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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Rs Group Plc | LSE:RS1 | London | Ordinary Share | GB0003096442 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
20.00 | 2.68% | 766.50 | 766.00 | 767.00 | 768.50 | 748.50 | 753.50 | 1,104,655 | 16:29:49 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Electronic Components, Nec | 2.98B | 284.8M | 0.6015 | 12.74 | 3.63B |
TIDMECM
RNS Number : 0558H
Electrocomponents PLC
02 June 2017
ELECTROCOMPONENTS PLC
ANNUAL REPORT AND ACCOUNTS FOR THE YEARED 31 MARCH 2017
NOTICE OF 2017 ANNUAL GENERAL MEETING
Pursuant to Listing Rule 9.6.1R copies of the documents listed below have been submitted to the Financial Services Authority National Storage Mechanism and will shortly be available for viewing at: http://www.morningstar.co.uk/uk/NSM
-- Annual Report and Accounts for the year ended 31 March 2017 (2017 Annual Report and Accounts) -- Circular and Notice of Annual General Meeting (Notice of AGM) to be held on 20 July 2017 -- Form of proxy for the Annual General Meeting (AGM) to be held on 20 July 2017
The 2017 Annual Report and Accounts and Notice of AGM, which includes explanatory notes on proposed resolutions, are also available in the Investor Relations section of the Electrocomponents plc website at: www.electrocomponents.com
IMPORTANT: EXPLANATORY NOTE AND WARNING
The primary purpose of this announcement is to inform the market about the publication of Electrocomponents plc's 2017 Annual Report and Accounts and Notice of Meeting.
The information below, which is extracted from the 2017 Annual Report and Accounts, is included solely for the purpose of complying with DTR 6.3.5R and the requirements it imposes on issuers as to how to make public annual financial reports. It should be read in conjunction with Electrocomponents' Preliminary Results announcement issued on 23 May 2017. Together these constitute the material required by DTR 6.3.5R to be communicated in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the full 2017 Annual Report and Accounts. Statutory accounts for 2017 are included in the 2017 Annual Report and Accounts, which will be delivered to the Registrar of Companies in due course. Page and note references in the text below relate to pages and notes in the 2017 Annual Report and Accounts. The preliminary announcement can be viewed or downloaded from the Investor Relation section of the Company's website www.electrocomponents.com.
LEI: 549300KVXDURRKVW7R37
Enquiries:
Ian Haslegrave, Company Electrocomponents Secretary plc 01865 207491 Polly Elvin, Head of Investor Relations Electrocomponents & Corporate PR plc 07973 812481 David Allchurch / Martin 020 7353 Robinson Tulchan Communications 4200
APPIX
Pages and note references in the text below relate to pages and notes in the 2017 Annual Report and accounts.
MANAGING OUR RISKS (pages 25 to 27)
The Group has risk management and internal control processes to identify, assess and manage the risks likely to affect the achievement of its corporate objectives and business performance.
The risk management process
The risk management process is co-ordinated by the Group's risk team. The principal elements of the process are:
-- Identification: risks are identified through a variety of sources within the Group, including senior, regional and country management teams. The focus of the risk identification is on those risks which, if they occurred, would have a material quantitative or reputation impact on the Group.
-- Assessment: management identifies the controls for each risk and assesses (using consistent measures) the impact and likelihood of the risk occurring taking into account the effects of the existing controls (the net risk). This assessment is compared with the Group's risk appetite to determine whether further mitigating actions are required. This process is supplemented by an annual risk and controls assessment, which all operating locations and functions are required to complete.
-- Ownership: the Group's principal risks are owned by the Group's Executive Management Team (EMT) with specific mitigating actions/controls owned by individual members of the team. The EMT collectively reviews the risk register, the controls and mitigating actions.
-- The Board: undertakes a robust review of the Group's Principal Risks (including those that could threaten its business model, future performance, solvency or liquidity) and assesses them against the Group's risk appetite. For a number of the principal risks, the Board requires management to present its analysis to the Board, including the gross risk, the mitigating controls and the assessment of the net risk after controls. This allows the Board to determine whether the actions taken by management are sufficient.
Going concern
The Directors, having made appropriate enquiries, have a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future. These enquiries included a review of going concern assumptions half yearly through the Audit Committee. For this reason, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the Group's accounts.
Viability statement
The Directors confirm that they have a reasonable expectation that the Group will continue to operate and meet its liabilities, as they fall due, for the next three years to 31 March 2020.
The assessment period of three years has been chosen in line with the Group's strategic plan, which has a three-year horizon and is updated annually. The Group has few contracts with either customers or suppliers extending beyond three years and, in the main, contracts are within one year. The business operates with a minimal forward order book, generally taking orders and shipping them on the same day.
The assessment considered the Group operating profit, revenue, cash flows, net debt and key operating measures over the three-year period. These metrics were subject to material but plausible downside stress analysis, taking account of the principal risks set out on pages 26 and 27, with a focus on the possible effects on the Group as the UK government negotiates the UK's exit from the EU, how the Group responds to market shifts such as changes in customer demands and/or competitor activity, and the potential impact of volatility in foreign currency earnings. These risks could lead to a downturn in revenue or weakened margins or a combination of revenue decline and weaker margins. In assessing the potential impact of these scenarios, we considered our current robust capital position and ability to flex our cost base and working capital position and other actions to protect viability in adverse economic conditions.
In considering the likely effectiveness of such actions, the conclusions of the Board's regular monitoring and review of risk management internal control systems, as described on page 47, were taken into account. In addition to the risk mitigation plans, our business model is structured so that the Group is not reliant on one particular group of customers or geography, and has a very diverse customer base across our several geographies.
Our current robust capital position is supported by a review of the Group's funding facilities and banking covenants' headroom, through the Board's Treasury Committee. The Group's financial position, in particular cash flow, is also reviewed through monthly
management accounts and regular updates from the Group Finance Director and CEO to the Board. Details of the Group's sources of finance are outlined on page 118 with the earliest date of our facilities expiring being June 2017 in respect of $85 million of the Group's Private Placement loan notes. In making this statement regarding viability, the Directors have also made the key assumption that the remaining sources of funding will continue to be available throughout the three-year period to 31 March 2020.
Risk appetite
In accordance with the UK Corporate Governance Code, the Board defined its risk appetite across three risk categories: strategic, operating and regulatory/compliance. These three categories use both quantitative and qualitative criteria. During the year ended 31 March 2017, the Board reviewed again its risk appetite across the three categories with no significant changes being made.
Principal risks and uncertainties
The Group has identified ten principal risks, which are similar to those disclosed last year, with the only changes being the developing of some already identified risks, e.g. the risk associated with the UK exit from the EU following the UK referendum result on 23 June 2016. The Group's principal risks are categorised under one of three headings: strategic (see the Group's Strategy on page 8), compliance and operating risks (see the Business Model on page 6). These categories mirror those used by the Group to assess its risk appetite.
Risk direction definition
The risk is likely to increase within the next 12 months
The risk is likely to remain stable within the next 12 months
The risk is likely to reduce within the next 12 months
Risk description Risk direction Mitigating activities ------ ------------------------------------------------------------ -------------- ----------------------------------------------------------- Strategic risks ------ ------------------------------------------------------------ -------------- ----------------------------------------------------------- Consequences A on the organisation * A Group risk assessment was undertaken in advance of of the UK exit the UK referendum, which led to reviews across from the EU Possible business areas that would be affected by a UK exit This includes implications and any subsequent changes to the UK/ EU and
the risk to the not fully UK/worldwide trading agreements. Group's supply defined chain activities and across the UK dependent * Across Electrocomponents these reviews include: and the EU including on national understanding the potential impacts on the Group's possible changes negotiations global supply chain infrastructure, including the to customs duties with effects transport of products between the UK and EU; and and tariffs (around from 2019 group purchasing arrangements both within and outside 80% of our purchases onwards the EU. Other areas that are being, and will be, for the global considered in the future include: employee mobility, RS brand are treasury management and indirect taxation. routed through the UK to serve our global customer * A specific team, headed by the Group Finance Director base). Other , related risks will continue to monitor the possible effects on, and include migration mitigating actions open to, the Group as the UK of employees government negotiates the UK's exit from the EU. and potential impact with changes to existing legislation. ====== ============================================================ ============== =========================================================== Fail to respond B to strategic * Monitoring of market developments. market shifts e.g. changes No in customer demands significant * Ongoing strategic and market reviews by the Board and and/or competitor high- EMT. activity service Unforeseen changes level in customer and competitor * Annual strategic planning process including the market assumptions changes assessment of external market changes. that the Group anticipated performance plans are based upon. * Ongoing review of the competitive environment. ====== ============================================================ ============== =========================================================== Performance Improvement C Plan (PIP) does * Prioritised set of proposals and projects, including not deliver anticipated sales growth initiatives and supporting activities revenue growth Current across shared business services and our supply chain and cost savings plans and infrastructure, focussed on 'getting the basics This risk could actions right' for our customers. lead to lower delivering than forecast sales and financial performance reduced * Governance structure with accountabilities designed both in terms costs to support delivery on time and budget, within our of revenue growth resources and capabilities. and cost savings with changes required to Group plans. ------ ------------------------------------------------------------ -------------- ----------------------------------------------------------- Compliance risks ------ ----------------------------------------------------------------------------------------------------------------------------------------- D Failure to comply with international * Employment of internal specialist expertise, and local legal/regulatory supported, where needed, by suitably requirements No qualified/experienced external partners. Failure to manage significant these collective changes risks adequately to new * Ongoing reviews of relevant national and could lead to: or existing international compliance requirements. * death or serious injury of an employee or third party, legislation and/or * Training and awareness programmes in place focussing on anti-bribery, competition and data protection * penalties for non-compliance in health and safety or legislation. other compliance areas * Global whilstleblowing hotline managed by an independent third party providing employees with a process to raise non-compliance issues. * Operational Audit reviews of capabilities to ensure compliance with local requirements. * Global Health and Safety policy, Target Zero accidents initiative with regular reviews undertaken by the EMT and Board. * Local health and safety forums in place with the Head of Global Health and Safety and Environment. * Real-time monitoring of customer orders to ensure compliance with international trade control regulations. ====== ============================================================ ============== =========================================================== Risk description Risk direction Mitigating activities ---- ------------------------- ---------------------- ------------------------------------------------------------ Operational risks ---- ------------------------- ---------------------- ------------------------------------------------------------ E Failure in supply chain infrastructure * Business continuity plans in place at operating An unplanned locations. event disrupting No changes the business's to the supply chain, Group's * Annual tests undertaken at key warehouse, sales and impacting the supply back office locations. Group's ability chain infrastructure to maintain customer service. ---- ------------------------- ---------------------- ------------------------------------------------------------ F Prolonged system outage * Resilient IT systems infrastructure featuring The loss of a operating redundancies and off-site disaster core transactional No significant recovery.
system resulting changes in the business to the being unable Group's * Strict control over upgrades to core transaction to serve customers. IT infrastructure systems and other applications. * Recent migration of core transaction systems to an upgraded data centre. ---- ------------------------- ---------------------- ------------------------------------------------------------ G Information loss/cyber breach * Anti-virus software to protect business PCs and An attack on laptops. the business's Increasing systems/data frequency could lead to and sophistication * Procedures to update supplier security patches to potential loss of cyberattacks servers and clients. of confidential on businesses information and disrupt the business's * Software scanning of incoming emails for known transactions viruses. with customers (including the transactional * Firewalls to protect against malicious attempts to website) and penetrate the business IT environment. transactions with suppliers. * IT control reviews to consider the security implications of IT changes. * Security reviews with selected third-party vendors. * Computer emergency readiness team (CERT) to track software vulnerabilities. ---- ------------------------- ---------------------- ------------------------------------------------------------ H UK Defined Benefit pension scheme * Quarterly reviews of the pension scheme funding cash requirements position. are in excess No significant of cash available changes The company is to related * Regular interaction with the pension scheme trustees. required to contribute financial increased cash and other sums to the UK assumptions * Joint trustee/company working group to review Defined Benefit anticipated investment strategy. pension scheme. * Consultation with scheme members on future individual funding options for defined benefit scheme. ---- ------------------------- ---------------------- ------------------------------------------------------------ I People resources unable to support * Development of existing employee competencies, and the existing the introduction of external expertise where and future growth No significant appropriate. of the business changes The business to the is not able to supply * Annual employee appraisal processes to align personal attract and retain and retention objectives with the Group's PIP. the necessary of quality high-performing employees employees to ensure that the business achieves its targeted performance. ---- ------------------------- ---------------------- ------------------------------------------------------------ J Macroeconomic environment deteriorates * Strong cash generative business. The Group's sales and hence profits Economic are adversely indicators * Strong balance sheet. affected by any currently decline in the showing global macroeconomic no significant * Significant headroom maintained on banking covenants environment with change and facilities. other associated in the effects such global as foreign exchange outlook * Relevant cash flow foreign exchange hedging for volatility. business trading purposes. * Tight cost management and control of stock. ==== ========================= ====================== ============================================================
RELATED PARTIES (page 126)
The Company has a related party relationship with its subsidiaries as disclosed in note 17 to the Group accounts and with its key management personnel. The key management personnel of the Group are the Directors and the Executive Management Team. Compensation of key management personnel was:
2016 GBPm ---------------------------- --- ----- Remuneration 5.4 4.1 ---------------------------- --- ----- Termination payments 0.3 0.6 ---------------------------- --- ----- Social security costs 0.7 0.5 ---------------------------- --- ----- Equity-settled transactions 2.6 1.7 ---------------------------- --- ----- Pension costs 0.4 0.5 ---------------------------- --- ----- 9.4 7.4 ---------------------------- --- -----
Details of transactions with the jointly controlled entity are given in note 17 to the Group accounts [and set out below].
( Footnote to Note 17 on page 110)
RS Components & Controls (India) Limited (RSCC) is a jointly controlled entity with Controls & Switchgear Company Limited, a company registered in India. The authorised share capital of this company is INR20 million, of which INR18 million is issued and owned in equal shares by Electrocomponents UK Limited and its partner. RS Components Limited supplies products to RSCC, while office space and distribution network are provided by Controls & Switchgear. During the year ended 31 March 2017 the Group made sales of L1.4 million (2016: L1.0 million) to RSCC. RSCC is accounted for using the equity accounting method.
STATEMENT OF DIRECTORS' RESPONSIBILITIES (page 72)
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company and of the profit or loss of the group and company for that period. In preparing the financial statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable IFRSs as adopted by the European Union have been followed for the group financial statements and United Kingdom Accounting Standards, comprising FRS 102, have been followed for the company financial statements, subject to any material departures disclosed and explained in the financial statements;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group and company's transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation.
The directors are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The directors consider 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 group and company's performance, business model and strategy.
Each of the directors, whose names and functions are listed on pages 34 to 36 confirm that, to the best of their knowledge:
-- the company financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the company;
-- the group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the group; and
-- the Strategic Report includes a fair review of the development and performance of the business and the position of the group and company, together with a description of the principal risks and uncertainties that it faces.
In the case of each director in office at the date the Directors' Report is approved:
-- so far as the director is aware, there is no relevant audit information of which the group and company's auditors are unaware; and
-- they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the group and company's auditors are aware of that information.
By order of the Board
Lindsley Ruth David Egan Chief Executive Officer Group Finance Director
SAFE HARBOUR
This financial report contains certain statements, statistics and projections that are or may be forward-looking. The accuracy and completeness of all such statements, including, without limitation, statements regarding the future financial position, strategy, projected costs, plans and objectives for the management of future operations of Electrocomponents plc and its subsidiaries is not warranted or guaranteed. These statements typically contain words such as "intends", "expects", "anticipates", "estimates" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Although Electrocomponents plc believes that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors, which may be beyond the control of Electrocomponents plc, which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Other than as required by applicable law or the applicable rules of any exchange on which our securities may be listed, Electrocomponents plc has no intention or obligation to update forward-looking statements contained herein.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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