mechanism located at www.morningstar.co.uk/UK/NSM:
·; Annual Report 2012
·; Chairman's Letter and Notice of Annual General Meeting
·; Annual General Meeting Proxy Card
·; Notice of Availability of BBA Aviation plc Annual Report 2012 and Notice of Annual General Meeting
At the Annual General Meeting due to be held on 10 May 2013 it is proposed that the Company seeks, inter alia, general authority from ordinary shareholders for the Company to make market purchases of up to 14.99 per cent of the Company's existing issued ordinary share capital. This renews the authority granted by shareholders at the Annual General Meeting held on 24 April 2012. Any ordinary shares purchased under the authority may be cancelled or held in treasury.
The Company's Final Results announcement released on 1 March 2013 contained the responsibility statement of the directors on the Annual Report 2012 and significant events occurring during the period. For the purposes of compliance with DTR 6.3.5 set out below is the statement of principal risks and uncertainties which is set out in the Annual Report 2012 and the text of note 26 to the consolidated financial statements in the Annual Report 2012 concerning related party transactions.
"Principal Risks and Uncertainties
Risk | Potential Impact | Mitigation |
General economic downturn | - Reduction in revenues and profits as a result of reduced B&GA and commercial flying and military expenditure
| - Strong financial controls to monitor financial performance and provide a basis for corrective action when required - Low fixed costs allow cost base to be flexed to meet demand - Mixture of early and later cycle businesses |
Catastrophic global event (terrorism, weather) with a material impact on global air travel | - Reduction in revenues and profits as a result of reduced B&GA and commercial flying
| - Strong financial controls to monitor financial performance and provide a basis for corrective action when required - Low fixed costs allow cost base to be flexed to meet demand |
Legislative changes causing material increase to cost of B&GA flight relative to alternatives | - Reduction in revenues and profits as a result of reduction in B&GA flying hours | - Active participation in all relevant industry bodies - Low fixed costs allow cost base to be flexed to meet demand |
Ability to attract and retain high-quality and capable people | - Loss of key personnel - Lack of internal successors to key management roles - Short to medium term disruption to the business
| - Remuneration structure designed to reward superior performance and promote retention - Succession planning process embedded with review at Executive Management Committee and Board level annually - Proactive employee development |
Potential liabilities from defects in services and products
| - Reputational impact with associated deterioration in customer relationships - Loss of earnings from liability claims
| - Standard operating procedures with routine root cause analysis of all incidents - Liability insurance |
Intentional or inadvertent non-compliance with legislation
| - Reputational impact - Exposure to potential litigation or criminal proceedings
| - Clear corporate policies and education in all major risk areas - Semi-annual compliance certification by all senior management - Robust internal control environment and regular review by internal and external audit |
Potential collapse of Euro or exit of a Euro zone member from the Euro | - Economic downturn in Euro zone affecting revenues and profits - Threat to solvency of Euro zone banks, impacting access to cash deposits or ability to draw committed facilities | - Limited contribution to Group profitability from Euro zone trading - Exposure managed according to counterparty credit rating - Strong and broad core banking group and diversified sources of debt financing |
Environmental exposures | - Loss of earnings from cost to remediate or potential litigation - Potential for loss of licence to operate - Greater than expected liabilities associated with historical operations | - Strong procedural controls and physical containment when working with fuel or other hazardous chemicals - Active management of known environmental matters to minimise costs to resolve'' |
"Related Party Transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are detailed below.
Compensation of key management personnel
Key management are the directors and members of the executive committee.
The remuneration of directors and other members of key management during the year was as follows:
2012 | 2011 | |||||
$m | $m | |||||
Short-term benefits | 7.6 | 7.6 | ||||
Post-employment benefits | 0.8 | 0.7 | ||||
Share-based payments | 0.8 | 2.1 | ||||
9.2 | 10.4 | |||||
Post-employment benefits include contributions of $0.7 million (2011: $0.6 million) in relation to defined contribution schemes.
The remuneration of directors and key executives is determined by the Remuneration Committee having regard to the performance of individuals and market trends. The directors' remuneration is disclosed in the Directors' Remuneration Report on pages 63 to 74.
The amount disclosed in the table above does not include the portion of the annual bonus subject to compulsory deferral, which will be expensed over the vesting period in accordance with IFRS 2 Share-based Payment. The amount of the 2012 annual bonus subject to compulsory deferral is $1.0 million (2011: $1.7million).
Other related party transactions
During the year, Group companies entered into the following transactions with related parties who are not members of the Group:
Sales of goods | Purchases of goods | Amounts owed by | Amounts owed to | ||||||||
related parties | related parties | ||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | ||||
$m | $m | $m | $m | $m | $m | $m | $m | ||||
Associates | 18.1 | 15.9 | 449.9 | 424.5 | 5.1 | 3.1 | 27.7 | 8.9 | |||
Purchases of goods principally relates to the purchase of aviation fuel. Purchases were made at market price discounted to reflect the quantity of goods purchased.
The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received.
At the balance sheet date, Group companies had loan receivables from an associated undertaking of $2.9 million (2011: $2.5 million). The loans are unsecured and will be settled in cash, and were made on terms which reflect the relationships between the parties.
In addition, the Group operates various pension and other post-retirement benefit schemes for its employees. Details are set out in note 19."
The financial information set out in the Company's Final Results announcement of 1 March 2013 does not constitute the Company's statutory accounts for the year ended 31 December 2012. Statutory accounts for 2012 will be delivered to the Registrar of Companies in due course.
This announcement should be read in conjunction with, and is not a substitute for, reading the full Annual Report 2012.
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