14th Sep 2007 07:54
Costain Group PLC14 September 2007 PART 2 APPENDIX IV APPENDIX IV PLACING TERMS AND CONDITIONS IMPORTANT INFORMATION FOR PLACEES ONLY MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING OF THE FULLYPAID RIGHTS IN CONNECTION WITH THE RIGHTS ISSUE. THIS APPENDIX AND THE TERMSAND CONDITIONS SET OUT AND REFERRED TO HEREIN ARE DIRECTED ONLY AT PERSONSSELECTED BY DRESDNER BANK AG, LONDON BRANCH ("DBAG") AND/OR DRESDNER KLEINWORTSECURITIES LIMITED ("DKS") AND/OR ARBUTHNOT SECURITIES LIMITED ("ARBUTHNOT") WHOARE "INVESTMENT PROFESSIONALS" AS DESCRIBED IN ARTICLE 19(5) OF THE FINANCIALSERVICES AND MARKETS 2000 (FINANCIAL PROMOTION) ORDER 2001 (AS AMENDED) (THE"ORDER"), ARE PERSONS FALLING WITHIN ARTICLE 49(2)(a) TO (d) ("HIGH NET WORTHCOMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.") OF THE ORDER OR TO WHOM IT MAYOTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TOAS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUTHEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANTPERSONS. ANY INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS ANDCONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILLBE ENGAGED IN ONLY WITH RELEVANT PERSONS. This announcement and the information contained herein are not for publicationor distribution, directly or indirectly, to persons in the United States,Canada, France, Japan, Malaysia, New Zealand, South Africa or Switzerland or inor into any other jurisdiction in which such publication or distribution isunlawful (a "Prohibited Jurisdiction"). This document and the information contained herein are not for publication ordistribution, directly or indirectly, to person in a Prohibited Jurisdictionunless permitted pursuant to an exemption under the relevant local law orregulation in any such jurisdiction. Unless otherwise defined in this Appendix, definitions used in this Appendixshall have the same meanings set out in Appendix V. Terms and Conditions of the Placing If a Relevant Person chooses to participate in the placing by DBAG and Arbuthnotof the Fully Paid Rights (as defined below) in connection with the Rights Issue(the "Placing") by making or accepting an offer for a Placing participation(each such Relevant Person being hereinafter referred to as a "Placee") it willbe deemed to have read and understood this Appendix in its entirety and to bemaking or accepting such offer on the terms and conditions and to be providingthe representations, warranties and acknowledgements contained in this Appendix. In particular, each Placee represents, warrants and acknowledges to each ofDBAG and Arbuthnot for themselves and as agents for the Company that it: 1. is, and at the time it agrees to acquire the Fully Paid Rights willbe, outside the United States and it will acquire any Fully Paid Rights pursuantto its Placing participation in an "offshore transaction" in reliance onRegulation S of the Securities Act; or 2. (i) is a qualified institutional buyer ("QIB") (as defined in Rule144A of the US Securities Act) and (ii) has duly executed a US investorrepresentation letter in the form provided to it (or otherwise agreed by DKS andArbuthnot) and has delivered the same to Dresdner Kleinwort Securities LLC. The Fully Paid Rights referred to in this announcement have not been and willnot be registered under the Securities Act, and may not be offered or soldwithin the United States absent registration or an exemption from registration. The New Ordinary Shares, the Nil Paid Rights, the Fully Paid Rights and theProvisional Allotment Letters have not been approved or disapproved by the SEC,any state securities commission in the United States or any other US regulatoryauthority, nor have any of the foregoing authorities passed upon or endorsed themerits of the offering of the New Ordinary Shares, the Nil Paid Rights, theFully Paid Rights or the Provisional Allotment Letters or the accuracy oradequacy of this document. Any representation to the contrary is a criminaloffence in the United States. This announcement and Appendix do not constitute an offer to sell or issue or asolicitation of an offer to buy or subscribe for Fully Paid Rights in anyjurisdiction including, without limitation, the United States, Canada, France,Japan, Malaysia, New Zealand, South Africa or Switzerland or any otherjurisdiction in which other such offer or solicitation is or may be unlawful.The distribution of this announcement and the Placing and issue of the FullyPaid Rights and/or the New Ordinary Shares in certain jurisdictions may berestricted by law. Persons to whose attention this announcement has been drawnare required by the Company, DKS, DBAG and Arbuthnot to inform themselves aboutand to observe any such restrictions. Details of the Underwriting Agreement and the Fully Paid Rights Daedalus Projects Limited ("Daedalus") has irrevocably undertaken pursuant to anundertaking dated 29 August 2007 (the "Irrevocable Undertaking") to, inter alia,the Company, DBAG and Arbuthnot to sell 81,261,941 of the Nil Paid Rights towhich it is entitled under the Rights Issue and to apply the net proceeds ofsuch sale in taking up the remainder of its entitlement under the Rights Issue.The Company has today entered into an underwriting agreement (the "UnderwritingAgreement") with, inter alia, DBAG and Arbuthnot under which DKS, as anaffiliate of DBAG, and Arbuthnot have agreed to procure persons to acquire theNil Paid Rights to be sold by Daedalus or the Fully Paid Rights or New OrdinaryShares relating to such rights on the terms and subject to the conditions setout herein. To the extent that DKS and Arbuthnot do not procure persons to takeup the Nil Paid Rights or any Fully Paid Rights or New Ordinary Shares relatingthereto, DBAG and/or Arbuthnot shall attempt to place them in the Rump and ifthey fail to do so, DBAG and/or Arbuthnot and/or the sub-underwriters (as thecase may be) shall acquire the balance of them in the Stick. Any Rump placing will be made subject to separate terms and conditions announcedat the time of such placing. Before implementing the Placing, for administrative reasons DKS will pay up infull the 81,261,941 Nil Paid Rights to be sold by Daedalus (the resulting FullyPaid Rights being the "Fully Paid Rights"). Placees will therefore acquire FullyPaid Rights in the Placing. The New Ordinary Shares relating to the Fully Paid Rights will, when issued andfully paid, rank in full for all dividends declared after the Record Date andotherwise pari passu in all respects with the Existing Shares. Application for Listing and Admission to Trading Application will be made to the UKLA for admission of the Nil Paid, Rights, theFully Paid Rights and the New Ordinary Shares to the Official List of the UKLA(the "Official List") and to the London Stock Exchange for admission to tradingof the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares on theLondon Stock Exchange's market for listed securities. It is expected thatAdmission will take place at 8.00am on 3 October 2007. Principal Terms of the Placing This Appendix gives details of the terms and conditions of, and the mechanics ofparticipation in, the Placing. 1. DBAG (through DKS) and Arbuthnot will arrange the Placing andparticipation will only be available to persons invited to participate by DBAGand/or DKS and/or Arbuthnot. 2. The price payable per Daedalus Fully Paid Right shall be 27.7857pence (the "Placing Price"). Placees will also be required to pay UK stamp dutyor stamp duty reserve tax (as appropriate) on the aggregate value of theirPlacing Commitment at the Placing Price. 3. A Placee's commitment to acquire a fixed number of Fully PaidRights will be agreed with and confirmed to it orally (the "Placing Commitment")and a written confirmation (a "Confirmed Commitment Letter") will be dispatchedas soon as possible thereafter. The oral confirmation to the Placee by DKS (asan affiliate of DBAG) or by Arbuthnot (as appropriate) (the "Oral Confirmation")constitutes an irrevocable, legally binding contractual commitment to eitherDBAG or Arbuthnot (as appropriate) to acquire a fixed number of Fully PaidRights allocated to it on the terms and conditions set out in this Appendix (the"Contract"). No commissions are payable to Placees in respect of their PlacingCommitments. A Form of Confirmation will be included with each ConfirmedCommitment Letter and this should be completed and returned by fax by 3.00 p.m.on the business day following the giving of the Oral Confirmation. If the OralConfirmation was given by DKS, the Confirmed Commitment Letter should becompleted and returned by fax to Simon Green at DKS. If the Oral Confirmationwas given by Arbuthnot, the Confirmed Commitment Letter should be completed andreturned by fax to Richard Johnson at Arbuthnot. 4. Following the Oral Confirmation, each Placee will, subject toAdmisison, have an immediate, separate, irrevocable and binding obligation, owedto DKS or Arbuthnot (as appropriate) to pay in cleared funds an amount equal tothe product of the Placing Price and the number of Fully Paid Rights comprisedin its Placing Commitment. Settlement for the Fully Paid Rights is due incleared funds by 11.00 am on 5 October 2007 or by the Placee ensuring that itsCREST account enables delivery of such Fully Paid Rights to be made to it on 8October 2007 against payment of the settlement price. DBAG, DKS and Arbuthnot shall be entitled to effect the Rights Issue and/or thePlacing by such method as they shall in their sole discretion determine. To thefullest extent permissible by law, none of DBAG, DKS or Arbuthnot, any holdingcompany thereof, not any subsidiary, branch or affiliate of any of them (each an"Affiliate") nor any person acting on behalf of any of them shall have anyliability to Placees (or to any other person whether acting on behalf of aPlacee or otherwise). In particular, none of DBAG, DKS and Arbuthnot, anyAffiliate thereof nor any person acting on their behalf shall have any liabilityin respect of its conduct of the Rights Issue (including the Placing) or of suchalternative method of effecting the Rights Issue and/or the Placing as it maydetermine. Conditions of the Rights Issue The Placing will not proceed unless all of the conditions to the obligations ofDBAG and Arbuthnot under the Underwriting Agreement are satisfied or are waivedin accordance with its terms. The obligations of DBAG and Arbuthnot under theUnderwriting Agreement are conditional, inter alia, on: 1. the passing of the Resolutions at the Extraordinary GeneralMeeting on the EGM Date (and not, without the prior written consent of DBAG andArbuthnot, at any adjournment thereof) without any amendment not previouslyapproved in writing by the DBAG and Arbuthnot; 2. none of the warranties given by the Company in the UnderwritingAgreement being untrue, inaccurate or misleading at the date of the UnderwritingAgreement and there being no change of circumstances such that, if suchwarranties were to be repeated at any time before Admission by reference to thefacts and circumstances then subsisting, any such warranty would be untrue,inaccurate or misleading, in each case in a manner which is material in thecontext of the Admission or the Rights Issue; 3. there not having occurred or arisen prior to Admission anysignificant change or new matter as is referred to in section 87G of the FSMAwhich requires a supplementary prospectus to be published; 4. each condition to enable the Nil Paid Rights and the Fully PaidRights to be admitted as a participating security (as defined in theRegulations) in CREST (other than Admission) being satisfied on or before theEGM Date; 5. the FSA agreeing to admit the Rights Shares (nil paid and fullypaid) to the Official List and the London Stock Exchange agreeing to admit theRights Shares to trading on its market for listed securities (both subject onlyto allotment of the Rights Shares) by no later than the EGM Date and Admissionoccurring at 8.00 a.m. on the first Dealing Day following the EGM Date; 6. the Existing Facilities Agreements remaining in full force and effectbetween the publication of the Prospectus and Admission, all representations andall warranties repeated or given by the Company under the Facilities AmendmentAgreements being, or when given being, correct and accurate in all respects, allconditions precedent to the New Facilities Agreements and the FacilitiesAmendment Agreements (other than those conditions relating to Admission and theUnderwriting Agreement becoming unconditional) having been satisfied or waivedin accordance with the terms of such agreements before Admission and the Companyhaving confirmed to DBAG and Arbuthnot (after consulting with the ExistingFacilities Agreements and New Facilities Agreements lead arrangers) in writingfollowing the EGM and in any event no later than 5.00 p.m. on the EGM Date that: so far as it is aware (i) there is no reason why (A) all of the conditionsprecedent to the Facilities Amendment Agreements and the New FacilitiesAgreements will not be satisfied as at Admission and (B) any representations orwarranties required to be given or repeated pursuant to the Facilities AmendmentAgreements or the New Facilities Agreements will not be capable of being givenor repeated as required by such agreements; and (ii) no fact, matter orcircumstance exists which is likely to result in any of the Existing Facilities(as amended and restated by the Facilities Amendment Agreements) or the NewFacilities being withdrawn or otherwise not being available for draw-down by theCompany in full; and there has been no material breach of the terms of the Existing FacilitiesAgreements or the Facilities Amendment Agreements which has not been remedied orwaived and, so far as it is aware, no fact, matter or circumstance exists whichis likely to result in any material breach of the terms of the ExistingFacilities Agreements, the Facilities Amendment Agreements or the New FacilitiesAgreements occurring; 7. each of the Undertakings having been complied with in full beforeAdmission (to the extent that they fall to be complied with before such time);and 8. the UEM Instruction Letter having been duly signed and delivered by UEMand Rood Nominees Limited to DBAG and having not been revoked, in each casebefore Admission. If (a) the conditions set out in the Underwriting Agreement are not satisfied or(to the extent permitted under the Underwriting Agreement) waived by DBAG andArbuthnot by the required time (or before such later time and/or date as theCompany, DBAG and Arbuthnot may agree) or (b) the Underwriting Agreement isterminated in the circumstances specified below, the Placing and the RightsIssue will lapse and the rights and obligations of the Placees hereunder shallcease and determine at such time and no claim can be made by any Placee inrespect thereof. In addition, the obligations of DKS and Arbuthnot under the Placing areconditional on Daedalus complying in full with the terms of the IrrevocableUndertaking. Rights of Termination DBAG and Arbuthnot may, following discussion with the Company where thecircumstances permit at any time prior to Admission terminate their respectiveobligations under the Underwriting Agreement by giving notice to the Company ifinter alia: 1. in the opinion of DBAG and Arbuthnot (acting in good faith), thewarranties in the Underwriting Agreement are not true and accurate or havebecome misleading (or would not be true and accurate or would be misleading ifthey were repeated at any time before Admission) by reference to the factssubsisting at the and in the opinion of DBAG and Arbuthnot (acting in goodfaith) such breach is material and adverse in the context of Admission or theRights Issue; or 2. in the opinion of DBAG and Arbuthnot (acting in good faith), there hasbeen a breach by the Company of any of its obligations under the UnderwritingAgreement or certain related agreements which is in the opinion of DBAG andArbuthnot (acting in good faith) material in the context of Admission or theRights Issue; or 3. in the opinion of DBAG and Arbuthnot (acting in good faith), there hasbeen a material adverse change in the financial or trading position or prospectsof the Group as a result of which DBAG and Arbuthnot consider (acting in goodfaith) it is impracticable or inadvisable to proceed with Admission or theRights Issue; or 4. any new matter or circumstance arises, and as a result of such matteror circumstance, it is necessary, in the opinion of DBAG and Arbuthnot (actingin good faith), to amend or supplement the Prospectus in the approved terms, inorder that the Prospectus will not contain an untrue statement of a materialfact or omit to state a material fact necessary to make the statements thereinnot misleading or in order to ensure the Prospectus complies with the ProspectusRules, the Companies Act, the FSMA, the Listing Rules and all other statutes andgovernmental and regulatory authority regulations applicable to the Rights Issueand which, in any case, in the opinion of DBAG and Arbuthnot (acting in goodfaith) is material and adverse in the context of Admission or the Rights Issue,or 5. any sub-underwriter terminates its sub-underwriting commitmentfollowing publication of any supplementary prospectus or the announcement of anyintention to publish such a supplementary prospectus; or 6. any press or public announcement concerning the Group or the RightsIssue has been made by or on behalf of the Group which has not been sanctionedby the Underwriters prior to its release (such sanction not to be unreasonablywithheld or delayed) and which in the opinion of DBAG and Arbuthnot (acting ingood faith) is detrimental to the Group and material and adverse in the contextof Admission or the Rights Issue; or 7. in the opinion of DBAG and Arbuthnot (acting in good faith), there hasbeen after today's date: (a) a change in national or international, financial, political, economic orstock market conditions (primary or secondary); or (b) an incident of terrorism, outbreak or escalation of hostilities, war,declaration of martial law or any other calamity or crisis; or (c) a suspension or material limitation in trading of securities generally onany major stock exchange in the United Kingdom; or (d) a change in currency exchange rates or exchange controls in the UnitedKingdom, or a disruption of settlement systems in the United Kingdom, or amaterial disruption in commercial banking in the United Kingdom, in each case as would be likely to prejudice materially the success of theRights Issue. Each Placee agrees with DKS, DBAG and Arbuthnot that the waiver by DBAG andArbuthnot, or the agreement by DBAG and Arbuthnot to the extension of time forthe satisfaction, of any condition of the Underwriting Agreement or the exerciseby DBAG and Arbuthnot of their right of termination of the UnderwritingAgreement, or any other discretion under such agreement, shall be within theabsolute discretion of DBAG and Arbuthnot and that none of DKS, DBAG norArbuthnot shall have any liability to any Placee whatsoever in connection withany decision to waive any such condition, agree to any such extension or toexercise or not to exercise any such right or discretion. By participating in the Placing, each Placee agrees that its rights andobligations hereunder terminate only in the circumstances described above andwill not be capable of rescission or termination by any Placee. Information for Placees A Prospectus will be published in connection with the Rights Issue and Admissionand will be approved by the UKLA. Placees have been sent a placing proof of thedraft Prospectus (the "U Proof"). A Placee may only rely on the informationcontained in the U Proof in deciding whether or not to participate in thePlacing. Each Placee, by accepting a participation in the Placing, agrees thatthe content of this announcement and the U Proof are exclusively theresponsibility of the Company and confirms to DBAG, DKS, Arbuthnot and theCompany that it has neither received nor relied on any other information,representation, warranty or statement made by or on behalf of DKS, DBAG orArbuthnot or any of their respective affiliates or the Company (other than theamount of the relevant placing participation communicated by DKS or Arbuthnot(as appropriate) in the Oral Confirmation), and none of DKS, DBAG, Arbuthnot orany of their respective affiliates or the Company will be liable for thedecision of any Placee to accept an invitation to participate in the Placingbased on any other information, representation, warranty or statement which thePlacee may have obtained or received. Each Placee acknowledges to and agreeswith each of DKS, DBAG and Arbuthnot for themselves and as agents for theCompany, that it has relied only on the information in the U Proof and thisannouncement in making its decision to participate in the Placing. Nothing inthis paragraph shall exclude the liability of any person for fraudulentmisrepresentation. Registration and Settlement Settlement of transactions in the New Ordinary Shares following Admission willtake place within CREST, using the DVP system, subject to certain exceptions.DKS, DBAG and Arbuthnot reserve the right to require settlement for and deliveryof the Fully Paid Rights to any Placee by such other means as they respectivelydeem necessary if delivery or settlement is not possible within CREST within thetimetable set out in this announcement or would not be consistent with theregulatory requirements in the jurisdictions of such Placee. It is expected that settlement of the Placing will be on 8 October 2007. Interest is chargeable daily on payments not received from Placees on the duedate in accordance with the arrangements set out in this Appendix at the rate of2 per cent. above the base rate from time to time of Barclays Bank Plc. If a Placee does not comply with these obligations, either (i) DKS and/or DBAG,and/or (ii) Arbuthnot (as appropriate) may sell the Fully Paid Rights allocatedto such Placee and retain from the proceeds, an amount equal to the PlacingPrice multiplied by the number of Fully Paid Rights comprised in its PlacingCommitment, plus any interest due. The relevant Placee will, however, remainliable, inter alia, for any shortfall below the Placing Price and it may berequired to bear any stamp duty or stamp duty reserve tax (together with anyinterest or penalties) which may arise upon the sale of its Fully Paid Rights onits behalf. If Fully Paid Rights are to be delivered to a custodian or settlement agent of aPlacee, the relevant Placee should ensure that its Confirmed Commitment Letteris copied and delivered immediately to the relevant person within thatorganisation. Placees will be required to pay UK stamp duty or stamp duty reserve tax (asappropriate) on the aggregate value of their Placing Commitment at the PlacingPrice. Representations and Warranties by Placees By participating in the Placing, each Placee (and any persons acting on itsbehalf): 1. represents and warrants that it is entitled to subscribe for andpurchase Fully Paid Rights and the related New Ordinary Shares under the laws ofall relevant jurisdictions which apply to it and that it has fully observed suchlaws and obtained all such governmental and other guarantees and other consentswhich may be required there under and complied with all necessary formalities; 2. represents and warrants that the issue to the Placee, or theperson specified by such Placee for registration as holder of Fully Paid Rightsand the related New Ordinary Shares will not give rise to a liability under anyof sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts andclearance services); 3. represents and warrants that it has complied with its obligationsin connection with money laundering under the Criminal Justice Act 1993, theMoney Laundering Regulations 1993 and the Money Laundering Regulations 2003(together, the "Regulations") and, if it is making payment on behalf of a thirdparty, that satisfactory evidence has been obtained and recorded by it to verifythe identity of the third party as required by the Regulations; 4. represents and warrants that it is a person falling within Article19 (5) or Article 49(2) (a) to (d) of the Order and undertakes that it willacquire, hold, manage or dispose of any Fully Paid Rights and the related NewOrdinary Shares that are allocated to it for the purposes of its business; 5. represents and warrants that it has complied and will comply withall applicable provisions of FSMA with respect to anything done by it inrelation to the Fully Paid Rights and the related New Ordinary Shares in, fromor otherwise involving the United Kingdom; 6. represents and warrants that it has all necessary capacity andauthority and has obtained all necessary consents and authorities to enable itto commit to participation in the Placing and to perform its obligations inrelation thereto and will honour its obligations (including, without limitation,in the case of any person on whose behalf it is acting, all necessary consentsand authorities to agree to the terms set out or referred to in thisannouncement); 7. undertakes that it will pay for the Fully Paid Rights and therelated New Ordinary Shares acquired by it in accordance with this Appendix onthe due time and date set out herein, failing which the relevant Fully PaidRights or, if appropriate, the related New Ordinary Shares may be placed withother subscribers or sold as either (i) DKS and/or DBAG, and/or (ii) Arbuthnotdetermine and without liability to such Placee; 8. acknowledges that participation in the Placing is on the basisthat it is not and will not be a client or customer of DKS, DBAG or Arbuthnotand that DKS, DBAG and Arbuthnot have no duties or responsibilities to it forproviding the protections afforded to their respective clients or customers orfor providing advice in relation to the Placing or in respect of anyrepresentations, warranties, undertakings or indemnities contained in theUnderwriting Agreement nor for the exercise or performance of any of DBAG's orArbuthnot's rights and obligations thereunder, including any right to waive orvary conditions or exercise any termination right; 9. undertakes and agrees that (i) the person whom it specifies forregistration as holder of the Fully Paid Rights and the related New OrdinaryShares will be (a) the Placee or (b) a nominee of the Placee, (ii) none of DKS,DBAG, Arbuthnot nor the Company will be responsible for any additional liabilityto stamp duty or stamp duty reserve tax resulting from a failure to observe thisrequirement and (iii) the Placee and any person acting on its behalf agrees toacquire Fully Paid Rights and the related New Ordinary Shares on the basis thatthe same will be allotted to the CREST stock account of DKS who, in respect ofPlacees procured by DKS, will hold them as nominee on its behalf untilsettlement in accordance with its standing settlement instructions and, inrespect of Placees procured by Arbuthnot, will hold them as nominee and thentransfer them to Arbuthnot on its behalf until Arbuthnot undertakes settlementin accordance with its standing settlement instructions; 10. acknowledges that any agreements entered into by it pursuant tothese terms and conditions shall be governed by and construed in accordance withthe laws of England and that it submits (on behalf of itself and on behalf ofany person on whose behalf it is acting) to the exclusive jurisdiction of theEnglish courts as regards any claim, dispute or matter arising out of any suchcontract; 11. acknowledges that the Fully Paid Rights and the related Nil PaidRights and New Ordinary Shares have not been and will not be registered underthe securities legislation of any state of the United States, Canada, France,Japan, Malaysia, New Zealand, South Africa or Switzerland and, subject tocertain exceptions, may not be offered, sold, delivered or transferred, directlyor indirectly, within those jurisdictions; 12. undertakes and agrees that neither it nor any of its affiliates (asdefined in Rule 501(b) of the Securities Act) nor any person acting on its ortheir behalf will offer or sell any Fully Paid Rights and the related NewOrdinary Shares within the United States except in accordance with Rule 903 ofRegulation S of the Securities Act or to QIBs pursuant to the exemption from theregistration requirements of the Securities Act provided by Rule 144A; 13. undertakes and agrees that neither it nor its affiliates (asdefined in Rule 501(b) of the Securities Act) nor any person acting on its ortheir behalf have engaged in or will engage in any "general solicitation orgeneral advertising" (within the meaning of Regulation D under the SecuritiesAct) or "directed selling efforts" (as defined in Regulation S under theSecurities Act) in connection with any offer or sale of the Fully Paid Rightsand the related New Ordinary Shares; 14. acknowledges that stamp duty and stamp duty reserve tax is payablein respect of each Placee's commitment (and/or the commitment of a person forwhom it is contracting as agent) and that the Placee is solely responsible forpayment of the same and none of Daedalus, the Company, DKS, DBAG and Arbuthnotwill be responsible for its payment. In addition, Placees should note that theywill be liable for any capital duty, stamp duty and all other stamp, issue,securities, transfer, registration, documentary or other duties or taxes(including any interest, fines or penalties relating thereto) payable outsidethe UK by them or any other person on the acquisition by them of any Fully PaidRights and the related New Ordinary Shares or the agreement by them to acquireany Fully Paid Rights and the related New Ordinary Shares; 15. acknowledges that any monies of any Placee or any person acting onbehalf of the Placee held or received by DKS or Arbuthnot will not be subject tothe protections conferred by the FSA's Client Money Rules. As a consequence,these monies will not be segregated from the monies of DKS or Arbuthnot and maybe used by DKS and/or Arbuthnot (as appropriate) in the course of theirrespective businesses, and the relevant Placee or any person acting on itsbehalf will therefore, to the extent it has a claim against DKS and/orArbuthnot, rank as a general creditor of DKS and/or Arbuthnot (as appropriate);and 16. (i) acknowledges that its acceptance of such participation is notby way of acceptance of the public offer to be made in the Prospectus andProvisional Allotment Letters but is by way of a collateral contract and as suchsection 87Q of the FSMA does not entitle it to withdraw if the Company publishesa supplementary prospectus in connection with the Rights Issue; and (ii)irrevocably undertakes to each of DKS, DBAG, Arbuthnot and the Company that ifat any time it becomes entitled pursuant to section 87Q of the FSMA to withdrawits Placing Commitment or otherwise not to acquire the Fully Paid Rights in thePlacing upon the terms and conditions of this Appendix, it will forthwithre-confirm to both DKS and Arbuthnot its Placing Commitment on the terms in thisAppendix by completing and returning to DKS or Arbuthnot (as appropriate,depending upon to which of DKS or Arbuthnot it previously returned a Form ofConfirmation) a further Form of Comfirmation in respect of the full PlacingCommitment referred to in the Form(s) of Confirmation returned by it before suchwithdrawal rights arose. 17. represents and warrants that it has read and understood thisAppendix in its entirety and acknowledges that its participation in the Placingwill be governed by the terms of this document and the U Proof. 18. agrees to indemnify on an after-tax basis and hold harmless the Company,DKS, DBAG and Arbuthnot, any of their respective Affiliates and any personacting on their behalf from any and all costs, claims, liabilities and expenses(including legal fees and expenses) arising out of or in connection with anybreach of the representations, warranties, acknowledgements, agreements andundertakings in this Appendix and further agrees that the provisions of thisAppendix shall survive after completion of the Rights Issue and the Placing; 19. acknowledges that the Existing Ordinary Shares are listed on the LondonStock Exchange/Official List of the UK Listing Authority, and the Company istherefore required to publish certain business and financial information inaccordance with the rules and practices of the London Stock Exchange/FSA(collectively, the "Exchange Information"), which includes a description of thenature of the Company's business and the Company's most recent balance sheet andprofit and loss account, and similar statements for preceding financial years,and that the Placee is able to obtain or access the Exchange Information withoutundue difficulty; 20. acknowledges that none of DBAG, DKS or Arbuthnot, nor any of theirAffiliates nor any person acting on their behalf has provided, and will notprovide it with any material or information regarding the New Ordinary Shares orthe Company; nor has it requested DBAB, DKS or Arbuthnot, nor any of theirAffiliates or any person acting on their behalf to provide it with any suchmaterial or information; 21. acknowledges that the content of this document is exclusively theresponsibility of the Company and that none of DKS, DBAG nor Arbuthnot, nor anyof their respective Affiliates nor any person acting on their behalf will beresponsible for or shall have any liability for any information, representationor statement relating to the Company contained in the U Proof or this Appendixor any information previously published by or on behalf of the Company and noneof DKS, DBAG or Arbuthnot any of their respective Affiliates nor any personacting on their behalf will be liable for any Placee's decision to participatein the Placing based on any information, representation or statement containedin the U Proof or this Appendix or otherwise. Each Placee further represents,warrants and agrees that the only information on which it is entitled to relyand on which such Placee has relied in committing to subscribe for the NewOrdinary Shares is contained in the U Proof or this Appendix and any ExchangeInformation, such information being all that it deems necessary to make aninvestment decision in respect of the New Ordinary Shares, and that it hasrelied on its own investigation with respect to the New Ordinary Shares and theCompany in connection with its decision to subscribe for the New Ordinary Sharesand acknowledges that it is not relying on any investigation that DKS, DBAG,Arbuthnot any of their respective Affiliates or any person acting on theirbehalf may have conducted with respect to the New Ordinary Shares or the Companyand none of such persons has made any representations to it, express or implied,with respect thereto; 22. acknowledges that it has not relied on any information relating to theCompany contained in any research reports prepared by DKS, DGAB, Arbuthnot, anyof their Affiliates or any person acting on DKS's, DBAG, Arbuthnot or any oftheir Affiliates' behalf and understands that (i) none of DKS, DGAB, Arbuthnot,any of their Affiliates nor any person acting on their behalf has or shall haveany liability for public information or any representation; (ii) none of DKS,DGAB, Arbuthnot, any of their Affiliates nor any person acting on their behalfhas or shall have any liability for any additional information that hasotherwise been made available to such Placee, whether at the date ofpublication, the date of this document or otherwise; and that (iii) none of DKS,DGAB, Arbuthnot, any of their Affiliates nor any person acting on their behalfmakes any representation or warranty, express or implied, as to the truth,accuracy or completeness of such information, whether at the date ofpublication, the date of this document or otherwise; 23. represents and warrants that it understands that the New Ordinary Shareshave not been and will not be registered under the Securities Act or under thesecurities laws of any state or other jurisdiction of the United States and thatthe Company has not been registered as an "investment company" under the UnitedStates Investment Company Act of 1940, as amended; 24. represents and warrants that it has not offered or sold and will notoffer or sell any New Ordinary Shares to persons in the United Kingdom prior toAdmission except to qualified investors as defined in section 86(7) of FSMA,being persons falling within Article 2.1(e)(i), (ii) or (iii) of the ProspectusDirective; 25. represents and warrants that it has only communicated or caused to becommunicated and will only communicate or cause to be communicated anyinvitation or inducement to engage in investment activity (within the meaning ofsection 21 of FSMA) relating to the New Ordinary Shares in circumstances inwhich section 21(1) of FSMA does not require approval of the communication by anauthorised person; 26. represents and warrants that it is a qualified investor as defined insection 86(7) of FSMA, being a person falling within Article 2.1(e)(i), (ii) or(iii) of the Prospectus Directive; 27. acknowledges that any of DKS, DBAG or Arbuthnot may itself become aPlacee in respect of some or all of the New Ordinary Shares or nominate anyconnected or associated person to do so; 28. acknowledges that until 40 days after the Acceptance Date, an offer orsale of New Ordinary Shares within the United States by any dealer (whether ornot participating in the Placing) may violate the registration requirements ofthe Securities Act if such offer or sale is made otherwise than in accordancewith Rule 144A or pursuant to another exemption from registration under theSecurities Act to a person that is a QP (as defined below); 29. that (a) it is a qualified institutional buyer within the meaning ofRule 144A of the Securities Act; (b) it is a "qualified purchaser" within themeaning of Section 2(a)(51) of the United States Investment Company Act of 1940,as amended ("QP"), and is not (i) a broker or dealer which owns or invests lessthan US$25 million in securities of unaffiliated issuers; (ii) aparticipant-directed employee plan or (iii) formed for the purposes of investingin the New Ordinary Shares or the Company; (c) it has duly executed, or willduly execute, an investor letter in the form provided to it by DKS, DGAB orArbuthnot in which it will make certain undertakings, representations andwarranties in addition to those contained herein; and (d) it is subscribing forthe New Ordinary Shares for its own account, or for the account managed onbehalf of another QIB that is also a QP, and not with a view to any distributionwithin the meaning of the Securities Act or applicable state law except as setforth below; 30. it acknowledges and agrees that it has, or to the extent it is acquiringNew Ordinary Shares for the account of another QIB, such other QIB (a) has,sufficient knowledge, sophistication and experience in financial and businessmatters so as to be capable of evaluating the merits and risks of the purchaseof the New Ordinary Shares; (b) is able to bear the economic and financial risk(including a complete loss) of such a purchase; (c) has had sufficient time toconsider and conduct its own investigation with respect to the offer andpurchase of the New Ordinary Shares, including the tax, legal, currency andother economic considerations relevant to such investment and (d) will not lookto the Company, DKS, DBAG, Arbuthnot any of their respective Affiliates or anyperson acting on their behalf for all or part of any such loss or losses it orthey may suffer; 31. it acknowledges and agrees that the Company, DKS, DBAG and Arbuthnot,their respective Affiliates and any person acting on their behalf will rely uponits representations, warranties, undertakings, agreements and acknowledgementsset forth herein and in the investor letter, and agrees to notify the Company,DKS, DBAG and Arbuthnot promptly in writing if any of its representations,warranties, undertakings, agreements or acknowledgements cease to be accurateand complete. The acknowledgements, undertakings, representations and warranties referred toabove are given to each of the Company, DKS, DBAG and Arbuthnot (for their ownbenefit and, where relevant, the benefit of their respective Affiliates and anyperson acting on their behalf) and are irrevocable. No UK stamp duty or stamp duty reserve tax should be payable to the extent thatthe New Ordinary Shares are issued or transferred (as the case may be) intoCREST to, or to the nominee of, a Placee who holds those shares beneficially(and not as agent or nominee for any other person) within CREST and registeredin the name of such Placee or such Placee's nominee. Any arrangements to issue or transfer the New Ordinary Shares into a depositaryreceipts system or a clearance service or to hold the New Ordinary Shares asagent or nominee of a person to whom a depositary receipt may be issued or whowill hold the New Ordinary Shares in a clearance service, or any arrangementssubsequently to transfer the New Ordinary Shares, may give rise to stamp dutyand/or stamp duty reserve tax, for which none of the Company, DKS, DBAG orArbuthnot will be responsible and the Placee to whom (or on behalf of whom, orin respect of the person for whom it is participating in the Placing as an agentor nominee) the allocation, allotment, issue or delivery of New Ordinary Shareshas given rise to such stamp duty or stamp duty reserve tax undertakes to paysuch stamp duty or stamp duty reserve tax forthwith and to indemnify on anafter-tax basis and to hold harmless the Company, DKS, DBAG and Arbuthnot in theevent that any of the Company and/or DKS and/or DBAG and/or Arbuthnot hasincurred any such liability to stamp duty or stamp duty reserve tax. In addition, Placees should note that they will be liable for any capital duty,stamp duty and all other stamp, issue, securities, transfer, registration,documentary or other duties or taxes (including any interest, fines or penaltiesrelating thereto) payable outside the UK by them or any other person on theacquisition by them of any New Ordinary Shares or the agreement by them toacquire any New Ordinary Shares. All times and dates in this document may be subject to amendment. DKS orArbuthnot will notify the Placees and any person acting on behalf of the Placeesof any such changes. This document has been issued by the Company and is the sole responsibility ofthe Company. The rights and remedies of DKS, DBAG, Arbuthnot and the Company under theseterms and conditions are in addition to any rights and remedies which wouldotherwise be available to each of them and the exercise or partial exercise orpartial exercise of one will not prevent the exercise of others. Each Placee may be asked to disclose in writing or orally to DKS and/orArbuthnot: (a) if he is an individual, his nationality; or (b) if he is a discretionary fund manager, the jurisdiction in which thefunds are managed or owned. Dresdner Kleinwort Securities Limited, which is authorised and regulated by theFinancial Services Authority, and Dresdner Bank AG, London Branch, which isauthorised by BAFin and by the Financial Services Authority for the conduct ofdesignated investment business in the United Kingdom, are acting for the Companyand for no one else in connection with the Rights Issue and will not beresponsible to anyone other than the Company for providing the protectionsafforded to customers of Dresdner Bank AG, London Branch and Dresdner KleinwortSecurities Limited or for providing advice in relation to the Rights Issue, orany other matters referred to herein. Arbuthnot Securities Limited, which is authorised and regulated by the FinancialServices Authority, is acting for the Company and for no one else in connectionwith the Rights Issue and will not be responsible to anyone other than theCompany for providing the protections afforded to customers of ArbuthnotSecurities Limited or for providing advice in relation to the Rights Issue, orany other matters referred to herein. APPENDIX V GLOSSARY OF TERMS "Acceptance Date" 25 October 2007 or such other date (not being later than 31 October 2007) as the Company and DBAG and Arbuthnot may agree "Admission" admission of the New Ordinary Shares, nil paid, to the Official List and to trading on the main market for listed securities of the London Stock Exchange; "Arbuthnot" Arbuthnot Securities Limited; "Closing Price" the closing middle market quotation of an Existing Ordinary Share, as published in the Daily Official List; "Commitment Period" the period commencing on (and including) the date of the Underwriting Agreement and ending on (and including) the earliest of: (a) if there are no Remaining Shares, 11.00 a.m. on the Acceptance Date; (b) if there are any Remaining Shares, 5.00 p.m. on the second Dealing Day following the Acceptance Date; (c) the date on which the obligations of the Underwriters lapse because any condition to the Underwriting Agreement becomes incapable of being fulfilled (and is not waived) or if all such conditions are not fulfilled (or waived); and (d) the date on which notice is given by the DBAG and Arbuthnot to the Company terminating their obligations under the Underwriting Agreement "Committed Shares" the 72,485,851 Rights Shares in aggregate in respect of which Qualifying Shareholders have irrevocably undertaken to subscribe (or procure that their nominees subscribe) or, in the case of the Directors, have indicated their intention to subscribe or procure that their nominee(s) subscribe "CREST" the system for the paperless settlement of trades in securities and the holding of uncertificated securities in accordance with the CRESTCo Regulations operated by CRESTCo; "CRESTCo Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended form time to time; "CRESTCo" Euroclear UK & Ireland Limited; "Daedalus" Daedalus Projects Limited; "Daily Official List" the daily official list of the London Stock Exchange; "Dealing Day" a day upon which dealings in domestic securities may take place on and with the authority of the London Stock Exchange; "DBAG" Dresdner Bank AG, London branch; "EGM Date" 2 October 2007 "Enlarged Share Capital" the issued ordinary share capital of the Company following the issue of the New Ordinary Shares pursuant to the Rights Issue; "Existing Facilities Agreements" the facility agreement dated 15 March 2004 (as amended) between the Company and The Royal Bank of Scotland plc acting as agent for National Westminster Bank plc as lender (the "RBS Facility Agreement") and each of the Bank Facilities Agreements and Surety Facilities Agreements (each as defined in the RBS Facility Agreement as amended and restated by the Facilities Amendment Agreements) "Existing Ordinary Shares" the ordinary shares of 5 pence each in the capital of the Company at the date of this document; "Extraordinary General Meeting" the extraordinary general meeting of the Company to be convened pursuant to the notice set out at the end of this document (including any adjournment thereof); "Facilities Amendment Agreements" the amendment and restatement agreements each dated on or about the date of this Agreement in the approved terms relating to the Existing Facilities Agreements "Form of Confirmation" the form of confirmation in respect of the Placing or sub-underwriting participation, as the case may be "FSMA" the Financial Services and Markets Act 2000 "Fully Paid Rights" rights to acquire New Ordinary Shares, fully paid; "Kharafi" Mohammed Abdulmohsin Al-Kharafi & Sons WLL; "London Stock Exchange" London Stock Exchange plc or its successor(s); "New Facilities Agreements" the new facilities agreements to be entered into pursuant to the Facilities Amendment Agreements and those facilities described as "New Surety Facilities Agreements" in the Facilities Amendment Agreements "New Ordinary Shares" the ordinary shares of 5 pence each in the capital of the Company to be issued by the Company pursuant to the Rights Issue; "Nil Paid Rights" the Rights Shares in nil paid form provisionally allotted to Qualifying Shareholders in connection with the Rights Issue "Official List" the official list of the UK Listing Authority; "Ordinary Shares" Existing Ordinary Shares and/or New Ordinary Shares, as the context requires; "Placing" the sale of rights over 81,261,941 New Ordinary Shares on behalf of Daedalus; "Prospectus" the document dated 14 September 2007, comprising a prospectus relating to the Company for the purpose of the Rights Issue and the listing of the New Ordinary Shares on the London Stock Exchange (together with any supplements or amendments thereto); "Prospectus Directive" the EU Prospectus Directive 2003/71/EC "Provisional Allotment Letter" the provisional allotment letter issued to Qualifying Non-CREST Shareholders; "Qualifying Shareholders" holders of Existing Ordinary Shares on the register of members of the Company on the Record Date; "Qualifying Non-CREST Qualifying Shareholders holding Ordinary Shares in certificated form;Shareholders" "Record Date" the close of business in London on 28 September 2007; "Remaining Shares" such number of the Underwritten Shares as are neither taken up nor deemed to be taken up "Rights Issue" the offer by way of rights to Qualifying Shareholders to acquire New Ordinary Shares, on the terms and conditions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, the Provisional Allotment Letter; "Rights Issue Price" 24 pence per New Ordinary Share; "Rights Shares" up to 267,923,469 new Ordinary Shares proposed to be allotted and offered for subscription under the Rights Issue "Rule 144A" Rule 144A as promulgated under the Securities Act "SEC" US Securities Exchange Commission "Securities Act" Unites States Securities Act, 1933 (as amended) "Shareholder(s)" holder(s) of Ordinary Shares; "Stick" those Underwritten Shares that are not taken up or deemed to be taken up and that DKS and Arbuthnot do not procure persons to take up and so fall to be acquired by DBAG and/or Arbuthnot and/or the Sub-underwriters "UEM Instruction Letter" the letter of instruction from Deadalus in connection with the Placing "UKLA" the Financial Services Authority in its capacity as the United Kingdom Listing Authority "Underwriters" Arbuthnot and DBAG; "Underwriting Agreement" the conditional underwriting agreement; "United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland; "United States" or "US" the United States of America, its territories and possessions, any state of the United States and the District of Columbia. "US Person" has the meaning ascribed to it under Regulation S under the Securities Act "Undertakings" the Kharafi Undertaking and the UEM Undertaking "Underwritten Shares" all the Rights Shares (including, for the avoidance of doubt only, the Daedalus shares to be Placed) other than the Committed Shares. Costain Group PLC Consolidated income statement Half-year ended 30 June, Notes 2007 2006 2006year ended 31 December Half-year Half-year Year £m £m £m Revenue (Group and share of joint ventures 2 430.0 436.2 886.3and associates)Share of joint ventures and associates 5 (77.7) (63.9) (137.9)Group revenue 352.3 372.3 748.4 Cost of sales (337.9) (385.9) (785.9)Gross profit/(loss) 14.4 (13.6) (37.5) Administrative expenses (10.8) (9.0) (20.9) Group operating profit/(loss) 3.6 (22.6) (58.4) Profit on sale of investment 2.7 - 3.6Profit on sale of joint ventures and 0.2 3.5 -associatesAmounts written off loans to associate - - (2.7)Share of results of joint ventures and 5 0.1 (2.8) (7.0)associates Profit/(loss) from operations 2 6.6 (21.9) (64.5) Financial income 3 14.5 13.2 26.7Finance costs 3 (13.1) (12.0) (23.9)Net financing income 1.4 1.2 2.8 Profit/(loss) before tax 8.0 (20.7) (61.7) Income tax (expense)/credit (1.8) 2.6 7.7 Profit/(loss) for the period attributable 2 6.2 (18.1) (54.0)to equity holders of the parent Earnings/(loss) per share - basic 4 1.7p (5.1)p (15.1)pEarnings/(loss) per share - diluted 4 1.7p (5.1)p (15.1)p Consolidated statement of recognised income and expense Half-year ended 30 June, 2007 2006 2006year ended 31 December Half-year Half-year Year £m £m £m Exchange differences on translation of foreign operations - 0.3 -Cash flow hedges: Effective portion of changes in fair value (net of tax) during period - Group - 0.1 0.3 Effective portion of changes in fair value (net of tax) during period - joint ventures and associates 5.9 3.2 3.1Change in fair value of assets classified as availablefor sale (2.6) (3.4) (0.8) Actuarial gains on defined benefit pension schemes 27.8 30.0 26.0Tax recognised on actuarial gains recognised directly inequity (7.8) (9.0) (7.8) Tax rate adjustment to brought forward actuarial lossesrecognised directly in equity (1.7) - - Net income recognised directly in equity 21.6 21.2 20.8 Profit/(loss) for the period 6.2 (18.1) (54.0) Total recognised income and expense for the period 27.8 3.1 (33.2)attributable to equity holders of the parent Consolidated balance sheet Half-year ended 30 June, Notes 2007 2006 2006 year ended 31 December Half-year Half-year Year £m £m £mAssetsNon-current assetsProperty, plant & equipment 4.4 5.8 5.7Intangible assets 3.1 3.9 3.4Investments in joint ventures 5 28.0 27.1 25.0Investments in associates 5 2.9 1.0 1.2Loans to joint ventures 4.3 2.6 3.3Loans to associates 1.2 0.4 2.0Other investments - 1.0 3.6Other debtors 6.2 7.3 10.1Deferred tax assets 18.4 24.6 30.6Total non-current assets 68.5 73.7 84.9 Current assetsInventories 1.7 2.0 2.4Trade and other receivables 146.0 184.3 160.6Cash and cash equivalents 42.9 51.2 56.4Total current assets 190.6 237.5 219.4Total assets 259.1 311.2 304.3 EquityShare capital 17.9 17.9 17.9Share premium 0.6 0.5 0.6Special reserve 12.8 12.9 12.8Fair value reserve - - 2.6Foreign currency translation reserve (1.2) (0.9) (1.2)Hedging reserve 4.4 (1.7) (1.6)Retained earnings (61.7) (47.8) (86.3)Total equity attributable to equity (27.2) (19.1) (55.2)holders of the parentMinority interests - - -Total equity (27.2) (19.1) (55.2) LiabilitiesNon-current liabilitiesInterest bearing loans and borrowings - 0.1 -Retirement benefit obligations 38.4 69.5 68.7Other payables 3.2 2.4 6.6Provisions 3.4 4.9 4.1Total non-current liabilities 45.0 76.9 79.4 Current liabilitiesTrade and other payables 233.6 243.4 266.1Tax liabilities 1.8 3.2 2.7Overdrafts 0.5 0.2 1.4Interest bearing loans and borrowings 0.3 1.0 1.7Provisions 5.1 5.6 8.2Total current liabilities 241.3 253.4 280.1Total liabilities 286.3 330.3 359.5Total equity and liabilities 259.1 311.2 304.3 Consolidated cash flow statementHalf-year ended 30 June, 2007 2006 2006year ended 31 December Half-year Half-year Year £m £m £m Cash flows from operating activities Profit/(loss) for the period 6.2 (18.1) (54.0)Adjustments for:Depreciation and amortisation 1.1 1.2 2.7Financial income (14.5) (13.2) (26.7)Finance costs 13.1 12.0 23.9Share-based payments expense 0.2 0.2 0.3Income tax 1.8 (2.6) (7.7)Profit on sale of investment (2.7) - (3.6)Profit on sale of interests in joint venture and associates (0.2) (3.5) -Share of results of joint ventures and associates (0.1) 2.8 7.0Amounts written off loans to associates - - 2.7Operating profit/(loss) before changes in working capital 4.9 (21.2) (55.4)and provisions Decrease/(increase) in inventories 0.7 - (0.4)Decrease/(increase) in receivables 18.4 (14.2) 2.2(Decrease)/increase in payables (32.5) 5.3 32.6Movement in provisions and employee benefits (6.1) (1.4) (2.6)Cash used by operations (14.6) (31.5) (23.6) Interest paid (0.1) (0.2) (0.3)Income taxes paid - - (0.2)Net cash used by operating activities (14.7) (31.7) (24.1) Cash flows from investing activitiesInterest received 1.2 1.2 2.6Additions to property, plant & equipment (0.2) (0.7) (1.9)Additions to intangible assets (0.1) (0.8) (0.9)Proceeds from sale of fixed assets - - 0.2Additions to investments - (2.0) (0.1)Disposal of subsidiary and associate (1.4) - -Proceeds from sale of investments 3.7 7.1 7.1Dividend received from joint venture - 2.6 6.1Loans to joint ventures and associates 0.3 0.2 (10.2)Net cash from investing activities 3.5 7.6 2.9 Cash flows from financing activitiesIssue of ordinary share capital - 0.2 0.3New loans - 0.2 0.9Payment of loans and finance lease liabilities (1.4) (0.1) (0.2)Net cash (used by)/from financing activities (1.4) 0.3 1.0 Net decrease in cash and cash equivalents (12.6) (23.8) (20.2) Cash and cash equivalents at beginning of period 55.0 75.0 75.0Effect of foreign exchange rate changes - (0.2) 0.2Cash and cash equivalents at end of period 42.4 51.0 55.0 Notes to the Interim Financial Statements These interim financial statements do not constitute statutory accounts withinthe meaning of the Companies Act 1985 and are unaudited. The Board approved theunaudited interim financial statements on 13 September 2007. 1. Basis of preparation This interim financial information has been prepared applying the accountingpolicies and presentation that were applied in the preparation of the company'spublished consolidated financial statements for the year ended 31 December 2006. They are prepared on a going concern basis. 2. Business and geographical segment information by origin In the opinion of the directors, the business segments are Civil Engineering,Building, Oil Gas & Process and International, which undertake engineering andconstruction projects, Property Development operations in Spain and CentralCosts. These represent the Group's primary segments. Secondary segments arepresented geographically. * Revenue in the tables below includes the Group's share of joint ventures and associates. For the half-year Civil Building Oil, Gas International Property Central Totalended Engineering & Process Development Costs30 June 2007 £m £m £m £m £m £m £m Revenue * 280.4 108.5 26.2 13.0 1.9 - 430.0 Group operating profit 9.9 (3.3) - (0.2) - (2.8) 3.6/(loss)Profit on sale of - 2.7 - - - - 2.7investmentProfit on sale of - - - 0.2 - - 0.2associateShare of results of 0.2 0.2 0.2 - (0.5) - 0.1joint ventures andassociatesSegment result 10.1 (0.4) 0.2 - (0.5) (2.8) 6.6Net financing income 1.4Income tax expense (1.8)Profit for the period 6.2 2. Business and geographical segment information by origin continued For the half-year Civil Building Oil, Gas & International Property Central Totalended Engineering Process Development Costs30 June 2006 £m £m £m £m £m £m £m Revenue * 217.0 158.3 30.8 22.9 7.2 - 436.2 Group operating profit 7.5 (11.5) (1.2) (14.6) - (2.8) (22.6)/(loss)Profit on sale of - 3.5 - - - - 3.5investmentShare of results of 0.4 0.1 0.1 (5.5) 2.1 - (2.8)joint ventures andassociatesSegment result 7.9 (7.9) (1.1) (20.1) 2.1 (2.8) (21.9)Net financing income 1.2Income tax credit 2.6Loss for the period (18.1) For the year ended Civil Building Oil, Gas & International Property Central Total31 December 2006 Engineering Process Development Costs £m £m £m £m £m £m £m Revenue * 488.1 298.0 57.2 29.8 13.2 - 886.3 Group operating profit 10.0 (29.6) (19.8) (13.0) - (6.0) (58.4)/(loss)Profit on sale of - 3.6 - - - - 3.6investmentAmounts written off - - - (2.7) - - (2.7)loans to associateShare of results of 0.3 0.1 0.3 (11.6) 3.9 - (7.0)joint ventures andassociatesSegment result 10.3 (25.9) (19.5) (27.3) 3.9 (6.0) (64.5)Net financing income 2.8Income tax credit 7.7Loss for the period (54.0) Revenue * Segment result 2007 2006 2006 2007 2006 2006 Half-year Half-year Year Half-year Half-year Year £m £m £m £m £m £m United Kingdom 405.7 390.6 816.9 7.2 (4.4) (22.1)Spain 1.9 7.2 13.2 (0.5) 2.1 3.9Rest of the world 22.4 38.4 56.2 (0.1) (19.6) (46.3) 430.0 436.2 886.3 6.6 (21.9) (64.5) 3. Net financing income/(costs) Finance income includes the expected return on the assets of the pension schemeof £13.4m (2006 half-year £12.0m, 2006 year £24.1m) and finance costs includethe expected increase in the present value of the pension scheme liabilities of£12.9m (2006 half-year £11.9m, 2006 year £23.6m). The expected return and theincrease in present value are based on the value of assets and liabilities ofthe pension scheme at the start of the period. 4. Earnings/(loss) per share The calculation of earnings/(loss) per share is based on profit forthe period of £6.2m (2006 half-year loss £18.1m, 2006 year loss £54.0m) and thenumber of shares set out below: 2007 2006 2006 Half-year Half-year Year Weighted average number of shares for basic earnings per 357,231,292 356,875,207 357,050,423share calculationDilutive potential ordinary shares:SAYE Scheme 5,772,679 6,567,096 6,314,913Weighted average number of shares for fully diluted 363,003,971 363,442,303 363,365,336earnings per share calculation 5. Joint ventures and associates The analysis of the Group's share of joint ventures (JVs) and associates is setout below: 2007 Half-year Alcaidesa 4Delivery Ltd Other joint Holding SA ventures Associates Total £m £m £m £m £m Revenue 1.9 53.3 18.2 4.3 77.7 (Loss)/profit before tax (0.7) - 0.4 0.4 0.1Income tax credit/(expense) 0.2 - (0.1) (0.1) -(Loss)/profit for the period (0.5) - 0.3 0.3 0.1 Non-current assets 7.1 - 6.6 0.3 14.0Current assets 27.9 60.8 90.5 51.2 230.4Current liabilities (4.1) (60.7) (14.3) (1.3) (80.4)Non-current liabilities (7.4) - (78.4) (47.3) (133.1)Investments in joint venturesand associates 23.5 0.1 4.4 2.9 30.9 Presentation in the balance sheet in respect of joint ventures and associatesrestricts the minimum carrying value to £nil. If the carrying value becomesnegative, the corresponding value of any loans or other advances to thoseinvestments is reduced or, where future funding obligations exist, a provisionis made. 5. Joint ventures and associates continued 2006 Half-year Alcaidesa 4Delivery Ltd Other joint Holding SA ventures Associates Total £m £m £m £m £m Revenue 7.2 33.4 19.2 4.1 63.9 Profit/(loss) before tax 3.1 0.1 (4.5) (0.5) (1.8)Income tax expense (1.0) - - - (1.0)Profit/(loss) for the period 2.1 0.1 (4.5) (0.5) (2.8) Non-current assets 6.5 - 5.2 1.9 13.6Current assets 41.3 13.4 49.2 48.6 152.5Current liabilities (18.1) (13.3) (13.3) (7.4) (52.1)Non-current liabilities (3.5) - (40.3) (42.1) (85.9)Investments in joint venturesand associates 26.2 0.1 0.8 1.0 28.1 2006 year Alcaidesa 4Delivery Ltd Other joint Holding SA ventures Associates Total £m £m £m £m £m Revenue 13.2 84.6 26.5 13.6 137.9 Profit/(loss) before tax 6.1 - (10.9) 0.1 (4.7)Income tax expense (2.2) - (0.1) - (2.3)Profit/(loss) for the period 3.9 - (11.0) 0.1 (7.0) Non-current assets 5.7 - 7.2 2.4 15.3Current assets 33.6 25.1 82.1 51.4 192.2Current liabilities (8.1) (25.1) (20.0) (12.9) (66.1)Non-current liabilities (7.3) - (68.2) (39.7) (115.2)Investments in joint venturesand associates 23.9 - 1.1 1.2 26.2 2007 2006 2006 Half-year Half-year Year £m £m £m Financial commitments 11.3 10.3 9.3 Capital commitments 29.6 28.4 25.1 The commitments relate to joint ventures involved in Private Finance Initiativeschemes and the capital commitments to construction work being undertaken by theCostain Group. All figures are the Group's share. The comparative figures for the financial year ended 31 December 2006 are notthe Company's statutory accounts for that financial year. Those accounts havebeen reported on by the Company's auditors and delivered to the Registrar ofCompanies. The report of the auditors was (i) unqualified, (ii) did not includea reference to any matters to which the auditors drew attention by way ofemphasis without qualifying their report, and (iii) did not contain a statementunder section 237(2) or (3) of the Companies Act 1985. The Interim Report and Accounts are unaudited but have been reviewed by theCompany's auditors and their Independent Review Report is set out below. INDEPENDENT REVIEW REPORT TO COSTAIN GROUP PLC Introduction We have been instructed by the Company to review the financial information forthe six months ended 30 June 2007 which comprises Consolidated Income Statement,Consolidated Statement of Recognised Income and Expense, Consolidated BalanceSheet, Consolidated Cash Flow Statement and the related notes. We have read theother information contained in the interim report and considered whether itcontains any apparent misstatements or material inconsistencies with thefinancial information. This report is made solely to the Company in accordance with the terms of ourengagement to assist the Company in meeting the requirements of the ListingRules of the Financial Services Authority. Our review has been undertaken sothat we might state to the Company those matters we are required to state to itin this report and for no other purpose. To the fullest extent permitted by law,we do not accept or assume responsibility to anyone other than the Company forour review work, for this report, or for the conclusions we have reached. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures should be consistentwith those applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4: Review of interim financial information issued by the Auditing PracticesBoard for use in the UK. A review consists principally of making enquiries ofmanagement and applying analytical procedures to the financial information andunderlying financial data and, based thereon, assessing whether the accountingpolicies and presentation have been consistently applied unless otherwisedisclosed. A review excludes audit procedures such as tests of controls andverification of assets, liabilities and transactions. It is substantially lessin scope than an audit performed in accordance with International Standards onAuditing (UK and Ireland) and therefore provides a lower level of assurance thanan audit. Accordingly, we do not express an audit opinion on the financialinformation. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. KPMG Audit PlcChartered Accountants London13 September 2007 UNSOLICITED MAIL The Company is legally obliged to make its share register available to thegeneral public. Consequently some shareholders may receive unsolicited mail,including correspondence from unauthorised investment firms. Shareholders whowish to limit the amount of unsolicited mail they receive can contact: The Mailing Preference Service Freepost (LON 20771) London WE1 0ZT SHAREHOLDER INFORMATION The Company's Registrar is Lloyds TSB Registrars, The Causeway, Worthing, WestSussex BN99 6DA. Their web site address is www.lloydstsb-registrars.co.uk. Forenquiries regarding your shareholding, please telephone 0870 600 3984. You canalso view up-to-date information about your holdings by visiting the shareholderweb site at www.shareview.co.uk. Please ensure that you advise Lloyds TSBRegistrars promptly of a change of name or address. ShareGIFT The Orr Mackintosh Foundation (ShareGIFT) operates a charity share donationscheme for shareholders with small parcels of shares whose value makes ituneconomic to sell them. Details of the scheme are available on the ShareGIFTInternet Site www.sharegift.org. Lloyds TSB Registrars can provide stocktransfer forms on request. Donating shares to charity in this way gives riseneither to a gain nor a loss for Capital Gains Tax purposes. This service iscompletely free of charge. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Costain