29th May 2009 17:14
HARVEY NASH GROUP PLC
("Harvey Nash" or "the Group")
Annual Report and Accounts
Harvey Nash publishes its annual report for the year ending 31 January 2009 and its 2009 AGM circular on its website today at www.harveynash.com. A hard copy of the annual report will also be posted to shareholders who have requested a copy.
In compliance with paragraph 6.3.5 of the Disclosure and Transparency Rules (DTR), 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. A condensed set of financial statements were appended to Harvey Nash's full year results announcement issued on 29 April 2009, which 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.
RISK MANAGEMENT
The Board reviews the key risks facing the business regularly. Outlined below are the main risks that could potentially impact the Group's operating and financial performance:
Economic Environment
In the current global slowdown the group has a number of policies in place to mitigate economic risks. These include a unique portfolio of services which caters for all stages of the economic cycle and a focus on annuity revenue streams which provide greater visibility of revenue.
Key Clients
The risk of loss of a key client is lessened by the Group not being overly reliant on any one client. The Group also ensures that there are regular reviews of relationships with all clients.
Personnel
The loss of senior management or key personnel could adversely affect the Group's results. This is mitigated by an ongoing talent management programme, sponsored by the Group's Executive Council.
Financial Risk Management
Financing
The Group's principal financial instruments are bank loans, overdrafts, cash and short term deposits. The Group has other financial instruments such as trade debtors and trade creditors that arise directly from its operations. Acquisitions are financed through a mixture of equity and medium term borrowings. Working capital finance for day-to-day requirements is provided through operating cash generation, invoice discount facilities and small short term overdraft facilities. All of the Group's long term borrowings are made centrally. Where applicable, funds are then made available for the financing of the Group's subsidiaries through intercompany loans.
Objectives, policies and strategies
The most significant treasury exposures faced by Harvey Nash are raising finance, managing interest rates and currency positions as well as investing surplus cash in high quality assets. The Board has established clear parameters, including levels of authority, on the type and use of financial instruments to manage these exposures. Transactions are only undertaken if they relate to underlying exposures and cannot be viewed as speculative.
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
During 2008/09, the Group's strategy, which was unchanged from 2007/08, is to have adequate headroom and access to cash facilities to meet its requirements.
Net debt £'000 (2009 - nil), (2008 - nil)
Total equity £'000 (2009 - 60,458), (2008 - 48,216)
Total capital £'000 (2009 - 60,458), (2008 - 48,216)
Gearing ratio % (2009 - n/a), (2008 - n/a)
Interest rate risk management
The Group's policy is to minimise interest charges through cash pooling and active cash management.
Foreign exchange risk management
The Group's policy is to minimise foreign currency risk. Harvey Nash manages its exposure on equity investments in overseas subsidiaries through foreign currency borrowings. The currency risk of holding assets and liabilities in foreign currencies across the Group is managed by partially matching foreign currency assets with foreign currency liabilities.
At 31 January 2009, if sterling had strengthened by 10% against the US dollar with all other variables held constant, operating profit for the year would have been £123k (2008:£80k) lower mainly as a result of foreign exchange losses on translation of dollar-denominated assets and liabilities.
At 31 January 2009, if sterling had strengthened by 5% against the euro with all other variables held constant, operating profit for the year would have been £354k (2008:£273k) lower mainly as a result of foreign exchange losses on translation of euro-denominated assets and liabilities.
Credit risk
The Group has no significant concentration of credit risk. It has policies in place to ensure that sales of products are made to customers with an appropriate credit history.
The table below shows the credit limit and balance with the Bank at the balance sheet date.
Bank overdraft - secured - A-1 (Standard and Poor's rating)
(2009 -Credit limit £2m, balance nil, 2008 - Credit limit £2m, balance nil)
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and committed credit facilities.
Management monitors rolling forecasts of the Group's liquidity reserve (comprises undrawn borrowing facility, cash and invoice discounting) on the basis of expected cash flow.
RELATED PARTY TRANSACTIONS
Banking Cross Guarantees
The following companies have given security to Harvey Nash Group plc, the Company.
The Group guarantees have been entered into by the Companies listed below and relate to any payment due under the Banking agreement by any of the companies listed below:
Harvey Nash plc -Group Guarantee, Debenture
Harvey Nash Resource Management Limited- Group Guarantee, Debenture
Interim Management In Information Technology Limited-
Group Guarantee, Debenture
Nash Direct Limited-Group Guarantee, Debenture
Vertis Consulting Limited-Group Guarantee, Debenture
Mortimer Spinks Limited-Group Guarantee, Debenture
Techpartners International Limited- Group Guarantee, Debenture
Harvey Nash Group EBT Limited-Group Guarantee
Impact Executives Holdings Limited- Group Guarantee, Debenture
Impact Executives Limited-Group Guarantee,Debenture
Broadbay Networks Inc-Group Guarantee
DIRECTORS' RESPONSIBILITY STATEMENT
The directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the group and the parent company financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, and the parent company financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The group and parent company 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 group financial statements comply with IFRSs as adopted by the European Union, and with regard to the parent company financial statements that applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the group and parent company financial statements on the going concern basis unless it is inappropriate to presume that the group will continue in business, in which case there should be supporting assumptions or qualifications as necessary.
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 to enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 1985 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 company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Each of the directors, whose names and functions are listed in page 2 of the Annual Report confirms that, to the best of their knowledge:
the group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the group; and
the directors' report contained in pages 9 to 13 of the Annual Report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties that it faces.
Directors
Ian Kirkpatrick
Albert Ellis
Richard Ashcroft
Simon Wassall
Gus Moore
Tom Crawford
Enquries:
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Harvey Nash |
Tel: 020 7333 0033 |
|
Albert Ellis, Chief Executive |
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|
Richard Ashcroft, Finance Director |
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|
College Hill |
Tel: 020 7457 2020 |
|
Mark Garraway |
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|
Adam Aljewicz |
Related Shares:
Harvey Nash Group