Keller Group plc
12 April 2013
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 for the year ended 31 December 2012 (the 'Annual
* The notice of annual general meeting 2013
* Form of proxy for the annual general meeting
These documents will shortly be available for inspection at the National
Storage Mechanism at www.hemscott.com/nsm.do.
The Annual Report 2012 is also available on the Company's website at
www.keller.co.uk. Hard copies of all the documents have been sent to
The annual general meeting will be held at 11.00am on Thursday 23 May 2013 at
the offices of Investec, 2 Gresham Street, London, EC2V 7QP.
In accordance with DTR 6.3.5, this announcement contains information in the
attached Appendix of the principal risk factors, the directors' responsibility
statement and a note to the accounts on related party transactions. This
information has been extracted in full unedited text from the Annual Report
2012. References to page numbers and notes in the Appendix refer to those in
the Annual Report 2012. A condensed set of financial statements was appended
to Keller Group plc's preliminary results announcement issued on 4 March 2013.
For further information please contact:
Unedited extract from Annual Report 2012
Risk Description KPIs Controls
Market cycles Whilst our business will Revenue growth • Strategy of
always be subject to geographic
The Group's broad economic cycles, market compared with diversification:
base helps to risk is reduced by the
mitigate against diversity of our markets, market growth - operations in
the risk of both in terms of geography over 30 countries
downturn in and market segment. It is Definition and
also partially offset by - growing presence
our markets opportunities for method of in Australia and
consolidation in our highly calculation developing
fragmented markets. Year-on-year • Broad
Typically, even where we sales base.
are the clear leader, we
still have a relatively growth in • Services used
small share of the market. local currency across all
Our ability to exploit segments:
these opportunities through compared with infrastructure,
bolt-on acquisitions is growth in industrial,
reflected in our track commercial,
record of growing sales, the total residential and
and doing so profitably, regional environmental.
across market cycles.
As our work
occurs at the
start of the
revenue is a
are based on
Tendering and It is in the nature of our Operating • Risk
business that we margin Framework defines
management continually assess and Minimum Standards
manage technical, and other in the control of
of projects operational, risks. project risk.
Project risk is Some of the controls we method of • Risk-based
managed have in place, particularly tender
at the crucial stage of Calculation. approval
throughout the tendering of contracts, are Operating process, with
life of a set out in the table clear
opposite. Given the Group's profit delegations of
project from the relatively small average expressed as a authority.
tendering contract value (less than £
200,000), it would be percentage of • Independent
stage to unusual for any one revenue. review of tenders.
completion contract to
• Training for
materially affect the staff in the
results of the Group. In typical risk
fact, our largest contract they may face when
in 2012 accounted for less tendering for
than 3% of total revenue. negotiating
Our ability to manage contracts and
technical risks will executing work.
generally be reflected
• Legal review
in our profitability. unusual or onerous
• Project staff
selected on the
basis of their
of a particular
type of project
meetings at each
step of the
• Weekly cost
for all projects
and reviewed by
learned with the
Acquisitions We recognise the risks Return on net • Target
associated with operating are usually well
Our long-term acquisitions and our known to Keller;
growth approach to buying Assets and the
businesses aims to manage and cultural
track record is these to acceptable levels. differences and
built on a potential
combination of First, we try to get to Definition and are well
organic growth know a target company, method of understood.
and acquisitions often working in joint
venture, to understand the calculation • Robust due
operational and cultural diligence process,
differences and potential Operating mostly undertaken
profit before by own management.
synergies. This is followed
by a robust due diligence impairment of • Clear
process, most of which is intangibles integration plan,
undertaken by our own reflecting the
managers, and we then expressed as a unique character
develop a clear integration percentage the target
plan which takes account of of average net
the unique character of the operating
net debt, tax
Safety Keller is made up of Accident • Keller Safety
businesses Frequency Framework 'Think
The construction Safe',
industry in which of varying sizes operating Rate ('AFR') incorporating our
we operate poses around the world, often in Safety Goal,
significant challenging environments. Principles, Policy
safety and Minimum
challenges, but It is essential that, as we Definition and Standards.
we do not accept continue to grow and move method of
the inevitability into new regions, we can be • All business
of injury sure that our approach to calculation units undertake an
safety is equally rigorous, annual safety
no matter Accident assessment.
whereabouts in the world, • From these,
or on which projects, we 100,000 man safety improvement
are working. hours. plans are
People The risk of losing, or not Staff turnover • Excellent
being able to attract, good rate training and
The accumulation people is key. We pride development
of ourselves in having some of opportunities.
the best professional and
knowledge and skilled people Definition and • Opportunities
experience is method of for career growth.
essential to in the industry, who are
helping our motivated by our culture calculation • Good
customers to find and the opportunities for and two-way
the best career growth. The number of communications.
managerial, • Employees
professional treated with
and technical respect.
in the period,
expressed as a
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
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.
24 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 £
3.9m (2011: £2.3m) for GTCEISU Construcción, S.A., a connected person of Mr
López Jiménez, who retired as a Director of the Company during the year. An
amount of £5.6m (2011: £1.8m) is included in trade and other receivables in
respect of amounts outstanding as at 31 December 2012.
During the year the Group made purchases from GTCEISU Construcción, S.A. with
total value of £2.0m (2011: £3.5m). An amount of £1.0m (2011: £1.0m) is
included in trade and other payables in respect of amounts outstanding as at 31
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:
Short-term employee benefits 3.4 2.1
Post-employment benefits 0.3 0.2
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