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26 Mar 2012 11:22
Keller Group plc
26 March 2012
Keller Group plc ("the Company") - Annual Financial Report
In accordance with the Listing Rules, copies of the following documents have been submitted to the National Storage Mechanism:
·; Annual report and accounts 2011 (incorporating the notice of annual general meeting 2012)
·; Form of Proxy
These documents will shortly be available for inspection at the National Storage Mechanism at www.hemscott.com/nsm.do.
The annual report and accounts for the year ended 31 December 2011 is also available on the Company's website at www.keller.co.uk. Hard copies have been sent to shareholders.
The annual general meeting will be held at 11.00am on Friday 18 May 2012 at the offices of RBS, 250 Bishopsgate, London EC2M 4AA.
In accordance with DTR 6.3.5, this announcement contains information in the attached appendix of the principal risk factors, a responsibility statement and details of related party transactions which has been extracted in full unedited text from the Annual Report and Accounts 2011. References to page numbers and notes in the Appendix refer to those in the Annual Report and Accounts 2011. A condensed set of financial statements were appended to the Keller Group plc's preliminary results announcement issued on 27 February 2012.
For further information please contact:
Jackie Holman
Company Secretary
Appendix
Unedited extract from Annual report and accounts 2011
Principal risks
Risk | Description | Controls |
Market cycles The Group's broad base helps to mitigate against the risk of downturn in our markets | Whilst our business will always be subject to economic cycles, market risk is reduced by the diversity of our markets, both in terms of geography and market segment. It is also partially offset by opportunities for consolidation in our highly fragmented markets. Typically, even where we are the clear leader, we still have a relatively small share of the market. Our ability to exploit these opportunities through bolt-on acquisitions is reflected in our track record of growing sales, and doing so profitably, across market cycles. | • Strategy of geographic diversification: - operations in over 30 countries - growing presence in Australia and developing markets. • Broad customer base. • Services used across all industry segments: infrastructure, industrial, commercial, residential and environmental. |
Tendering and management of projects. Project risk is managed throughout the life of a project from the tendering stage to completion
| It is in the nature of our business that we continually assess and manage technical, and other operational, risks. Some of the controls we have in place, particularly at the crucial stage of tendering of contracts, are set out in the table opposite. Given the Group's relatively small average contract value (less than £200,000), it would be unusual for any one contract to materially affect the results of the Group. Our ability to manage technical risks will generally be reflected in our profitability.
| • Risk-based tender approval process, with clear delegations of authority. • Independent review of tenders. • Formal and informal training for staff in the typical risk issues they may face when tendering for jobs, negotiating contracts and executing work. • Legal review of unusual or onerous contract terms. • Project staff selected on the basis of their skills, experience of a particular type of project and their workload. • Establishment of 'centres of excellence'. • Pre-job meetings undertaken on site. • Formal daily reports generated and reviewed for each contract in progress. Weekly cost reports produced for all projects and reviewed by next level management. • Periodic reviews of poorly performing contracts to establish lessons learned with the results communicated to all relevant staff.
|
Acquisitions Our long-term growth track record is built on a combination of organic growth and acquisitions
| We recognise the risks associated with acquisitions and our approach to buying businesses aims to manage these to acceptable levels. First, we try to get to know a target company, often working in joint venture, to understand the operational and cultural differences and potential synergies. This is followed by a robust due diligence process, most of which is undertaken by our own managers, and we then develop a clear integration plan which takes account of the unique character of the target company.
| • Target companies are usually well known to Keller; and the operational and cultural differences and potential synergies are well understood. • Robust due diligence process, mostly undertaken by own management. • Clear integration plan, reflecting the unique character of the target company. |
People The accumulation of knowledge and experience is essential to helping our customers to find the best solution
| The risk of losing, or not being able to attract, good people is key. We pride ourselves in having some of the best professional and skilled people in the industry, who are motivated by our culture and the opportunities for career growth.
| • Excellent training and development opportunities. • Opportunities for career growth. • Good engagement and two-way communications. • Employees treated with dignity and respect.
|
Responsibility statement of the Directors in respect of the annual report and the financial statements
We confirm that to the best of our knowledge:
- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation as a whole; and
- the Directors' report, including content contained by reference, includes 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.
25 Related party transactions
Transactions between the parent, jointly controlled operations and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
During the year the Group undertook various contracts with a total value of £2.3m (2010: £3.3m) for GTCEISU Construcción, S.A., a connected person of Mr López Jiménez, a Director of the Company. An amount of £1.8m (2010: £2.3m) is included in trade and other receivables in respect of amounts outstanding as at 31 December 2011.
During the year the Group made purchases from GTCEISU Construcción, S.A. with a total value of £3.5m (2010: £3.6m). An amount of £1.0m (2010: £2.8m) is included in trade and other payables in respect of amounts outstanding as at 31 December 2011.
Related party transactions were made on an arms-length basis. All amounts outstanding from related parties are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of the amounts owed by related parties.
The remuneration of the Directors, who are the key management personnel and related parties of the Group, is set out below in aggregate for each of the relevant categories specified in IAS 24 - Related Party Disclosures.
Key management personnel compensation comprised:
2011 £m | 2010 £m | |
Short-term employee benefits | 2.1 | 1.9 |
Post-employment benefits | 0.2 | 0.2 |
2.3 | 2.1 |
END
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