TIDMECEL

RNS Number : 7735V

Eurocell plc

16 April 2021

16 April 2021

EUROCELL plc

(the 'Company')

PUBLICATION OF 2020 ANNUAL REPORT

AND NOTICE OF 2021 ANNUAL GENERAL MEETING

The Company announces that it has published its full Annual Report for the year ended 31 December 2020 and Notice of the 2021 Annual General Meeting, which is to be held at 3pm on Thursday 13 May 2021 at Eurocell Head Office and Distribution Centre, High View Road, Alfreton, Derbyshire, DE55 2DT.

(Please note:

At the time of publication of this document, UK Government legislation prohibits public gatherings and non-essential travel and therefore shareholders, proxies and other attendees will not be permitted to attend the AGM in person. Anyone seeking to attend the AGM will be refused entry and therefore shareholders are strongly recommended to vote by proxy. In the event that the AGM arrangements change, the Company will issue a further communication.)

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

1. Annual Report 2020

2. Notice of 2021 Annual General Meeting

3. Form of Proxy for the 2021 Annual General Meeting

The above documents are also available on the Eurocell plc website at investors.eurocell.co.uk.

In accordance with LR 9.6.1R of the Listing Rules , a copy of each of the above documents has been submitted to the UK Listing Authority via the National Storage Mechanism and are/will be available for inspection at data.fca.org.uk/#/nsm/nationalstoragemechanism.

Further to the Company's Preliminary Results announcement on 12 March 2021 (RNS number: 0279S ), and in accordance with DTR 6.3.5(2)(b), set out below are the following extracts from the Annual Report 2020 in full unedited text form:

   --      Principal Risks 
   --      Statement of Directors' Responsibilities in respect of the financial statements 

PRINCIPAL RISKS

 
MACROECONOMIC CONDITIONS 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
Our products are used 
in the residential and    *    Notwithstanding macro conditions, we expect our         *    The UK economy is experiencing a severe downturn due 
commercial building            strategic priorities and self-help initiatives to            to the ongoing impact of the COVID-19 pandemic. 
and construction               support sales and profit growth and drive good cash 
markets,                       conversion. 
both within the RMI 
sector, for new                                                                        *    Now that key aspects of the UK's trading relationship 
residential housing       *    Initiatives include: growing market share, expanding         with the EU have been defined, and the first two 
developments and for           the branch network, delivering sustained operational         months of 2021 have passed without significant 
new construction               excellence and increasing recycling.                         interruption to raw material imports for our business 
projects.                                                                             , 
Our private RMI                                                                             Brexit related uncertainty has reduced. The 
business is strongly      *    Actions taken in response to the COVID-19 pandemic           medium-term impact of Brexit on the UK economy 
correlated to the              have secured our financial position.                         remains unclear. 
level of household 
disposable incomes. 
Our new-build business    *    We operate comfortably within the terms of our bank     *    CPA now forecast the private housing RMI market to 
is particularly                facility and related financial covenants.                    grow 14% in 2021 (after a 14% decline in 2020). 
influenced by the 
level of activity in 
the house-building                                                                     *    The UK is also experiencing high levels of mortgage 
industry.                                                                                   approvals. 
As such, our business 
and ability to fund 
ongoing operations is                                                                  *    UK base rate is at its lowest ever level. 
dependent on the level 
of 
activity and market 
demand in these 
sectors, itself often 
a function of general 
economic conditions 
(including interest 
rates and inflation) 
in the UK. 
Government economic 
and social policy can 
also have a 
significant impact on 
our business. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
CYBER SECURITY 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
A breach of IT 
security (externally      *    Ongoing investment in cyber risk detection and           *    Increased home working in response to the COVID-19 
or internally) could           prevention tools.                                             pandemic has elevated cyber risk. 
result in an inability 
to operate 
systems effectively       *    Physical security of servers at third-party off-site     *    This remains a high-profile area and continues to 
(e.g. viruses) or the          data centre, with full disaster recovery capability.          receive considerable management attention. 
release of 
inappropriate 
information (e.g.         *    Password and safe-use policies in place, internet 
hackers).                      usage monitored and anti-malware used. 
 
 
                          *    External cyber review and internal audit reviews 
                               conducted periodically, resulting in significant 
                               enhancements in defence. 
 
 
                          *    Cyber awareness/IT security campaign active for all 
                               employees. 
 
 
                          *    Enhanced monitoring and vigilance in response to 
                               increased remote working in 2020. 
 
 
                          *    Financial crime protection and cyber liability 
                               insurance in place. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
REGULATORY RISKS, INCLUDING HEALTH & SAFETY 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
We may be adversely 
affected by the           *    Procedures and policies in place to support             *    COVID-19 has significantly increased health & safety 
crystallisation of             compliance with all relevant regulations.                    risks. 
unexpected corporate 
or regulatory 
risks.                    *    Regular communication and training on policy            *    More generally, recent developments widen the scope 
These include health &         compliance.                                                  and increase the penalty regime for breaches in these 
safety, data,                                                                               areas. For example: Corporate Criminal Offence of 
reputational and                                                                            Failure to Prevent the Facilitation of Tax Evasion 
environmental risks       *    Monitoring procedures in place, including near miss          ('CCO') legislation came into force on 30 September 
(including regulations         and potential hazard reporting for health & safety           2017, and General Data Protection Regulations 
related to our                 matters.                                                     ('GDPR') came into effect in May 2018. 
recycling operations), 
or other legal, 
taxation and              *    Introduction of a range of COVID-safe protection 
compliance matters.            measures, in line with recommended guidance and 
                               designed and implemented collaboratively with input 
                               from the workforce. 
 
 
                          *    Employees returning to work post H1 2020 shut-down 
                               provided with training and personal protective 
                               equipment where necessary. 
 
 
                          *    Internal and third-party site audits to test 
                               compliance with our policies. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
RAW MATERIAL SUPPLY 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
There are only a 
limited number of PVC     *    We generally operate with at least two suppliers for    *    A number of European PVC resin suppliers issued force 
resin and certain              all critical raw materials, including PVC resin, to          majeure notices on material supply in H2 2020, 
other raw material             support security of supply.                                  following plant outages and other operational issues. 
suppliers and 
we operate with 
limited raw material      *    On-going raw material tests to identify potential       *    Strong demand for PVC resin exacerbated supply 
storage capacity.              alternative suppliers.                                       constraints in H2 2020. 
The recycling 
feedstock supply 
market is fragmented      *    A spot market exists for resin, that we are able to     *    Knock-on effect into recycling feedstock supply 
and can be                     access at certain times.                                     market also tightening in 2020. 
unpredictable. 
Failure to receive raw 
materials on a timely     *    Contractual arrangements for certain key suppliers      *    The PVC resin supply market remains tight at the 
basis could impact on          include liquidated damages for failure to supply.            beginning of 2021, which is also impacting pricing 
our ability to                                                                              (see below). 
manufacture 
products and meet         *    Regular reviews to test financial stability of key 
customer demand.               suppliers. 
 
 
                          *    Potential remains for increased resin supply 
                               originating from the US to come on line and deliver 
                               into Europe. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
RAW MATERIAL AND TRADED GOODS PRICES 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
Our manufacturing 
operations depend on      *    We generally operate with at least two suppliers for    *    Raw material prices fluctuated throughout 2020, 
the supply of PVC              all critical raw materials and traded goods,                 primarily due to the impact of COVID-19 on the 
resin, a material              including PVC resin, to provide competitive pricing.         relevant markets. 
derivative of ethylene 
which in turn is a 
derivative of crude       *    Where possible we pass through raw material or traded   *    Supply-side constraints resulted in increasing prices 
oil.                           goods price increases to our customers.                      for PVC resin and recycling feedstock in H2 2020, 
The price of PVC resin                                                                      continuing on into 2021. 
can therefore be 
subject to                *    Increasing the use of recycled material in our 
fluctuations based on          manufacturing partially mitigates exposure to resin     *    We have elected not to enter into a fixed price 
the markets for crude          prices, although prices for recycling feedstock can          contract for PVC resin so far in 2021, as the premium 
oil and ethylene, as           also be volatile.                                            currently required by suppliers is prohibitive. 
well as the market for 
resin itself. 
In addition, although     *    We consider fixed price supply arrangements with 
we pay for resin in            suppliers where it is economic to do so. 
sterling, crude oil 
and ethylene are 
priced in US 
dollars and euros 
respectively. As such, 
the price of resin in 
sterling is also 
impacted by 
international currency 
markets. 
Our ability to pass on 
resin and other raw 
material or traded 
goods price increases 
to our 
customers will depend 
on market conditions 
at the time. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
CUSTOMER CREDIT RISK 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
Default by a large 
customer or multiple      *    Regular process for in-depth credit reviews for         *    Increased bad debt risk due to the impact of COVID-19 
smaller customers              existing and new customer accounts.                          on our customer base, with some business failures and 
could result in a                                                                           a deterioration in the age profile of receivables 
material bad debt(s).                                                                       during the first lockdown in H1. 
The loss of a major       *    Following onset of COVID-19 pandemic and first 
customer(s) could              lockdown, increased frequency of credit reviews and 
limit our ability to           greater involvement of relevant Executive Committee     *    Some improvement in bad debt experience and age 
continue to grow the           members in managing position on key accounts.                profile of receivables in H2, although significant 
business.                                                                                   uncertainty remains. 
 
                          *    Significant increase in bad debt provisions recorded 
                               in H1. Year end provisions remain at a similar level, 
                               reflecting continued prudent assessment of bad debt 
                               risk. 
 
 
                          *    Credit insurance in place to the extent available for 
                               selected large accounts. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
SUSTAINABILITY 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
Demonstrating 
improving business        *    Strong underlying position driven by window recycling   *    Continued rise in importance of sustainability for 
sustainability is              operation, which drives significant carbon savings           all stakeholders. 
becoming increasingly          compared to the use of virgin PVC resin. 
important to all 
stakeholders. 
We have a strong          *    Publication of verified carbon savings data in the 
underlying position,           2020 annual report. 
driven by our 
expanding window 
recycling operation.      *    Work in progress to define and implement a Group-wide 
We intend to widen             sustainability strategy, with long-term goals linked 
this narrative into a          to relevant UN Sustainable Development Goals and the 
Group-wide                     UK Government's transition towards a net zero carbon 
sustainability                 economy. 
strategy, which will 
encompass 
all aspects of 
business 
sustainability. 
Failure to do so could 
lead to regulatory 
challenges (e.g. if 
sustainability 
regulation is 
tightened) and 
potentially reduced 
access to capital and 
difficulties with 
recruitment and 
retention. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
MANUFACTURING CAPACITY CONSTRAINTS 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
Demand running above 
our manufacturing         *    Investment in 2019 to increase co-extrusion and foam     *    Customer demand in H2 2020 increased to such an 
capacity may result in         capacity by 30% and 15% respectively.                         extent that the business was running close to 
production related                                                                           existing manufacturing capacity. 
inefficiencies, 
as well as customer       *    Strengthened management team in critical areas, 
service issues if a            including Chief Operating Officer (joined Q3 2019).      *    Competitor weakness has resulted in a clear 
backlog of customer            Team ensured peak periods in H2 2020 were navigated           opportunity to acquire new customers. 
orders develops.               successfully. 
A shortage of capacity 
may also prevent the                                                                    *    Investment in new extrusion capacity planned for 
acquisition of new        *    COO has an improvement plan with c.100 actions                2021. 
customers, thereby             targeting productivity gains in extrusion, foiling, 
limiting                       warehousing and distribution. 
our ability to 
continue to grow the 
business.                 *    New warehouse facility (see below) is a catalyst to 
                               free up space in the existing footprint to 
                               future-proof extrusion capacity. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
WAREHOUSING AND DISTRIBUTION CAPACITY CONSTRAINTS 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
We exceeded the 
capacity of our           *    Strengthened management team in critical areas,         *    Despite strong customer demand in H2 2020, and 
existing warehouse in          including Chief Operating Officer and Head of Supply         existing capacity constraints, measures taken 
2018/19, resulting in          Chain (joined Q3 2019). Team ensured peak periods in         (including extra labour and temporary overflow site) 
significant                    H2 2020 were navigated successfully from existing            to ensure safe and successful operation from the 
inefficiencies                 facilities.                                                  existing warehouse. 
and additional labour 
and distribution 
costs.                    *    COO has an improvement plan with c.100 actions          *    Fit-out of the new warehouse continued safely 
A new central                  targeting productivity gains in extrusion, foiling,          throughout 2020, despite COVID-related constraints, 
warehouse and                  warehousing and distribution.                                with the new site becoming operational early in 2021. 
distribution centre 
was approved early in 
2020, which will          *    Fully resourced team hired to deliver new warehouse     *    Transition to continue in 2021, with the final stages 
deliver                        fit-out, including project management and technical          expected to complete in Q2. 
>50% increase in               expertise, supported by third party subject matter 
capacity, improved             specialists. 
efficiency and a safer 
operation. 
 
On-time execution of 
the fit-out project 
and successful 
operation from the new 
site are critical 
to unlocking future 
growth potential and 
the delivery of 
anticipated 
improvements in 
operating 
efficiencies. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
UNPLANNED PLANT DOWNTIME 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
The business is 
dependent on the         *    Regular planned maintenance to reduce the risk of         *    Potential for COVID-19 to spread amongst the 
continued and                 plant failure, including maintenance capital                   workforce and result in significant and extended 
uninterrupted                 investment of >GBP5 million per annum across the               absence. 
performance of our            Group. 
production 
facilities. 
Each of the facilities   *    Extrusion facilities spread over three manufacturing 
is subject to                 sites. 
operating risks, such 
as: industrial 
accidents (including     *    Recycling facilities spread over two sites. 
fire); extended power 
outages; withdrawal of 
permits and licences     *    Group-wide disaster recovery plans in place. 
(e.g. the regulated 
operation 
of the recycling         *    Introduction of a range of COVID-safe protection 
facility); breakdowns         measures, in line with recommended guidance and 
in machinery;                 designed and implemented collaboratively with input 
equipment or                  from the workforce. 
information systems; 
prolonged 
maintenance activity;   -- Employees returning to work post H1 2020 shut-down 
strikes or other        provided with training and personal 
extended workforce      protective equipment where necessary. 
absences; natural 
disasters; and 
other unforeseen 
events. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL AND HIGHLY SKILLED INDIVIDUALS 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
Our success depends 
inter alia, on the        *    Developing successful track record and clear             *    Guaranteed long-term incentive plan awards issued to 
efforts and abilities          strategic direction provides an attractive backdrop           senior team in 2020 (excluding Executive Directors) 
of certain key                 to joining the senior team at Eurocell.                       to help mitigate impact of COVID-19 on existing 
personnel and                                                                                in-flight schemes. 
our ability to attract 
and retain such           *    Market rate compensation for all personnel, including 
people, with the               leadership team.                                         *    Progressive implementation of people plan. 
appropriate skills and 
experience. 
                          *    Equity-based long-term incentive plans in place for 
                               senior team. 
 
 
                          *    People plan includes focus on improving employee 
                               engagement and communication. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
SHORTAGES OR INCREASED COSTS OF APPROPRIATELY SKILLED LABOUR 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
We are subject to 
supply risks related     *    Market level or better salaries and good benefits         *    Sufficient labour secured in H2 2020 via fixed-term 
to the availability           package.                                                       contract initiative. 
and cost of labour, 
both in our 
manufacturing            *    Induction and training programme.                         *    Fifth SAYE scheme planned for 2021. 
operations and in our 
branch business. Our 
headquarters and         *    Annual SAYE share-save scheme available to all            *    Progressive implementation of people plan. 
several manufacturing         personnel. 
and operational sites 
are located in areas 
of generally full        *    Use of fixed-term contracts to secure sufficient 
employment.                   labour through H2 2020 without longer-term commitment, 
We may also experience        due to inherent levels of uncertainty. 
labour cost increases 
(including those 
related to the Minimum   *    People plan includes focus on improving employee 
Wage)                         engagement and communication. 
or disruptions in 
circumstances where we 
have to compete for 
employees with the 
necessary 
skills and experience 
in tight labour 
markets. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
FAILURE TO DEVELOP NEW PRODUCTS 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
Failure to innovate 
could reduce our          *    We invest continuously in research and development      *    Recent successes for Profiles include: introduction 
growth potential or            through our in-house team.                                   of a flush window sash for the Logik product range, a 
render existing                                                                             new sliding patio door system (Syncro) and 
products obsolete.                                                                          development of a through-colour grey substrate 
The launch of new         *    The team is highly focused on new ways to develop            profile. 
products and new               existing products and to be innovative with new ones. 
variants of existing 
products is an                                                                         *    In Building Plastics, the Equinox conservatory roof 
inherently uncertain      *    We work closely with customers and technical advisers        system has been developed to include a skylight 
process. We cannot             on product development.                                      (Vega) and our new suite of outdoor living products, 
guarantee that we will                                                                      including the Kyube garden room, has been very well 
continuously develop                                                                        received. 
successful new            *    We have a strong product pipeline with more than 25 
products or                    projects in development. 
new variants of 
existing products. 
Nor can we predict how 
customers and 
end-users will react 
to new products or how 
successful 
our competitors will 
be in developing 
products which are 
more attractive than 
ours. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
COMPETITOR ACTIVITY 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
We have a number of 
existing competitors      *    Strong market and customer awareness, with good          *    During the first lockdown period in H1 2020, the 
who compete on range,          intelligence around competitor activity.                      business prepared well for re-opening, from both an 
price, quality and                                                                           operational and commercial perspective. These 
service.                                                                                     activities supported further gains in market share 
Increased competition     *    Absolute focus on customer proposition and points of          delivered in H2 2020. 
could reduce volumes           differentiation in product and service offering. 
and margins on 
manufactured and                                                                        *    The more uncertain market environment may have 
traded products.          *    We have developed a strong new customer pipeline.             weakened some of our competitors. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
FAILURE TO IDENTIFY, COMPLETE AND INTEGRATE ACQUISITIONS 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
We may not be able to 
identify and complete     *    Public communication of bolt-on acquisitions being a    *    Whilst we continue to assess and consider acquisition 
appropriate bolt-on            strategic priority.                                          opportunities, our focus in 2020 and 2021 is 
acquisitions (one of                                                                        delivering operational efficiencies from recent 
our strategic                                                                               investments in manufacturing and warehousing 
priorities).              *    Good knowledge of companies operating in our sector          capacity. 
Any future acquisition         and related sectors. 
we do make poses 
integration risks                                                                      *    Previously reported delays with the project to expand 
which may affect our      *    Six acquisitions completed since our IPO in 2015.            Eurocell Recycle North (acquired in 2018) further 
results or                                                                                  impacted by H1 2020 shut-down. Performance is now 
operations.                                                                                 improving towards delivering acceptable operational 
The acquisition and       *    Tried and tested procedure for the integration of new        and financial performance. 
integration of                 acquisitions and a good track record of recent 
companies is a                 success. 
complex, costly and 
time-consuming process 
involving a number of 
possible risks. These 
include diversion of 
management attention, 
failure 
to retain personnel, 
failure to maintain 
customer service 
levels, disruption to 
relationships 
with various third 
parties, system risks 
and unanticipated 
liabilities. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 
 
DIGITAL AND IT SYSTEMS DEVELOPMENT 
------------------------------------------------------------------------------------------------------------------------------------------------- 
Principal risk and      Mitigation                                                    Risk change in reporting period 
impact 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
We have introduced a                                                                   *    Increasing importance of digital for stakeholders. 
new strategic priority    *    Strengthened IT function with recruitment of New 
to develop a                   Director of IT with strong sector and digital 
sector-leading digital         experience (joined March 2020). 
proposition. 
Stakeholders in most 
organisations             *    Developed three-year IT road map, including 
increasingly require           significant investment in additional resources and 
full end-to-end                application landscape to support development of 
digital solutions;             business efficiency and digital proposition. 
a trend exacerbated by 
the COVID pandemic. 
Failure to develop a 
leading digital 
proposition could lead 
to a competitive 
disadvantage, 
hinder progression of 
our other priorities 
and detract from the 
supplier, customer and 
employee 
experience of working 
with Eurocell. 
                        ------------------------------------------------------------  ----------------------------------------------------------- 
 

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the group financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 "Reduced Disclosure Framework", and applicable law).

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

   --    select suitable accounting policies and then apply them consistently; 

-- state whether applicable international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union have been followed for the Group financial statements and United Kingdom Accounting Standards, comprising FRS 101 have been followed for the Company financial statements, subject to any material departures disclosed and explained in the financial statements;

   --    make judgements and accounting estimates that are reasonable and prudent; and 

-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

   Directors'   confirmations 

The Directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's and Company's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the corporate governance section on pages 64 and 65 confirm that, to the best of their knowledge:

-- the Group financial statements, which have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, give a true and fair view of the assets, liabilities, financial position and loss of the Group;

-- the Company financial statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 101, give a true and fair view of the assets, liabilities, financial position and loss of the Company; and

-- the Directors' Report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that it faces.

In the case of each Director in office at the date the Directors' Report is approved:

-- so far as the Director is aware, there is no relevant audit information of which the Group's and Company's auditors are unaware; and

-- they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group's and Company's auditors are aware of that information.

The Directors' Responsibility Statement was approved by the Board on 11 March 2021.

   Mark Kelly                                 Michael Scott 
   Chief Executive Officer              Chief Financial Officer 

Enquiries:

Paul Walker

Group Company Secretary

01773 842100

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