Annual Financial Report

Keller Group plc

7 April 2016

Keller Group plc (“the Company”) - Annual Report 2015

In accordance with Listing Rule 9.6.1, copies of the following documents have been submitted to the National Storage Mechanism:

• Annual Report and Accounts for the year ended 31 December 2015  (the ‘Annual Report 2015’)

• The notice of Annual General Meeting 2016

• 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 2015 is also available on the Company’s website at www.keller.co.uk. Hard copies of all the documents have been sent to shareholders.

The Annual General Meeting will be held at 11.00am on Tuesday 24 May 2016 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 2015.  References to page numbers and notes in the Appendix refer to those in the Annual Report 2015.  A condensed set of financial statements was appended to Keller Group plc's preliminary results announcement issued on 29 February 2016.

For further information please contact:

Kerry Porritt

Company Secretary

Appendix

Unedited extract from Annual Report 2015

Principal risks and uncertainties

Risk	Risk Description	Potential Impact	Mitigation
Market risk A rapid downturn in our markets	Inability to maintain a sustainable level of financial performance throughout the construction industry market cycle which grows more than many other industries during periods of economic expansion and falls harder than many other industries when the economy contracts.	Failure to continue in operation or to meet our liabilities.	Diversification of our markets, both in terms of geography and market segment. Strong balance sheet. Leveraging the global scale of our Group. Having strong local businesses to address geographic markets.
Strategic risks Failure to procure new contracts	A failure to continue to win and retain contracts on satisfactory terms and conditions in our existing and new target markets if competition increases, customer requirements change or demand reduces due to general adverse economic conditions.	Failure to achieve targets for revenue, profit and earnings.	Continually analysing our existing and target markets to ensure we understand the opportunities that they offer. Structured bid review processes in operation throughout the Group with well-defined selectivity criteria that are designed to ensure we take on contracts only where we understand and can manage the risks involved.
Losing our market share	Inability to achieve sustainable growth, whether through acquisition, new products, new geographies or industry specific solutions.	Failure to achieve targets for revenue, profits and earnings.	Continually seeking to differentiate our offering through service quality, value for money and innovation. A Business Development function focusing on our customers’ requirements and understanding our competitors. Minimising the risk of acquisitions, including getting to know a target company in advance, often working in joint venture, to understand the operational and cultural differences and potential synergies, as well as undertaking these through thorough due diligence and structured and carefully managed integration plans. Implementing annual efficiency and improvement programmes to help us remain competitive.
Non-compliance with our Code of Business Conduct	Not maintaining high standards of ethics and compliance in conducting our business or failing to meet legal or regulatory requirements.	Losing the trust of our customers, suppliers and other stakeholders with consequent adverse effects on our ability to deliver against our strategy and business objectives. Substantial damage to Keller’s brand and/or large financial penalties.	Having clear policies and procedures in respect of ethics, integrity, regulatory requirements and contract management. Maintaining training programmes to ensure our people fully understand these policies and requirements. Operating and encouraging the use of a ‘whistleblowing’ facility.
Financial risk Inability to finance our business	Losing access to the financing facilities necessary to fund the business.	Breach of banking covenants or failure to continue in business or meet our liabilities.	Procedures to monitor the effective management of cash and debt, including weekly cash reports and regular cash forecasting.
Operational risks Product and/or solution failure	Failure of our product and/or solution to achieve the required standard.	Financial loss and consequent damage to our brand reputation.	Continuing to enhance our technological and operational capabilities through investment in our product teams, project managers and our engineering capabilities.
Ineffective management of our contracts	Failure to manage our contracts to ensure that they are delivered on time and to budget.	Failure to achieve the margins, profits and cash flows we expect from contracts.	Ensuring we understand all of our risks through the bid appraisal process and applying rigorous policies and processes to manage and monitor contract performance. Ensuring we have high-quality people delivering projects.
Causing a serious injury or fatality to an employee or member of the public	Failure to maintain high standards of Safety and Quality.	Damage to employee morale leading to an increase in employee turnover rates, loss of customer, supplier and partner confidence and damage to our brand reputation in an area that we regard as a top priority.	A Board-led commitment to achieve zero accidents. Visible management commitment with Safety Tours, Safety Audits and Safety Action Groups. Implementing management systems that conform to Occupational Health & Safety Assessment System 18001. Extensive mandatory employee training programmes.
Not having the right skills to deliver	Inability to attract and develop excellent people to create a high-quality, vibrant, diverse and flexible workforce.	Failure to maintain satisfactory performance in respect of our current contracts and failure to deliver our strategy and business targets for growth.	Continuing to develop and implement leadership, personal development and employee engagement programmes that encourage and support all our people to achieve their full potential.

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 and performance 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.

  The Board confirms that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the performance, strategy and business model of the Company.

  25 Related party transactions

  Transactions between the parent, its subsidiaries and joint operations, which are related parties, have been eliminated on consolidation.
   

  The remuneration of the Directors, who are the key management personnel and related parties of the Group, is set out in note 6 (extract below).

	2015 £m	2014 £m
Short-term employee benefits	2.7	2.0
Post-employment benefits Share-based payments	0.1 0.9	0.1 0.9
	3.7	3.0

END