2020 Annual Report & Accounts & 2021 Notice of AGM

RNS Number : 0777T

Helios Towers PLC

22 March 2021

 

Helios Towers plc

(the "Company")

2020 Annual Report and Accounts and 2021 Notice of Annual General Meeting

In accordance with Listing Rule 9.6.1R and Disclosure and Transparency Rule ("DTR") 4.1.3R, the Company announces that the following documents have been posted and/or otherwise made available to shareholders:

· 2020 Annual Report and Accounts

· 2020 Sustainable Business Report

· 2021 Notice of Annual General Meeting

· Form of Proxy for the 2021 Annual General Meeting

The above mentioned documents (except for the Form of Proxy) are available on the Company's website at www.heliostowers.com and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. 

22 March 2021

LEI: 213800DGC7GS4XCHCU30

Identification Code: GB00BJVQC708

Enquiries:
For investor enquiries	[e-mail]
For media enquiries	Edward Bridges, Stephanie Ellis
	FTI Consulting LLP
	[phone]

Appendix

In compliance with DTR 6.3.5R, the information contained in this appendix is extracted from the 2020 Annual Report and Accounts and should be read in conjunction with the Company's 2020 Full Year Results Announcement for the year ended 31 December 2020 issued on 10 March 2021. Both documents are available at www.heliostowers.com/investors/results-reports-and-presentations/ and together constitute the material required by DTR 6.3.5R to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the 2020 Annual Report and Accounts in full. Page numbers and cross references in the extracted information refer to page numbers and cross references in the 2020 Annual Report and Accounts.

1.  Business principal risks

Summarised below are the key risks identified (not in order of significance) which could have a material impact on the Group.

Riskstatus	Riskdescription	Impacts	Riskmitigation
Nochange	1.Operationalresilience The ability of the Group to continue operations is heavilyreliant on third parties, the proper functioning of its technology platforms and the capacity of its available humanresources.Failureinanyofthesethreeareascouldseverely affect its operational capabilities and ability todeliveronitsstrategicobjectives.	Strategic Reputational Operational	· Ongoing enhancements to data security and protection measureswiththird-partyexpertsupport; · AdditionalinvestmentinITresourceandinfrastructuretoincrease automation and workflow of business as usual activities; · Third-party due diligence, ongoing monitoring and regularsupplierperformancereviews; · Alternative sourcesof supplyare identifiedin advancetomitigate any potential disruption to the strategic supply chain; · Ongoingreviewand involvementof thehuman resourcesdepartment at an early stage in organisation design anddevelopmentactivities.
Nochange	2.Major quality failure or breach of contract The Group's reputation and profitability could bedamaged if it fails to meet its customers' operationalspecifications,qualitystandardsordeliveryschedules. AsubstantialportionofGrouprevenuesisgeneratedfroma limited number of large customers. The loss of any ofthese customers would materially affect the Group'sfinancesandgrowthprospects. Many of the Group's customer tower contracts containliquidated damage provisions, which may require theGroup to make unanticipated and potentially significantpaymentstoitscustomers.	Reputational Financial	· Continued skills development and training programmesfortheprojectandoperationaldeliveryteam; · Detailed and defined project scoping and life cyclemanagement through project delivery and transfer toongoingoperations; · Contractanddisputemanagementprocessesin place; · Continuous monitoring and management of customer relationships; · Useoflong-termcontractingwithminimalterminationrights.
Nochange	3. Non-compliance withvariouslawsandregulations  suchas: i)Health,safetyandenvironmentallaws ii)Anti-briberyandcorruptionprovisions Non-compliance withapplicablelawsand regulationsmay lead to substantial fines and penalties, reputationaldamageandadverseeffectsonfuturegrowthprospects. Suddenandfrequentchangesinlawsandregulations,in respect of their interpretation or application andenforcement, both locally and internationally, mayrequire the Group to modify its existing businesspractices, incur increased costs and subject it topotentialadditionalliabilities.	ComplianceFinancial Reputational	· Constant monitoring of potential changes to laws andregulatoryrequirements; · In-person and virtual training on health, safety andenvironmental matters provided to employees and relevantthird-partycontractors; · I S O 3 7 0 0 1 ( A n t i - B r i b e r y M ana g e m e n t S y s t e m ) c e r t i fi c a t i o n retained; · Ongoing refresh of compliance and related policies i m p l e m e n t e d i n 2018 , i n c l u d i n g s p e c i fi c d e t a il s c o v e r i n g Anti-Bribery and Corruption, Facilitation of Tax Evasion,Anti-Money-Laundering; · Compliance monitoring activities and periodic reporting requirementsintroduced; · Ongoing engagement with external lawyers, consultants,and regulatory authorities, as necessary, to identify andassesschangesintheregulatoryenvironment; · Third-Party Code of Conduct communicated andannual certifications required of all high and medium risk thirdpartiesintroducedandcommunicated; · Third-party monitoring through supplier audits andperformancereviews.
Nochange	4.Economicandpoliticalinstability Aslowdown in thegrowth of, ora reduction in demandfor, wireless communication services could adverselyaffect the demand for communication sites and towerspace,andcouldhaveamaterialadverseeffectontheGroup'sfinancialconditionandresultsofoperations. Therearesignificantrisksrelatedtopoliticalinstability,security,ethnic,religiousandregionaltensionsineachgeographywheretheGrouphasoperations.	Operational Financial	· Ongoingmarket analysis and business intelligencegatheringactivities; · Marketsharegrowthstrategyinplace; · Long-term contracts with blue chip MNOs; · Closemonitoring of any potential risks thatmay affect operations; · Business continuity and contingency plans in place to respondtoanyemergencysituations.
Nochange	5. Significant exchange ratemovements Fluctuationsin,ordevaluationsof,localmarketcurrencieswhere the Group operates could have a significant andnegative financial impact on the Group's business,financial condition and results. Such impacts may alsoresult from any adverse effects that these movementshave on Group third-party customers and strategic suppliers.	Financial	· USDandEURpeggedcontracts; · 'Natural'hedgeoflocalcurrencies(revenuevs.opex); · Monthlyreviewofexchangeratedifferences.
Nochange	6.Non-compliancewithpermitrequirements The Group may not always operate with the necessaryrequiredapprovalsandpermitsforsomeofitstowersites,particularlyinthecaseoftowerportfoliosacquiredfroma third-party. Vagueness, uncertainty and changes ininterpretationofregulatoryrequirementsarefrequentand often arise without warning. As a result, the Groupmay be subject to potential reprimands, warnings, finesand penalties for non-compliance with the relevantpermittingandapprovalrequirements.	Operational	· Inventoryofrequiredlicencesandpermitsmaintainedforeachoperatingcompany; · Compliance registers maintained with any potentialnon-conformities identified by relevant governmentauthoritieswithatimetableforrectification; · Periodic engagement with external lawyers and advisors, andparticipationinindustrygroups; · Active and ongoing engagement with relevant regulatoryauthoritiestoproactivelyidentify,assessandmanage actual andpotentialregulationchanges.
Nochange	7.Lossofkeypersonnel The Group's successful operational activities and growthare closely linked to the knowledge and experience ofkey members of senior management and highly skilledtechnicalemployees.Thelossofanysuchpersonnel,or thefailuretoattract,recruitandretainequallyhigh-calibreprofessionals, could adversely affect the Group'soperations, financial condition and strategic growthprospects.	People	· Talentidentificationandsuccessionplanningareinplaceforkeyroles; · Competitively benchmarked performance-related remuneration plans; · Staffperformanceanddevelopment/supportplans.
Nochange	8.Technologyrisk Advances in technology that enhance the efficiency of wirelessnetworks,andpotentialactivesharingofwirelessspectrum,maysignificantlyreduceornegatetheneedfortower-based infrastructure or services. This could reducethe need for telecommunications operators to add moretower-based antenna equipment at certain tower sites,leading to a potential decline in tenancies, service needsandrevenuestreams. Examples may include spectrally efficient technologies, which could potentially relieve certain network capacity problems, or complementary voice over internet protocol access technologies that could absorb a portion of subscriber traffic from the traditional tower-based networks.	Strategic	· Strategiclong-termplanning; · Business intelligence; · Exploringalternativetechnologiessuchassolarpower; · Continuously improving our product offering to adaptto newwirelesstechnologies; · Applying for new licenses to provide active infrastructure servicesincertainmarkets.
Nochange	9.Failuretoremaincompetitive Competition in, or consolidation of, thetelecommunications tower industry may create pricingpressuresthatmateriallyandadverselyaffecttheGroup.	Financial	· Key performance indicator ('KPI') monitoring andbenchmarkingagainstcompetitors; · TotalcostofownershipanalysisforMNOs; · Fairpricingstructure; · Businessintelligenceandreviewofcompetitors'activities; · Strongtenderingteamtoensurehighwin/retentionrate; · ContinuouscapexinvestmenttoensurethattheGroup has sufficientcapacity.
Nochange	10. Failure to integrate new lines of business in new markets Multiple risks exist with entry into new markets and newlines of business. Failure to successfully manage andintegrate operations, resources and technology couldhavematerialadverseimplicationsfortheGroup'soverallgrowth strategy, and negatively impact its financialpositionandcorporateculture.	StrategicFinancialOperational	· Pre-acquisition due diligence conducted with the assistance of external advisors with specific geographic and industry expertise; · Ongoingmonitoringactivitiespost-acquisition/agreement; · Detailed management, operations and technologyintegrationplan; · Ongoing measurement of performance vs. plan and Groupstrategicobjectives; · Implementation of a regional CEO and support function togovernanceandoversightstructure.
Nochange	11.Taxdisputes Our operations are based in certain countries withcomplex, frequently changing and bureaucratic andadministrativelyburdensometaxregimes.Thismayleadto significant disputes around interpretation andapplicationoftaxrulesandmayexposeustosignificantadditionaltaxationliabilities.	ComplianceFinancialOperational Reputational	· Frequent interaction and transparent communication withrelevantgovernmentalauthoritiesandrepresentatives; · Engagementofexternallegalandtaxconsultantsto advise on legislative/tax code changes and assessed liabilities or audits; · Engagement with trade associations and industry bodiesand other international companies and organisations facing similar issues; · Defendingagainstunwarrantedclaims; · RecruitmentofGroupTaxManager,andongoingrecruitmentofin-housetaxexpertiseatbothGroupandOpcolevels.
New	12.Covid-19 In addition to the normal health and safety risks to ouremployees and contractors, the ongoing impact of the C o v i d-19 p an d e m i c c o u l d m a t e r i a ll y an d a d v e rs e l y a ff e c t the financial and operational performance of the Groupacross all its activities. The effects of the pandemic mayalso disrupt the achievement of the Group's strategicplansandgrowthobjectivesandplaceadditionalstrainonits technology infrastructure. There is also an increasedrisk of litigation due to the potential effects of thepandemiconfulfilmentofcontractualobligations.	FinancialOperational	· Healthandsafetyprotocolsestablishedandimplemented; · Business continuity plans implemented with ongoing monitoring; · Financialmodelling,scenariobuildingandstresstesting; · Continuousmonitoringoftheexternalenvironment; · Increasedfuelandcapexpurchases; · Reviewofcontractualtermsandconditions; · Reviewandadaptationofourcontrolenvironment for remoteworking.
New	13. Information technology failure and cyber-attack risk We are increasingly dependent on the performance andeffectivenessofourITsystems.Failureofourkeysystems,exposure to the increasing threat of cybercrime attacksandthreats,lossortheftofsensitiveinformation,whetheraccidentally or intentionally, expose the Group tooperational, strategic, reputational and financial risks.Theserisksareincreasingduetogreaterinterconnectivity,reliance on technology solutions to drive businessperformance, use of third parties in operational activitiesandcontinuedadoptionofremoteworkingpractices. Cyber-attacks are becoming more sophisticated andfrequentandmaycompromisesensitiveinformationoftheGroup,itsemployees,customersorotherthirdparties.Failure to prevent unauthorised access or to updateprocesses and IT security measures may expose theGroup to potential fraud, inability to conduct its business,damage to customers as well as regulatory investigationsandassociatedfinesandpenalties.	FinancialOperational Reputational	· Ongoing implementation andenhancement of securityandremoteaccessprocesses,policiesandprocedures; · Regular security testing regime established, validated byindependentthirdparties; · Annualstafftrainingandawarenessprogrammeinplace; · Security controls based on industry best practiceframeworkssuchasNCSC,andvalidatedthroughinternalauditassessments; · Specialist security third parties engaged to assess cyberrisksandmitigationplans; · Incident management and response processes aligned to In f or ma t i on T e c hn o l ogy In f r a s t ruc t u r e L i b r ar y ( ' I T I L ® ' ) b es t practice - identification, containment, eradication, recoveryandlessonslearned; · Newsupplierriskmanagementassessmentsand due diligencecarriedout.

2.  Related party transactions

During the year, the Group companies entered into the following commercial transactions with related parties:

	2020			2019
	Income from towers US$m	Purchase of goods US$m		Income from towers US$m	Purchase of goods US$m
Millicom Holding B.V. and subsidiaries(1)	72.2	-		70.4	-
Ecost Building Management Pty	-	-		-	1.4
Vulatel (Pty) Ltd	-	-		0.2	0.3
Nepic Pty	-	0.2		0.3	-
Total	72.2	0.2		70.9	1.7

	2020			2019
	Amount owed by US$m	Amount owed to US$m		Amount owed by US$m	Amount owed to US$m
Millicom Holding B.V. and subsidiaries(1)	37.1	-		22.9	-
Vulatel (Pty) Ltd(2)	-	-		0.2	-
Nepic Pty(2)	-	-		0.3	0.1
SA Towers Proprietary Limited(2)	-	-		-	1.5
Total	37.1	-		23.4	1.6

(1)  Millicom Holding B.V is a shareholder of Helios Towers plc.

(2)  No longer classified as related parties as of November 2020. See Note 13 for further details.

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. Based on the ECL model, no provisions have been made for loss allowances in respect of the amounts owed by related parties.

Amounts receivable from the related parties related to other Group companies are short term and carry interest varying from 0% to 15% per annum charged on the outstanding trade and other receivable balances (Note 15).

3.  Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and Financial Statements, and the Group's Financial Statements, in accordance with applicable United Kingdom law and those applicable accounting standards.

The Directors have elected to prepare the Company Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice ('UK GAAP'), which is the United Kingdom Accounting Standards and applicable law, including the Financial Reporting Standard Applicable in the UK and Republic of Ireland ('FRS 102').

The Directors are required to prepare Financial Statements for each financial year which present a true and fair view of the financial position of the Company and of the Group, and of the financial performance and cash flows of the Group. In preparing those Financial Statements, the Directors are required to:

• select suitable accounting policies in accordance with IAS 8 ('Accounting policies, changes in accounting estimates and errors') and FRS 102 then apply them consistently;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

• provide additional disclosures when compliance with the specific requirements in IFRS for Group and FRS 102 for Company is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company and of the Group's financial position and financial performance;

• state that the Company has complied with FRS 102 and the Group has complied with IFRS, subject to any material departures disclosed and explained in the Financial Statements; and

• prepare the accounts on a going concern basis unless, having assessed the ability of the Company and the Group to continue as a going concern, management either intends to liquidate the entity or to cease trading, or have no realistic alternative but to do so.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and of the Group, and which enable them to ensure that the Financial Statements comply with the Companies Act2006 and 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.

Under applicable UK law and regulations, the Directors are responsible for the preparation of a Directors' report, Directors' remuneration report and corporate Governance Report that comply with that law and regulations. In addition, the Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.

Neither the Company nor the Directors accept any liability to any person in relation to the Annual Report and Financial Statements except to the extent that such liability could arise under English law. Accordingly, any liability to a person who has demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with section 90A and schedule 10A of the Financial Services and Markets Act 2000.

Directors' responsibility statement under the UK Corporate Governance Code:

In accordance with Provision 27 of the 2018 UK Corporate Governance Code, the Directors consider that the Annual Report and Financial Statements, taken   as a whole, is fair, balanced and understandable and provides information to enable shareholders to assess the Company's performance, business model and strategy.

Responsibility statement of the Directors in respect of the Annual Report and Financial Statements Each of the Directors whose names are listed on pages 72-74 confirm that to the best of their knowledge:

a)  the Group Financial Statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, and the Company Financial Statements prepared under FRS 102, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group and Company and the undertakings included in the consolidation taken as a whole; and

b)  the management report (encompassed within the Overview, Strategic Report, and Governance sections) includes a fair review of the development and performance of the business, and the position of the Group 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 Strategic Report and the Statement of Directors' Responsibilities were approved by the Board and signed on its behalf by the Chief Executive Officer. 

 

END

 

 

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