Interims & Rights Issue-Part2
Costain Group PLC
14 September 2007
PART 2
APPENDIX IV
APPENDIX IV
PLACING TERMS AND CONDITIONS
IMPORTANT INFORMATION FOR PLACEES ONLY
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING OF THE FULLY
PAID RIGHTS IN CONNECTION WITH THE RIGHTS ISSUE. THIS APPENDIX AND THE TERMS
AND CONDITIONS SET OUT AND REFERRED TO HEREIN ARE DIRECTED ONLY AT PERSONS
SELECTED BY DRESDNER BANK AG, LONDON BRANCH ('DBAG') AND/OR DRESDNER KLEINWORT
SECURITIES LIMITED ('DKS') AND/OR ARBUTHNOT SECURITIES LIMITED ('ARBUTHNOT') WHO
ARE 'INVESTMENT PROFESSIONALS' AS DESCRIBED IN ARTICLE 19(5) OF THE FINANCIAL
SERVICES AND MARKETS 2000 (FINANCIAL PROMOTION) ORDER 2001 (AS AMENDED) (THE
'ORDER'), ARE PERSONS FALLING WITHIN ARTICLE 49(2)(a) TO (d) ('HIGH NET WORTH
COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.') OF THE ORDER OR TO WHOM IT MAY
OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO
AS 'RELEVANT PERSONS'). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT
HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT
PERSONS. ANY INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND
CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL
BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
This announcement and the information contained herein are not for publication
or distribution, directly or indirectly, to persons in the United States,
Canada, France, Japan, Malaysia, New Zealand, South Africa or Switzerland or in
or into any other jurisdiction in which such publication or distribution is
unlawful (a 'Prohibited Jurisdiction').
This document and the information contained herein are not for publication or
distribution, directly or indirectly, to person in a Prohibited Jurisdiction
unless permitted pursuant to an exemption under the relevant local law or
regulation in any such jurisdiction.
Unless otherwise defined in this Appendix, definitions used in this Appendix
shall have the same meanings set out in Appendix V.
Terms and Conditions of the Placing
If a Relevant Person chooses to participate in the placing by DBAG and Arbuthnot
of the Fully Paid Rights (as defined below) in connection with the Rights Issue
(the 'Placing') by making or accepting an offer for a Placing participation
(each such Relevant Person being hereinafter referred to as a 'Placee') it will
be deemed to have read and understood this Appendix in its entirety and to be
making or accepting such offer on the terms and conditions and to be providing
the representations, warranties and acknowledgements contained in this Appendix.
In particular, each Placee represents, warrants and acknowledges to each of
DBAG and Arbuthnot for themselves and as agents for the Company that it:
1. is, and at the time it agrees to acquire the Fully Paid Rights will
be, outside the United States and it will acquire any Fully Paid Rights pursuant
to its Placing participation in an 'offshore transaction' in reliance on
Regulation S of the Securities Act; or
2. (i) is a qualified institutional buyer ('QIB') (as defined in Rule
144A of the US Securities Act) and (ii) has duly executed a US investor
representation letter in the form provided to it (or otherwise agreed by DKS and
Arbuthnot) and has delivered the same to Dresdner Kleinwort Securities LLC.
The Fully Paid Rights referred to in this announcement have not been and will
not be registered under the Securities Act, and may not be offered or sold
within the United States absent registration or an exemption from registration.
The New Ordinary Shares, the Nil Paid Rights, the Fully Paid Rights and the
Provisional Allotment Letters have not been approved or disapproved by the SEC,
any state securities commission in the United States or any other US regulatory
authority, nor have any of the foregoing authorities passed upon or endorsed the
merits of the offering of the New Ordinary Shares, the Nil Paid Rights, the
Fully Paid Rights or the Provisional Allotment Letters or the accuracy or
adequacy of this document. Any representation to the contrary is a criminal
offence in the United States.
This announcement and Appendix do not constitute an offer to sell or issue or a
solicitation of an offer to buy or subscribe for Fully Paid Rights in any
jurisdiction including, without limitation, the United States, Canada, France,
Japan, Malaysia, New Zealand, South Africa or Switzerland or any other
jurisdiction in which other such offer or solicitation is or may be unlawful.
The distribution of this announcement and the Placing and issue of the Fully
Paid Rights and/or the New Ordinary Shares in certain jurisdictions may be
restricted by law. Persons to whose attention this announcement has been drawn
are required by the Company, DKS, DBAG and Arbuthnot to inform themselves about
and to observe any such restrictions.
Details of the Underwriting Agreement and the Fully Paid Rights
Daedalus Projects Limited ('Daedalus') has irrevocably undertaken pursuant to an
undertaking dated 29 August 2007 (the 'Irrevocable Undertaking') to, inter alia,
the Company, DBAG and Arbuthnot to sell 81,261,941 of the Nil Paid Rights to
which it is entitled under the Rights Issue and to apply the net proceeds of
such sale in taking up the remainder of its entitlement under the Rights Issue.
The Company has today entered into an underwriting agreement (the 'Underwriting
Agreement') with, inter alia, DBAG and Arbuthnot under which DKS, as an
affiliate of DBAG, and Arbuthnot have agreed to procure persons to acquire the
Nil Paid Rights to be sold by Daedalus or the Fully Paid Rights or New Ordinary
Shares relating to such rights on the terms and subject to the conditions set
out herein. To the extent that DKS and Arbuthnot do not procure persons to take
up the Nil Paid Rights or any Fully Paid Rights or New Ordinary Shares relating
thereto, DBAG and/or Arbuthnot shall attempt to place them in the Rump and if
they fail to do so, DBAG and/or Arbuthnot and/or the sub-underwriters (as the
case may be) shall acquire the balance of them in the Stick.
Any Rump placing will be made subject to separate terms and conditions announced
at the time of such placing.
Before implementing the Placing, for administrative reasons DKS will pay up in
full the 81,261,941 Nil Paid Rights to be sold by Daedalus (the resulting Fully
Paid Rights being the 'Fully Paid Rights'). Placees will therefore acquire Fully
Paid Rights in the Placing.
The New Ordinary Shares relating to the Fully Paid Rights will, when issued and
fully paid, rank in full for all dividends declared after the Record Date and
otherwise pari passu in all respects with the Existing Shares.
Application for Listing and Admission to Trading
Application will be made to the UKLA for admission of the Nil Paid, Rights, the
Fully Paid Rights and the New Ordinary Shares to the Official List of the UKLA
(the 'Official List') and to the London Stock Exchange for admission to trading
of the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares on the
London Stock Exchange's market for listed securities. It is expected that
Admission will take place at 8.00am on 3 October 2007.
Principal Terms of the Placing
This Appendix gives details of the terms and conditions of, and the mechanics of
participation in, the Placing.
1. DBAG (through DKS) and Arbuthnot will arrange the Placing and
participation will only be available to persons invited to participate by DBAG
and/or DKS and/or Arbuthnot.
2. The price payable per Daedalus Fully Paid Right shall be 27.7857
pence (the 'Placing Price'). Placees will also be required to pay UK stamp duty
or stamp duty reserve tax (as appropriate) on the aggregate value of their
Placing Commitment at the Placing Price.
3. A Placee's commitment to acquire a fixed number of Fully Paid
Rights will be agreed with and confirmed to it orally (the 'Placing Commitment')
and a written confirmation (a 'Confirmed Commitment Letter') will be dispatched
as soon as possible thereafter. The oral confirmation to the Placee by DKS (as
an affiliate of DBAG) or by Arbuthnot (as appropriate) (the 'Oral Confirmation')
constitutes an irrevocable, legally binding contractual commitment to either
DBAG or Arbuthnot (as appropriate) to acquire a fixed number of Fully Paid
Rights allocated to it on the terms and conditions set out in this Appendix (the
'Contract'). No commissions are payable to Placees in respect of their Placing
Commitments. A Form of Confirmation will be included with each Confirmed
Commitment Letter and this should be completed and returned by fax by 3.00 p.m.
on the business day following the giving of the Oral Confirmation. If the Oral
Confirmation was given by DKS, the Confirmed Commitment Letter should be
completed and returned by fax to Simon Green at DKS. If the Oral Confirmation
was given by Arbuthnot, the Confirmed Commitment Letter should be completed and
returned by fax to Richard Johnson at Arbuthnot.
4. Following the Oral Confirmation, each Placee will, subject to
Admisison, have an immediate, separate, irrevocable and binding obligation, owed
to DKS or Arbuthnot (as appropriate) to pay in cleared funds an amount equal to
the product of the Placing Price and the number of Fully Paid Rights comprised
in its Placing Commitment. Settlement for the Fully Paid Rights is due in
cleared funds by 11.00 am on 5 October 2007 or by the Placee ensuring that its
CREST account enables delivery of such Fully Paid Rights to be made to it on 8
October 2007 against payment of the settlement price.
DBAG, DKS and Arbuthnot shall be entitled to effect the Rights Issue and/or the
Placing by such method as they shall in their sole discretion determine. To the
fullest extent permissible by law, none of DBAG, DKS or Arbuthnot, any holding
company thereof, not any subsidiary, branch or affiliate of any of them (each an
'Affiliate') nor any person acting on behalf of any of them shall have any
liability to Placees (or to any other person whether acting on behalf of a
Placee or otherwise). In particular, none of DBAG, DKS and Arbuthnot, any
Affiliate thereof nor any person acting on their behalf shall have any liability
in respect of its conduct of the Rights Issue (including the Placing) or of such
alternative method of effecting the Rights Issue and/or the Placing as it may
determine.
Conditions of the Rights Issue
The Placing will not proceed unless all of the conditions to the obligations of
DBAG and Arbuthnot under the Underwriting Agreement are satisfied or are waived
in accordance with its terms. The obligations of DBAG and Arbuthnot under the
Underwriting Agreement are conditional, inter alia, on:
1. the passing of the Resolutions at the Extraordinary General
Meeting on the EGM Date (and not, without the prior written consent of DBAG and
Arbuthnot, at any adjournment thereof) without any amendment not previously
approved in writing by the DBAG and Arbuthnot;
2. none of the warranties given by the Company in the Underwriting
Agreement being untrue, inaccurate or misleading at the date of the Underwriting
Agreement and there being no change of circumstances such that, if such
warranties were to be repeated at any time before Admission by reference to the
facts and circumstances then subsisting, any such warranty would be untrue,
inaccurate or misleading, in each case in a manner which is material in the
context of the Admission or the Rights Issue;
3. there not having occurred or arisen prior to Admission any
significant change or new matter as is referred to in section 87G of the FSMA
which requires a supplementary prospectus to be published;
4. each condition to enable the Nil Paid Rights and the Fully Paid
Rights to be admitted as a participating security (as defined in the
Regulations) in CREST (other than Admission) being satisfied on or before the
EGM Date;
5. the FSA agreeing to admit the Rights Shares (nil paid and fully
paid) to the Official List and the London Stock Exchange agreeing to admit the
Rights Shares to trading on its market for listed securities (both subject only
to allotment of the Rights Shares) by no later than the EGM Date and Admission
occurring at 8.00 a.m. on the first Dealing Day following the EGM Date;
6. the Existing Facilities Agreements remaining in full force and effect
between the publication of the Prospectus and Admission, all representations and
all warranties repeated or given by the Company under the Facilities Amendment
Agreements being, or when given being, correct and accurate in all respects, all
conditions precedent to the New Facilities Agreements and the Facilities
Amendment Agreements (other than those conditions relating to Admission and the
Underwriting Agreement becoming unconditional) having been satisfied or waived
in accordance with the terms of such agreements before Admission and the Company
having confirmed to DBAG and Arbuthnot (after consulting with the Existing
Facilities Agreements and New Facilities Agreements lead arrangers) in writing
following the EGM and in any event no later than 5.00 p.m. on the EGM Date that:
so far as it is aware (i) there is no reason why (A) all of the conditions
precedent to the Facilities Amendment Agreements and the New Facilities
Agreements will not be satisfied as at Admission and (B) any representations or
warranties required to be given or repeated pursuant to the Facilities Amendment
Agreements or the New Facilities Agreements will not be capable of being given
or repeated as required by such agreements; and (ii) no fact, matter or
circumstance exists which is likely to result in any of the Existing Facilities
(as amended and restated by the Facilities Amendment Agreements) or the New
Facilities being withdrawn or otherwise not being available for draw-down by the
Company in full; and
there has been no material breach of the terms of the Existing Facilities
Agreements or the Facilities Amendment Agreements which has not been remedied or
waived and, so far as it is aware, no fact, matter or circumstance exists which
is likely to result in any material breach of the terms of the Existing
Facilities Agreements, the Facilities Amendment Agreements or the New Facilities
Agreements occurring;
7. each of the Undertakings having been complied with in full before
Admission (to the extent that they fall to be complied with before such time);
and
8. the UEM Instruction Letter having been duly signed and delivered by UEM
and Rood Nominees Limited to DBAG and having not been revoked, in each case
before Admission.
If (a) the conditions set out in the Underwriting Agreement are not satisfied or
(to the extent permitted under the Underwriting Agreement) waived by DBAG and
Arbuthnot by the required time (or before such later time and/or date as the
Company, DBAG and Arbuthnot may agree) or (b) the Underwriting Agreement is
terminated in the circumstances specified below, the Placing and the Rights
Issue will lapse and the rights and obligations of the Placees hereunder shall
cease and determine at such time and no claim can be made by any Placee in
respect thereof.
In addition, the obligations of DKS and Arbuthnot under the Placing are
conditional on Daedalus complying in full with the terms of the Irrevocable
Undertaking.
Rights of Termination
DBAG and Arbuthnot may, following discussion with the Company where the
circumstances permit at any time prior to Admission terminate their respective
obligations under the Underwriting Agreement by giving notice to the Company if
inter alia:
1. in the opinion of DBAG and Arbuthnot (acting in good faith), the
warranties in the Underwriting Agreement are not true and accurate or have
become misleading (or would not be true and accurate or would be misleading if
they were repeated at any time before Admission) by reference to the facts
subsisting at the and in the opinion of DBAG and Arbuthnot (acting in good
faith) such breach is material and adverse in the context of Admission or the
Rights Issue; or
2. in the opinion of DBAG and Arbuthnot (acting in good faith), there has
been a breach by the Company of any of its obligations under the Underwriting
Agreement or certain related agreements which is in the opinion of DBAG and
Arbuthnot (acting in good faith) material in the context of Admission or the
Rights Issue; or
3. in the opinion of DBAG and Arbuthnot (acting in good faith), there has
been a material adverse change in the financial or trading position or prospects
of the Group as a result of which DBAG and Arbuthnot consider (acting in good
faith) it is impracticable or inadvisable to proceed with Admission or the
Rights Issue; or
4. any new matter or circumstance arises, and as a result of such matter
or circumstance, it is necessary, in the opinion of DBAG and Arbuthnot (acting
in good faith), to amend or supplement the Prospectus in the approved terms, in
order that the Prospectus will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein
not misleading or in order to ensure the Prospectus complies with the Prospectus
Rules, the Companies Act, the FSMA, the Listing Rules and all other statutes and
governmental and regulatory authority regulations applicable to the Rights Issue
and which, in any case, in the opinion of DBAG and Arbuthnot (acting in good
faith) is material and adverse in the context of Admission or the Rights Issue,
or
5. any sub-underwriter terminates its sub-underwriting commitment
following publication of any supplementary prospectus or the announcement of any
intention to publish such a supplementary prospectus; or
6. any press or public announcement concerning the Group or the Rights
Issue has been made by or on behalf of the Group which has not been sanctioned
by the Underwriters prior to its release (such sanction not to be unreasonably
withheld or delayed) and which in the opinion of DBAG and Arbuthnot (acting in
good faith) is detrimental to the Group and material and adverse in the context
of Admission or the Rights Issue; or
7. in the opinion of DBAG and Arbuthnot (acting in good faith), there has
been after today's date:
(a) a change in national or international, financial, political, economic or
stock market conditions (primary or secondary); or
(b) an incident of terrorism, outbreak or escalation of hostilities, war,
declaration of martial law or any other calamity or crisis; or
(c) a suspension or material limitation in trading of securities generally on
any major stock exchange in the United Kingdom; or
(d) a change in currency exchange rates or exchange controls in the United
Kingdom, or a disruption of settlement systems in the United Kingdom, or a
material disruption in commercial banking in the United Kingdom,
in each case as would be likely to prejudice materially the success of the
Rights Issue.
Each Placee agrees with DKS, DBAG and Arbuthnot that the waiver by DBAG and
Arbuthnot, or the agreement by DBAG and Arbuthnot to the extension of time for
the satisfaction, of any condition of the Underwriting Agreement or the exercise
by DBAG and Arbuthnot of their right of termination of the Underwriting
Agreement, or any other discretion under such agreement, shall be within the
absolute discretion of DBAG and Arbuthnot and that none of DKS, DBAG nor
Arbuthnot shall have any liability to any Placee whatsoever in connection with
any decision to waive any such condition, agree to any such extension or to
exercise or not to exercise any such right or discretion.
By participating in the Placing, each Placee agrees that its rights and
obligations hereunder terminate only in the circumstances described above and
will not be capable of rescission or termination by any Placee.
Information for Placees
A Prospectus will be published in connection with the Rights Issue and Admission
and will be approved by the UKLA. Placees have been sent a placing proof of the
draft Prospectus (the 'U Proof'). A Placee may only rely on the information
contained in the U Proof in deciding whether or not to participate in the
Placing. Each Placee, by accepting a participation in the Placing, agrees that
the content of this announcement and the U Proof are exclusively the
responsibility of the Company and confirms to DBAG, DKS, Arbuthnot and the
Company that it has neither received nor relied on any other information,
representation, warranty or statement made by or on behalf of DKS, DBAG or
Arbuthnot or any of their respective affiliates or the Company (other than the
amount of the relevant placing participation communicated by DKS or Arbuthnot
(as appropriate) in the Oral Confirmation), and none of DKS, DBAG, Arbuthnot or
any of their respective affiliates or the Company will be liable for the
decision of any Placee to accept an invitation to participate in the Placing
based on any other information, representation, warranty or statement which the
Placee may have obtained or received. Each Placee acknowledges to and agrees
with each of DKS, DBAG and Arbuthnot for themselves and as agents for the
Company, that it has relied only on the information in the U Proof and this
announcement in making its decision to participate in the Placing. Nothing in
this paragraph shall exclude the liability of any person for fraudulent
misrepresentation.
Registration and Settlement
Settlement of transactions in the New Ordinary Shares following Admission will
take place within CREST, using the DVP system, subject to certain exceptions.
DKS, DBAG and Arbuthnot reserve the right to require settlement for and delivery
of the Fully Paid Rights to any Placee by such other means as they respectively
deem necessary if delivery or settlement is not possible within CREST within the
timetable set out in this announcement or would not be consistent with the
regulatory requirements in the jurisdictions of such Placee.
It is expected that settlement of the Placing will be on 8 October 2007.
Interest is chargeable daily on payments not received from Placees on the due
date in accordance with the arrangements set out in this Appendix at the rate of
2 per cent. above the base rate from time to time of Barclays Bank Plc.
If a Placee does not comply with these obligations, either (i) DKS and/or DBAG,
and/or (ii) Arbuthnot (as appropriate) may sell the Fully Paid Rights allocated
to such Placee and retain from the proceeds, an amount equal to the Placing
Price multiplied by the number of Fully Paid Rights comprised in its Placing
Commitment, plus any interest due. The relevant Placee will, however, remain
liable, inter alia, for any shortfall below the Placing Price and it may be
required to bear any stamp duty or stamp duty reserve tax (together with any
interest or penalties) which may arise upon the sale of its Fully Paid Rights on
its behalf.
If Fully Paid Rights are to be delivered to a custodian or settlement agent of a
Placee, the relevant Placee should ensure that its Confirmed Commitment Letter
is copied and delivered immediately to the relevant person within that
organisation.
Placees will be required to pay UK stamp duty or stamp duty reserve tax (as
appropriate) on the aggregate value of their Placing Commitment at the Placing
Price.
Representations and Warranties by Placees
By participating in the Placing, each Placee (and any persons acting on its
behalf):
1. represents and warrants that it is entitled to subscribe for and
purchase Fully Paid Rights and the related New Ordinary Shares under the laws of
all relevant jurisdictions which apply to it and that it has fully observed such
laws and obtained all such governmental and other guarantees and other consents
which may be required there under and complied with all necessary formalities;
2. represents and warrants that the issue to the Placee, or the
person specified by such Placee for registration as holder of Fully Paid Rights
and the related New Ordinary Shares will not give rise to a liability under any
of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and
clearance services);
3. represents and warrants that it has complied with its obligations
in connection with money laundering under the Criminal Justice Act 1993, the
Money Laundering Regulations 1993 and the Money Laundering Regulations 2003
(together, the 'Regulations') and, if it is making payment on behalf of a third
party, that satisfactory evidence has been obtained and recorded by it to verify
the identity of the third party as required by the Regulations;
4. represents and warrants that it is a person falling within Article
19 (5) or Article 49(2) (a) to (d) of the Order and undertakes that it will
acquire, hold, manage or dispose of any Fully Paid Rights and the related New
Ordinary Shares that are allocated to it for the purposes of its business;
5. represents and warrants that it has complied and will comply with
all applicable provisions of FSMA with respect to anything done by it in
relation to the Fully Paid Rights and the related New Ordinary Shares in, from
or otherwise involving the United Kingdom;
6. represents and warrants that it has all necessary capacity and
authority and has obtained all necessary consents and authorities to enable it
to commit to participation in the Placing and to perform its obligations in
relation thereto and will honour its obligations (including, without limitation,
in the case of any person on whose behalf it is acting, all necessary consents
and authorities to agree to the terms set out or referred to in this
announcement);
7. undertakes that it will pay for the Fully Paid Rights and the
related New Ordinary Shares acquired by it in accordance with this Appendix on
the due time and date set out herein, failing which the relevant Fully Paid
Rights or, if appropriate, the related New Ordinary Shares may be placed with
other subscribers or sold as either (i) DKS and/or DBAG, and/or (ii) Arbuthnot
determine and without liability to such Placee;
8. acknowledges that participation in the Placing is on the basis
that it is not and will not be a client or customer of DKS, DBAG or Arbuthnot
and that DKS, DBAG and Arbuthnot have no duties or responsibilities to it for
providing the protections afforded to their respective clients or customers or
for providing advice in relation to the Placing or in respect of any
representations, warranties, undertakings or indemnities contained in the
Underwriting Agreement nor for the exercise or performance of any of DBAG's or
Arbuthnot's rights and obligations thereunder, including any right to waive or
vary conditions or exercise any termination right;
9. undertakes and agrees that (i) the person whom it specifies for
registration as holder of the Fully Paid Rights and the related New Ordinary
Shares will be (a) the Placee or (b) a nominee of the Placee, (ii) none of DKS,
DBAG, Arbuthnot nor the Company will be responsible for any additional liability
to stamp duty or stamp duty reserve tax resulting from a failure to observe this
requirement and (iii) the Placee and any person acting on its behalf agrees to
acquire Fully Paid Rights and the related New Ordinary Shares on the basis that
the same will be allotted to the CREST stock account of DKS who, in respect of
Placees procured by DKS, will hold them as nominee on its behalf until
settlement in accordance with its standing settlement instructions and, in
respect of Placees procured by Arbuthnot, will hold them as nominee and then
transfer them to Arbuthnot on its behalf until Arbuthnot undertakes settlement
in accordance with its standing settlement instructions;
10. acknowledges that any agreements entered into by it pursuant to
these terms and conditions shall be governed by and construed in accordance with
the laws of England and that it submits (on behalf of itself and on behalf of
any person on whose behalf it is acting) to the exclusive jurisdiction of the
English courts as regards any claim, dispute or matter arising out of any such
contract;
11. acknowledges that the Fully Paid Rights and the related Nil Paid
Rights and New Ordinary Shares have not been and will not be registered under
the securities legislation of any state of the United States, Canada, France,
Japan, Malaysia, New Zealand, South Africa or Switzerland and, subject to
certain exceptions, may not be offered, sold, delivered or transferred, directly
or indirectly, within those jurisdictions;
12. undertakes and agrees that neither it nor any of its affiliates (as
defined in Rule 501(b) of the Securities Act) nor any person acting on its or
their behalf will offer or sell any Fully Paid Rights and the related New
Ordinary Shares within the United States except in accordance with Rule 903 of
Regulation S of the Securities Act or to QIBs pursuant to the exemption from the
registration requirements of the Securities Act provided by Rule 144A;
13. undertakes and agrees that neither it nor its affiliates (as
defined in Rule 501(b) of the Securities Act) nor any person acting on its or
their behalf have engaged in or will engage in any 'general solicitation or
general advertising' (within the meaning of Regulation D under the Securities
Act) or 'directed selling efforts' (as defined in Regulation S under the
Securities Act) in connection with any offer or sale of the Fully Paid Rights
and the related New Ordinary Shares;
14. acknowledges that stamp duty and stamp duty reserve tax is payable
in respect of each Placee's commitment (and/or the commitment of a person for
whom it is contracting as agent) and that the Placee is solely responsible for
payment of the same and none of Daedalus, the Company, DKS, DBAG and Arbuthnot
will be responsible for its payment. In addition, Placees should note that they
will be liable for any capital duty, stamp duty and all other stamp, issue,
securities, transfer, registration, documentary or other duties or taxes
(including any interest, fines or penalties relating thereto) payable outside
the UK by them or any other person on the acquisition by them of any Fully Paid
Rights and the related New Ordinary Shares or the agreement by them to acquire
any Fully Paid Rights and the related New Ordinary Shares;
15. acknowledges that any monies of any Placee or any person acting on
behalf of the Placee held or received by DKS or Arbuthnot will not be subject to
the protections conferred by the FSA's Client Money Rules. As a consequence,
these monies will not be segregated from the monies of DKS or Arbuthnot and may
be used by DKS and/or Arbuthnot (as appropriate) in the course of their
respective businesses, and the relevant Placee or any person acting on its
behalf will therefore, to the extent it has a claim against DKS and/or
Arbuthnot, rank as a general creditor of DKS and/or Arbuthnot (as appropriate);
and
16. (i) acknowledges that its acceptance of such participation is not
by way of acceptance of the public offer to be made in the Prospectus and
Provisional Allotment Letters but is by way of a collateral contract and as such
section 87Q of the FSMA does not entitle it to withdraw if the Company publishes
a supplementary prospectus in connection with the Rights Issue; and (ii)
irrevocably undertakes to each of DKS, DBAG, Arbuthnot and the Company that if
at any time it becomes entitled pursuant to section 87Q of the FSMA to withdraw
its Placing Commitment or otherwise not to acquire the Fully Paid Rights in the
Placing upon the terms and conditions of this Appendix, it will forthwith
re-confirm to both DKS and Arbuthnot its Placing Commitment on the terms in this
Appendix by completing and returning to DKS or Arbuthnot (as appropriate,
depending upon to which of DKS or Arbuthnot it previously returned a Form of
Confirmation) a further Form of Comfirmation in respect of the full Placing
Commitment referred to in the Form(s) of Confirmation returned by it before such
withdrawal rights arose.
17. represents and warrants that it has read and understood this
Appendix in its entirety and acknowledges that its participation in the Placing
will be governed by the terms of this document and the U Proof.
18. agrees to indemnify on an after-tax basis and hold harmless the Company,
DKS, DBAG and Arbuthnot, any of their respective Affiliates and any person
acting on their behalf from any and all costs, claims, liabilities and expenses
(including legal fees and expenses) arising out of or in connection with any
breach of the representations, warranties, acknowledgements, agreements and
undertakings in this Appendix and further agrees that the provisions of this
Appendix shall survive after completion of the Rights Issue and the Placing;
19. acknowledges that the Existing Ordinary Shares are listed on the London
Stock Exchange/Official List of the UK Listing Authority, and the Company is
therefore required to publish certain business and financial information in
accordance with the rules and practices of the London Stock Exchange/FSA
(collectively, the 'Exchange Information'), which includes a description of the
nature of the Company's business and the Company's most recent balance sheet and
profit and loss account, and similar statements for preceding financial years,
and that the Placee is able to obtain or access the Exchange Information without
undue difficulty;
20. acknowledges that none of DBAG, DKS or Arbuthnot, nor any of their
Affiliates nor any person acting on their behalf has provided, and will not
provide it with any material or information regarding the New Ordinary Shares or
the Company; nor has it requested DBAB, DKS or Arbuthnot, nor any of their
Affiliates or any person acting on their behalf to provide it with any such
material or information;
21. acknowledges that the content of this document is exclusively the
responsibility of the Company and that none of DKS, DBAG nor Arbuthnot, nor any
of their respective Affiliates nor any person acting on their behalf will be
responsible for or shall have any liability for any information, representation
or statement relating to the Company contained in the U Proof or this Appendix
or any information previously published by or on behalf of the Company and none
of DKS, DBAG or Arbuthnot any of their respective Affiliates nor any person
acting on their behalf will be liable for any Placee's decision to participate
in the Placing based on any information, representation or statement contained
in the U Proof or this Appendix or otherwise. Each Placee further represents,
warrants and agrees that the only information on which it is entitled to rely
and on which such Placee has relied in committing to subscribe for the New
Ordinary Shares is contained in the U Proof or this Appendix and any Exchange
Information, such information being all that it deems necessary to make an
investment decision in respect of the New Ordinary Shares, and that it has
relied on its own investigation with respect to the New Ordinary Shares and the
Company in connection with its decision to subscribe for the New Ordinary Shares
and acknowledges that it is not relying on any investigation that DKS, DBAG,
Arbuthnot any of their respective Affiliates or any person acting on their
behalf may have conducted with respect to the New Ordinary Shares or the Company
and none of such persons has made any representations to it, express or implied,
with respect thereto;
22. acknowledges that it has not relied on any information relating to the
Company contained in any research reports prepared by DKS, DGAB, Arbuthnot, any
of their Affiliates or any person acting on DKS's, DBAG, Arbuthnot or any of
their Affiliates' behalf and understands that (i) none of DKS, DGAB, Arbuthnot,
any of their Affiliates nor any person acting on their behalf has or shall have
any liability for public information or any representation; (ii) none of DKS,
DGAB, Arbuthnot, any of their Affiliates nor any person acting on their behalf
has or shall have any liability for any additional information that has
otherwise been made available to such Placee, whether at the date of
publication, the date of this document or otherwise; and that (iii) none of DKS,
DGAB, Arbuthnot, any of their Affiliates nor any person acting on their behalf
makes any representation or warranty, express or implied, as to the truth,
accuracy or completeness of such information, whether at the date of
publication, the date of this document or otherwise;
23. represents and warrants that it understands that the New Ordinary Shares
have not been and will not be registered under the Securities Act or under the
securities laws of any state or other jurisdiction of the United States and that
the Company has not been registered as an 'investment company' under the United
States Investment Company Act of 1940, as amended;
24. represents and warrants that it has not offered or sold and will not
offer or sell any New Ordinary Shares to persons in the United Kingdom prior to
Admission except to qualified investors as defined in section 86(7) of FSMA,
being persons falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus
Directive;
25. represents and warrants that it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning of
section 21 of FSMA) relating to the New Ordinary Shares in circumstances in
which section 21(1) of FSMA does not require approval of the communication by an
authorised person;
26. represents and warrants that it is a qualified investor as defined in
section 86(7) of FSMA, being a person falling within Article 2.1(e)(i), (ii) or
(iii) of the Prospectus Directive;
27. acknowledges that any of DKS, DBAG or Arbuthnot may itself become a
Placee in respect of some or all of the New Ordinary Shares or nominate any
connected or associated person to do so;
28. acknowledges that until 40 days after the Acceptance Date, an offer or
sale of New Ordinary Shares within the United States by any dealer (whether or
not participating in the Placing) may violate the registration requirements of
the Securities Act if such offer or sale is made otherwise than in accordance
with Rule 144A or pursuant to another exemption from registration under the
Securities Act to a person that is a QP (as defined below);
29. that (a) it is a qualified institutional buyer within the meaning of
Rule 144A of the Securities Act; (b) it is a 'qualified purchaser' within the
meaning of Section 2(a)(51) of the United States Investment Company Act of 1940,
as amended ('QP'), and is not (i) a broker or dealer which owns or invests less
than US$25 million in securities of unaffiliated issuers; (ii) a
participant-directed employee plan or (iii) formed for the purposes of investing
in the New Ordinary Shares or the Company; (c) it has duly executed, or will
duly execute, an investor letter in the form provided to it by DKS, DGAB or
Arbuthnot in which it will make certain undertakings, representations and
warranties in addition to those contained herein; and (d) it is subscribing for
the New Ordinary Shares for its own account, or for the account managed on
behalf of another QIB that is also a QP, and not with a view to any distribution
within the meaning of the Securities Act or applicable state law except as set
forth below;
30. it acknowledges and agrees that it has, or to the extent it is acquiring
New Ordinary Shares for the account of another QIB, such other QIB (a) has,
sufficient knowledge, sophistication and experience in financial and business
matters so as to be capable of evaluating the merits and risks of the purchase
of the New Ordinary Shares; (b) is able to bear the economic and financial risk
(including a complete loss) of such a purchase; (c) has had sufficient time to
consider and conduct its own investigation with respect to the offer and
purchase of the New Ordinary Shares, including the tax, legal, currency and
other economic considerations relevant to such investment and (d) will not look
to the Company, DKS, DBAG, Arbuthnot any of their respective Affiliates or any
person acting on their behalf for all or part of any such loss or losses it or
they may suffer;
31. it acknowledges and agrees that the Company, DKS, DBAG and Arbuthnot,
their respective Affiliates and any person acting on their behalf will rely upon
its representations, warranties, undertakings, agreements and acknowledgements
set forth herein and in the investor letter, and agrees to notify the Company,
DKS, DBAG and Arbuthnot promptly in writing if any of its representations,
warranties, undertakings, agreements or acknowledgements cease to be accurate
and complete.
The acknowledgements, undertakings, representations and warranties referred to
above are given to each of the Company, DKS, DBAG and Arbuthnot (for their own
benefit and, where relevant, the benefit of their respective Affiliates and any
person acting on their behalf) and are irrevocable.
No UK stamp duty or stamp duty reserve tax should be payable to the extent that
the New Ordinary Shares are issued or transferred (as the case may be) into
CREST to, or to the nominee of, a Placee who holds those shares beneficially
(and not as agent or nominee for any other person) within CREST and registered
in the name of such Placee or such Placee's nominee.
Any arrangements to issue or transfer the New Ordinary Shares into a depositary
receipts system or a clearance service or to hold the New Ordinary Shares as
agent or nominee of a person to whom a depositary receipt may be issued or who
will hold the New Ordinary Shares in a clearance service, or any arrangements
subsequently to transfer the New Ordinary Shares, may give rise to stamp duty
and/or stamp duty reserve tax, for which none of the Company, DKS, DBAG or
Arbuthnot will be responsible and the Placee to whom (or on behalf of whom, or
in respect of the person for whom it is participating in the Placing as an agent
or nominee) the allocation, allotment, issue or delivery of New Ordinary Shares
has given rise to such stamp duty or stamp duty reserve tax undertakes to pay
such stamp duty or stamp duty reserve tax forthwith and to indemnify on an
after-tax basis and to hold harmless the Company, DKS, DBAG and Arbuthnot in the
event that any of the Company and/or DKS and/or DBAG and/or Arbuthnot has
incurred any such liability to stamp duty or stamp duty reserve tax.
In addition, Placees should note that they will be liable for any capital duty,
stamp duty and all other stamp, issue, securities, transfer, registration,
documentary or other duties or taxes (including any interest, fines or penalties
relating thereto) payable outside the UK by them or any other person on the
acquisition by them of any New Ordinary Shares or the agreement by them to
acquire any New Ordinary Shares.
All times and dates in this document may be subject to amendment. DKS or
Arbuthnot will notify the Placees and any person acting on behalf of the Placees
of any such changes.
This document has been issued by the Company and is the sole responsibility of
the Company.
The rights and remedies of DKS, DBAG, Arbuthnot and the Company under these
terms and conditions are in addition to any rights and remedies which would
otherwise be available to each of them and the exercise or partial exercise or
partial exercise of one will not prevent the exercise of others.
Each Placee may be asked to disclose in writing or orally to DKS and/or
Arbuthnot:
(a) if he is an individual, his nationality; or
(b) if he is a discretionary fund manager, the jurisdiction in which the
funds are managed or owned.
Dresdner Kleinwort Securities Limited, which is authorised and regulated by the
Financial Services Authority, and Dresdner Bank AG, London Branch, which is
authorised by BAFin and by the Financial Services Authority for the conduct of
designated investment business in the United Kingdom, are acting for the Company
and for no one else in connection with the Rights Issue and will not be
responsible to anyone other than the Company for providing the protections
afforded to customers of Dresdner Bank AG, London Branch and Dresdner Kleinwort
Securities Limited or for providing advice in relation to the Rights Issue, or
any other matters referred to herein.
Arbuthnot Securities Limited, which is authorised and regulated by the Financial
Services Authority, is acting for the Company and for no one else in connection
with the Rights Issue and will not be responsible to anyone other than the
Company for providing the protections afforded to customers of Arbuthnot
Securities Limited or for providing advice in relation to the Rights Issue, or
any other matters referred to herein.
APPENDIX V
GLOSSARY OF TERMS
'Acceptance Date' 25 October 2007 or such other date (not being later than 31 October 2007)
as the Company and DBAG and Arbuthnot may agree
'Admission' admission of the New Ordinary Shares, nil paid, to the Official List and
to trading on the main market for listed securities of the London Stock
Exchange;
'Arbuthnot' Arbuthnot Securities Limited;
'Closing Price' the closing middle market quotation of an Existing Ordinary Share, as
published in the Daily Official List;
'Commitment Period' the period commencing on (and including) the date of the Underwriting
Agreement and ending on (and including) the earliest of:
(a) if there are no Remaining Shares, 11.00 a.m. on the Acceptance
Date;
(b) if there are any Remaining Shares, 5.00 p.m. on the second
Dealing Day following the Acceptance Date;
(c) the date on which the obligations of the Underwriters lapse
because any condition to the Underwriting Agreement becomes incapable of
being fulfilled (and is not waived) or if all such conditions are not
fulfilled (or waived); and
(d) the date on which notice is given by the DBAG and Arbuthnot to
the Company terminating their obligations under the Underwriting
Agreement
'Committed Shares' the 72,485,851 Rights Shares in aggregate in respect of which Qualifying
Shareholders have irrevocably undertaken to subscribe (or procure that
their nominees subscribe) or, in the case of the Directors, have
indicated their intention to subscribe or procure that their nominee(s)
subscribe
'CREST' the system for the paperless settlement of trades in securities and the
holding of uncertificated securities in accordance with the CRESTCo
Regulations operated by CRESTCo;
'CRESTCo Regulations' the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as
amended form time to time;
'CRESTCo' Euroclear UK & Ireland Limited;
'Daedalus' Daedalus Projects Limited;
'Daily Official List' the daily official list of the London Stock Exchange;
'Dealing Day' a day upon which dealings in domestic securities may take place on and
with the authority of the London Stock Exchange;
'DBAG' Dresdner Bank AG, London branch;
'EGM Date' 2 October 2007
'Enlarged Share Capital' the issued ordinary share capital of the Company following the issue of
the New Ordinary Shares pursuant to the Rights Issue;
'Existing Facilities Agreements' the facility agreement dated 15 March 2004 (as amended) between the
Company and The Royal Bank of Scotland plc acting as agent for National
Westminster Bank plc as lender (the 'RBS Facility Agreement') and each of
the Bank Facilities Agreements and Surety Facilities Agreements (each as
defined in the RBS Facility Agreement as amended and restated by the
Facilities Amendment Agreements)
'Existing Ordinary Shares' the ordinary shares of 5 pence each in the capital of the Company at the
date of this document;
'Extraordinary General Meeting' the extraordinary general meeting of the Company to be convened pursuant
to the notice set out at the end of this document (including any
adjournment thereof);
'Facilities Amendment Agreements' the amendment and restatement agreements each dated on or about the date
of this Agreement in the approved terms relating to the Existing
Facilities Agreements
'Form of Confirmation' the form of confirmation in respect of the Placing or sub-underwriting
participation, as the case may be
'FSMA' the Financial Services and Markets Act 2000
'Fully Paid Rights' rights to acquire New Ordinary Shares, fully paid;
'Kharafi' Mohammed Abdulmohsin Al-Kharafi & Sons WLL;
'London Stock Exchange' London Stock Exchange plc or its successor(s);
'New Facilities Agreements' the new facilities agreements to be entered into pursuant to the
Facilities Amendment Agreements and those facilities described as 'New
Surety Facilities Agreements' in the Facilities Amendment Agreements
'New Ordinary Shares' the ordinary shares of 5 pence each in the capital of the Company to be
issued by the Company pursuant to the Rights Issue;
'Nil Paid Rights' the Rights Shares in nil paid form provisionally allotted to Qualifying
Shareholders in connection with the Rights Issue
'Official List' the official list of the UK Listing Authority;
'Ordinary Shares' Existing Ordinary Shares and/or New Ordinary Shares, as the context
requires;
'Placing' the sale of rights over 81,261,941 New Ordinary Shares on behalf of
Daedalus;
'Prospectus' the document dated 14 September 2007, comprising a prospectus relating to
the Company for the purpose of the Rights Issue and the listing of the
New Ordinary Shares on the London Stock Exchange (together with any
supplements or amendments thereto);
'Prospectus Directive' the EU Prospectus Directive 2003/71/EC
'Provisional Allotment Letter' the provisional allotment letter issued to Qualifying Non-CREST
Shareholders;
'Qualifying Shareholders' holders of Existing Ordinary Shares on the register of members of the
Company on the Record Date;
'Qualifying Non-CREST Qualifying Shareholders holding Ordinary Shares in certificated form;
Shareholders'
'Record Date' the close of business in London on 28 September 2007;
'Remaining Shares' such number of the Underwritten Shares as are neither taken up nor deemed
to be taken up
'Rights Issue' the offer by way of rights to Qualifying Shareholders to acquire New
Ordinary Shares, on the terms and conditions set out in this document
and, in the case of Qualifying Non-CREST Shareholders only, the
Provisional Allotment Letter;
'Rights Issue Price' 24 pence per New Ordinary Share;
'Rights Shares' up to 267,923,469 new Ordinary Shares proposed to be allotted and offered
for subscription under the Rights Issue
'Rule 144A' Rule 144A as promulgated under the Securities Act
'SEC' US Securities Exchange Commission
'Securities Act' Unites States Securities Act, 1933 (as amended)
'Shareholder(s)' holder(s) of Ordinary Shares;
'Stick' those Underwritten Shares that are not taken up or deemed to be taken up
and that DKS and Arbuthnot do not procure persons to take up and so fall
to be acquired by DBAG and/or Arbuthnot and/or the Sub-underwriters
'UEM Instruction Letter' the letter of instruction from Deadalus in connection with the Placing
'UKLA' the Financial Services Authority in its capacity as the United Kingdom
Listing Authority
'Underwriters' Arbuthnot and DBAG;
'Underwriting Agreement' the conditional underwriting agreement;
'United Kingdom' or 'UK' the United Kingdom of Great Britain and Northern Ireland;
'United States' or 'US' the United States of America, its territories and possessions, any state
of the United States and the District of Columbia.
'US Person' has the meaning ascribed to it under Regulation S under the Securities
Act
'Undertakings' the Kharafi Undertaking and the UEM Undertaking
'Underwritten Shares' all the Rights Shares (including, for the avoidance of doubt only, the
Daedalus shares to be Placed) other than the Committed Shares.
Costain Group PLC
Consolidated income statement
Half-year ended 30 June, Notes 2007 2006 2006
year ended 31 December Half-year Half-year Year
£m £m £m
Revenue (Group and share of joint ventures 2 430.0 436.2 886.3
and associates)
Share of joint ventures and associates 5 (77.7) (63.9) (137.9)
Group revenue 352.3 372.3 748.4
Cost of sales (337.9) (385.9) (785.9)
Gross profit/(loss) 14.4 (13.6) (37.5)
Administrative expenses (10.8) (9.0) (20.9)
Group operating profit/(loss) 3.6 (22.6) (58.4)
Profit on sale of investment 2.7 - 3.6
Profit on sale of joint ventures and 0.2 3.5 -
associates
Amounts written off loans to associate - - (2.7)
Share of results of joint ventures and 5 0.1 (2.8) (7.0)
associates
Profit/(loss) from operations 2 6.6 (21.9) (64.5)
Financial income 3 14.5 13.2 26.7
Finance costs 3 (13.1) (12.0) (23.9)
Net financing income 1.4 1.2 2.8
Profit/(loss) before tax 8.0 (20.7) (61.7)
Income tax (expense)/credit (1.8) 2.6 7.7
Profit/(loss) for the period attributable 2 6.2 (18.1) (54.0)
to equity holders of the parent
Earnings/(loss) per share - basic 4 1.7p (5.1)p (15.1)p
Earnings/(loss) per share - diluted 4 1.7p (5.1)p (15.1)p
Consolidated statement of recognised income and expense
Half-year ended 30 June, 2007 2006 2006
year ended 31 December Half-year Half-year Year
£m £m £m
Exchange differences on translation of foreign operations - 0.3 -
Cash flow hedges:
Effective portion of changes in fair value (net of
tax) during period - Group - 0.1 0.3
Effective portion of changes in fair value (net of
tax) during period - joint ventures and associates 5.9 3.2 3.1
Change in fair value of assets classified as available
for sale (2.6) (3.4) (0.8)
Actuarial gains on defined benefit pension schemes 27.8 30.0 26.0
Tax recognised on actuarial gains recognised directly in
equity (7.8) (9.0) (7.8)
Tax rate adjustment to brought forward actuarial losses
recognised directly in equity (1.7) - -
Net income recognised directly in equity 21.6 21.2 20.8
Profit/(loss) for the period 6.2 (18.1) (54.0)
Total recognised income and expense for the period 27.8 3.1 (33.2)
attributable to equity holders of the parent
Consolidated balance sheet
Half-year ended 30 June, Notes 2007 2006 2006
year ended 31 December Half-year Half-year Year
£m £m £m
Assets
Non-current assets
Property, plant & equipment 4.4 5.8 5.7
Intangible assets 3.1 3.9 3.4
Investments in joint ventures 5 28.0 27.1 25.0
Investments in associates 5 2.9 1.0 1.2
Loans to joint ventures 4.3 2.6 3.3
Loans to associates 1.2 0.4 2.0
Other investments - 1.0 3.6
Other debtors 6.2 7.3 10.1
Deferred tax assets 18.4 24.6 30.6
Total non-current assets 68.5 73.7 84.9
Current assets
Inventories 1.7 2.0 2.4
Trade and other receivables 146.0 184.3 160.6
Cash and cash equivalents 42.9 51.2 56.4
Total current assets 190.6 237.5 219.4
Total assets 259.1 311.2 304.3
Equity
Share capital 17.9 17.9 17.9
Share premium 0.6 0.5 0.6
Special reserve 12.8 12.9 12.8
Fair value reserve - - 2.6
Foreign currency translation reserve (1.2) (0.9) (1.2)
Hedging reserve 4.4 (1.7) (1.6)
Retained earnings (61.7) (47.8) (86.3)
Total equity attributable to equity (27.2) (19.1) (55.2)
holders of the parent
Minority interests - - -
Total equity (27.2) (19.1) (55.2)
Liabilities
Non-current liabilities
Interest bearing loans and borrowings - 0.1 -
Retirement benefit obligations 38.4 69.5 68.7
Other payables 3.2 2.4 6.6
Provisions 3.4 4.9 4.1
Total non-current liabilities 45.0 76.9 79.4
Current liabilities
Trade and other payables 233.6 243.4 266.1
Tax liabilities 1.8 3.2 2.7
Overdrafts 0.5 0.2 1.4
Interest bearing loans and borrowings 0.3 1.0 1.7
Provisions 5.1 5.6 8.2
Total current liabilities 241.3 253.4 280.1
Total liabilities 286.3 330.3 359.5
Total equity and liabilities 259.1 311.2 304.3
Consolidated cash flow statement
Half-year ended 30 June, 2007 2006 2006
year ended 31 December Half-year Half-year Year
£m £m £m
Cash flows from operating activities
Profit/(loss) for the period 6.2 (18.1) (54.0)
Adjustments for:
Depreciation and amortisation 1.1 1.2 2.7
Financial income (14.5) (13.2) (26.7)
Finance costs 13.1 12.0 23.9
Share-based payments expense 0.2 0.2 0.3
Income tax 1.8 (2.6) (7.7)
Profit on sale of investment (2.7) - (3.6)
Profit on sale of interests in joint venture and associates (0.2) (3.5) -
Share of results of joint ventures and associates (0.1) 2.8 7.0
Amounts written off loans to associates - - 2.7
Operating profit/(loss) before changes in working capital 4.9 (21.2) (55.4)
and provisions
Decrease/(increase) in inventories 0.7 - (0.4)
Decrease/(increase) in receivables 18.4 (14.2) 2.2
(Decrease)/increase in payables (32.5) 5.3 32.6
Movement in provisions and employee benefits (6.1) (1.4) (2.6)
Cash used by operations (14.6) (31.5) (23.6)
Interest paid (0.1) (0.2) (0.3)
Income taxes paid - - (0.2)
Net cash used by operating activities (14.7) (31.7) (24.1)
Cash flows from investing activities
Interest received 1.2 1.2 2.6
Additions to property, plant & equipment (0.2) (0.7) (1.9)
Additions to intangible assets (0.1) (0.8) (0.9)
Proceeds from sale of fixed assets - - 0.2
Additions to investments - (2.0) (0.1)
Disposal of subsidiary and associate (1.4) - -
Proceeds from sale of investments 3.7 7.1 7.1
Dividend received from joint venture - 2.6 6.1
Loans to joint ventures and associates 0.3 0.2 (10.2)
Net cash from investing activities 3.5 7.6 2.9
Cash flows from financing activities
Issue of ordinary share capital - 0.2 0.3
New loans - 0.2 0.9
Payment of loans and finance lease liabilities (1.4) (0.1) (0.2)
Net cash (used by)/from financing activities (1.4) 0.3 1.0
Net decrease in cash and cash equivalents (12.6) (23.8) (20.2)
Cash and cash equivalents at beginning of period 55.0 75.0 75.0
Effect of foreign exchange rate changes - (0.2) 0.2
Cash and cash equivalents at end of period 42.4 51.0 55.0
Notes to the Interim Financial Statements
These interim financial statements do not constitute statutory accounts within
the meaning of the Companies Act 1985 and are unaudited. The Board approved the
unaudited interim financial statements on 13 September 2007.
1. Basis of preparation
This interim financial information has been prepared applying the accounting
policies and presentation that were applied in the preparation of the company's
published consolidated financial statements for the year ended 31 December 2006.
They are prepared on a going concern basis.
2. Business and geographical segment information by origin
In the opinion of the directors, the business segments are Civil Engineering,
Building, Oil Gas & Process and International, which undertake engineering and
construction projects, Property Development operations in Spain and Central
Costs. These represent the Group's primary segments. Secondary segments are
presented geographically.
* Revenue in the tables below includes the Group's share of joint
ventures and associates.
For the half-year Civil Building Oil, Gas International Property Central Total
ended Engineering & Process Development Costs
30 June 2007 £m £m £m £m £m £m £m
Revenue * 280.4 108.5 26.2 13.0 1.9 - 430.0
Group operating profit 9.9 (3.3) - (0.2) - (2.8) 3.6
/(loss)
Profit on sale of - 2.7 - - - - 2.7
investment
Profit on sale of - - - 0.2 - - 0.2
associate
Share of results of 0.2 0.2 0.2 - (0.5) - 0.1
joint ventures and
associates
Segment result 10.1 (0.4) 0.2 - (0.5) (2.8) 6.6
Net financing income 1.4
Income tax expense (1.8)
Profit for the period 6.2
2. Business and geographical segment information by origin continued
For the half-year Civil Building Oil, Gas & International Property Central Total
ended Engineering Process Development Costs
30 June 2006 £m £m £m £m £m £m £m
Revenue * 217.0 158.3 30.8 22.9 7.2 - 436.2
Group operating profit 7.5 (11.5) (1.2) (14.6) - (2.8) (22.6)
/(loss)
Profit on sale of - 3.5 - - - - 3.5
investment
Share of results of 0.4 0.1 0.1 (5.5) 2.1 - (2.8)
joint ventures and
associates
Segment result 7.9 (7.9) (1.1) (20.1) 2.1 (2.8) (21.9)
Net financing income 1.2
Income tax credit 2.6
Loss for the period (18.1)
For the year ended Civil Building Oil, Gas & International Property Central Total
31 December 2006 Engineering Process Development Costs
£m £m £m £m £m £m £m
Revenue * 488.1 298.0 57.2 29.8 13.2 - 886.3
Group operating profit 10.0 (29.6) (19.8) (13.0) - (6.0) (58.4)
/(loss)
Profit on sale of - 3.6 - - - - 3.6
investment
Amounts written off - - - (2.7) - - (2.7)
loans to associate
Share of results of 0.3 0.1 0.3 (11.6) 3.9 - (7.0)
joint ventures and
associates
Segment result 10.3 (25.9) (19.5) (27.3) 3.9 (6.0) (64.5)
Net financing income 2.8
Income tax credit 7.7
Loss for the period (54.0)
Revenue * Segment result
2007 2006 2006 2007 2006 2006
Half-year Half-year Year Half-year Half-year Year
£m £m £m £m £m £m
United Kingdom 405.7 390.6 816.9 7.2 (4.4) (22.1)
Spain 1.9 7.2 13.2 (0.5) 2.1 3.9
Rest of the world 22.4 38.4 56.2 (0.1) (19.6) (46.3)
430.0 436.2 886.3 6.6 (21.9) (64.5)
3. Net financing income/(costs)
Finance income includes the expected return on the assets of the pension scheme
of £13.4m (2006 half-year £12.0m, 2006 year £24.1m) and finance costs include
the expected increase in the present value of the pension scheme liabilities of
£12.9m (2006 half-year £11.9m, 2006 year £23.6m). The expected return and the
increase in present value are based on the value of assets and liabilities of
the pension scheme at the start of the period.
4. Earnings/(loss) per share
The calculation of earnings/(loss) per share is based on profit for
the period of £6.2m (2006 half-year loss £18.1m, 2006 year loss £54.0m) and the
number of shares set out below:
2007 2006 2006
Half-year Half-year Year
Weighted average number of shares for basic earnings per 357,231,292 356,875,207 357,050,423
share calculation
Dilutive potential ordinary shares:
SAYE Scheme 5,772,679 6,567,096 6,314,913
Weighted average number of shares for fully diluted 363,003,971 363,442,303 363,365,336
earnings per share calculation
5. Joint ventures and associates
The analysis of the Group's share of joint ventures (JVs) and associates is set
out below:
2007 Half-year
Alcaidesa 4Delivery Ltd Other joint
Holding SA ventures Associates Total
£m £m £m £m £m
Revenue 1.9 53.3 18.2 4.3 77.7
(Loss)/profit before tax (0.7) - 0.4 0.4 0.1
Income tax credit/(expense) 0.2 - (0.1) (0.1) -
(Loss)/profit for the period (0.5) - 0.3 0.3 0.1
Non-current assets 7.1 - 6.6 0.3 14.0
Current assets 27.9 60.8 90.5 51.2 230.4
Current liabilities (4.1) (60.7) (14.3) (1.3) (80.4)
Non-current liabilities (7.4) - (78.4) (47.3) (133.1)
Investments in joint ventures
and associates 23.5 0.1 4.4 2.9 30.9
Presentation in the balance sheet in respect of joint ventures and associates
restricts the minimum carrying value to £nil. If the carrying value becomes
negative, the corresponding value of any loans or other advances to those
investments is reduced or, where future funding obligations exist, a provision
is made.
5. Joint ventures and associates continued
2006 Half-year
Alcaidesa 4Delivery Ltd Other joint
Holding SA ventures Associates Total
£m £m £m £m £m
Revenue 7.2 33.4 19.2 4.1 63.9
Profit/(loss) before tax 3.1 0.1 (4.5) (0.5) (1.8)
Income tax expense (1.0) - - - (1.0)
Profit/(loss) for the period 2.1 0.1 (4.5) (0.5) (2.8)
Non-current assets 6.5 - 5.2 1.9 13.6
Current assets 41.3 13.4 49.2 48.6 152.5
Current liabilities (18.1) (13.3) (13.3) (7.4) (52.1)
Non-current liabilities (3.5) - (40.3) (42.1) (85.9)
Investments in joint ventures
and associates 26.2 0.1 0.8 1.0 28.1
2006 year
Alcaidesa 4Delivery Ltd Other joint
Holding SA ventures Associates Total
£m £m £m £m £m
Revenue 13.2 84.6 26.5 13.6 137.9
Profit/(loss) before tax 6.1 - (10.9) 0.1 (4.7)
Income tax expense (2.2) - (0.1) - (2.3)
Profit/(loss) for the period 3.9 - (11.0) 0.1 (7.0)
Non-current assets 5.7 - 7.2 2.4 15.3
Current assets 33.6 25.1 82.1 51.4 192.2
Current liabilities (8.1) (25.1) (20.0) (12.9) (66.1)
Non-current liabilities (7.3) - (68.2) (39.7) (115.2)
Investments in joint ventures
and associates 23.9 - 1.1 1.2 26.2
2007 2006 2006
Half-year Half-year Year
£m £m £m
Financial commitments 11.3 10.3 9.3
Capital commitments 29.6 28.4 25.1
The commitments relate to joint ventures involved in Private Finance Initiative
schemes and the capital commitments to construction work being undertaken by the
Costain Group. All figures are the Group's share.
The comparative figures for the financial year ended 31 December 2006 are not
the Company's statutory accounts for that financial year. Those accounts have
been reported on by the Company's auditors and delivered to the Registrar of
Companies. The report of the auditors was (i) unqualified, (ii) did not include
a reference to any matters to which the auditors drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a statement
under section 237(2) or (3) of the Companies Act 1985.
The Interim Report and Accounts are unaudited but have been reviewed by the
Company's auditors and their Independent Review Report is set out below.
INDEPENDENT REVIEW REPORT TO COSTAIN GROUP PLC
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 30 June 2007 which comprises Consolidated Income Statement,
Consolidated Statement of Recognised Income and Expense, Consolidated Balance
Sheet, Consolidated Cash Flow Statement and the related notes. We have read the
other information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
This report is made solely to the Company in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the Company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Company for
our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board for use in the UK. A review consists principally of making enquiries of
management and applying analytical procedures to the financial information and
underlying financial data and, based thereon, assessing whether the accounting
policies and presentation have been consistently applied unless otherwise
disclosed. A review excludes audit procedures such as tests of controls and
verification of assets, liabilities and transactions. It is substantially less
in scope than an audit performed in accordance with International Standards on
Auditing (UK and Ireland) and therefore provides a lower level of assurance than
an audit. Accordingly, we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2007.
KPMG Audit Plc
Chartered Accountants
London
13 September 2007
UNSOLICITED MAIL
The Company is legally obliged to make its share register available to the
general public. Consequently some shareholders may receive unsolicited mail,
including correspondence from unauthorised investment firms. Shareholders who
wish to limit the amount of unsolicited mail they receive can contact:
The Mailing Preference Service
Freepost (LON 20771)
London WE1 0ZT
SHAREHOLDER INFORMATION
The Company's Registrar is Lloyds TSB Registrars, The Causeway, Worthing, West
Sussex BN99 6DA. Their web site address is www.lloydstsb-registrars.co.uk. For
enquiries regarding your shareholding, please telephone 0870 600 3984. You can
also view up-to-date information about your holdings by visiting the shareholder
web site at www.shareview.co.uk. Please ensure that you advise Lloyds TSB
Registrars promptly of a change of name or address.
ShareGIFT
The Orr Mackintosh Foundation (ShareGIFT) operates a charity share donation
scheme for shareholders with small parcels of shares whose value makes it
uneconomic to sell them. Details of the scheme are available on the ShareGIFT
Internet Site www.sharegift.org. Lloyds TSB Registrars can provide stock
transfer forms on request. Donating shares to charity in this way gives rise
neither to a gain nor a loss for Capital Gains Tax purposes. This service is
completely free of charge.
This information is provided by RNS
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