TIDMMSLH

RNS Number : 7834J

Marshalls PLC

09 April 2015

9 April 2015

Marshalls plc

Annual Report 2014 and Notice of 2015 Annual General Meeting

The Company announces that it has published its full Annual Report for the year ended 31 December 2014 and Notice of 2015 Annual General Meeting which is to be held at 11.00am on Wednesday 20 May 2015 at The Cedar Court Hotel, Ainley Top, Huddersfield HD3 3RH.

Copies of the documents listed below have been posted to shareholders:

1. Annual Report 2014

2. Notice of 2015 Annual General Meeting

3. Form of Proxy for the 2015 Annual General Meeting

A copy of each of these documents has also been submitted to the UK Listing Authority via the National Storage Mechanism and is available for inspection at www.morningstar.co.uk/uk/NSM.

These documents are also accessible via the Company's website at www.marshalls.co.uk.

Reference is made to RNS announcement number 7004G published on 6 March 2015 (Final Results). In addition to the information in that announcement, in accordance with DTR 6.3.5(2)(b), we also set out below the following extracts from the Annual Report 2014 in full text form:-

= Statement of Directors' Responsibilities;

= Principal Risks

-----------------------------------------------------------

Statement of Directors' Responsibilities in respect of the Annual Report and the Financial Statements

The Directors are responsible for preparing the Annual Report andthe Group and Parent Company Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and Parent Company Financial Statements for each financial year. Under that law they are required to prepare the Group Financial Statements in accordance with IFRSs as adopted by the EU and applicable law, and have elected to prepare the Parent Company Financial Statements in accordance with UK Accounting Standards, including FRS 101 "Reduced Disclosure Framework".

Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of their profit or loss for that period. In preparing each of the Group and Parent Company Financial Statements, the Directors are required to:

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

-- for the Group Financial Statements, state whether they have been prepared in accordance with IFRSs as adopted by the EU;

-- for the Parent Company Financial Statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Parent Company Financial Statements; and

-- prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Group and the Parent Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy, at any time, thefinancial position of the Parent Company and enable them to ensure that its Financial Statements comply with the Companies Act 2006.

They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company'swebsite. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation

in other jurisdictions.

The Directors who held office at the date of approval of this Directors' Report and whose names and functions are listed on pages 32 and 33 of the Annual Report 2014 confirm that, to the best of each 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 of the Company and the undertakings included in the consolidation taken as a whole; and

-- the Strategic Report contained in the Annual Report includes a fair review of the development and performance of the business and the position of the Company and the Group taken as a whole, together with a description of the principal risks anduncertainties that they face.

-- The Directors consider the Annual Report and Financial Statements, taken as a whole, to be fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.

----------------------------------------------------

Principal Risks

Process

There is a formal ongoing process to identify, assess and analyse risks and those of a more material nature are included in the Group Risk Register. The Group Risk Register is reviewed and updated at least every six months and the overall process is the subject of regular review. Risks are recorded with a full analysis and risk owners are nominated who have authority and responsibility for assessing and managing the risk. All risks are analysed for impact and probability to determine exposure and impact to the business and the determination of a "gross risk score" enables risk exposure to be prioritised. External risks include the weather, political and economic conditions, the effect of legislation or other regulatory actions, the actions of competitors, foreign exchange, raw material prices and pension funding. Internal risks include investment in new products, new business strategies and acquisitions.

The Group seeks to mitigate exposure to all forms of strategic, financial and operational risk both external and internal. The effectiveness of key mitigating controls is continually monitored and such controls are subjected to internal audit and periodic testing in order to provide independent verification where this is deemed appropriate. The effectiveness and impact of key controls are evaluated and this is used to determine a "net risk score" for each risk. The process is used to develop action plans that are used to manage, or respond to, the risks and these are monitored and reviewed on a regular basis by the Group's Risk Committee.

 
 Nature of risk           Potential impact              Mitigating factors              Change 
-----------------------  ----------------------------  ------------------------------  ------------------------------- 
 Macro-economic 
  and political             The lower activity            The Group closely               Economic risk has 
  The Group is              levels could reduce           monitors trends and             reduced as economic 
  dependent on              sales and production          lead indicators, invests        and sector outlook 
  the level of              volumes and therefore         in market research              and growth rates 
  activity in               could have an adverse         and is an active member         have improved. 
  its UK and                effect on the Group's         of the CPA. 
  international             financial results.            The Group benefits              Government expenditure 
  end markets.                                            from the diversity              is not likely to 
  Accordingly,                                            of its business and             be near the cyclical 
  it is susceptible                                       end markets.                    low and there is 
  to economic                                             The Group focuses               not upside potential 
  downturn and                                            on sales opportunities          in certain focus 
  the impact                                              and strategic growth            areas, e.g. rail. 
  of Government                                           initiatives, together 
  policy.                                                 with quality, service           The economic outlook 
                                                          and its supply chain.           for the Eurozone 
                                                                                          continues to be 
                                                                                          difficult. 
-----------------------  ----------------------------  ------------------------------  ------------------------------- 
 Weather 
  The Group is              The lower activity           The Group has a continuing       Weather conditions 
  exposed to                levels could reduce          focus on new product             are totally beyond 
  the impact                sales and production         development including            the Group's control. 
  of prolonged              volumes and therefore        landscape water management.      2014 has been a 
  periods of                could have an adverse        The Group is developing          relatively benign 
  bad weather.              effect on the Group's        its internal flooring            weather year. 
                            financial results.           offer and developing 
                                                         its International 
                                                         strategy in order 
                                                         to diversify its activities. 
-----------------------  ----------------------------  ------------------------------  ------------------------------- 
 Customers 
  The UK business           The loss of a significant     The Group focuses               The risk continues 
  has a number              customer may give             on brand and new product        and is largely a 
  of key customers,         rise to a significant         development, quality            consequence of the 
  in particular             adverse effect                and customer service            way the market is 
  the national              on the Group's                improvement.                    structured. 
  merchants.                financial results. 
  This is partly                                          The Group maintains 
  as a result                                             a national network 
  of the consolidated                                     of manufacturing and 
  nature of the                                           distribution sites. 
  market. 
                                                          The Group undertakes 
                                                          ongoing reviews of 
                                                          trading policies and 
                                                          relationships and 
                                                          maintains constant 
                                                          communication with 
                                                          customers. 
-----------------------  ----------------------------  ------------------------------  ------------------------------- 
 Competitor 
  activity                  The increased competition    The Group has unique             The improved market 
  The Group has             could reduce volumes         selling points that              outlook has increased 
  a number of               and margins on               differentiate the                demand (relative 
  existing competitors      manufactured and             Marshalls branded                to available supply) 
  who compete               traded products.             offer.                           and this has led 
  on range, price,                                                                        to a reduction in 
  quality and                                            The Group focuses                such competitive 
  service.                                               on quality, service,             pressure. 
                                                         reliability and ethical 
  Potential new                                          standards that differentiate     Continuing demand 
  low cost competitors                                   Marshalls from competitor        for imported natural 
  may be attracted                                       products.                        stone potentially 
  into the market                                                                         serves to maintain 
  through increased                                      The Group continues              this risk. 
  demand for                                             to have the lowest 
  imported natural                                       cost to market. 
  stone products. 
                                                         The Group has a continuing 
                                                         focus on new product 
                                                         development. 
-----------------------  ----------------------------  ------------------------------  ------------------------------- 
 Cost and availability 
  of raw materials          The increased costs          The Group benefits                   Cost inflation remains 
  The Group is              could reduce margins         from the diversity                   a risk as demand 
  susceptible               and may be further           of its business and                  for raw materials 
  to significant            impacted in the              end markets.                         increases. 
  increases in              event of imbalances 
  the price of              in the mix of regional       The Group focuses                    The improved market 
  raw materials,            activity.                    on its supplier                      outlook has increased 
  utilities,                                             relationships,                       demand (relative 
  fuel oil, haulage         The risk of market           flexible contracts                   to available supply) 
  costs and vehicle         demand exceeding             and the use of hedging               and there is an 
  availability.             raw material supply          instruments.                         increased risk of 
                            could lead to inefficient                                         temporary shortages. 
  As demand increases,      production which             The Group utilises 
  the Group is              could reduce margins.        sales pricing and 
  potentially                                            purchasing policies 
  more exposed                                           designed to mitigate 
  to the risk                                            the risks. 
  of temporary 
  raw material                                           The Group has its 
  shortages.                                             own fleet of specialist 
                                                         delivery vehicles. 
-----------------------  ----------------------------  ------------------------------  ------------------------------- 
 Pension 
  The Defined               These risks could             The defined benefit             The risks surrounding 
  Benefit Pension           increase pension              section of the Pension          the continuing funding 
  Scheme may                scheme liabilities            Scheme is closed to             of the past service 
  be impacted               or reduce assets,             new members and future          liability remain 
  by volatility             putting pressure              service accrual.                unchanged as many 
  in financial              on accounting notional                                        of these are driven 
  markets and               interest and therefore        The Group uses liability        by financial markets 
  the longevity             downward pressure             driven investments              and factors outside 
  of members.               on PBT and EPS.               to hedge interest               the Group's control. 
                            This could also               rate and inflation 
                            result in the need            risks. 
                            for additional 
                            cash contributions.           De-risking strategies 
                                                          continue to be pursued 
                                                          and risk management 
                                                          is a key control used 
                                                          by the Trustee. 
 
                                                          Professional advisers 
                                                          are consulted to minimise 
                                                          risk. 
-----------------------  ----------------------------  ------------------------------  ------------------------------- 
 Environmental 
  An environmental          An incident could             The Group uses professional     The Group is unable 
  contamination             lead to disruption            specialists covering            to predict future 
  event may lead            to production and             carbon reduction,               changes in environmental 
  to a prosecution          to financial penalties        water management and            laws or policies 
  and to reputational       as well as a potential        biodiversity.                   or the ultimate 
  loss.                     negative impact                                               cost of compliance 
                            on the Group's                The Group focuses               with such laws or 
                            reputation.                   on the implementation           policies. 
                                                          of ISO standards. 
 
                                                          The Group has a formal 
                                                          Group sustainability 
                                                          strategy focusing 
                                                          on impact reduction. 
-----------------------  ----------------------------  ------------------------------  ------------------------------- 
 Corporate, 
  Legal and Regulatory      An incident could             Group employs compliance           The extension of 
  The Group may             lead to a disruption          procedures, policies               the Group's activities 
  be adversely              to the supply of              and independent audit              into new international 
  affected by               products for customers        processes which seek               markets causes this 
  an unexpected             and to increased              to ensure that local,              risk to continue, 
  reputational              costs as well as              national and international         notwithstanding 
  event, for                a potential negative          regulatory and compliance          the additional compliance 
  example, in               impact on the Group's         procedures are fully               procedures within 
  its ethical               reputation.                   complied with.                     the supply chain. 
  supply chain. 
-----------------------  ----------------------------  ------------------------------  ------------------------------- 
 Access to Funding 
  The Group continues       Insufficient access           The Group has significant           The improved economic 
  to require                to funding could              committed facilities                outlook and the 
  debt funding              limit the Group's             in place with a good                Group's reduced 
  in order to               ability to achieve            spread of medium term               gearing has served 
  meet its trading          the desired levels            maturities and significant          to reduce this risk. 
  obligations               of growth.                    headroom.                           There is also improved 
  and to grow                                                                                 liquidity and increased 
  the business.                                           The Group's policy                  competition within 
                                                          continues to be to                  the banking sector. 
                                                          arrange funding ahead 
                                                          of requirements and 
                                                          to maintain sufficient 
                                                          undrawn committed 
                                                          bank facilities. 
-----------------------  ----------------------------  ------------------------------  ------------------------------- 
 IT Infrastructure 
  Disruption                Ineffective procedures        All IT system development           The continued investment 
  to the IT environment     could lead to an              projects are actively               in and maintenance 
  could affect              adverse effect                and carefully planned               of IT systems across 
  the Group's               on the Group's                with defined governance             the Group gives 
  ability to                financial results.            and control procedures.             rise to good control 
  conduct its                                             To support and enable               of this risk. 
  ongoing operations.                                     future growth the 
                                                          Group has upgraded 
                                                          its IT systems to 
                                                          ensure a common platform 
                                                          across all business 
                                                          units. 
                                                          Regular independent 
                                                          risk and project management 
                                                          audits are undertaken. 
                                                          The Group ensures 
                                                          that industry standards 
                                                          are adopted and disaster 
                                                          recovery plans and 
                                                          procedures exist and 
                                                          are regularly tested. 
-----------------------  ----------------------------  ------------------------------  ------------------------------- 
 

----------------------------------------------------

Cautionary statement and Directors' liability

The Annual Report 2014 has been prepared for, and only for, the members of the Company, as a body, and no other persons.

Neither the Company nor the Directors accept or assume any liability to any person to whom the Annual Report is shown or into whose hands it may come except to the extent that such liability arises and may not be excluded under English law. Accordingly, any liability to a person who has demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with Section 90A of the Financial Services and Markets Act 2000.

The Annual Report contains certain forward-looking statements with respect to the Group's financial condition, results, strategy, plans and objectives. These statements are not forecasts or guarantees of future performance and involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future.

There are a number of factors that could cause actual results or developments to differ materially from those expressed, implied or forecast by these forward looking statements. All forward-looking statements in the Annual Report are based on information known to the Group as at the date of the Annual Report and the Group has no obligation publicly to update or revise any forward looking statements, whether as a result of new information or future events. Nothing in the Annual Report should be construed as a profit

forecast.

Annual General Meeting

The Notice convening the Annual General Meeting to be held at The Cedar Court Hotel, Ainley Top, Huddersfield HD3 3RH at 11.00 am on Wednesday 20 May 2015 together with explanatory notes on the resolutions to be proposed is contained in a circular sent to shareholders with the Annual Report.

Enquiries:

C E Baxandall, Group Company Secretary, Marshalls plc

Tel: 01422 314777

This information is provided by RNS

The company news service from the London Stock Exchange

END

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