Keller Group plc15 April 2014Keller Group plc ("the Company") - Annual Financial ReportIn accordance with Listing Rule 9.6.1, copies of the following documents havebeen submitted to the National Storage Mechanism: * Annual Report and Accounts for the year ended 31 December 2013 (the `Annual Report 2013') * The notice of annual general meeting 2014 * Form of proxy for the annual general meetingThese documents will shortly be available for inspection at the NationalStorage Mechanism at www.hemscott.com/nsm.do.The Annual Report 2013 is also available on the Company's website atwww.keller.co.uk. Hard copies of all the documents have been sent toshareholders.The annual general meeting will be held at 11.00am on Thursday 22 May 2014 atthe offices of Investec, 2 Gresham Street, London, EC2V 7QP.In accordance with DTR 6.3.5, this announcement contains information in theattached Appendix of the principal risk factors, the directors' responsibilitystatement and a note to the accounts on related party transactions. Thisinformation has been extracted in full unedited text from the Annual Report2013. References to page numbers and notes in the Appendix refer to those inthe Annual Report 2013. A condensed set of financial statements was appendedto Keller Group plc's preliminary results announcement issued on 3 March 2014.For further information please contact:Kerry PorrittCompany Secretary Appendix Unedited extract from Annual Report 2013Principal risks and KPIsRisk Description Controls and KPIs mitigationMarket cycles Whilst our business • Strategy of Revenue growth will always be geographic compared withThe Group's broad subject to economic diversification: market growthbase helps to cycles, market riskmitigate against is reduced by the - operations in over Definition andthe risk of diversity of our 40 countries method ofdownturn in our markets, both in calculationmarkets terms of geography • Broad customer and market segment. base. Year-on-year sales growth (including It is also partially • Services used acquisitions) in offset by across all industry local currency opportunities for segments: compared with consolidation in our infrastructure, growth in the total highly fragmented industrial, regional markets. Typically, commercial, construction even where we are residential and market. the clear leader, we environmental. still have a As our work occurs relatively small at the start of the share of the market. construction cycle, Our ability to our revenue is a exploit these leading indicator opportunities for the through bolt-on construction acquisitions is market, whereas reflected in our market comparators track record of are based on the growing sales, and lagging indicator doing `construction put so profitably, in place'. across market cycles.Tendering and It is in the nature • Risk Management Operating marginmanagement of our business that Framework definesof contracts we continually Minimum Standards in Definition and assess and manage the control of method ofProject risk is technical, and other project risk. calculationmanaged operational, risks.throughout the • Risk-based tender Operating profitlife of a project Some of the controls approval process, before exceptionalfrom the we have in place, with clear items expressed astendering stage particularly at the delegations of a percentage ofto completion crucial stage of authority. revenue. tendering of contracts, are set • Independent review out in the table of tenders. opposite. • Training for staff in the typical risk issues they may face when tendering for jobs, negotiating contracts and executing work. • Legal review of unusual or onerous contract terms. • Project staff selected on the basis of their skills, experience of a particular type of project and their workload. • Establishment of `centres of excellence'. • Formal handover meetings at each stage of the contract. • Formal daily reports generated and reviewed for each contract in progress. Weekly cost reports produced for projects and reviewed by next level management. • Periodic reviews of poorly performing contracts to establish lessons learned with the results communicated to all relevant staff.Expansion We recognise the • Moving into new Return on net risks associated geographic markets operating assetsOur long-term with acquisitions often involvesgrowth track and expanding into following customers Definition andrecord is built new regions and aim with whom we have method ofon a combination to manage these to previously worked. calculationof organic growth acceptableand acquisitions levels. • We deploy trusted Operating profit and experienced before exceptional These include personnel to items expressed as various country establish and grow a percentage of risks, including the our business in new average net challenges of regions. operating assets operating within (including goodwill different business • Robust operating acquired through and safety cultures. rules, including our acquisitions). Think Safe framework When considering an and Code of Conduct, `Net operating acquisition, we try apply wherever in assets' excludes to get to know a the world we are net debt, tax target company, working. balances, deferred often working in consideration and joint venture, to • Cross-border net defined benefit understand the support and sharing pension operational and of expertise support liabilities. cultural differences the transfer of and potential technologies. synergies. • Acquisition targets are usually well known to Keller. • We have thorough due diligence processes, mostly undertaken by our own management. • Individual integration plans reflect the unique character of each acquisition.Safety Keller is made up of * Our safety Accident Frequency businesses of framework, Rate (`AFR')The construction varying sizes `Think Safe',industry poses operating around the incorporates our Definition andsignificant world, often in Safety Goal, method ofsafety challenging Principles, calculationchallenges, but environments. Policy andwe do not view Minimum Accident frequencyinjuries as being It is essential Standards. per 100,000 maninevitable that, as we continue hours. to grow and move * All business into new regions, we units undertake can be sure that our an annual safety approach to safety assessment. is equally rigorous, no matter * From these, whereabouts in the safety world, or on which improvement projects, we are plans working. are developed and implemented. * Regular directors' and managers' safety tours reinforce the importance of safety.People The risk of losing, We aim to be a Staff turnover rate or not being responsible employerThe accumulation able to attract, for whom our Definition andof knowledge and good people employees are proud method ofexperience is is key. to work. calculationessential tohelping our We pride ourselves • We provide: Managerial,customers to find in having some of professional andthe best the best - excellent training technical staffsolutions professional and and development leaving in the skilled people in opportunities; period, other than the industry, who through redundancy are motivated by our - experience on or normal culture and the challenging and retirement, opportunities for high-profile expressed as a career growth. projects; percentage of employees in this - opportunities for category. international career growth; and - good engagement and two-way communications. • We aim to treat our employees with fairness, dignity and respect.Responsibility statement of the Directors in respect of the annual report andthe financial statementsWe confirm that to the best of our knowledge: * the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation as a whole; and * the Directors' report, including content contained by reference, includes a fair review of the development and performance of the business and the position of the Company 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 Board confirms that the Annual Report and Accounts, taken as a whole, isfair, balanced and understandable and provides the information necessary forshareholders to assess the performance, strategy and business model of theCompany.26 Related party transactionsTransactions between the parent, its subsidiaries and jointly controlledoperations, which are related parties, have been eliminated on consolidationand are not disclosed in this note.On 3 April 2013, the Group acquired the remaining 49% minority shareholding ofKeller-Terra S.L. for a cash consideration of £5.6m (€6.7m) from GTCEISUConstrucción, S.A., a connected person of Mr López Jiménez, who retired as aDirector of the Company during 2012.During the year, the Group undertook various contracts with a total value of £nil (2012: £3.9m) for GTCEISU Construcción, S.A. An amount of £nil (2012: £5.6m) is included in trade and other receivables in respect of amountsoutstanding as at 31 December 2013. During the year, the Group made purchasesfrom GTCEISU Construcción, S.A. with a total value of £nil (2012: £2.0m). Anamount of £nil (2012: £1.0m) is included in trade and other payables in respectof amounts outstanding as at 31 December 2013.Related party transactions were made on an arms-length basis and no guaranteeshave been given or received.The remuneration of the Directors, who are the key management personnel andrelated parties of the Group, is set out in note 6 (extract below). 2013 2012 £m £mShort-term employee benefits 3.4 3.4Post-employment benefits 0.1 0.3Share-based payments 1.0 0.8 4.5 4.5