TIDMCKSN
RNS Number : 1672B
Cookson Group PLC
11 April 2012
11 April 2012
Cookson Group plc
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: www.hemscott.com/nsm.do
- Annual Report and Accounts for the year ended 31 December 2011
("2011 Annual Report and Accounts")
- Circular and Notice of Annual General Meeting to be held on 17 May 2012
- Form of proxy for the Annual General Meeting ("AGM") to be held on 17 May 2012
The following resolution is being proposed as special business
at the forthcoming AGM:
Resolution 20seeks approval to continue to call general meetings
on 14 clear days' notice. The Company would like to preserve the
ability to call general meetings (other than an AGM) on 14 clear
days' notice. The Company does not propose to use this reduced
notice period as a matter of routine, but wishes to maintain the
flexibility to do so where it is merited by the business of the
meeting, for example, because the matter to be discussed is time
sensitive or in the interests of Shareholders as a whole. The
approval will be effective until the Company's next AGM, when it is
intended that a similar resolution will be proposed. The Company
will also need to meet the requirements for electronic voting under
the Shareholder Rights Directive in order to be able to call a
general meeting on 14 clear days' notice. Resolution 20 is proposed
as a special resolution.
Printed copies of the AGM documents are being posted or
otherwise made available to shareholders today. Copies of the 2011
Annual Report and Accounts and 2012 Notice of Meeting, which
includes explanatory notes on the proposed resolutions, are
available on the Company's website at www.cooksongroup.co.uk.
IMPORTANT: EXPLANATORY NOTE AND WARNING
The primary purpose of this announcement is to inform the market
about the publication of Cookson Group plc's 2011 Annual Report and
Accounts.
The information below, which is extracted from the 2011 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 Cookson's Preliminary Results
announcement issued on 27 February 2012. Together these 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 full 2011 Annual
Report and Accounts.
"Principal Risks and Uncertainties
As described in the Corporate Governance Report, there is a
continuous process for identifying, evaluating and managing
significant risks faced by Cookson. Group management operates a
risk management process designed to identify the key risks facing
each business and reports to the Audit Committee on the process of
how those risks are being managed. The Board is responsible for the
Group's risk management and also reviews the role of insurance and
other measures used in managing risks across the Group. The Board
receives regular reports on any major issues that have arisen
during the year and makes an annual assessment of how the risks
have changed over the period under review.
Throughout its global operations, Cookson faces various risks,
both internal and external, which could have a material impact on
the Group's long-term performance. Cookson manages the risks
inherent in its operations in order to mitigate exposure to all
forms of risk, where practical, and to transfer risk to insurers,
where cost-effective. The risks below are not the only ones that
the Group will face. Some risks are not yet known and some that are
not currently deemed material could later become material. All of
these risks could materially affect the Group, its businesses,
results of future operations or financial condition.
RISK AND IMPACT MITIGATION
-------------------------------------------- ---------------------------------------------
The financial performance and financial
position of Cookson may be adversely
affected by a significant weakening
in demand in its core end-markets.
The Board regularly reviews Group
End-market conditions, and the strategy, which determines the
Group's trading performance, improved markets in which the Group operates.
markedly during the first half The current spread of the Group's
of 2011, reflecting the continuation major businesses, both geographically
of the recovery from the economic and by end-market served, provides
downturn which started in the fourth some protection to the Group should
quarter of 2008 and persisted through conditions, in particular markets,
much of 2009. Whilst the recovery deteriorate. Further, the reduction
has been strong, end-markets (and in the Group's cost base during
revenue) for a number of our businesses the last three years provides additional
is still not yet back to pre-crisis insulation to the adverse impact
levels. However, since midsummer of any near-term market downturn.
2011, concerns about the world Also, in view of the extent of
economy have intensified with growing the de-stocking which took place
evidence of a slowdown both in during 2009 in the Group's end-markets,
the economies of the developed the Directors believe that any
and developing world. Whilst fears downturn in its end-markets is
of a "double-dip" recession in likely to be less severe than that
the US and a "hard landing" in experienced in 2009. Following
China seem to have abated in recent the cost-reduction initiatives
months, market commentators are and equity raising successfully
still concerned about slowing global completed during 2009 and the debt
growth rates generally (including refinancing recently completed
in China) and the likelihood of in 2010 and 2011, the Directors
low, or possibly, negative growth believe that the Group is well
in Europe. In addition to clear positioned financially to sustain
evidence of slowing worldwide economic a further downturn in end-market
growth, concerns about the stability activity should this occur.
of the Eurozone and the European
financial/banking system have not
totally receded. It is as yet unclear
to what extent the seeming insolvency
of Greece and the fiscal weakness
of other countries such as Ireland,
Spain, Italy and Portugal will
impact the euro currency and the
banking system. Whilst, for now,
a liquidity squeeze in the banking
system seems to have been avoided,
there can be no certainty that
this risk will not return. This
is concerning given that this was
the catalyst for the severe downturn
in the "real" economy in late 2008/early
2009.
Cookson's divisions supply predominantly
consumable products, on short lead
times, to the global steel, foundry,
electronics and precious metals
industries. As such the Group's
expectations of future trading
are based upon the Directors' assessment
of end-market conditions, which
conditions are subject to some
uncertainty. In the event that
end-market conditions suffer further
significant deterioration, Cookson
may experience further reductions
in trading activity, a lower share
price, the financial failure of
one or more of its key customers
and suppliers, asset impairments,
lower profitability and a material
adverse impact on its financial
position.
-------------------------------------------- ---------------------------------------------
The Group's financial position
and trading results may be adversely
affected by fluctuations in exchange
rates, interest rates or the rate
of inflation. The Group attempts to manage transactional
and balance sheet translation risks
The Group has no control over changes associated with currency exchange
in foreign currency exchange rates, rate fluctuations through its hedging
or inflation and interest rates. and funding policies and it is
In the normal course of business, Group policy that foreign currency
many transactions are carried out transaction exposures that are
by Group businesses in currencies material at an individual operating
other than their reporting currency, unit level are hedged using appropriate
leading to transactional foreign instruments such as forward foreign
exchange risk, although this is exchange contracts. For its key
not material for the Group overall. operating currencies, the Group
The Group is exposed to the effect broadly matches the currency profile
of translating the results and of its borrowings with the currencies
net assets of its overseas subsidiaries of its asset base, but does not
into sterling. Significant fluctuations hedge translational impact on the
in the value of currencies in which income statements of overseas subsidiaries.
it operates, in interest rates, Where appropriate, the Group manages
or in rates of inflation may adversely its interest rate exposures using
impact the Group's financial position, interest rate swaps or other instruments.
results of operations and ability
to comply with its financial covenants.
-------------------------------------------- ---------------------------------------------
The Group may lose customers to
competitors with new or alternative
technologies if its businesses
either do not adequately adapt
to market developments or are unable
to protect, maintain and enforce Cookson invests significant amounts
their intellectual property. in research and development and
endeavours to sustain its competitive
The markets in which many of the advantage and take appropriate
Group's businesses operate can action to ensure that its cost
experience rapid changes due to base remains competitive. In 2011,
the introduction of new technologies. total research and development
The Group's continued success depends spend was GBP42.1m, equivalent
upon its ability to continue to to 1.9% of net sales value.
develop and produce new and enhanced
products and services on a cost-effective The Group applies for patents over
and timely basis in accordance its major products, technologies
with customer demands. If the Group and processes in a number of jurisdictions,
fails to adequately adapt to market including in Europe and the US.
developments related to new products New product and service offerings
and technology, it could lose customers by competitors are regularly monitored
to suppliers with better or less and any perceived breach of a Group
costly products. Throughout its patent is vigorously challenged.
operations, the Group relies on To the extent possible, the Group
a combination of trade secrets, avoids holding key intellectual
patents, confidentiality procedures property in countries which do
and agreements, and copyright and not afford an acceptable degree
trade mark laws to protect its of legal protection to the Group.
proprietary rights. If the Group
fails to or is unable to protect,
maintain and enforce its existing
intellectual property, this may
result in the loss of the Group's
exclusive right to use technologies
and processes which are included
or used in its businesses. In addition,
the laws of certain foreign countries
in which the Group operates may
not protect proprietary rights
to the same extent as those of,
for example, the UK or the US.
-------------------------------------------- ---------------------------------------------
The Group's financial condition
may be materially adversely affected
by any significant liabilities
for any defects of its products
or services. The Board believes that, taking
into account legal advice received,
If a product of the Group or of the Group's insurance arrangements,
one of the Group's industrial customers indemnification provided by former
does not conform to agreed specifications owners of certain of the subsidiaries
or is otherwise defective, the impacted and financial provisions,
Group may be subject to claims none of the currently pending or
by its customers arising from end-product potential claims will, either individually
defects, injury to individuals or in the aggregate, have a material
or other such claims. Legal claims adverse impact on the Group's financial
have been brought against certain position and results of operations.
Group companies by third parties
alleging that persons have been
harmed by exposure to hazardous
materials used by those companies
in the manufacture of industrial
and consumer products, and further
claims may be brought in the future.
Certain of the Group's subsidiaries
are subject to suits, predominantly
in the US, relating to a small
number of products containing asbestos
manufactured prior to the acquisition
of those subsidiaries by the Group.
These suits usually also name many
other product manufacturers. To
date, the Group is not aware of
there being any liability verdicts
against any of these subsidiaries.
-------------------------------------------- ---------------------------------------------
The Group's worldwide operations
and businesses may be adversely
affected by various political,
legal, regulatory and other developments
in countries in which it operates. As part of its planning process
before entering a new market or
The Group is subject to various territory, or expanding in an existing
legal and regulatory regimes, including market or territory, the Group
those covering taxation and environmental undertakes a rigorous assessment
matters; and political risks including of the risks involved. In addition,
the imposition of trade barriers, the spread of the Group's major
changes of regulatory requirements, businesses, both geographically
lack of protection for intellectual and by end-market served, provides
property rights and the volatility some protection to the Group should
of input costs, selling prices, any of its businesses be adversely
taxes and currencies. In particular, impacted by legal, regulatory or
operating within the rapidly evolving other changes in an individual
developing nations can expose the market or territory.
Group's businesses to significant
local risks and challenges. Future The Group has in place an insurance
global political, legal or regulatory programme covering all of its businesses
developments concerning Group businesses which provides an acceptable level
may affect their ability to operate of coverage for the operational
and to operate profitably in the risks which they face.
affected jurisdictions. Should
Group businesses fail to comply
with applicable legal and regulatory
requirements, this may result in
a financial loss or restriction
on their ability to operate. The
Group's businesses are subject
to a variety of operational risks,
including natural catastrophe,
terrorist action, theft, fraud
and, particularly in developing
nations, insufficient supply of
high-quality local management and
technical personnel. If any of
the operational risks materialise
to a significant extent, this could
result in a substantial interruption
to a facility, loss of future insurance
cover, a potential loss of customers
and revenue and financial loss.
-------------------------------------------- ---------------------------------------------
A withdrawal or reduction of precious
metal consignment arrangements,
or increased precious metal prices
resulting in consignment lines
being fully utilised, may cause
a shortage of raw materials requiring
the business to be restructured
and downsized and may result in Cookson has successfully maintained
a short-term material increase precious metal consignment arrangements
in the Group's financial indebtedness. of this nature for over 20 years.
The Group has close commercial
The Group's precious metal fabrication relationships with its group of
operations utilise significant consignor banks. Management seeks
quantities of precious metals, to operate the business at all
primarily gold by value. These times with appropriate headroom
metals are held predominantly on within the consignment facilities,
consignment under contractual arrangements taking account of anticipated levels
whereby the consignor retains title of business activity and precious
to the metal and the associated metals prices.
risks and benefits of ownership,
with the result that the physical
metal so held is not recorded in
the Group balance sheet. These
arrangements are uncommitted in
that the consignor has the right,
with limited or in some cases no
notice, to demand physical return
or purchase of its consigned metal.
The utilisation of consigned precious
metals is established practice
in the precious metals industry.
Should precious metals consignors
decide to reduce or withdraw the
facilities for whatever reason,
or require a return of the consigned
metal, or increased metal prices
lead to the consignment arrangements
becoming fully utilised, the Group's
precious metal fabrication operations
may suffer shortages of raw materials
requiring the business to be restructured
and downsized in order to be able
to operate within its available
consignment facilities. In the
short-term this may require precious
metals to be purchased, which could
materially increase the Group's
financial indebtedness pending
completion of the downsizing.
-------------------------------------------- ---------------------------------------------
Responsibility Statement of the Directors in respect of the
Annual Financial Report
"Each of the Directors whose names and functions are indicated
below confirms that to the best of their 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
taken as a whole; and
-- the Directors' Report includes a fair review of the
development and performance of the business and the position of the
issuer 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 names and functions of the Directors of Cookson Group plc
are as follows:
Jeff Harris Chairman
Nick Salmon Chief Executive
Mike Butterworth Group Finance Director
Francois Wanecq Executive Director
Emma FitzGerald Non-executive Director
Jeff Hewitt Non-executive Director and Chairman of the Audit Committee
Peter Hill Non-executive Director
Jan Oosterveld Non-executive Director
John Sussens Non-executive Director, Senior Independent Director and Chairman of the
Remuneration Committee
On behalf of the Board
Mike Butterworth
27 February 2012"
Forward looking statements
This announcement contains certain forward looking statements
which may include reference to one or more of the following: the
Group's financial condition, results of operations, cash flows,
dividends, financing plans, business strategies, operating
efficiencies or synergies, budgets, capital and other expenditures,
competitive positions, growth opportunities for existing products,
plans and objectives of management and other matters.
Statements in this announcement that are not historical facts
are hereby identified as "forward looking statements". Such forward
looking statements, including, without limitation, those relating
to the future business prospects, revenue, working capital,
liquidity, capital needs, interest costs and income, in each case
relating to Cookson, wherever they occur in this announcement, are
necessarily based on assumptions reflecting the views of Cookson
and involve a number of known and unknown risks, uncertainties and
other factors that could cause actual results, performance or
achievements to differ materially from those expressed or implied
by the forward looking statements. Such forward looking statements
should, therefore, be considered in light of various important
factors. Important factors that could cause actual results to
differ materially from estimates or projections contained in the
forward looking statements include without limitation: economic and
business cycles; the terms and conditions of Cookson's financing
arrangements; foreign currency rate fluctuations; competition in
Cookson's principal markets; acquisitions or disposals of
businesses or assets; and trends in Cookson's principal
industries.
The foregoing list of important factors is not exhaustive. When
relying on forward looking statements, careful consideration should
be given to the foregoing factors and other uncertainties and
events, as well as factors described in documents the Company files
with the UK regulator from time to time including its annual
reports and accounts.
Such forward looking statements speak only as of the date on
which they are made. Except as required by the Rules of the UK
Listing Authority and the London Stock Exchange and applicable law,
Cookson undertakes no obligation to update publicly or revise any
forward looking statements, whether as a result of new information,
future events or otherwise. In light of these risks, uncertainties
and assumptions, the forward looking events discussed in this
announcement might not occur.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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