16 Apr 2012 11:56
16 April 2012
Cape plc ('Cape' or the 'Company')
Mailing of Annual Report, Notice of Annual General Meeting and Electronic Documents and Information Letter
Cape announces that its Annual Report and Accounts ("Annual Report") for the year ended 31 December 2011, the Notice of Annual General Meeting ("Notice of AGM"), Form of Proxy and a letter requesting the sending of documents and information by electronic means ("Electronic Documents and Information Letter") have been mailed to Ordinary Shareholders and the Scheme Shareholder (as defined in the Company's articles of association) on 13 April 2012.
Pursuant to Listing Rule 9.6.1, the Annual Report, Notice of AGM, Form of Proxy and Electronic Documents and Information Letter have been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Hemscott.com/nsm.do and can also be viewed on the Company's website at www.capeplc.com.
AGM Location
The Company's AGM will be held at 11.00am (BST) on Wednesday 16 May 2012 at the offices of Lawrence Graham LLP, 4 More London Riverside, London SE1 2AU, United Kingdom.
Additional Information
In accordance with Disclosure and Transparency Rule 6.3.5(2) (b), additional information is set out in the appendices to this announcement. This information is extracted in full unedited text from the Annual Report. References to page numbers are the respective page numbers in the Annual Report.
Cape PLCJeremy Gorman, Company Secretary
Tel: +44 (0)20 3178 5485
Appendices
Appendix 1: Directors' Responsibility Statement.
The following directors' responsibility statement is extracted from the Annual Report (page 41).
Directors' responsibilities
The Directors are responsible for preparing the Annual Report and the Group and Parent Company financial statements in accordance with applicable law and regulations. The Directors have chosen to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS). The Directors are also responsible for the preparation of the Directors' Remuneration report, which they have chosen to prepare, being under no obligation to do so under Jersey law. The Directors are also responsible for the preparation of the Corporate Governance report under the Listing Rules.
Jersey company law requires the Directors to prepare financial statements for each financial period in accordance with any generally accepted accounting principles prescribed for the purposes of the law.
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.
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 at the period end and the profit or loss of the Company and the Group for the period then ended. 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; and
- 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 which are sufficient to show and explain the Company's transactions and as such to disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the Group and Parent Company financial statements comply with the law 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 corporate and financial information included on the Company's website. Legislation in Jersey governing the preparation and dissemination of fnancial statements may differ from legislation in other jurisdictions.
Statement of disclosure of information to auditors
Each Director has approved the Annual Report and confirmed that so far as each Director is aware, there is no relevant audit information of which the Company's auditors are unaware. Relevant information is defined as information needed by the Company's auditors in connection with preparing their report. Each Director has taken all the steps (such as making enquiries of other Directors and the auditors and any other steps required by the Director's duty to exercise due care, skill and diligence) that he ought to have taken in his duty as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
Responsibility statement under the Disclosure and Transparency Rules
Each of the current Directors, whose names and functions are listed on page 21, confirms that, to the best of his knowledge:
- the 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 Company and the undertakings included in the consolidation taken as a whole; and
- the Directors' report on pages 39 to 40 and the Regional and Chief Financial Officer's reviews on pages 10 to 16 include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face as set out in the risks and uncertainties review on pages 19 and 20.
By order of the Board
Richard Bingham
Chief Financial Officer
13 April 2012
Appendix 2: Principal Risks & Uncertainties.
The following description of the principal risks and uncertainties that the Company faces is extracted from the Annual Report (pages 19 to 20).
Principal risks and uncertainties
Cape's performance and prospects may be affected by a number of risks and uncertainties that relate to our industry and the environments in which we undertake our operations around the world. We are alive to the issue of risk, and we have systems and procedures in place across the Group to identify, assess and mitigate major business risk.
Each region and central function is required to undertake a formal review of risks which could impact its area of business. Identified significant risks and agreed mitigation are formally reviewed on a regular basis and are recorded in an active risks register. We continue to develop our risk management systems and processes to ensure that our responses remain
appropriate to the range of risks that we face.
No such review of risks and uncertainties can be exhaustive and risks might exist which have not been identified by the Directors. New risks might also emerge, and the likelihood of known risks occurring and the impact they might have upon the Group, may change from time to time.
Risk and potential impact | Change | Mitigation |
External | ||
Operating activities may be affected by factors outside our control. These include geo-political events, government actions or inactions, climatic conditions, unusual or unexpected geological occurrences, environmental hazards, industrial conditions, technical failures, labour disputes, delays in construction, availability of materials or parts and shipping, import or customs delays.
| no change | These external factors are normally likely to affect a specific location, customer relationship or a single contract. Cape's business is diverse by geography, number of clients, range of services and exposure to industries or sectors.
This portfolio diversification reduces the impact of Cape's overall exposure to individual risks and uncertainties.
Cape's policy is to avoid a concentration of activity in markets/regions which it assesses as high risk. Risk is mitigated by a strong senior management presence in each region and particularly where risks are identified, regions operate in close communication with central management.
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Changes in the political or security environment in existing and new territories may result in Cape, or its clients, losing commercial or legal protections, facing security threats or being less able to control their operations.
| increasing | Local legal counsel is regularly engaged to ensure compliance with local legislation and to advise managers on actual or potential changes in legal or regulatory framework.
We monitor carefully any changes in political regimes that might impact on our business. We have appointed a Group Head of Security, who is responsible for security coordination in higher risk territories and we have expanded our use of specialist consultancies to advise us and when necessary, provide protection.
As detailed on page 33 in the Corporate governance report we have established policies and procedures to address these risks.
|
Risk and potential impact | Change | Mitigation |
Competition | ||
Losing certain key clients could have an adverse effect on Cape's revenues, particularly where these clients have several contracts with Cape.
| no change | Cape's top 10 clients accounted for 35% of Group revenues in 2011 (2010: 35%), with the largest customer accounting for 9% of Group revenues (2010: 9%). Cape has a broad customer base, with circa 110 clients each contributing more than £1 million of annual revenue. Cape seeks to maintain a stable and balanced customer profile.
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The majority of Cape's clients are either in, or are dependent upon, the energy and natural resources sectors. Cape's earnings therefore depend on stable long-term energy demand particularly for oil, gas and electricity.
| no change | Cape has developed long-standing relationships with clients, based on service quality, reliability and safety. These relationships are at a variety of levels from sites to senior management. Strong relationships support revenue retention and growth through ongoing contract award and renewal.
In most existing markets Cape has a relatively small market share.
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Cyclical downturns could lead to declines in demand for Cape's services.
| no change | Most contracts cover a multi-year engagement and are for work of a long-term nature. Cape, therefore, has limited exposure to fluctuations in the spot price of any one energy product, or its short-term demand.
Cape is firmly positioned in the downstream energy infrastructure, power generation and later cycle production markets. These markets are less impacted by cyclical downturns than upstream, exploration segments.
Cape's wide range of essential services ensures it can serve clients' needs through the lifecycle of the production asset, whether related to installation, maintenance or decommissioning.
|
Risk and potential impact | Change | Mitigation |
Operational | ||
Many client assets have associated health and safety risks (offshore platform, refineries, and power stations). Failure to maintain the highest Health, Safety and Environmental (HSE) standards on-site could result in injury to our employees or others involved in site operations. Failure to deliver HSE excellence could result in a material loss of clients and/or damage to Cape's reputation and the environment.
| no change | Cape values its excellent reputation for safety and HSE-related matters around the world. Cape's investment in systems and resources, with around 425 people in full-time HSE roles across the Group, continues to deliver significant reductions in accidents, working days lost and environmental incidents.
Occupational health and safety performance continues to be in the upper quartile of comparable companies, with a Lost Time Incident (LTI) frequency rate of 0.025 per 100,000 hours worked for the Group as a whole.
Through both its training centres and on-site training courses, Cape invests a considerable amount in improving staff skills. This helps retain key staff through regular progression, helps reduce skills shortage and improves safety performance.
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The loss of key senior management or skilled employees, may adversely affect Cape's business. Cape's ability to successfully operate and grow the business is largely dependent on its ability to attract and retain high-quality personnel. An inability to attract and retain well-qualified and skilled personnel could materially adversely affect Cape's business, operating results or financial condition.
| no change | Cape's regionalised organisational structure provides considerable management autonomy and opportunity for senior personnel to develop within the business. The Future Leaders Programme has been introduced for managers who are identified through a succession planning process, with the skills needed to rapidly progress in the organisation. The Cape Management Training Scheme has been introduced to provide a regular pipeline of talent for key management roles across the Group. Annual performance appraisals are conducted to assess executives' performance and to discuss career goals.
Senior executive remuneration is reviewed against market data provided by specialist remuneration consultants to ensure awards are competitive. Long-term incentive plans are in place to encourage the retention of the key management group.
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Risk and potential impact | Change | Mitigation |
Financial | ||
Failure to achieve satisfactory returns on acquisitions and other investments. Inadequate financial controls leading to loss of assets, loss of financial data or loss of the integrity of data.
| increase
| Cape carries out detailed assessments and reviews of existing and potential acquisition and other investments including external legal and financial diligence, where appropriate.
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Other financial risks including foreign exchange and interest rate exposure are described further in note 22 to the Group financial statements.
| no change | Cape has high quality and experienced finance, acquisitions, internal audit, tax and treasury teams that operate at Group level and across the regions.
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The eventual value of contracts may be lower than expected. Many of Cape's contracts are term maintenance contracts and do not guarantee revenue levels.
| no change | Cape operates a stringent contract review process with clear authority limits governing the acceptance of contracts. Contract values are often significantly different from initial estimates or from prior year amounts. However, Cape's commercial managers ensure that variations are agreed in advance and changes in scope are captured as revenue. Across many contracts individual increases and reductions tend to offset.
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Lump sum contracts could expose Cape to potential cost overruns.
| decrease | Cape's policy is to avoid large lump sum contracts, with the large majority of its contracts being cost reimbursable or at scheduled rates.
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- ENDS -