Annual report & accounts and AGM notice

RNS Number : 2307B

Hill & Smith Hldgs PLC

13 April 2012

 



Hill & Smith Holdings PLC (the "Company")

2011 Annual Report and Notice of 2012 Annual General Meeting ("AGM")

Hill & Smith Holdings PLC has today posted, or otherwise notified as being available on its website www.hsholdings.com, the following documents:

1.   2011 Annual Report

2.   Notice of 2012 AGM

In accordance with Listing Rule 9.6.1 a copy of each of these documents has been uploaded to the National Storage Mechanism and will be available for viewing shortly.

A hard copy of the 2011 Annual Report can be obtained upon request to the Company Secretary, Hill & Smith Holdings PLC, Westhaven House, Arleston Way, Shirley, Solihull, B90 4LH.

The statutory accounts for the year ended 31 December 2011 have been approved by the Board and will be delivered to the Registrar of Companies following the Company's AGM. 

Compliance with Disclosure and Transparency Rule 6.3.5 ("DTR 6.3.5") - Extracts from the 2011 Annual Report

The information below, headed as Appendix A, B and C, and which is extracted from the 2011 Annual Report, is included solely for the purpose of complying with DTR 6.3.5 and the requirements it imposes on how to make public Annual Financial Reports.  It should be read in conjunction with the Company's Preliminary Announcement issued on 15 March 2012 (available at www.hsholdings.com).  Together these constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service.  This material is not a substitute for reading the full 2011 Annual Report.  All page numbers and cross-references in the extracted information below refer to page numbers in the 2011 Annual Report.

Appendix A - Principal Risks and Uncertainties

Market/Strategic Risks	Strategic Connection/Explanation	Mitigation
Economic environment and markets	Medium to long-term revenue and earnings growth Investment funding The impact of a general economic downturn that leads to a reduction in customer demand and production volumes. The Group derives part of its revenue from Government spending on infrastructure projects such as road and rail and any timing, funding or policy issues can have an adverse impact on key areas of the business.	Diversification of markets and territories with expansion into markets in India, China, Australia and Sweden. Expanding the market for existing products and services e.g. pipes supports in the US power generation market. The Group Board is in close contact with the subsidiary management and identifies any wider trends requiring action. These risks are also managed at local level where they are best understood and where we are close to our customers. Each business reviews its cost base in response to changing circumstances.
Competition and commercial relationships	Revenue growth, market positioning and profitability The Group benefits from well established commercial relationships with long standing key customers and suppliers. The significant loss of any of these or a worsening of commercial terms could have an impact on the Group's performance.	Maintaining and developing the quality and competitiveness of products and services. Close engagement with both key customers and suppliers supported by monitoring of customer and supplier reliability, our dependency and their financial security. Strengthening of commercial functions to manage contract progress and variations. Immediate response to any quality or timing issues. Use of credit insurance to lessen impact of customer failure.
Financial Risks	Strategic Connection/Explanation	Mitigation
Liquidity/Foreign Exchange and Fiscal	Future investment projects and expansion of foreign earnings The Group is exposed to a number of financial risks including credit risk, liquidity risk and foreign exchange volatility. Short term impact on earnings. The Group operates in a range of different legal, political and fiscal regimes presenting both operating and culture risks.	Group companies operate a common set of reporting procedures and accounting policies and have the availability of the Group intranet. The internal audit programme regularly reviews our operations. We have centralised cash and banking controls and a Treasury function which governs all Group companies. Hedging of transactions exposure through forward foreign exchange rates. Regular monitoring of tax developments in major jurisdictions and actions taken to ensure (through specialist advice) the most effective tax structures.
Pensions	Capital that would otherwise be available for investment Factors outside the Company's control, such as mortality rates, interest and inflation rates and investment performance, may lead to an increase in the deficit and Company contributions	Quarterly reporting to the Board of invested asset performance. Management and scheduling of deficit funding in agreement with Trustees. Reduction in liabilities through cessation of future accrual for UK Executive Scheme, as from January 2012. Reduction in UK Scheme operating expenses in 2011.
Operational Risks	Strategic Connection/Explanation	Mitigation
Product failure	Market share and profitability Many of the Group's products are supplied to the public sector for the benefit of members of the public. To the extent that any of the Group's products fail, this could generate adverse publicity and have a significant effect on the Group's reputation, its financial position and its ability to win new business.	Where appropriate, accreditation, regulatory approval and testing are undertaken to reach required compliance levels. Comprehensive quality control procedures are backed up by an appropriate level of insurance cover through a global insurer. Processes are in place to respond to a given situation to minimise reputational risk.
Supply of key raw materials and services	Organic growth and market share Pressure on margins and competitiveness. Risks to the quality of service to our customers through the failure in the supply chain and dependency on key suppliers.	We monitor the availability and price of key raw materials and energy and where appropriate hedge against volatility. We are reinforcing our controls over supplier selection and performance monitoring both internally and through the use of external specialists. We also have dual sourcing and a focus upon maintaining long-standing relationships.
Human resources	Market share, revenue and shareholder value growth Our future success will depend, to a large degree, on the ability of the Group to attract and retain skilled and qualified personnel, particularly at senior management level.	The Group offers competitive rates of pay, reviews salaries annually and provides a competitive package of benefits and incentives. Succession planning is undertaken and reviewed at subsidiary and Board level.

Operational Risks	Strategic Connection/Explanation	Mitigation
Environmental and safety	Organic growth of the business and market share Changes in legislation and standards, or the Group's failure to adequately control environmental risks, may have an adverse effect on the Group. A serious failure on the part of the Group to adequately control its health and safety risks could have an adverse effect upon on its operations, reputation and financial performance.	Operational management work within the policies and processes laid down by the Group. Where appropriate outside specialist expertise is engaged and recommendations and improvements monitored for implementation as necessary. Monthly reporting to the Board of health and safety management and performance, including accident statistics and ranked audit performance. Introduction of a Group "Safety Cloud" IT system in 2012 to enhance compliance monitoring and levels of assurance on improvement actions.
Project Assurance	Strategic Connection/Explanation	Mitigation
Acquisitions	Revenue and growth of shareholder value. Acquisitions are a key driver of the strategy The Group is an active acquirer. Acquisitions can involve risks that might have a material impact on the Group's financial performance and reputation. Integration plans not implemented properly.	Sensible profit multiples/prices are paid for businesses operating in markets that we know well. Comprehensive, rigorous and structured due diligence is carried out prior to completion. Formal prior approval process at Board level before commitment. A post acquisition programme of integration and review of performance is undertaken for the first 100 days. Key personnel retained with appropriately incentivised remuneration and benefits
Legal & Regulatory	Strategic Connection/Explanation	Mitigation
Compliance (laws and regulations)	Prohibitor on future investment and shareholder backing The Group operates in a number of different territories and is subject to wide-ranging laws and regulations including its business conduct.	We mitigate compliance risks through various means, including but not limited to: -     Systems of internal control and risk management. -     The Group's Codes of Conduct and Policies (further described in the CSR section of this report). -     External and internal legal, compliance and audit resources. A Group Risk & Compliance Counsel was appointed in November 2011.

Appendix B - Directors Responsibilities Statement pursuant to Disclosure and Transparency Rule 4

The following statement is extracted from page 47 of the 2011 Annual Report and is repeated here for the purposes of compliance with DTR 6.3.5.  This statement relates solely to the 2011 Annual Report and is not connected to the extracted information set out in this announcement or the Preliminary Announcement.

We confirm that to the best of our knowledge:

·      the Group and parent company 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 Group as a whole; and

·      the management report (which comprises the business review and other statutory information) includes a fair review of the development and performance of the business and the position of the Company and Group as a whole, together with a description of the principal risks and uncertainties that they face.

Appendix C - Related Party Transactions

The key management are considered to be the Board of Directors of Hill & Smith Holdings PLC, whose remuneration can be seen in the Directors' Remuneration Report on pages 38 to 44 and in the related party details on page 87 (note 24) of the 2011 Annual Report.

John Humphreys

Company Secretary

Hill & Smith Holdings PLC

Tel: [phone]

 

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