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Annual Financial Report

20th Jun 2011 15:43

RNS Number : 7636I
Cable & Wireless Communications PLC
20 June 2011
 



 

Annual financialreport Announcement

20 June 2011

 

 

CABLE & WIRELESS COMMUNICATIONS Plc

Annual financial report AnnouncementFOR THE year ENDED 31 march 2011

 

 

Cable & Wireless Communications Plc (the Company) has submitted copies of the following documents to the UK Listing Authority:

 

·; Letter from the Chairman and Notice of Annual General Meeting (AGM);

·; Proxy Form;

·; Letter of Availability;

·; Dividend Reinvestment Plan Brochure;

·; Dividend Reinvestment Plan Mandate Form;

·; Annual Report and Accounts for the year ended 31 March 2011; and

·; Annual Review and summary financial statements for the year ended 31 March 2011.

 

These documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do

 

The Annual Report and Accounts or Annual Review together with the letter from the Chairman and Notice of AGM or the Letter Availability, together with the Proxy Form, Dividend Reinvestment Plan Brochure and Dividend Reinvestment Plan Mandate Form are being posted to shareholders today, 20 June 2011. Copies of these documents (with the exception of the Proxy Form and Letter of Availability) or links to the relevant services will shortly be available on the Company's website (www.cwc.com) and from the Company Secretary, 26 Red Lion Square, London WC1R 4HQ.

 

This announcement should be read in conjunction with the Company's announcement issued on 25 May 2011. Together these constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the full Cable & Wireless Communications Plc 2010/11 Annual Report and Accounts.

 

The financial information included within this annual financial report announcement has been extracted from the audited consolidated financial statements of Cable & Wireless Communications Plc for the year ended 31 March 2011 (which will shortly be delivered to the Registrar of Companies) but does not constitute the Company's statutory financial statements for 2010/11 or 2009/10 under Section 434 of the Companies Act 2006.

 

Those accounts are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. They have been reported on by the Group's auditors, whose audit report (i) was unqualified, (ii) did not include a reference to any matters by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

 

Whilst the financial information included in this announcement has been prepared in accordance with IFRS adopted by the EU, this announcement does not itself contain sufficient information to comply with IFRS.

CABLE & WIRELESS COMMUNICATIONS

Sheldon Bruha

Director, Corporate Finance and

Investor Relations

[email protected]

+44 (0)20 7315 4178

Kunal Patel

Associate Director, Corporate Finance and Investor Relations

[email protected]

+44 (0)20 7315 4083

Lachlan Johnston

Director of Public Relations

[email protected]

+44 (0)7800 021 405

 

EXTRACTS FROM THE CABLE & WIRELESS COMMUNICATIONS PLC 2010/11 ANNUAL REPORT AND ACCOUNTS

 

The information below has been extracted from the Cable & Wireless Communications 2010/11 Annual Report and Accounts and is included solely for the purpose of complying with DTR 6.3.5 and the requirements it imposes on issuers as to how to make public annual financial reports.

 

 

Consolidated income statement

For the year ended 31 March 2011

 

2010/11

2009/10

Pre-

Pre-

exceptional

Exceptional

exceptional

Exceptional

items

items

Total

items

items

Total

US$m

US$m

US$m

US$m

US$m

US$m

Continuing operations

Revenue

2,440

-

2,440

2,346

-

2,346

Operating costs before depreciation and amortisation

(1,592)

6

(1,586)

(1,481)

(49)

(1,530)

Depreciation

(271)

-

(271)

(295)

-

(295)

Amortisation

(50)

-

(50)

(53)

-

(53)

Other operating income

5

-

5

4

-

4

Other operating expense

(33)

-

(33)

(1)

(33)

(34)

Group operating profit/(loss)

499

6

505

520

(82)

438

Share of profits of joint ventures

31

-

31

30

-

30

Total operating profit/(loss)

530

6

536

550

(82)

468

Gains on sale of businesses

36

-

36

-

-

-

Losses on termination of operations

(2)

-

(2)

(1)

-

(1)

Finance income

32

-

32

23

19

42

Finance expense

(140)

-

(140)

(119)

(7)

(126)

Profit/(loss) before income tax

456

6

462

453

(70)

383

Income tax (expense)/credit

(119)

1

(118)

(126)

6

(120)

Profit/(loss) for the year from continuing operations

337

7

344

327

(64)

263

Discontinued operations

Profit/(loss) for the year from discontinued operations

-

-

-

302

(122)

180

Profit/(loss) for the year

337

7

344

629

(186)

443

Profit/(loss) attributable to

Owners of the Parent Company

189

8

197

486

(182)

304

Non-controlling interests

148

(1)

147

143

(4)

139

 Profit/(loss) for the year

337

7

344

629

(186)

443

Earnings per share attributable to the owners of

the Parent Company during the year (cents per share)

- basic

7.6

11.9*

- diluted

7.5

11.8*

Earnings per share from continuing operations

attributable to owners of the Parent Company

during the year (cents per share)

- basic

7.6

4.9

- diluted

7.5

4.8

Earnings per share from discontinued operations

attributable to the owners of the Parent Company

during the year (cents per share)

- basic

-

7.0

- diluted

-

7.0

 

* Includes discontinued operationsConsolidated statement of comprehensive income

For the year ended 31 March 2011

 

2010/11

2009/10

US$m

US$m

US$m

US$m

Profit for the year

344

443

Other comprehensive income for the year

Actuarial losses in the value of defined benefit retirement plans

(36)

(463)

Exchange differences on translation of foreign operations

(9)

(14)

Less: Amounts recognised in the income statement on disposal of foreign operations

-

19

(9)

5

Exchange differences relating to hedging instrument

-

3

Fair value gain on available-for-sale assets

2

2

Other comprehensive income for the year

(43)

(453)

Income relating to components of other comprehensive income

(3)

-

Other comprehensive income for the year, net of tax

(46)

(453)

Total comprehensive income for the year

298

(10)

Total comprehensive income attributable to:

Owners of the Parent Company

149

(148)

Non-controlling interests

149

138

 

 

Consolidated statement of financial position

As at 31 March 2011

 

31 March

31 March

2011

2010

US$m

US$m

ASSETS

Non-current assets

Intangible assets

433

414

Property, plant and equipment

1,757

1,725

Investments in joint ventures

243

231

Available-for-sale financial assets

31

29

Financial assets at fair value through profit or loss

6

-

Other receivables

48

42

Deferred tax asset

4

19

Retirement benefit assets

43

35

2,565

2,495

Current assets

Trade and other receivables

592

491

Inventories

84

49

Cash and cash equivalents

379

573

Financial assets at fair value through profit or loss

27

65

1,082

1,178

Assets held-for-sale

-

3

1,082

1,181

Total assets

3,647

3,676

LIABILITIES

Current liabilities

Trade and other payables

753

769

Loans and borrowings

116

58

Financial liabilities at fair value

96

30

Provisions

62

104

Current tax liabilities

209

187

1,236

1,148

Net current (liabilities)/ assets

(154)

33

Non-current liabilities

Trade and other payables

20

3

Loans and borrowings

1,257

1,179

Financial liabilities at fair value

120

189

Deferred tax liabilities

38

42

Provisions

32

27

Retirement benefit obligations

133

227

1,600

1,667

Net assets

811

861

EQUITY

Capital and reserves attributable to the owners of the Parent Company

Share capital

133

131

Share premium

97

62

Reserves

136

221

366

414

Non-controlling interests

445

447

Total equity

811

861

 

Consolidated statement of changes in equity

For the year ended 31 March 2011

 

Foreign 

currency 

translation 

Capital

and 

and

Non- 

Share 

Share 

hedging 

other 

Retained 

controlling 

Total 

capital 

premium 

reserve 

reserves 

earnings 

Total 

interests 

equity 

US$m 

US$m 

US$m 

US$m 

US$m 

US$m 

US$m 

US$m 

Balance at 1 April 2009

129 

1,889 

111 

2,398 

(1,877)

2,650 

315 

2,965 

Profit for the year

-

-

-

-

304

304

139

443

Net actuarial losses recognised (net of taxation)

-

-

-

-

(462)

(462)

(1)

 (463)

Exchange differences on translation of foreign operations

-

-

5

-

-

5

-

5

Exchange differences relating to hedging instrument

-

-

3

-

-

3

-

3

Fair value movements in available-for-sale assets

-

-

-

2

-

2

-

2

Total comprehensive income/(expense) for the year

-

-

8

2

(158)

(148)

138

(10)

Cash received in respect of employee share schemes

-

-

-

-

6

6

-

6

Own shares purchased

-

-

-

-

(1)

(1)

-

(1)

Share-based payment expenses

-

-

-

-

25

25

-

25

Issue of share capital

2

104

-

(106)

106

106

-

106

Equity element of the convertible bond

-

-

-

37

-

37

-

37

Dividends

-

-

-

-

(355)

(355)

-

(355)

Foreign exchange

-

-

-

-

867

867

-

867

Demerger of Cable & Wireless Worldwide business

-

-

-

(37)

(2,749)

(2,786)

-

(2,786)

Court approved capital reduction scheme

-

(1,931)

-

1,931

-

-

-

-

Total dividends and other transactions with Cable & Wireless Communications Plc shareholders

2

(1,827)

-

1,825

(2,101)

(2,101)

-

(2,101)

Dividends paid to non-controlling interests

-

-

-

-

-

-

(126)

(126)

Non-controlling interest reallocation

-

-

-

-

(11)

(11)

11

-

Purchase of non-controlling interest

-

-

-

30

(6)

24

109

133

Total dividends and other transactions with non-controlling interests

-

-

-

30

(17)

13

(6)

7

Balance at 31 March 2010

131

62

119

4,255

(4,153)

414

447

861

Profit for the year

-

-

-

-

197

197

147

344

Net actuarial losses recognised (net of taxation)

-

-

-

-

(39)

(39)

-

(39)

Exchange differences on translation of foreign operations

-

-

(11)

-

-

(11)

2

(9)

Fair value movements in available-for-sale assets

-

-

-

2

-

2

-

2

Total comprehensive (expense)/ income for the year

-

-

(11)

2

158

149

149

298

Equity element of the convertible bond

-

-

-

(2)

-

(2)

-

(2)

Cash received in respect of employee share schemes

-

-

-

-

1

1

-

1

Own shares purchased

-

-

-

-

(34)

(34)

-

(34)

Share-based payment expenses

-

-

-

-

3

3

-

3

Issue of share capital

2

35

-

-

-

37

-

37

Dividends

-

-

-

-

(205)

(205)

-

(205)

Transfers to retained earnings

-

-

-

(742)

742

-

-

-

Total dividends and other transactions with Cable & Wireless Communications Plc shareholders

2

35

-

(744)

507

(200)

-

(200)

Dividends paid to non-controlling interests

-

-

-

-

-

(144)

(144)

Purchase of non-controlling interest

-

-

-

3

-

3

(7)

(4)

Total dividends and other transactions with non-controlling interests

-

-

-

3

-

3

(151)

(148)

Balance at 31 March 2011

133

97

108

3,516

(3,488)

366

445

811

 

Consolidated statement of cash flows

For the year ended 31 March 2011

 

2010/11

2009/10

US$m

US$m

Cash flows from operating activities

Cash generated from continuing operations (see following table)

651

676

Cash generated from discontinued operations

-

382

Income taxes paid

(88)

(110)

Net cash from operating activities

563

948

Cash flows from investing activities

Continuing operations

Finance income

7

7

Other income/(expense)

(4)

1

Dividends received

9

30

Decrease in available-for-sale assets

2

14

Decrease in held-for-sale assets

3

-

Proceeds on disposal of property, plant and equipment

3

5

Purchase of property, plant and equipment

(290)

(267)

Purchase of intangible assets

(42)

(21)

Proceeds on disposal of businesses (net of cash disposed)

62

-

Acquisition of subsidiaries and non-controlling interests (net of cash received and transaction costs)

(17)

19

Net cash used in continuing operations

(267)

(212)

Discontinued operations

-

(394)

Net cash used in investing activities

(267)

(606)

Net cash flow before financing

296

342

Cash flows from financing activities

Continuing operations

Dividends paid to the owners of the Parent Company

(168)

(268)

Dividends paid to non-controlling interests

(152)

(144)

Demerger finance costs

-

(27)

Repayments of borrowings

(111)

(620)

Finance costs

(115)

(105)

Payment to Cable & Wireless Worldwide plc for transfer of convertible bond

-

(366)

Transfer to the Cable & Wireless Worldwide plc for the 2009/10 final dividend

(117)

-

Proceeds from borrowings

200

1,064

Proceeds on issue of shares on settlement of share options

1

24

Purchase of shares for share awards

(30)

(1)

Net cash used in continuing operations

(492)

(443)

Discontinued operations

-

142

Net cash used in financing activities

(492)

(301)

Net (decrease)/increase in cash and cash equivalents:

From continuing operations

(196)

(89)

From discontinued operations

-

130

Less: cash held by the Cable & Wireless Worldwide business at demerger

-

(288)

Net decrease in cash and cash equivalents

(196)

(247)

Cash and cash equivalents at 1 April

573

790

Exchange gains on cash and cash equivalents

2

30

Cash and cash equivalents at 31 March

379

573

 

 

The reconciliation of profit for the year to net cash generated from continuing operations was as follows:

 

2010/11

2009/10

US$m

US$m

Continuing operations

Profit for the year

344

263

Adjustments for:

Tax expense

118

120

Depreciation

271

295

Amortisation

50

53

Loss on termination of operations

2

1

Gain on sale of businesses

(36)

-

Gain on disposal of property, plant and equipment

(3)

(4)

Finance income

(32)

(42)

Finance expense

140

126

Other income and expenses

26

-

Decrease in provisions

(40)

(16)

Employee benefits

32

16

Defined benefit pension scheme funding

(149)

(43)

Defined benefit pension scheme other contributions

(17)

(11)

Share of post tax results of joint ventures

(31)

(30)

Operating cash flows before working capital changes

675

728

Changes in working capital (excluding effects of acquisition and disposal of subsidiaries)

Increase in inventories

(35)

(17)

(Increase)/ decrease in trade and other receivables

(105)

10

Increase/ (decrease) in payables

116

(45)

Cash generated from continuing operations

651

676

 

 

1 Summary of significant accounting policies

Basis of preparation

The consolidated financial statements of the Cable & Wireless Communications Group (the Group) have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the European Union (EU) as they apply to the financial statements of the Group for the year ended 31 March 2011.

 

Group reorganisation and demerger in the year ended 31 March 2010

On 19 March 2010, the Cable & Wireless Group effected a Group reorganisation whereby Cable & Wireless Communications Plc was inserted as a new holding company for the Cable & Wireless Group via a Scheme of Arrangement. Cable & Wireless Communications Plc therefore replaced Cable and Wireless plc (now Cable & Wireless Limited) as the Parent Company of the Cable & Wireless Group as at this date. On the same date, shareholders were given one ordinary share and one B share of Cable & Wireless Communications Plc for every share of Cable and Wireless plc held on that date. At this time, the Cable & Wireless Group was renamed the Cable & Wireless Communications Group. Shares in Cable & Wireless Communications Plc were admitted to the Official List of the Financial Services Authority and to trading on the London Stock Exchange's main market for listed securities on 22 March 2010.

 

The Scheme of Arrangement was accounted for using the principles of reverse acquisition accounting contained within IFRS 3 Business Combinations. In the consolidated financial statements, the transaction to interpose the new holding company, Cable & Wireless Communications Plc, was presented as though the Cable & Wireless Group acquired Cable & Wireless Communications Plc. This resulted in the legal acquiror, Cable & Wireless Communications Plc, being treated for accounting purposes as having been acquired by its legal subsidiary, Cable & Wireless Limited. In these financial statements, this resulted in a continuation of the consolidated financial statements of the Cable & Wireless Group (renamed the Cable & Wireless Communications Group).

 

On 26 March 2010, the Cable & Wireless Worldwide business was demerged from the Cable & Wireless Communications Group. The demerger was effected by a three-part transaction which involved the following:

 

·; The B shares and associated share premium in Cable & Wireless Communications Plc were cancelled to enable the Company to repay capital to shareholders;

 

·; The entire share capital of Cable & Wireless UK Holdings Limited, the parent entity of the Worldwide Group of companies and the Cable & Wireless Worldwide Brand, were transferred to Cable & Wireless Worldwide plc, an unrelated company; and

 

·; In return for the share capital of Cable & Wireless UK Holdings Limited and the Cable & Wireless Worldwide Brand, Cable & Wireless Worldwide plc issued one ordinary share in itself to the holder of each Cable & Wireless Communications Plc B share prior to their cancellation as part of this transaction.

 

These transactions resulted in the demerger of the Cable & Wireless Worldwide business from the Cable & Wireless Communications Group and the holders of shares in Cable & Wireless Communications Plc at 26 March 2010 received one share in Cable & Wireless Communications Plc and one share in Cable & Wireless Worldwide plc for every share in Cable & Wireless Communications Plc held at that date. The results of the Cable & Wireless Worldwide business were shown as discontinued operations in the financial statements.

 

Change of functional currency

Following the demerger of the Worldwide business, the functional currency of the Parent Company and the majority of holding and financing companies of the Group that previously had a sterling functional currency were changed to US dollars. The Directors consider the US dollar to most faithfully represent the economic effects of the underlying transactions, events and conditions for these companies within the Cable & Wireless Communications Group.

 

Accounting policies

The accounting policies applied by the Group in the consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 March 2010, with the exception of new and revised accounting standards effective from 1 April 2010.

 

During the period, the Group adopted Revised IFRS 3 Business Combinations and Revised IAS 27 Consolidated and Separate Financial Statements. The Revised IFRS 3 is applicable prospectively to business combinations and has not had an effect on the Group during the period. The Revised IAS 27 is consistent with current Group policy. Further, the Group has adopted IFRIC 18 Transfers of Assets from Customers and a number of other accounting policies during the period. There was no material effect on the Group from the adoption of these policies.

 

 

 

 

 

2 Segment information

Cable & Wireless Communications Group is an international telecommunications service provider. It operates integrated telecommunications companies offering mobile, broadband, TV and fixed line services to residential and business customers. It has four principal operations which have been identified as the Group's reportable segments, being the Caribbean, Panama, Macau and Monaco & Islands.

 

The Group also has a London corporate centre (London) that does not meet the definition of an operating segment as it does not earn revenue from its activities. This function primarily acts as a portfolio manager and operational support provider for the reportable segments.

 

The operating segment results from continuing operations for the year ended 31 March 2011 is presented below. The non-operating London corporate centre is also disclosed within 'Other and eliminations' in order to reconcile the reportable segment results to the Group results.

 

During the year, the Group considered the allocation of joint ventures to the different segments. Telecommunications Services of Trinidad and Tobago Limited and our South Pacific joint ventures (Fiji International Telecommunications Limited, Solomon Telekom Company Limited and Telecom Vanuatu Limited) are hereby allocated to 'other' as these are managed through the London corporate centre. Telecom Development Company Afghanistan Ltd remains allocated to Monaco & Islands. This revised allocation reflects management reporting to the Board.

 

Other

Monaco & 

and

Caribbean 

Panama 

Macau 

Islands

eliminations¹

Total

Year ended 31 March 2011

US$m 

US$m 

US$m 

US$m

US$m

US$m

Revenue

850

623

377

605

(15)

2,440

Cost of sales

(236)

(202)

(171)

(180)

7

(782)

Gross margin

614

421

206

425

(8)

1,658

Pre-exceptional operating costs

(385)

(145)

(53)

(218)

15

(786)

EBITDA2

229

276

153

207

7

872

LTIP charge

-

-

-

-

(24)

(24)

Depreciation and amortisation

(125)

(78)

(33)

(78)

(7)

(321)

Net other operating income

(3)

-

-

1

(26)

(28)

Exceptional operating costs

(5)

-

-

(2)

13

6

Group operating profit/(loss)

96

198

120

128

(37)

505

Share of profit after tax of joint ventures

-

-

-

3

28

31

Total operating profit/(loss)

96

198

120

131

(9)

536

Net other non-operating income

34

Net finance expense

(108)

Profit before income tax

462

Income tax

(118)

Profit for the year from continuing operations

344

 

1 Other and eliminations includes London expenses and eliminations for inter-segment transactions. In the prior financial year, it also includes the Central operating costs of Cable and Wireless plc prior to demerger.

2 EBITDA is used in management reporting as it is considered by management to be a key financial metric. It is defined as earnings before interest, tax, depreciation and amortisation, LTIP credit/charge, net other operating and non-operating income/expense and exceptional items.

 

There are no differences in the measurement of the reportable segments' results and the Group's results.

 

There is no significant trading between the segments. Transactions between the segments are on commercial terms similar to those offered to external customers.

 

There are no differences in the measurement of the reportable segments' assets and liabilities and the Group's assets and liabilities. Furthermore, there are no asymmetrical allocations to reportable segments.

 

 

 

 

3 Exceptional items within operating costs

 

2010/11

2009/10

Note

US$m

US$m

Exceptional items within operating costs

Staff costs

(i)

5

16

Other (income)/ costs

(ii)

(11)

33

Total exceptional operating (income)/ costs

(6)

49

 

i) In 2010/11, exceptional staff costs were US$5 million arising from the restructuring of the Group's Caribbean operations.

In 2009/10, exceptional staff costs included US$10 million arising from the restructuring of the Group's operations, principally in the Caribbean, and US$6 million relating to the closure of the Central division of Cable and Wireless plc.

 

ii) In 2010/11, exceptional other costs included US$4 million professional fees as a result of the demerger, and US$2 million relating to the restructuring of our African operations within Monaco & Islands. In addition, US$17 million of exceptional income arose after successfully defending claims brought by a Caribbean competitor.

In 2009/10, exceptional other costs included US$24 million relating to the One Caribbean transformation programme and US$9 million relating to costs of defending claims brought by a Caribbean competitor. The One Caribbean costs primarily consisted of US$20 million related to consulting and contractor fees and US$4 million related to rebranding and other costs incurred on the reorganisation programme.

 

4 Finance income and expense

 

2010/11

2009/10

Pre-

Total

exceptional

Exceptional

Total

US$m

US$m

US$m

US$m

Finance income

Interest on cash and deposits

6

10

-

10

Investment income

1

2

-

2

Foreign exchange gains on deposits

3

11

-

11

Gains on derivative foreign exchange contracts

22

-

19

19

Total finance income

32

23

19

42

Finance expense

Interest on bank loans

42

36

-

36

Interest on bonds

86

60

-

60

Unwinding of discounts on provisions

2

5

-

5

Unwinding of discount on Monaco put option liability

13

21

-

21

Unwinding of discount on Monaco 6% put option liability

1

1

-

1

Capitalised finance transaction costs written off

-

-

7

7

144

123

7

130

Less: Interest capitalised

(4)

(4)

-

(4)

Total finance expense

140

119

7

126

 

In 2009/10, movements in the fair value of remaining open foreign exchange contracts relating to repatriation from the prior year, resulted in an exceptional finance gain of US$19 million.

 

 

5 Discontinued operations

There were no businesses classified as discontinued operations during 2010/11.

 

At a General Meeting on 25 February 2010, the shareholders of Cable and Wireless plc approved the demerger of the Cable & Wireless Worldwide business. On 26 March 2010 (the demerger date), the Cable & Wireless Worldwide business was transferred to an unrelated company, Cable & Wireless Worldwide plc, in return for the entire share capital of that company.

6 Intangible assets

 

Licences and

Customer

operating

contracts and

Goodwill

Software

agreements

relationships

Other

Total

US$m

US$m

US$m

US$m

US$m

US$m

Cost

At 1 April 2009

1,327

1,118

184

211

80

2,920

Business combinations

35

-

-

51

18

104

Additions

-

54

-

-

6

60

Disposals

-

-

-

-

(45)

(45)

Transfer between categories

-

-

(30)

-

30

-

Demerger of Cable & Wireless Worldwide business

(1,192)

(1,049)

(10)

(216)

-

(2,467)

Exchange differences

26

28

1

5

2

62

At 31 March 2010

196

151

145

51

91

634

Business combinations

11

-

-

-

-

11

Additions

-

36

-

-

6

42

Transfer between categories

-

(1)

29

-

(28)

-

Disposals

-

(3)

(1)

-

-

(4)

Exchange differences

11

4

8

-

3

26

At 31 March 2011

 218

 187

 181

 51

 72

709

Amortisation and impairment

At 1 April 2009

-

1,018

42

67

66

1,193

Charge for the year

11

59

14

33

7

124

Disposals

-

-

-

-

(33)

(33)

Demerger of Cable & Wireless Worldwide business

-

(981)

(4)

(95)

-

(1,080)

Exchange differences

(1)

18

(4)

-

3

16

At 31 March 2010

10

114

48

5

43

220

Charge for the year

-

23

11

7

9

50

Disposals

-

(3)

-

-

-

(3)

Transfer between categories

-

-

6

-

(6)

-

Exchange differences

2

3

3

(2)

3

9

At 31 March 2011

12

137

68

10

49

276

Net book value

At 31 March 2011

206

50

113

41

23

433

At 31 March 2010

186

37

97

46

48

414

 

Goodwill balances are allocated to the following cash-generating units:

 

Dhivehi

Raajjeyge

Gulhun

Private Ltd

(Dhiraagu)²

Afinis²

(formerly

Connecteo)

Monaco²

Energis¹

THUS¹

Apollo¹

Telecom

Total

US$m

US$m

US$m

US$m

US$m

US$m

US$m

At 1 April 2009

625

495

18

170

19

-

1,327

Business combinations

-

27

-

(17)

-

25

35

Impairment

-

-

-

-

(11)

-

(11)

Demerger of Cable & Wireless Worldwide business

(642)

(532)

(18)

-

-

-

(1,192)

Exchange differences

17

10

-

-

-

-

27

At 31 March 2010

-

-

-

153

8

25

186

Business combinations

-

-

-

11

-

-

11

Exchange differences

-

-

-

8

1

-

9

At 31 March 2011

-

-

-

172

9

25

206

 

1 Reporting segment: Discontinued.

2 Reporting segment: Monaco & Islands.

7 Property, plant and equipment

 

2010/11

2009/10

Land and

Plant and

Assets under

Land and

Plant and

Assets under

buildings

equipment

construction

Total

buildings

equipment

construction

Total

US$m

US$m

US$m

US$m

US$m

US$m

US$m

US$m

Cost

At 1 April

406

4,022

238

4,666

841

11,349

268

12,458

Business combinations

-

-

-

-

8

105

38

151

Additions

-

33

281

314

2

28

663

693

Movements in asset retirement obligations

(2)

2

-

-

(6)

1

-

(5)

Disposals

(27)

(165)

-

(192)

(14)

(220)

-

(234)

Transfers between categories

32

235

(267)

-

46

583

(629)

-

Demerger of Cable & Wireless Worldwide business

-

-

-

-

(479)

(8,002)

(103)

(8,584)

Exchange differences

7

35

2

44

8

178

1

187

At 31 March

416

 4,162

 254

4,832

406

4,022

238

4,666

Depreciation

At 1 April

177

2,764

-

2,941

545

8,937

-

9,482

Charge for the year

15

256

-

271

29

615

-

644

Disposals

(18)

(146)

-

(164)

(8)

(199)

-

(207)

Transfers between categories

4

(4)

-

-

2

(2)

-

-

Demerger of Cable & Wireless Worldwide business

-

-

-

-

(399)

(6,730)

-

(7,129)

Exchange differences

2

25

-

27

8

143

-

151

At 31 March

180

 2,895

-

3,075

177

2,764

-

2,941

Net book value at 31 March

236

1,267

254

1,757

229

1,258

238

1,725

 

 

8 Earnings per share

Basic earnings per ordinary share is based on the profit for the year attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding.

 

2010/11

2009/10

US$m

US$m

Profit for the financial year attributable to equity shareholders of the Parent Company

197

304

Weighted average number of ordinary shares in issue (millions)

2,607

2,544

Dilutive effect of share options (millions)

22

24

Number of ordinary shares used to calculate diluted earnings per share (millions)

2,629

2,568

Basic earnings per share (cents per share)

7.6

11.9

Diluted earnings per share (cents per share)

7.5

11.8

Continuing operations

Profit from continuing operations for the financial year attributable to shareholders

197

124

Basic earnings per share from continuing operations (cents per share)

7.6

4.9

Diluted earnings per share from continuing operations (cents per share)

7.5

4.8

Discontinued operations

Profit from discontinued operations for the financial year attributable to shareholders

-

180

Basic earnings per share from discontinued operations (cents per share)

-

7.0

Diluted earnings per share from discontinued operations (cents per share)

-

7.0

 

As a result of the reorganisation of the Group's legal structure, Cable & Wireless Communications Plc became the new Parent Company of the Cable & Wireless Communications Group during the previous financial year. Therefore, the weighted average number of ordinary shares outstanding in 2009/10 was calculated using the number of ordinary shares issued by Cable & Wireless Communications Plc at the date of the reorganisation (19 March 2010) and adjusted for:

 

·; Movements in the number of ordinary shares of Cable and Wireless plc from the beginning of each period prior to the reorganisation date; and

 

·; Movements in the number of ordinary shares outstanding from the reorganisation date to 31 March 2010 using the actual number of ordinary shares of Cable & Wireless Communications Plc outstanding during that period.

 

9 Dividends declared and paid

2010/11

2009/10

US$m

US$m

Final dividend in respect of the prior year

135

227

Interim dividend in respect of the current year

70

128

Total dividend paid

205

355

 

During the year ended 31 March 2011 the Group declared and paid a final dividend of 3.34 pence per share (US4.97 cents per share) in respect of the year ended 31 March 2010 (2009/10 - 5.67 pence per share (US9.02 cents per share) in respect of the year ended 31 March 2009). Beginning with the interim dividend in respect of 2010/11, the Group declares dividends in cents per share. The Group declared and paid an interim dividend of US2.67 cents per share in respect of the year ended 31 March 2011 (2009/10 - 3.16 pence per share (US5.03 cents per share) in respect of the year ended 31 March 2010).

 

In respect of the year ended 31 March 2011, the Directors have proposed a final dividend of US5.33 cents per share (2009/10 - final dividend totalling £86 million (US$135 million)), for approval by shareholders at the AGM to be held on 22 July 2011. These financial statements do not reflect the proposed dividend, which will be accounted for in shareholders' equity as an appropriation of retained earnings in the year ended 31 March 2012.

 

 

10 Retirement benefits obligations

 

Funding valuation - Cable & Wireless Superannuation Fund (CWSF)

The latest triennial actuarial valuation of the CWSF was carried out by independent actuaries Towers Watson Limited as at 31 March 2010. An agreement was reached between the Trustee of the CWSF and Cable & Wireless Communications to remove the deficit calculated by this valuation by 2016.

 

Cable & Wireless Communications paid a total contribution of US$157 million (£98 million) in 2010/11, comprising deficit funding of US$149 million and normal contributions of US$8 million, to the CWSF to meet the cost of future benefit accrual and expenses, to recover part of the deficit on the scheme funding basis, and to meet the cost of the agreed derisking of the CWSF's investment strategy. A deficit recovery funding plan was also agreed with the Trustees during the year which includes additional payments from 2014 to 2016 totalling US$102 million (£64 million). These contributions are based on best estimated investment returns and are subject to the outcome of the next full valuation due in March 2013.

 

A US$160 million contingent funding agreement (2009/10 - US$149 million) was agreed with the CWSF Trustee, under which the Trustee can call for a letter of credit or cash escrow in certain circumstances, such as material deterioration in the financial performance of the business.

 

Minimum pension indexation - Cable & Wireless Superannuation Fund and UK unfunded defined benefit arrangements

In July 2010, the Government announced its intention that future statutory minimum pension indexation would be measured by the Consumer Prices Index, rather than the Retail Prices Index.

 

The Group is currently taking external advice in respect of the Government's announcement on the determination of liabilities in the CWSF. Dependent upon the outcome, this may lead to a reduction in scheme liabilities, however it is presently too soon to determine the likelihood or value of the impact.

 

IAS 19 valuation - Cable & Wireless Superannuation Fund

The deficit recovery funding plan agreed with the Trustees of the CWSF during the year constitutes a minimal funding requirement. An adjustment to the deficit in the CWSF to account for the minimum funding requirement has been calculated in accordance with IFRIC 14 The limits on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. The adjustment to the deficit, which is recorded directly in equity, was US$57 million as at 31 March 2011 (2009/10 - US$nil).

 

 

 

 

 

 

Changes in the present value of the defined benefit pension and post-retirement medical plan obligations are as follows:

 

2010/11

2009/10

CWSF

Other

Total

CWSF

Other

Total

US$m

US$m

US$m

US$m

US$m

US$m

Obligation at 1 April

(1,477)

(317)

(1,794)

(2,453)

(428)

(2,881)

Current service cost

(2)

(6)

(8)

(12)

(12)

(24)

Interest cost

(82)

(20)

(102)

(177)

(33)

(210)

Actuarial (losses)/gains recognised in equity

(23)

18

(5)

(941)

(104)

(1,045)

Employee contributions

-

(5)

(5)

(3)

(5)

(8)

Obligations extinguished on demerger

-

-

-

1,983

239

2,222

Gains on curtailment or settlement

-

2

2

2

3

5

Benefits paid

78

17

95

127

20

147

Exchange differences

(113)

(11)

(124)

(3)

3

-

Obligations at 31 March

(1,619)

(322)

(1,941)

(1,477)

(317)

(1,794)

 

Changes in the fair value of defined benefit assets are as follows:

2010/11

2009/10

CWSF

Other

Total

CWSF

Other

Total

US$m

US$m

US$m

US$m

US$m

US$m

Fair value of assets as at 1 April

1,312

307

1,619

2,407

403

2,810

Expected return

78

22

100

182

36

218

Actuarial gains/(losses) recognised in equity

28

(7)

21

521

64

585

Contributions by employer

157

7

164

75

20

95

Employee contributions

-

5

5

3

5

8

Assets divested (including asset transfers upon demerger in 2009/10)

-

-

-

(1,772)

(197)

(1,969)

Assets acquired

2

-

2

-

-

-

Benefits paid

(78)

(17)

(95)

(127)

(20)

(147)

Exchange differences on translation

99

11

110

23

(4)

19

Fair value of assets as at 31 March

1,598

328

1,926

1,312

307

1,619

 

11 Loans and borrowings

31 March

2011

31 March

2010

US$m

US$m

Loans

Sterling secured loans repayable in 2012

46

43

US$500 million secured bonds due 2017

490

489

Sterling unsecured bonds repayable in 2012 and 2019

552

509

US dollar and currencies linked to the US dollar loans repayable at various dates up to 2038

285

196

1,373

1,237

Loans - current

116

58

Loans - non-current

1,257

1,179

 

Sterling secured loan repayable in 2012

The Group has a US$46 million (£29 million) loan secured on the 2019 bonds that is repayable in February 2012. Interest is payable at 6%.

 

The carrying amount of this loan approximates to fair value.

 

US dollar secured bonds due 2017

During the year ended 31 March 2010, the Group arranged US$500 million of Senior Secured Notes (the Bonds) with a coupon of 7.75% due in 2017. These bonds had a fair value of US$527 million at 31 March 2011 (31 March 2010 - US$520 million). This value was determined by reference to market values obtained from third parties. The bonds are secured on share pledges over the Group assets.

 

Sterling unsecured bonds due 2012 and 2019

The Group has US$320 million (£200 million) listed bonds due in 2012 with a balance outstanding at 31 March 2011, net of costs, of US$317 million (31 March 2010 - US$290 million). Interest is payable at 8.75% per annum.

 

The Group also has US$320 million (£200 million) listed bonds due in 2019 with a balance outstanding at 31 March 2011, net of bonds repurchased, of US$235 million (31 March 2010 - US$219 million). Interest is payable at 8.625% per annum.

 

The sterling unsecured bonds had a fair value of US$582 million at 31 March 2011 (31 March 2010 - US$547 million). This value was determined by reference to market values obtained from third parties.

 

US dollar and US dollar linked loans

Various US dollar and US dollar linked loans of US$285 million (31 March 2010 - US$196 million) are held by subsidiaries across the Group, with the majority in Panama. Interest on these loans ranges between 0.0% and 12.8%. The loans are repayable over a period up to 2038.

 

The carrying amount of the US dollar and currencies linked to the US dollar loans approximates to fair value.

 

US dollar revolving credit facility and term loan

During the year ended 31 March 2010, the Group entered into a US$500 million revolving credit facility with a maturity date of 2013 secured on share pledges over Group assets. Further, the Group arranged a US$100 million term loan facility. This was secured on share pledges over the Group assets.

 

This facility and the term loan were undrawn as at 31 March 2011 and 31 March 2010.

 

Convertible bonds demerged during the year ended 31 March 2010

On 24 November 2009, convertible bonds due in 2014 of £230 million were issued by Cable and Wireless plc. These bonds were subsequently transferred to Cable & Wireless Communications Plc on 19 March 2010 before being transferred to Cable & Wireless Worldwide plc on 26 March 2010 as part of the demerger. An amount of US$2 million in relation to accrued interest was transferred post demerger. The bonds were separated into their loan and equity components on inception, being US$329 million of loan and US$37 million of equity on initial recognition.

 

 

12 Related party transactions

 

Transactions with key management personnel

Two Directors of Cable & Wireless Communications Plc own unsecured bonds issued by Cable & Wireless Limited (formerly Cable and Wireless plc) and Cable & Wireless International Finance BV. These bonds had a nominal value at 31 March 2011 of US$4,211,156 (£2,630,000) (31 March 2010 - US$3,914,492 (£2,630,000)). The interest earned on these bonds during 2010/11 was US$354,033 of which US$154,103 remained unpaid at 31 March 2011 (2009/10 - US$364,082 of which US$143,247 remained unpaid at 31 March 2010).

 

Two Directors' spouses hold bonds issued by Cable & Wireless Limited (formerly Cable and Wireless plc) and Cable & Wireless International Finance BV. These bonds had a nominal value at 31 March 2011 of US$784,588 (£490,000) (31 March 2010 - US$729,316 (£490,000)). The interest earned on those bonds during 2010/11 was US$65,378 of which US$2,000 remained unpaid at 31 March 2011 (2009/10 - US$66,888 of which US$1,859 remained unpaid at 31 March 2010).

 

13 Gain on sale of businesses

During the year ended 31 March 2011 the Group disposed of Cable & Wireless (Bermuda) Holdings and its subsidiaries, which was classified within the Monaco & Islands reportable segment. The disposal took place on 10 March 2011 to The Bragg Group for total consideration of US$70 million (excluding transaction costs) resulting in a gain on disposal of US$36 million. Cable & Wireless (Bermuda) Holdings does not constitute a discontinued operation in accordance with IFRS5 Non-current Assets Held for Sale and Discontinued Operations, due to its size.

 

During the year ended 31 March 2010 there were no gains on the sale of businesses.

 

14 Events after the reporting period

Business combinations

Bahamas Telecommunications Company

On 6 April 2011, the Group acquired 51% of the share capital of the Bahamas Telecommunications Company (BTC) from the Government of the Commonwealth of The Bahamas for cash consideration of US$210 million. BTC is the exclusive mobile operator in The Bahamas as well as a leading provider of fixed-line and broadband services. It is complementary to the Group's Caribbean business, LIME, which is the leading full-service telecommunications provider in the region. The goodwill recognised of US$71 million on acquisition was based on a provisional assessment of the fair values of assets acquired and liabilities assumed. The net cash outflow on acquisition was US$151 million.

 

To partly finance the acquisition, the Group drew US$180 million of the US$500 million revolving credit facility.

 

The Directors have made a provisional assessment of the fair values of the assets and liabilities as at the acquisition date. The fair values were as follows:

 

Book value

US$m

 Fair value

adjustments

US$m

Fair value

at 6 April

2011

 US$m

Property, plant and equipment

384

(125)

259

Customer contracts and relationships

-

31

31

Trademarks

-

1

1

Available-for-sale assets

20

-

20

Trade and other receivables

57

(10)

47

Inventories

13

(5)

8

Cash and cash equivalents

59

-

59

Trade and other payables

(96)

(10)

(106)

Financial liabilities at fair value through profit or loss

(2)

-

(2)

Provisions

-

(10)

(10)

Loans and borrowings

(34)

-

(34)

Total

401

(128)

273

 

 

Goodwill arising on the acquisition of BTC included the value of expected synergies resulting from the integration into the existing business and other intangible assets that did not meet the recognition criteria set out in IAS 38 Intangible Assets as they were unable to be separately identified. Acquisition-related costs of US$7 million were recorded in these financial statements as other operating expenses. Further acquisition-related costs are expected to be recorded in 2011/12 following completion. A non-controlling interest of US$134 million will be recognised in the 2011/12 accounts as at acquisition date measured at cost.

 

No revenue or profit related to BTC is included in these financial statements. For the statutory year ended 31 December 2010, BTC had total unaudited revenue of US$343 million and EBITDA of US$79 million.

 

Maldives currency partial flotation

On 11 April 2011, the Government of the Maldives announced a partial flotation of the Maldivian rufiyaa (MRF) within a range of 20% in either direction around the previously fixed rate of MRF 12.85 for USD 1.00.

 

The impact of the partial flotation is not reflected in these financial statements. However, a 20% devaluation of the Maldivian rufiyaa would have had the impact of reducing EBITDA by approximately US$14 million in 2010/11.

RISK OVERVIEW

 

During the year, a revised risk review process was introduced at operating and Group level with the intention of identifying and quantifying key risks and considering the adequacy of the way they are controlled. Below is a summary of some of the key risks identified by the review which could affect our business. Investors should consider them along with other information provided in the annual report.

 

Investment

We operate an active merger, acquisition and investment strategy which seeks new opportunities and, following thorough analysis, will execute them if appropriate. There is risk of failure or of an incorrect merger, acquisition and/or investment strategy being pursued and potential that new sources of growth may prove insufficient or fail to develop. We manage this risk by ensuring we employ experienced, knowledgeable individuals who undertake due diligence and if necessary, obtain specialist advice. The risks on any potential investment are thoroughly discussed by the Board of Directors.

 

Business development

Revenue and profit growth from customers increasing use of mobile data, pay TV and value added services are essential to the Group's future growth. If these services fail to perform as anticipated, or if we fail to identify and mobilise into new business lines within sufficient time, our revenue and profit may decrease as other core services reach full market penetration. Our marketing and product development strategies are focused to enable our businesses to reach full potential. We also engage experts to examine external product development.

 

Competitive activity

We operate in competitive markets, implementing plans to provide good value and enhance our proposition to customers. Competitor activity, new entrants and further liberalisation could all reduce our market share and margins, which in turn could affect revenue and profits. Reflecting that, we continue to invest in our network, enhance customer relationship systems, advance service quality, focus on loyalty and retention programmes, conduct market analysis and run marketing promotions, as well as tightly managing costs.

 

Business change

We continually work to strengthen our business. When necessary, we implement improvement strategies for underperforming areas (for instance, our Jamaica 'win back' activity). There is a risk that such strategies fail to achieve business improvement, which in turn could affect the carrying value of our investments and assets. Similarly there are risks that network or system maintenance and upgrades do not deliver expected improvements or cause disruption to existing services. To manage risks we employ people with experience of working within challenging business environments, target initiatives at key issues and thoroughly plan any upgrade works.

 

Economic conditions

A significant downturn in the global economy or poor local or national economic conditions may adversely affect our operations and trading, impacting our profitability, ability to obtain finance and pay dividends. The Caribbean economy continues to suffer. Whilst other regions have not been as affected, implementation of government austerity measures delayed agreement on certain new projects. Our businesses are geographically spread and that assists in reducing overall exposure. We continue to monitor key economic indicators and remain prepared to take action to protect profitability and cash flow in the event of a downturn in any of our markets.

 

Licences, regulation and political

The provision of telecommunications services is governed by applicable laws, regulations and government licences. The Group actively engages with governments and regulators in advance of licences and operating agreements expiring. However, there are risks that our licences are not renewed, or renewed on less favourable terms. Furthermore, licences could possibly be revoked or amended following changes in regulation, laws, government policy and/or the economic or political environment, or due to not fulfilling our regulatory requirements, default, or to promote public interest. In particular, without changes to the regulatory environment in Jamaica the Group will struggle to make an acceptable return on the capital it has invested which in turn could affect the carrying value of our investment. The Group continues to make vigorous efforts to seek a level playing field in bringing about changes to the current regulatory environment.

 

The Group may also be unable to obtain new or additional licences to implement new services or technology. Furthermore, regulatory environments could become anti-competitive. These risks could affect the value of our investments, cause a business to cease operating, severely restrict its operations and/or limit the Group's strategic options.

 

Some of the territories we operate in offer low or favourable taxation conditions, attracting large companies, several of which are also our customers. Changes to those tax regimes could result in customers moving their operations. We also provide services to governments which may be affected following changes in the political environment. Both of these risks could impact on the Group's revenues and profitability.

 

We manage these risks by active liaison with governments and regulators to encourage a positive working relationship consisting of open dialogue at senior level in both organisations. We also monitor developments in regulatory environments of our businesses.

 

Technology

Technological development may render existing products, services and supporting infrastructure non-competitive. Increased rate and level of investment in new technologies could affect our cash flow and profits. The Group keeps new technology developments under constant review.

 

Mobile telecommunications are a vital part of our business. Concerns are occasionally expressed that mobile phones and transmitters may pose long-term health risks. There is a risk that we may lose a strategic revenue stream or be exposed to litigation if such claims are proven. We continue to keep updated of research in this field.

 

Joint ventures

Although our preference is to gain management control in a joint venture business, that is not always possible.

 

Where we do not, we are often unable to influence their performance or ensure they do not underperform. To manage this risk, we endeavour to have some operational involvement and engagement with local management and major stakeholders.

 

Service disruption

Our networks are critical to providing an effective service to customers. Like other telecoms operators, our businesses also depend on other operators to provide network access and interconnect services for the origination, carriage and/or termination of some of their telecommunications services. Furthermore, our network and IT systems are vulnerable to interruption from natural disasters, fire, security breaches, terrorist action and human error. Network or IT failure could result in the loss of customers and in claims for loss of service. We continue to update our business continuity and disaster recovery plans, maintain crisis management and emergency response teams, insurance cover and employ network resilience to mitigate the effects of these risks.

 

Network and data security

Despite security management across the Group network, there is a risk that third parties may gain unauthorised access to the network and to sensitive data. The business has information security procedures and controls in place which are regularly reviewed and remedial action plans implemented where necessary.

 

People

Our people are one of our most important assets. We have incentive, succession and retention plans in place to reduce the risk of losing key personnel or significant numbers of trained people. The Group also faces risk of disruption if significant numbers of personnel are unavailable due to industrial action or a national emergency. We continuously review incentive, succession and retention plans, communicate with our colleagues and engage with unions, keep up to date with health warnings and undertake colleague engagement surveys.

 

Corporate ethics

We sustain a strong ethical culture through developing robust procedures, emphasising core values and providing colleagues with the information they need to make ethical decisions. The Group's anti-bribery policy has been updated to provide further guidance in light of the forthcoming implementation of the Bribery Act 2010, supplemented by a training programme.

 

Counterparty

The Group and business units routinely enter into a range of significant customer and supplier contracts. In any agreement there are counterparty risks, for example, insolvency of the customer or supplier or a default on their obligations, which could affect the profitability or cash flow of the business and/or its ability to perform. We manage these risks through robust procurement processes, good contract governance and regular review and management of our main customers and suppliers.

 

Foreign exchange and taxation

The Group generates all its profits from outside the UK, and so profits (and associated investments) are exposed to exchange rate fluctuations and changes to tax law. The Group also finances its operations by way of borrowings in several currencies. These factors create a potential risk of adverse financial impact on the results of business units and the Group. Foreign exchange risks are managed by use of hedging contracts, matching the currencies of material cash in-flows and expenditure and those of significant borrowings. The risk of changes to tax laws are managed by development of close working relationships with fiscal authorities, continuous monitoring of proposed legislative change and due consideration of appropriate changes to the Group contracting arrangements, tax compliance processes and holding structure.

 

Litigation

Not uncommon to most large organisations, there is a risk of litigation against our business units. Such risks are more prevalent in more litigious regions such as Panama and the Caribbean. Unfavourable rulings could affect our financial performance and reputation. However, if we are the subject of litigation, we will, as appropriate, defend our position vigorously using internal and external advice and support.

 

Liquidity

Liquidity risk could arise where the Group does not have sufficient financial resources available to meet its obligations and commitments as they fall due, or can access funding only at excessive cost. Exceptional market events could adversely impact any of the business units affecting their ability to meet obligations as they fall due. The Group forecasts and monitors cash generation and the maturity profile of its financing facilities by ensuring sufficient liquidity to fund both the business units and the Group's financial obligations. We have raised sufficient credit lines to meet medium-term liquidity needs and continue to maintain good relationships with our core banks.

 

Funding

Our financing agreements are subject to certain covenants. If we were to be in breach of these covenants, we may face early repayment of the funding facilities, thereby affecting our cash position. Our actual and forecast financial performance is checked against these covenants monthly.

 

Pensions

Our main UK defined benefit pension scheme is well managed and measures have been taken to reduce the financial risk exposures. However, the value of the scheme's assets and liabilities are affected by market movements. The Group may also have to make additional contributions to the scheme if its assumptions change. We maintain regular dialogue with the scheme Trustees who manage its assets with appropriate external advice, and supporting the Trustees with the aim of reducing financial risk.

 

Shared brand

The rights to the Cable & Wireless trade marks are shared between Cable & Wireless Communications Plc and Cable & Wireless Worldwide plc, pursuant to the terms of trade mark licences which took effect upon demerger. Both Cable & Wireless Communications and Cable & Wireless Worldwide are subject to severe restrictions in using the Cable & Wireless trade marks outside of their own allocated territories, except in relation to their respective carrier businesses, and for certain incidental and grandfathered use. To the extent that Cable & Wireless Communications has activities outside of its allocated territories which are not part of its carrier business, it must operate under trade marks other than the Cable & Wireless trade marks. Breach by either party on the agreement of how the Cable & Wireless trade mark should be used could result in litigation or potential reputational issues.

 

 

STATEMENT OF DIRECTORS' RESPONSIBILITY

 

The following statement is extracted from page 61 of the Cable & Wireless Communications 2010/11 Annual Report and Accounts and is repeated here for the purposes of Disclosure and Transparency Rule 6.3.5 to comply with Disclosure and Transparency Rule 6.3. This statement relates solely to the Cable & Wireless Communications 2010/11 Annual Report and Accounts and is not connected to the extracted information set out in this announcement or the annual results announcement.

 

Directors' statement pursuant to the Disclosure and Transparency Rules

Each of the Directors, whose names and functions are listed on pages 36 to 37 of the Cable & Wireless Communications 2010/11 Annual Report and Accounts, confirm that, to the best of each person's knowledge and belief:

§ The Group financial statements, prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group;

§ The Company financial statements, prepared in accordance with UK GAAP give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

§ The Annual Report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that they face.

 

A list of current Directors is also maintained on the Cable & Wireless Communications Plc website: www.cwc.com

 

By order of the Board

 

 

 

Clare Underwood

Company Secretary

20 June 2011

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
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