TIDMHTWS
RNS Number : 0777T
Helios Towers PLC
22 March 2021
Helios Towers plc
(the "Company")
2020 Annual Report and Accounts and 2021 Notice of Annual
General Meeting
In accordance with Listing Rule 9.6.1R and Disclosure and
Transparency Rule ("DTR") 4.1.3R, the Company announces that the
following documents have been posted and/or otherwise made
available to shareholders:
-- 2020 Annual Report and Accounts
-- 2020 Sustainable Business Report
-- 2021 Notice of Annual General Meeting
-- Form of Proxy for the 2021 Annual General Meeting
The above mentioned documents (except for the Form of Proxy) are
available on the Company's website at www.heliostowers.com and will
shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
22 March 2021
LEI: 213800DGC7GS4XCHCU30
Identification Code: GB00BJVQC708
Enquiries:
For investor enquiries investorrelations@heliostowers.com
For media enquiries Edward Bridges, Stephanie Ellis
FTI Consulting LLP
+44 (0)20 3727 1000
Appendix
In compliance with DTR 6.3.5R, the information contained in this
appendix is extracted from the 2020 Annual Report and Accounts and
should be read in conjunction with the Company's 2020 Full Year
Results Announcement for the year ended 31 December 2020 issued on
10 March 2021. Both documents are available at
www.heliostowers.com/investors/results-reports-and-presentations/
and together constitute the material required by DTR 6.3.5R to be
communicated to the media in unedited full text through a
Regulatory Information Service. This material is not a substitute
for reading the 2020 Annual Report and Accounts in full. Page
numbers and cross references in the extracted information refer to
page numbers and cross references in the 2020 Annual Report and
Accounts.
1. Business principal risks
Summarised below are the key risks identified (not in order of
significance) which could have a material impact on the Group.
Risk status Risk description Impacts Risk mitigation
No change 1. Operational Strategic
resilience Reputational * Ongoing enhancements to data security and protection
Operational measures with third-party expert support;
The ability of the
Group to continue
operations is * Additional investment in IT resource and
heavily reliant on infrastructure to increase automation and workflow of
third parties, the business as usual activities;
proper
functioning of its
technology * Third-party due diligence, ongoing monitoring and
platforms and the regular supplier performance reviews;
capacity of its
available human
resources. * Alternative sources of supply are identified in
Failure in any of advance to mitigate any potential disruption to the
these three areas strategic supply chain;
could severely
affect its
operational * Ongoing review and involvement of the human resources
capabilities and department at an early stage in organisation design
ability to deliver and development activities.
on its strategic
objectives.
------------------ ------------------ -----------------------------------------------------------------
No change 2. Major quality Reputational
failure or breach Financial * Continued skills development and training programmes
of contract for the project and operational delivery team;
The Group's
reputation and * Detailed and defined project scoping and life cycle
profitability management through project delivery and transfer to
could be damaged ongoing operations;
if it fails to
meet its
customers' * Contract and dispute management processes in place;
operational
specifications,
quality standards * Continuous monitoring and management of customer
or delivery relationships;
schedules.
A substantial * Use of long-term contracting with minimal termination
portion of Group rights.
revenues is
generated from a
limited number of
large customers.
The loss of any of
these customers
would materially
affect the Group's
finances and
growth
prospects.
Many of the
Group's customer
tower contracts
contain liquidated
damage provisions,
which may
require the Group
to make
unanticipated and
potentially
significant
payments to its
customers.
------------------ ------------------ -----------------------------------------------------------------
No change 3. Non-compliance Compliance
with various laws Financial * Constant monitoring of potential changes to laws and
and regulations Reputational regulatory requirements;
such as:
i) Health, safety * In-person and virtual training on health, safety and
and environmental environmental matters provided to employees and
laws relevant third-party contractors;
ii)Anti-bribery
and corruption * I S O 3 7 0 0 1 ( A n t i - B r i b e r y M ana g e m
provisions e n t S y s t e m ) c e r t i fi c a t i o n
retained;
Non-compliance
with applicable
laws and * Ongoing refresh of compliance and related policies i
regulations may m p l e m e n t e d i n 2018 , i n c l u d i n g s p
lead to e c i fi c d e t a il s c o v e r i n g Anti-Bribery
substantial fines and Corruption, Facilitation of Tax Evasion,
and penalties, Anti-Money-Laundering;
reputational
damage and adverse
effects on future * Compliance monitoring activities and periodic
growth prospects. reporting requirements introduced;
Sudden and
frequent changes * Ongoing engagement with external lawyers, consultants
in laws and ,
regulations, in and regulatory authorities, as necessary, to identify
respect of their and assess changes in the regulatory environment;
interpretation or
application and
enforcement, both * Third-Party Code of Conduct communicated and annual
locally and certifications required of all high and medium risk
internationally, third parties introduced and communicated;
may require the
Group to modify
its existing * Third-party monitoring through supplier audits and
business performance reviews.
practices, incur
increased costs
and subject it to
potential
additional
liabilities.
------------------ ------------------ -----------------------------------------------------------------
No change 4. Economic and Operational
political Financial * Ongoing market analysis and business intelligence
instability gathering activities;
A slowdown in the
growth of, or a * Market share growth strategy in place;
reduction in
demand for,
wireless * Long-term contracts with blue chip MNOs;
communication
services
could adversely * Close monitoring of any potential risks that may
affect the demand affect operations;
for communication
sites and tower
space, and could * Business continuity and contingency plans in place to
have respond to any emergency situations.
a material adverse
effect on the
Group's financial
condition and
results of
operations.
There are
significant risks
related to
political
instability,
security, ethnic,
religious
and regional
tensions in each
geography where
the Group has
operations.
------------------ ------------------ -----------------------------------------------------------------
No change 5. Significant Financial
exchange rate * USD and EUR pegged contracts;
movements
Fluctuations in, * 'Natural' hedge of local currencies (revenue vs.
or devaluations opex);
of, local market
currencies where
the Group operates * Monthly review of exchange rate differences.
could
have a significant
and negative
financial impact
on the Group's
business,
financial
condition
and results. Such
impacts may also
result from any
adverse effects
that these
movements have
on Group
third-party
customers and
strategic
suppliers.
------------------ ------------------ -----------------------------------------------------------------
No change 6. Non-compliance Operational
with permit * Inventory of required licences and permits maintained
requirements for each operating company;
The Group may not
always operate * Compliance registers maintained with any potential
with the necessary non-conformities identified by relevant government
required approvals authorities with a timetable for rectification;
and permits for
some
of its tower * Periodic engagement with external lawyers and
sites, advisors, and participation in industry groups;
particularly in
the case of tower
portfolios * Active and ongoing engagement with relevant
acquired from a regulatory authorities to proactively identify,
third-party. assess and manage actual and potential regulation
Vagueness, changes.
uncertainty and
changes in
interpretation of
regulatory
requirements are
frequent
and often arise
without warning.
As a result, the
Group may be
subject to
potential
reprimands,
warnings, fines
and penalties for
non-compliance
with the relevant
permitting and
approval
requirements.
------------------ ------------------ -----------------------------------------------------------------
No change 7. Loss of key People
personnel * Talent identification and succession planning are in
place for key roles;
The Group's
successful
operational * Competitively benchmarked performance-related
activities and remuneration plans;
growth are closely
linked to the
knowledge * Staff performance and development/support plans.
and experience of
key members of
senior management
and highly skilled
technical
employees.
The loss of any
such personnel, or
the failure to
attract, recruit
and retain equally
high-calibre
professionals,
could adversely
affect the Group's
operations,
financial
condition and
strategic
growth prospects.
------------------ ------------------ -----------------------------------------------------------------
No change 8. Technology risk Strategic
* Strategic long-term planning;
Advances in
technology that
enhance the * Business intelligence;
efficiency of
wireless networks,
and potential * Exploring alternative technologies such as solar
active power;
sharing of
wireless spectrum,
may significantly * Continuously improving our product offering to adapt
reduce or negate to new wireless technologies;
the need for
tower-based
infrastructure or * Applying for new licenses to provide active
services. This infrastructure services in certain markets.
could reduce the
need for
telecommunications
operators to
add more
tower-based
antenna equipment
at certain tower
sites, leading to
a potential
decline
in tenancies,
service needs and
revenue streams.
Examples may
include spectrally
efficient
technologies,
which could
potentially
relieve certain
network capacity
problems, or
complementary
voice over
internet protocol
access
technologies
that could absorb
a portion of
subscriber traffic
from the
traditional
tower-based
networks.
------------------ ------------------ -----------------------------------------------------------------
No change 9. Failure to Financial
remain competitive * Key performance indicator ('KPI') monitoring and
benchmarking against competitors;
Competition in, or
consolidation of,
the * Total cost of ownership analysis for MNOs;
telecommunications
tower industry may
create pricing * Fair pricing structure;
pressures that
materially and
adversely affect * Business intelligence and review of competitors'
the Group. activities;
* Strong tendering team to ensure high win/retention
rate;
* Continuous capex investment to ensure that the Group
has sufficient capacity.
------------------ ------------------ -----------------------------------------------------------------
No change 10. Failure to Strategic
integrate new Financial * Pre-acquisition due diligence conducted with the
lines of business Operational assistance of external advisors with specific
in new markets geographic and industry expertise;
Multiple risks
exist with entry * Ongoing monitoring activities
into new markets post-acquisition/agreement;
and new lines of
business. Failure
to successfully * Detailed management, operations and technology
manage and integration plan;
integrate
operations,
resources and * Ongoing measurement of performance vs. plan and Group
technology could strategic objectives;
have material
adverse
implications * Implementation of a regional CEO and support function
for the Group's to governance and oversight structure.
overall growth
strategy, and
negatively impact
its financial
position and
corporate culture.
------------------ ------------------ -----------------------------------------------------------------
No change 11. Tax disputes Compliance
Financial * Frequent interaction and transparent communication
Our operations are Operational with relevant governmental authorities and
based in certain Reputational representatives;
countries with
complex,
frequently * Engagement of external legal and tax consultants to
changing and advise on legislative/tax code changes and assessed
bureaucratic liabilities or audits;
and
administratively
burdensome tax * Engagement with trade associations and industry
regimes. This may bodies and other international companies and
lead to organisations facing similar issues;
significant
disputes around
interpretation and * Defending against unwarranted claims;
application of tax
rules and may
expose us to * Recruitment of Group Tax Manager, and ongoing
significant recruitment of in-house tax expertise at both Group
additional and Opco levels.
taxation
liabilities.
------------------ ------------------ -----------------------------------------------------------------
New 12. Covid-19 Financial
Operational * Health and safety protocols established and
In addition to the implemented;
normal health and
safety risks to
our employees and * Business continuity plans implemented with ongoing
contractors, the monitoring;
ongoing
impact of the C o
v i d-19 p an d e * Financial modelling, scenario building and stress
m i c c o u l d m testing;
a t e r i a ll y
an d a d v e rs e
l * Continuous monitoring of the external environment;
y a ff e c t the
financial and
operational * Increased fuel and capex purchases;
performance of the
Group across all
its activities. * Review of contractual terms and conditions;
The effects of the
pandemic may also
disrupt the * Review and adaptation of our control environment for
achievement of the remote working.
Group's strategic
plans
and growth
objectives and
place additional
strain on its
technology
infrastructure.
There
is also an
increased risk of
litigation due to
the potential
effects of the
pandemic on
fulfilment
of contractual
obligations.
------------------ ------------------ -----------------------------------------------------------------
New 13. Information Financial
technology failure Operational * Ongoing implementation and enhancement of security
and cyber-attack Reputational and remote access processes, policies and procedures;
risk
We are * Regular security testing regime established,
increasingly validated by independent third parties;
dependent on the
performance and
effectiveness of * Annual staff training and awareness programme in
our IT systems. place;
Failure
of our key
systems, exposure * Security controls based on industry best practice
to the increasing frameworks such as NCSC, and validated through
threat of internal audit assessments;
cybercrime attacks
and threats, loss
or theft of * Specialist security third parties engaged to assess
sensitive cyber risks and mitigation plans;
information,
whether
accidentally or * Incident management and response processes aligned to
intentionally, In f or ma t i on T e c hn o l ogy In f r a s t ruc t
expose the Group u r e L i b r ar y ( ' I T I L (R) ' ) b es t
to operational, practice - identification, containment, eradication,
strategic, recovery and lessons learned;
reputational and
financial risks.
These risks are * New supplier risk management assessments and due
increasing due diligence carried out.
to greater
interconnectivity,
reliance on
technology
solutions to drive
business
performance,
use of third
parties in
operational
activities and
continued adoption
of remote working
practices.
Cyber-attacks are
becoming more
sophisticated and
frequent and may
compromise
sensitive
information
of the Group, its
employees,
customers or other
third parties.
Failure to prevent
unauthorised
access or to
update processes
and IT security
measures may
expose the Group
to potential
fraud,
inability to
conduct its
business, damage
to customers as
well as regulatory
investigations
and associated
fines and
penalties.
------------------ ------------------ -----------------------------------------------------------------
2. Related party transactions
During the year, the Group companies entered into the following
commercial transactions with related parties:
2020 2019
----------------------- -----------------------
Purchase Purchase
Income from of goods Income from of goods
towers US$m US$m towers US$m US$m
------------------------------------------ ------------ --------- ------------ ---------
Millicom Holding B.V. and subsidiaries(1) 72.2 - 70.4 -
Ecost Building Management Pty - - - 1.4
Vulatel (Pty) Ltd - - 0.2 0.3
Nepic Pty - 0.2 0.3 -
------------------------------------------ ------------ --------- ------------ ---------
Total 72.2 0.2 70.9 1.7
------------------------------------------ ------------ --------- ------------ ---------
2020 2019
------------------ ------------------
Amount Amount Amount Amount
owed by owed to owed by owed to
US$m US$m US$m US$m
------------------------------------------ -------- -------- -------- --------
Millicom Holding B.V. and subsidiaries(1) 37.1 - 22.9 -
Vulatel (Pty) Ltd(2) - - 0.2 -
Nepic Pty(2) - - 0.3 0.1
SA Towers Proprietary Limited(2) - - - 1.5
------------------------------------------ -------- -------- -------- --------
Total 37.1 - 23.4 1.6
------------------------------------------ -------- -------- -------- --------
(1) Millicom Holding B.V is a shareholder of Helios Towers plc.
(2) No longer classified as related parties as of November 2020.
See Note 13 for further details.
The amounts outstanding are unsecured and will be settled in
cash. No guarantees have been given or received. Based on the ECL
model, no provisions have been made for loss allowances in respect
of the amounts owed by related parties.
Amounts receivable from the related parties related to other
Group companies are short term and carry interest varying from 0%
to 15% per annum charged on the outstanding trade and other
receivable balances (Note 15).
3. Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report
and Financial Statements, and the Group's Financial Statements, in
accordance with applicable United Kingdom law and those applicable
accounting standards.
The Directors have elected to prepare the Company Financial
Statements in accordance with United Kingdom Generally Accepted
Accounting Practice ('UK GAAP'), which is the United Kingdom
Accounting Standards and applicable law, including the Financial
Reporting Standard Applicable in the UK and Republic of Ireland
('FRS 102').
The Directors are required to prepare Financial Statements for
each financial year which present a true and fair view of the
financial position of the Company and of the Group, and of the
financial performance and cash flows of the Group. In preparing
those Financial Statements, the Directors are required to:
-- select suitable accounting policies in accordance with IAS 8
('Accounting policies, changes in accounting estimates and errors')
and FRS 102 then apply them consistently;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- provide additional disclosures when compliance with the
specific requirements in IFRS for Group and FRS 102 for Company is
insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the Company and of the
Group's financial position and financial performance;
-- state that the Company has complied with FRS 102 and the
Group has complied with IFRS, subject to any material departures
disclosed and explained in the Financial Statements; and
-- prepare the accounts on a going concern basis unless, having
assessed the ability of the Company and the Group to continue as a
going concern, management either intends to liquidate the entity or
to cease trading, or have no realistic alternative but to do
so.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company and of the Group, and which
enable them to ensure that the Financial Statements comply with the
Companies Act 2006 and Article 4 of the IAS Regulation. 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.
Under applicable UK law and regulations, the Directors are
responsible for the preparation of a Directors' report, Directors'
remuneration report and corporate Governance Report that comply
with that law and regulations. In addition, the Directors are
responsible for the maintenance and integrity of the corporate and
financial information included on the Company's website.
Legislation in the UK governing the preparation and
dissemination of Financial Statements may differ from legislation in other jurisdictions.
Neither the Company nor the Directors accept any liability to
any person in relation to the Annual Report and Financial
Statements except to the extent that such liability could arise
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 a nd s
c h e d u le 10A of t he F i n a n c i al Services
and Markets Act 2000.
Directors' responsibility statement under the UK Corporate
Governance Code:
In accordance with Provision 27 of the 2018 UK C o r po r a te
Go v e r n a n ce C od e, the Directors consider that the Annual
Report and Financial Statements, taken as a whole, is fair,
balanced and understandable and provides information to enable
shareholders to assess the Company's performance, business model
and strategy.
Responsibility statement of the Directors in respect of the
Annual Report and Financial Statements Each of the Directors whose
names are listed on pages 72-74 confirm that to t he b e st of t h
e ir k n o w l e dg e:
a) the Group Financial Statements, prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union, and the Company Financial Statements prepared u n d
er F RS 102, g i ve a t r ue a nd f a ir view of the assets,
liabilities, financial position and profit and loss of the Group
and Company and the undertakings included in the consolidation
taken as a whole; and
b) the management report (encompassed within the Overview,
Strategic Report, and Governance sections) includes 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.
The Strategic Report and the Statement of Directors'
Responsibilities were approved by the Board and signed on its
behalf by the Chief Executive Officer.
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