TIDMCIU

RNS Number : 6925U

Cape plc

08 April 2016

Cape plc

8 April 2016

8 April 2016

Cape plc ('Cape' or the 'Company')

Annual Financial Report

Cape announces that its Annual Financial Report for the year ended 31 December 2015 (the "2015 Annual Report"), the Notice of Annual General Meeting ("Notice of AGM"), form of proxy ("Form of Proxy") and a letter requesting the sending of documents and information by electronic means ("Electronic Documents and Information Letter") have today been mailed to Ordinary Shareholders and the Scheme Shareholder (as defined in the Company's Articles of Association).

Pursuant to Listing Rule 9.6.1, the 2015 Annual Report, Notice of AGM, Form of Proxy and Electronic Documents and Information Letter have been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Hemscott.com/nsm.do and can also be viewed on the Company's website at www.capeplc.com.

AGM Location

The Company's AGM will be held at 11.00am (BST) on Wednesday, 11 May 2016 at the offices of Cape at Drayton Hall, Church Road, West Drayton, Middlesex UB7 7PS, United Kingdom.

Additional Information

In accordance with Disclosure and Transparency Rule 6.3.5(2)(b), additional information is set out in the appendices to this announcement. This information is extracted in full unedited text from the Annual Report. References to page numbers are the respective page numbers in the Annual Report. This information is not a substitute for reading the full Annual Report.

Cape plc

Richard Allan

Company Secretary

Appendices:

Appendix 1: Directors' Responsibility Statement

The following directors' responsibility statement is extracted from the 2015 Annual Report (page 81).

Directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable laws and regulations. The directors are also responsible for the preparation of the directors' remuneration report, which they have chosen to prepare, being under no obligation to do so under Jersey law. The directors are also responsible for the preparation of the directors' governance report under the Listing Rules.

Jersey company law requires the directors to prepare financial statements for each financial period in accordance with generally accepted accounting principles prescribed for the purposes of the law. Pursuant to that law, the directors have prepared the consolidated financial statements and the parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

The financial statements are required by law to give a true and fair view of the state of affairs of the Company at the period's end and also the profit or loss of the Company for the period then ended. In preparing those financial statements, the directors should:

   -          select suitable accounting policies and then apply them consistently; 
   -          make judgements and estimates that are reasonable; 

- state that the financial statements comply with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; and

- prepare the financial statements on the 'going concern' basis unless it is inappropriate to presume that the Company will continue in business, in which case there should be supporting assumptions or qualifications as necessary.

The directors are responsible for keeping proper accounting records which are sufficient to show and explain the Company's transactions and as such to disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the law. 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.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement under the Disclosure and Transparency Rules

Each of the current directors, whose names and functions are listed on page 54 confirms that, to the best of his/her knowledge:

- the consolidated financial statements, prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group and the undertakings included in the consolidation taken as a whole; and

- the directors' governance report (including the corporate governance report and the Audit Committee report) on pages 52 to 81 and the regional and Chief Financial Officer's reviews on pages 30 to 39 include 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 as set out in the risks and uncertainties review on pages 18 to 25.

Directors' statement under the Corporate Governance Code

The strategic report and this directors' governance report (including the remuneration report) were reviewed and approved by the Board on 15 March 2016. The Board confirms that, taken as a whole, these reports represent a fair, balanced and understandable report on the Group's performance, business model and strategy.

By order of the Board

Michael Speakman

Chief Financial Officer

15 March 2016

Appendix 2: Principal Risks & Uncertainties

The following description of the principal risks and uncertainties that the Company faces is extracted from the 2015 Annual Report (pages 18 to 25).

Cape recognises that in a complex operational environment, it is essential that we actively manage our risks and opportunities to allow us to deliver the Group's strategic objectives. Our risk management procedures allow the Group to identify, assess and manage risk to an acceptable level whilst in pursuit of our strategic objectives.

How we manage risk

Following Cape's values in everything we do

Whilst Cape is focussed on seeking opportunities and delivering our objectives, we are passionate that we will do this by working in line with our values. We firmly believe that adopting responsible behaviour

at every level and in every aspect of the business is key to our success and is our first line of defence in risk management. Our values, visible adherence to our values and the reinforcement of them has created a strong culture of risk awareness within the business.

For more information go to page 41

Operations are accountable and maintain an effective risk framework

Our employees work across many different geographies and provide a wide range of services, carrying a range of risk types. Our employees take accountability for effectively managing risks, using the Group's thorough system of policies and procedures to do so. Internal control procedures are maintained on a day-to-day basis, risk registers are in place and training needs are assessed, to ensure the appropriate knowledge and skills are everywhere that they are needed.

Our independent risk management and compliance functions determine appropriate frameworks for managing risk Independent functions determine the appropriate frameworks, set standards for managing risk, provide oversight for specific risk areas and ensure standards are implemented by process owners consistently across Cape. Independent functions such as health and safety, finance, legal, commercial and Operational Excellence operate as centres of quality and collaborate with process owners on controls to mitigate identified risks.

Internal audit provides independent challenge

Our internal audit department reviews financial controls and risk management procedures throughout Cape, identifying risks, issues and opportunities for improvement and then reporting to the executive management and Audit Committee on these matters including updates on progress made against open items.

The Board and Executive Management are our final line of defence

The Board and Executive Management are actively engaged in assessing strategic risk and providing oversight. The Audit Committee formally reviews the results of the risk management process twice a year and reviews internal audit assurance work throughout the year. We are looking to strengthen this by formalising executive management's role in risk management. We have commenced this in 2015 with further development planned for 2016.

For more information go to page 61

Our risk monitoring process

Analysing risks

- Risks are evaluated to establish potential financial and non-financial impacts, the likelihood of occurrence and the root cause. A bottom-up risk assessment is undertaken by all business units every six months which results in a prioritised register of risks. A top-down assessment of operational and strategic risk is undertaken by the Board and Executive Committee at least annually. The two processes are compared for profile and gaps and are factored into Cape's final risk analysis.

Risk mitigation

- We review the nature, adequacy and appropriateness of our current controls to mitigate these risks. If new, different or additional risks are identified or if additional controls are required, these are developed and appropriate responsibilities to discharge are assigned. Acquisition and other investment-related risks are identified and assessed before key investment decisions are made.

Reporting and monitoring

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- Risks are monitored throughout the year by the executive management and summarised to the Board. Emerging risks are identified, reported and reviewed on an ongoing basis, with particular focus on capturing emerging risk and monitoring all changing risk during monthly business reviews. Management is responsible for monitoring weakness in controls and progress of actions taken by business units to mitigate the key risks; this is supported through the Group's internal audit programme. The results of the risk management process are reported to the Audit Committee every six months.

For more information go to page 61 to 64

Risk appetite

The Group's risk appetite drives strong commercial risk controls, high standard of health, safety and environmental compliance and financial management that collectively allow growth whilst limiting the Group's risk exposure to an acceptable level. The level of risk is considered appropriate for Cape to accept in achieving our strategic objectives and is determined in accordance with the Board's strategic reviews and risk assessments during the year.

2015 assessment of principal risks

The risk assessment exercise is undertaken by each region and Group function to conduct a formal review of risk that could impact the Group. The assessment includes the perceived level of risk and likelihood of occurrence, both before and after mitigating controls.

The impact of risks are quantified across a range of factors including: financial, health and safety, environmental, enforcement and reputational. The Executive Committee separately discussed the Group's principal risks in December 2015 to form a top-down assessment and oversight from a Group-wide view. The Board performed a top-down review in August 2015 and again in January 2016 and subsequently reviewed and challenged both bottom-up and top-down assessments to arrive at the agreed principal risks. Subsequent to the risk management process, the Board identified eleven principal risks which are set out in the table below:

[Please see table set out on page 19 of the 2015 Annual Report.]

 
 A Global political, security                              G Investment and asset 
  and economic conditions                                   integrity 
 B Key client and market                                   H Compliance and business 
  dependency                                                conduct risk 
 C Health, safety and                                      I Industrial Disease 
  environmental risks                                       Claims - 
                                                            provision adequacy risks 
                                                            on existing scope of 
                                                            liability provision 
 D Recruitment and retention                                  J Industrial Disease 
  of key executives and                                        Claims (IDC) - 
  skilled employees                                            widening of the scope 
                                                               and liability 
 E Contract acceptance                                     K Taxation 
  risk 
 F Operational and project 
  performance risk 
 
 
  Principal risks and viability 
 Risk              Risk description      Link to           Mitigation             Change      More information 
                                          strategy                                 in risk 
                                                                                   during 
                                                                                   2015 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 A. Global         There                 -- Geographic     -- A diverse           [Please     Corporate 
  political,        is a potential        expansion         portfolio              see page    and social 
  security          impact                -- Balanced       reduces                21 of       responsibility 
  and economic      on the                business          exposure               the 2015    section 
  conditions        Group                 -- Operational    to each                Annual      (security) 
                    from political,       excellence        specific               Report]     page 43 
                    security                                location.                          Our markets 
                    and                                     -- Monitor                         page 8 
                    economic                                travel 
                    conditions                              by Cape 
                    globally.                               employees 
                    We operate                              and restrict 
                    across                                  travel 
                    the globe                               to countries 
                    and                                     deemed 
                    therefore                               unsafe 
                    may be                                  or too 
                    exposed                                 high risk. 
                    to adverse                              -- Dedicated 
                    situations                              Group 
                    with potential                          Head of 
                    risk to                                 Security 
                    our people,                             in place. 
                    property                                -- Regular 
                    and business                            security 
                    operations.                             and risk 
                    Examples                                assessments 
                    of such                                 and monitoring. 
                    risks                                   -- Contingency 
                    would                                   plans 
                    be geo-political                        and exit 
                    events,                                 strategy 
                    sanctions,                              in place. 
                    terrorist                               -- Monitor 
                    events,                                 any changes 
                    disease                                 in sanctions 
                    outbreaks                               by legal 
                    or environmental                        counsel. 
                    hazards.                                -- Senior 
                    Deterioration                           management 
                    in commodity                            presence 
                    prices                                  in all 
                    affecting                               regions. 
                    customer                                -- Insurance 
                    capital                                 policies 
                    and operational                         taken 
                    expenditure                             as appropriate. 
                    is a key                                -- Wide 
                    risk.                                   range 
                    Although                                of geographies 
                    we operate                              and sectors 
                    over a                                  provide 
                    number                                  diverse 
                    of sectors,                             revenue 
                    we are                                  streams. 
                    at risk                                 -- Reviews 
                    of                                      of Group's 
                    declining                               forecast 
                    revenue                                 and market 
                    streams,                                trends 
                    contract                                are completed 
                    renegotiation                           quarterly 
                    and incurring                           along 
                    costs                                   with the 
                    not supported                           Group's 
                    by revenue                              strategic 
                    during                                  annual 
                    economic                                planning 
                    downturns.                              process 
                                                            to ensure 
                                                            impacts 
                                                            from the 
                                                            economic 
                                                            environment 
                                                            are managed. 
                                                            -- Contract 
                                                            performance 
                                                            reviewed 
                                                            monthly 
                                                            by finance 
                                                            and 
                                                            commercial 
                                                            management, 
                                                            with those 
                                                            deemed 
                                                            high risk 

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                                                            escalated 
                                                            to the 
                                                            Audit 
                                                            Committee. 
                                                            This allows 
                                                            any changes 
                                                            to expected 
                                                            performance 
                                                            or impact 
                                                            of economic 
                                                            downturns 
                                                            to be 
                                                            identified 
                                                            early 
                                                            and any 
                                                            necessary 
                                                            action 
                                                            taken. 
                                                            -- Operational 
                                                            Excellence 
                                                            initiatives 
                                                            seek to 
                                                            increase 
                                                            efficiencies 
                                                            and improve 
                                                            customer 
                                                            relations 
                                                            and satisfaction. 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 B. Key            Loss of               -- Customer       -- Client              [Please     Our markets 
  client            key clients           intimacy          relationships          see page    page 8 
  and market        or decline            -- Balanced       are built              21 of 
  dependency        in a key              business          at multiple            the 2015 
                    market                                  levels                 Annual 
                    could                                   from site              Report] 
                    adversely                               supervisors 
                    affect                                  to senior 
                    Cape's                                  management. 
                    revenues.                               -- Multi-year 
                    The Group's                             contracts 
                    top ten                                 in place. 
                    clients                                 -- Group 
                    represented                             strategy 
                    45% of                                  focussed 
                    revenue                                 on creating 
                    (2014:                                  a broad 
                    42%) and                                portfolio 
                    if we                                   of clients 
                    are unable                              and markets. 
                    to continue                             -- Acquisitions 
                    working                                 brought 
                    for one                                 new client 
                    or more                                 relationships 
                    of our                                  and wider 
                    key clients                             opportunities. 
                    then the                                -- Revenue 
                    Group's                                 generated 
                    future                                  across 
                    prospects                               numerous 
                    may be                                  markets, 
                    impacted.                               across 
                    There                                   different 
                    is the                                  geographies 
                    risk of                                 providing 
                    revenues                                greater 
                    being                                   stability 
                    too concentrated                        and robustness 
                    on a                                    of revenue 
                    particular                              streams. 
                    market.                                 -- Work 
                    Working                                 performed 
                    capital                                 throughout 
                    may be                                  asset 
                    impacted                                life cycles 
                    if key                                  providing 
                    customers                               opportunities 
                    look to                                 at each 
                    extend                                  stage. 
                    payment                                 -- Monthly 
                    terms                                   contract 
                    or reject                               performance 
                    claims.                                 reviews 
                                                            by finance 
                                                            and commercial 
                                                            management 
                                                            to identify 
                                                            and escalate 
                                                            high risk 
                                                            areas. 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 C. Health,        The Group             -- Operational    -- High                [Please     Corporate 
  safety            may suffer            excellence        number                 see page    and social 
  and               commercial                              of HSE                 21 of       responsibility 
  environmental     and reputational                        personnel              the 2015    section 
  (HSE)             damage                                  in all                 Annual      (health 
  risks             as a                                    regions.               Report]     and safety) 
                    result                                  -- Investment                      page 43 
                    of a safety                             in training                        to 47 
                    or environmental                        to improve 
                    incident                                staff 
                    involving                               skills 
                    our employees,                          and ensure 
                    members                                 qualifications 
                    of the                                  are up 
                    public                                  to date. 
                    or third-party                          -- HSE 
                    partners.                               initiatives 
                    Failure                                 rolled 
                    to maintain                             out throughout 
                    high                                    the year 
                    HSE standards                           to raise 
                    could                                   awareness. 
                    result                                  -- HSE 
                    in injury                               policies 
                    or loss                                 and procedures 
                    of personnel,                           in place 
                    breach                                  and monitored 
                    of                                      throughout 
                    regulations,                            all regions. 
                    financial 
                    loss and 
                    reputational 
                    damage. 
                    Financial 
                    penalties 
                    may be 
                    incurred 
                    for HSE 
                    incidents 
                    which 
                    in the 
                    UK are 
                    significantly 
                    increasing. 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 D. Recruitment    The inability         -- Geographic     -- Monitor             [Please     Directors' 
  and retention     to recruit            expansion         employee               see page    remuneration 
  of                or retain             -- Broaden        turnover               21 of       report 
  key executives    both key              portfolio         and conduct            the 2015    page 65 
  and skilled       executives            -- Operational    exit interviews.       Annual      to 77 

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  employees         and skilled           excellence        -- Training            Report]     Corporate 
                    employees                               programmes                         and social 
                    could                                   implemented                        responsibility 
                    adversely                               at all                             section 
                    impact                                  levels                             (People) 
                    the Group                               of Cape                            page 42 
                    both operationally                      including 
                    and                                     programmes 
                    financially.                            aimed 
                    Key executives,                         at executives, 
                    senior                                  senior 
                    management                              leaders, 
                    and skilled                             future 
                    employees                               leaders 
                    possess                                 and supervisors. 
                    the industry                            Skilled 
                    knowledge                               employees' 
                    and experience                          training 
                    without                                 is monitored 
                    which                                   and 
                    the                                     refreshed 
                    strategic                               as required. 
                    objectives                              -- Executive 
                    may not                                 remuneration 
                    be advanced.                            is reviewed 
                                                            against 
                                                            market 
                                                            data to 
                                                            ensure 
                                                            awards 
                                                            are competitive. 
                                                            Long-term 
                                                            incentive 
                                                            plans 
                                                            are in 
                                                            place 
                                                            to 
                                                            encourage 
                                                            the retention 
                                                            of the 
                                                            key management 
                                                            group. 
                                                            -- Availability 
                                                            of skilled 
                                                            employees 
                                                            has improved 
                                                            in some 
                                                            geographies 
                                                            as projects 
                                                            complete 
                                                            and some 
                                                            projects 
                                                            become 
                                                            impacted 
                                                            by the 
                                                            economic 
                                                            conditions. 
                                                            -- Software 
                                                            to track 
                                                            status 
                                                            of applicants 
                                                            introduced 
                                                            across 
                                                            all regions. 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 E. Contract       There                 -- Operational    -- Policies            [Please     Audit 
  acceptance        is a risk             excellence        and procedures         see page    Committee 
  risk              that Cape             -- Broaden        in place               23 of       report 
                    may fail              portfolio         for contract           the 2015    page 62 
                    to manage                               approval               Annual      to 64 
                    contract                                include                Report] 
                    risk and                                bid approval 
                    commit                                  models, 
                    to contractual                          peer review 
                    terms                                   and Board 
                    and conditions                          approval 
                    that expose                             of key 
                    the Group                               contracts. 
                    to excessive                            -- Dedicated 
                    financial                               commercial 
                    risks                                   teams 
                    and potential                           are in 
                    cost overruns.                          place 
                                                            in all 
                                                            regions. 
                                                            -- Experienced 
                                                            management 
                                                            teams 
                                                            in place 
                                                            for all 
                                                            service 
                                                            offerings 
                                                            with the 
                                                            relevant 
                                                            technical 
                                                            and industry 
                                                            knowledge. 
                                                            -- Large 
                                                            majority 
                                                            of contracts 
                                                            being 
                                                            cost reimbursable 
                                                            and 
                                                            preference 
                                                            of management 
                                                            for this 
                                                            basis. 
                                                            -- Commercial 
                                                            management 
                                                            report 
                                                            on high 
                                                            risk contracts 
                                                            to senior 
                                                            executives 
                                                            and the 
                                                            Audit 
                                                            Committee. 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 F. Operational    Inefficient           -- Operational    -- Operational         [Please     Audit 
  and project       project               excellence        Excellence             see page    Committee 
  performance       execution             -- Customer       initiatives            23 of       report 
  risk              and management        intimacy          have been              the 2015    page 62 
                    could                 -- Broaden        implemented            Annual      to 64 
                    lead to               portfolio         and                    Report] 
                    additional                              subsequently 
                    costs                                   further 
                    being                                   developed 
                    incurred,                               each year 
                    affecting                               as part 
                    overall                                 of continuous 
                    project                                 improvement 
                    performance                             programmes; 
                    and the                                 implementing 
                    Group's                                 a global 

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                    financial                               project 
                    performance.                            management 
                    As our                                  toolkit 
                    range                                   and standardised 
                    of services                             project 
                    and                                     delivery 
                    geographies                             system 
                    broaden,                                framework; 
                    the number                              continuing 
                    of project                              to develop 
                    types                                   and formalise 
                    and styles                              best practice; 
                    expand,                                 and knowledge 
                    increasing                              sharing 
                    this risk.                              across 
                                                            the Group. 
                                                            -- Cape 
                                                            Management 
                                                            Development 
                                                            Programme 
                                                            provides 
                                                            training 
                                                            to 
                                                            all levels 
                                                            of employees 
                                                            and includes 
                                                            project 
                                                            management 
                                                            and 
                                                            financial 
                                                            management 
                                                            skills. 
                                                            -- Centres 
                                                            of excellence 
                                                            share 
                                                            knowledge 
                                                            across 
                                                            the Group. 
                                                            -- Monthly 
                                                            project 
                                                            performance 
                                                            reviews 
                                                            are undertaken 
                                                            involving 
                                                            finance, 
                                                            commercial 
                                                            and operational 
                                                            personnel. 
                                                            -- Audit 
                                                            Committee 
                                                            regularly 
                                                            review 
                                                            commercial 
                                                            contract 
                                                            risks 
                                                            with 
                                                            the Group 
                                                            Commercial 
                                                            Director 
                                                            and Chief 
                                                            Executive. 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 G. Investment     Return                -- Operational    -- Due                 [Please     Note 34, 
  and asset         on invested           excellence        diligence              see page    'Business 
  integrity         capital               -- Geographic     and assessments        23 of       acquisitions' 
                    may decrease          expansion         made prior             the 2015    Audit 
                    if there                                to acquisitions.       Annual      Committee 
                    is a failure                            -- Detailed            Report]     report 
                    to achieve                              assessments                        page 62 
                    satisfactory                            of joint                           to 64 
                    returns                                 venture 
                    on assets,                              arrangements 
                    acquisitions,                           and other 
                    joint                                   investments, 
                    ventures                                including 
                    or other                                legal 
                    investments.                            and financial 
                    Cape holds                              due diligence 
                    GBP80.2                                 where 
                    million                                 appropriate. 
                    of property,                            -- Asset 
                    plant                                   counts 
                    and equipment                           performed 
                    assets                                  annually 
                    around                                  including 
                    the globe                               impairment 
                    and the                                 assessments. 
                    inadequate                              -- Group 
                    management                              Head of 
                    and financial                           Assets 
                    control                                 responsible 
                    of these                                for the 
                    assets                                  co-ordination 
                    may expose                              and 
                    the Group                               supply 
                    to loss                                 of assets 
                    of operational                          worldwide. 
                    control,                                -- Asset 
                    assets,                                 control 
                    financial                               policies 
                    data or                                 and procedures 
                    data integrity.                         in place 
                    Implementation                          globally. 
                    of new                                  -- Standardised 
                    ERP systems                             asset 
                    could                                   management 
                    pose a                                  systems 
                    transitional                            being 
                    risk to                                 rolled 
                    the financial                           out. 
                    management                              New ERP 
                    of these                                systems 
                    assets                                  being 
                    and the                                 evaluated 
                    business.                               for staged 
                                                            implementation. 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 H. Compliance     Cape is               -- Geographic     -- Anti-bribery        [Please     For further 
  and business     exposed                expansion         and anti-corruption    see page   information 
  conduct          to the                 -- Operational    policies               23 of      of Cape's 
  risk             risk of                excellence        and training           the 2015   corporate 
                   non-compliance                           is provided            Annual     responsibility 
                   and breach                               globally.              Report]    please 
                   of                                       -- HSE                            refer 
                   applicable                               specialists                       to our 
                   laws and                                 are based                         website 
                   regulations                              in each                           www.capeplc.com/ 
                   including                                region                            corporate-responsibility 
                   anti-bribery                             we operate 
                   and anticorruption,                      in to 
                   sanctions,                               ensure 
                   health                                   knowledge 
                   and safety                               of local 

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                   regulations                              HSE regulations 
                   and tax.                                 is in 
                   A lack                                   place 
                   of                                       and monitored 
                   knowledge                                frequently. 
                   of relevant                              -- Whistle-blowing 
                   legislation                              procedures 
                   across                                   are in 
                   the countries                            place 
                   we operate                               globally. 
                   in                                       -- Compliance 
                   could                                    is monitored 
                   result                                   by the 
                   in a breach                              relevant 
                   of law                                   Group 
                   or regulation.                           functions 
                                                            including 
                                                            tax and 
                                                            treasury, 
                                                            legal, 
                                                            financial, 
                                                            and HSE. 
                                                            -- Cape's 
                                                            values 
                                                            drive 
                                                            a culture 
                                                            where 
                                                            integrity, 
                                                            honesty 
                                                            and 
                                                            compliance 
                                                            are an 
                                                            integral 
                                                            part of 
                                                            day-to-day 
                                                            business 
                                                            at all 
                                                            levels. 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 I. Industrial     Cape receives         -- Operational    -- The                 [Please     Note 2 
  Disease           claims                excellence        court-approved         see page    'Summary 
  Claims            from individuals                        2006 Scheme            25 of       of significant 
  (IDC)             and insurance                           of Arrangement         the 2015    accounting 
  - provision       companies                               protects               Annual      policies' 
  adequacy          in                                      the                    Report]     Note 4 
  risks             relation                                interests                          'Significant 
  on existing       to the                                  of future                          judgements 
  scope             historical                              IDC claimants                      and estimates' 
  of liability      alleged                                 whilst                             Note 28 
  provision         exposure                                at the                             'Provisions' 
                    to asbestos.                            same time                          Note 35 
                    There                                   protecting                         'Industrial 
                    is a risk                               the Group                          disease 
                    that Cape                               from the                           claim 
                    materially                              impact                             provision 
                    underestimates                          of extreme                         and 
                    IDC funding                             adverse                            contingent 
                    requirement                             change                             liabilities' 
                    due to                                  in the 
                    inherent                                claims 
                    uncertainty                             environment. 
                    associated                              -- Triennial 
                    with the                                scheme 
                    future                                  valuation 
                    level                                   carried 
                    of asbestos                             out by 
                    related                                 external 
                    IDC and                                 actuaries 
                    of the                                  using 
                    costs                                   the Group's 
                    arising                                 cumulative 
                    from such                               claims 
                    claims.                                 history 
                                                            and updated 
                                                            economic 
                                                            assumptions. 
                                                            -- Annual 
                                                            review 
                                                            carried 
                                                            out by 
                                                            external 
                                                            actuaries 
                                                            and external 
                                                            auditors 
                                                            of Cape's 
                                                            accounting 
                                                            note on 
                                                            valuation 
                                                            of IDC. 
                                                            -- Half 
                                                            yearly 
                                                            review 
                                                            of economic 
                                                            assumptions 
                                                            reviewed 
                                                            by the 
                                                            Board. 
                                                            -- Regular 
                                                            Board 
                                                            review 
                                                            of IDC 
                                                            litigation. 
                                                            -- Dedicated 
                                                            internal 
                                                            legal 
                                                            function 
                                                            and external 
                                                            claims 
                                                            handlers 
                                                            to proactively 
                                                            manage 
                                                            cases 
                                                            and monitor 
                                                            changes 
                                                            in the 
                                                            legal 
                                                            environment. 
                                                            -- Specialist 
                                                            external 
                                                            legal 
                                                            advisors 
                                                            and claims 
                                                            handlers 
                                                            engaged. 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 J. Industrial     Legal                 -- Operational    -- Regular             [Please     Note 2 
  Disease          precedent              excellence        Board                  see page    'Summary 
  Claims           in this                                  review                 25 of       of 
  (IDC)            area is                                  of IDC                 the 2015    significant 
  - widening       constantly                               litigation.            Annual      accounting 
  of the           evolving                                 -- Dedicated           Report]     policies' 

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April 08, 2016 10:48 ET (14:48 GMT)

  scope            and the                                  internal                           Note 4 
  and              Group                                    legal                              'Significant 
  liability        is                                       function                           judgements 
                   subjected                                monitors                           and estimates' 
                   to new                                   changes                            Note 28 
                   claim                                    in the                             'Provisions' 
                   types                                    legal                              Note 35 
                   over time.                               environment.                       'Industrial 
                   These                                    -- Specialist                      disease 
                   may give                                 external                           claim 
                   rise to                                  legal                              provision 
                   uncertainty                              and other                          and 
                   in both                                  advisors                           contingent 
                   the future                               engaged.                           liabilities' 
                   level 
                   of asbestos-related 
                   IDC and 
                   of the 
                   legal 
                   and other 
                   costs 
                   arising 
                   from such 
                   claims. 
                   One such 
                   example 
                   of this 
                   are the 
                   speculative 
                   product 
                   liability 
                   claims 
                   being 
                   brought 
                   by certain 
                   insurers 
                   which 
                   are described 
                   more fully 
                   in 
                   note 35 
                   'Industrial 
                   disease 
                   claim 
                   provision 
                   and contingent 
                   liabilities' 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 K. Taxation       We operate            -- Broaden        -- Communication       [Please     Note 2 
                    across                portfolio         and strong             see page    'Summary 
                    a number              -- Geographic     tone from              25 of       of significant 
                    of economies          expansion         top concerning         the 2015    accounting 
                    and jurisdictions                       compliance             Annual      policies' 
                    which                                   with local             Report]     Note 12 
                    therefore                               tax laws.                          'Income 
                    exposes                                 -- Formal                          tax' 
                    the Group                               policies                           Note 20 
                    to a range                              and procedures                     'Deferred 
                    of tax                                  regularly                          income 
                    laws that                               updated.                           tax' 
                    vary                                    -- Embedded                        Note 27 
                    significantly                           tax expertise                      'Current 
                    and are                                 in all                             income 
                    rapidly                                 major                              tax liabilities' 
                    evolving                                businesses 
                    toward                                  along 
                    global                                  with central 
                    transparency                            Group 
                    and                                     tax team 
                    harmonisation.                          support. 
                    The Group                               -- Ongoing 
                    is required                             reviews 
                    to interpret                            conducted 
                    laws and                                by the 
                    treaties                                Group 
                    and                                     tax and 
                    must manage                             legal 
                    its tax                                 team to 
                    affairs                                 monitor 
                    within                                  compliance. 
                    these                                   -- External 
                    laws or                                 advisors 
                    else risk                               used to 
                    incurring                               support 
                    fines                                   local 
                    and/or                                  teams 
                    charges                                 on specific 
                    from the                                tax 
                    tax authorities.                        matters. 
                    In some                                 -- Legal 
                    cases,                                  opinion 
                    it is                                   sought 
                    not clear                               requiring 
                    where                                   interpretation 
                    lines                                   of tax 
                    should                                  legislation 
                    be drawn                                and 
                    and the                                 principals 
                    Group                                   when needed. 
                    may disagree                            -- Active 
                    with the                                engagement 
                    tax                                     with relevant 
                    authorities.                            tax and 
                    If this                                 government 
                    is the                                  authorities. 
                    case, 
                    then it 
                    may be 
                    necessary 
                    to get 
                    the 
                    courts 
                    involved 
                    to interpret 
                    the laws. 
----------------  --------------------  ----------------  ---------------------  ----------  ------------------------- 
 

Viability statement

In accordance with the revised UK Corporate Governance Code, the directors have assessed the prospect for the Group over a longer period than the twelve-month going concern provision.

The directors' assessment of the Group's prospects for the three--year period is based on the review and analysis described below. The directors consider this to be a reasonable process which therefore allows them to form a reasonable expectation of the Group's prospects in the circumstances of the inherent uncertainty of a three--year period. The time period was selected to represent the duration of the Group's contract base with construction contracts having a typical duration of two to three years with a change in provider for maintenance contracts taking around one to two years. Additionally the revaluation of both the IDC and pension liabilities takes place on a three--year cycle.

The Group performs a strategic review each year, in which the Board reviews Cape's current position, strategy and risks and opportunities alongside current and expected market conditions and trends. Our viability assessment was based upon the Group's strategy and planning information and assessed the selected principal risks, individually and on a combined basis. This analysis considers cash flows, covenant projections and liquidity and other key financial measures over the period. The strategy model has been stress tested against selected key risks that could affect the future viability of the Group. These risks are highlighted on pages 20 to 25 and include the following key downside risks: political and security instability in one region; acceptance of a new contract with unfavourable terms; poor operational performance on an existing contract; new scope of liability and new claims emergence relating to IDC; loss of a key client and increase in interest rates and tax liabilities.

Based upon the robust assessment of the principal risks to the Group's prospects, the directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three--year period of their assessment.

Appendix 3: Related party transactions

Details of directors' emoluments are shown in note 37 'Related party transactions' to the consolidated financial statements and in the Directors' Remuneration Report on pages 65 to 77.

There have been no material transactions with the Company and other related parties during the year.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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