TIDMTSCO
RNS Number : 6964M
Tesco PLC
13 May 2020
13 May 2020
Tesco PLC
Annual Report and Financial Statements and Notice of Annual
General Meeting 2020
Further to the release of its preliminary results announcement
on 8 April 2020, Tesco PLC (the "Company") announces that it has
today published its Annual Report and Financial Statements 2020. In
addition, the Company announces that its Notice of Annual General
Meeting 2020 (the "Notice") has been sent to shareholders. The 2020
Annual General Meeting will be held at our Heart building, Shire
Park, Welwyn Garden City, Herts, AL7 1TW on Friday, 26 June 2020 at
10.30 am (the "AGM").
Given prevailing Government guidance in relation to COVID-19,
involving social distancing and prohibiting public gatherings, it
is proposed that the AGM be convened with the minimum quorum of
shareholders present (which will be facilitated by Tesco) in order
to conduct the business of the meeting. In the interests of
protecting the health and safety of the Company's shareholders,
colleagues and AGM support staff, as well as the public,
shareholders will not be admitted to the AGM in line with the
latest Government guidance. The Company will continue to closely
monitor the rapidly developing impact of COVID-19, including the
latest Government guidance, and how this may affect the
arrangements for the AGM. Consequently, the AGM is subject to
change, possibly at short notice. If it becomes necessary or
appropriate to revise the current arrangements for the AGM, further
information will be made available on our website at
www.tescoplc.com/AGM2020 .
The Company's Annual Report and Financial Statements 2020,
Notice of Annual General Meeting 2020 and Little Helps Plan
Progress Update can be viewed on the Company's website at
www.tescoplc.com .
In accordance with Listing Rule 9.6.1R, copies of the following
documents have been submitted to the National Storage Mechanism and
will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
-- Annual Report and Financial Statements 2020;
-- Notice of Annual General Meeting 2020; and
-- Proxy Form for the 2020 Annual General Meeting.
The Company's preliminary consolidated financial information and
information on important events that have occurred during the year,
and their impact on the financial statements were included in the
Company's preliminary results announcement on 8 April 2020. That
information, together with the information set out below, which is
extracted from the Annual Report and Financial Statements 2020,
constitute regulated information, which is to be communicated to
the media in full unedited text through a Regulatory Information
Service in accordance with the FCA's Disclosure Guidance and
Transparency Rules ("DTR"), Rule 6.3.5R. This announcement is not a
substitute for reading the full Annual Report and Financial
Statements 2020. Page and note references in the text below refer
to page numbers and note references in the Annual Report and
Financial Statements 2020. To view the preliminary results
announcement, visit the Company's website: www.tescoplc.com .
Enquiries: Robert Welch
Company Secretary
Tesco PLC
Tesco House
Shire Park
Kestrel Way
Welwyn Garden City
Hertfordshire
AL7 1GA
Tel: 07793 222569
LEI Number: 2138002P5RNKC5W2JZ46
Principal risks and uncertainties
We have an established risk management framework to manage and
report the risks that we face as a business. A risk that can
seriously affect our performance, future prospects or reputation of
the Group is termed a principal risk.
To manage our risks effectively we have identified a risk
appetite which is driven by the following:
- our performance should be competitive, responsible and focused
on creating value for all our stakeholders including customers,
colleagues, suppliers and shareholders;
- our behaviours must be in line with our code of business
conduct to protect and enhance our reputation;
- we aim to operate our business within the capital allocation
framework we have set out; and
- we seek to ensure that our principal risks are effectively managed.
Principal risks are discussed and agreed by Executive management
and the Audit Committee and are cascaded to the business units who
manage and report on the principal risks and any additional
significant business unit risks. Business units also escalate risks
as appropriate to the Executive Committee.
The principal risks are discussed and evaluated through regular
meetings with senior management. Each principal risk is discussed
at least annually by the Board to provide oversight and ensure that
they remain well managed and relevant.
The seven steps of the risk, controls and assurance framework on
page 13 are embedded within our business as a key element of how we
manage our risks and ensure appropriate controls are
established.
The risk assessment process relies on our evaluation of the risk
likelihood and impact, and on the development and monitoring of
appropriate internal controls. We maintain risk registers detailing
the risks we face, and this is an important component of how we
manage our risks.
Risk Management
We have performed a robust review of our principal risks which
includes periodic assessments of the risks we believe could
threaten the Group's business model, future performance, solvency
or liquidity.
The COVID-19 outbreak has become a global pandemic moving from
an emerging risk for the business to a principal risk. The Booker
integration and synergy realisation risk has significantly reduced
over the year and is now considered to be operating in a business
as usual capacity. Consequently it has been retired as a principal
risk. Other principal risks remain largely unchanged from last
year.
Risks related to climate change and sustainability remain an
integral part of a number of our principal risks including brand,
reputation and trust, and responsible sourcing and supply chain. We
have enhanced our risk descriptions for these two principal risks
over the year to further reflect that.
The risks associated with Brexit remain due to there being no
clarity on the long-term trading relationship with the EU. Although
the UK entered the standstill transition period on 31 January 2020,
uncertainty over the longer-term trade issues could remain until 31
December 2020 and potentially beyond. We have amended our Brexit
risk description accordingly and continue to monitor this risk.
Liquidity and risks related to our transformation programme have
reduced. An improved credit rating, reduction in indebtedness and
improving cash flow position has resulted in reduced exposure and
the transformation programme is delivering capability with pilot
and major releases taking place over the past year.
We have noted a slight increase in our Health and Safety risk
primarily driven by a shift in the external regulatory landscape
leading to potentially higher penalties and legal action. Our
Group-wide injury statistics continue to improve as we identify and
implement improvement opportunities to further enhance our
controls.
We recognise the potential risk of disruption to activities in
view of the proposed sale of our businesses in Thailand and
Malaysia. We have appropriate plans in place to monitor and manage
these risks.
Emerging risks - This year we have conducted a formal exercise
to identify and assess emerging risks. While assessing potential
emerging risks we have considered our risk exposure across a number
of themes e.g. finance and economics, geopolitical and security,
social and humanitarian, technological, climate and sustainability
(see TCFD on page 20).
Emerging risk and horizon scanning are integrated as part of
regular risk discussions and reported at both business unit and
Executive Committee level and we will continue to embed this
further going forward. Our subject matter experts supported by our
second line of defence teams have been working through the year to
deepen our understanding of key risks like climate change,
sustainability, cyber, packaging, artificial intelligence, animal
welfare and more recently pandemics.
Key focus areas
As part of our focus on continuous improvement we have begun
work to refine risk appetite for our principal risks with the
Executive and Audit Committee this year and will continue to
progress this in the coming year (see risk appetite below). We have
also developed our assessment of emerging risks and integrated this
into our bi-annual risk review process (see emerging risks and
Corporate governance).
Risk appetite - During the year we have initiated work to
formalise our approach to develop and report our risk appetite. We
have worked with the Executive Committee, Audit Committee and
subject matter experts to agree our methodology. We have revised
our internal Board reporting guidance to ensure matters presented
for approval clearly indicate the risk(s) and as we progress we
will also integrate reference to our risk appetite. Next year we
will formalise reporting to the Board and improve oversight by
further developing and embedding our assessment and reporting
against risk appetite.
The table below sets out our principal risks, their movement
during the year, and a summary of key controls and mitigating
factors. They do not comprise all our risks and are not set out in
priority order. Additional risks not presently known, or currently
deemed to be less material, may also have adverse effects.
Principal risk Risk movement Key controls and mitigating
factors
Customer
Uncertainties (including There is continued
Brexit) and macroeconomic volatility and uncertainty * We have a value, price, promotions and Clubcard
conditions impact with the need for strategy that drives our business priorities with
our customers' budgets customer reassurance governance and oversight mechanisms.
and force customers on both value and
to reappraise the quality; however
concepts of value we feel that we have * We have a consistent approach to building impactful
and loyalty in a the right strategy customer propositions, offering high-quality and
way in which we are and processes in competitive value while improving the customer
unable to respond. place to monitor experience.
this risk.
No risk movement * Propositions are being developed across channels and
geographies to ensure consistency in the customer
engagement.
* Group-wide customer insight analysis is undertaken to
understand and leverage trends around customer
behaviour, expectations and experience across the
different parts of the business to improve our
propositions.
* We monitor the effectiveness of our processes by
regularly tracking our business and competitors
against measures that customers tell us are important
to their shopping experience.
* We have well-established product development and
quality management processes, which keep the needs of
our customer central to our decision-making.
--------------------------- ------------------------------------------------------------
Transformation
Failure to achieve The risk has decreased
our transformation driven by on-going * We have clear market strategies and business plans to
objectives due to delivery of key programmes address changes to business priorities, strategic
poor prioritisation, to meet our transformation objectives and external market factors.
ineffective change objectives.
management and a
failure to understand Risk decreasing * We have executive-level governance and oversight for
and deliver the technology all the transformation activities to ensure
required, results programmes are adequately resourced, milestones
in an inability to achieved and to approve key rollout decisions.
progress sufficiently
quickly to maintain
or increase operating * Real-time independent assurance activities are
margin and generate conducted over the transformation programme.
sufficient cash to
meet business objectives.
--------------------------- ------------------------------------------------------------
Liquidity
Failure of our business The risk has decreased
performance to deliver driven by a reduction * We maintain an infrastructure of systems, policies
cash as expected; in our debt levels and reports to ensure discipline and oversight on
access to funding and improving credit liquidity matters, including specific treasury and
markets or facilities rating and debt metrics. debt-related issues.
being restricted;
failures in operational Risk decreasing
liquidity and currency * Our treasury policies are communicated across the
risk management; Group and are regularly reviewed by the Board,
Tesco Bank cash call; Executive Committee and management.
or adverse changes
to the pension deficit
funding requirement; * The Group's funding strategy is approved annually by
create calls on cash the Board and includes maintaining appropriate levels
higher than anticipated, of working capital, undrawn committed facilities and
leading to impacts access to the capital markets.
on financial performance,
cash liquidity or
the ability to continue * The Audit Committee reviews and annually approves the
to fund operations. viability and going concern statements and reports
into the Board.
* There is a long-term funding framework in place for
the pension deficit and there is ongoing
communication and engagement with the Pension
Trustees.
* Liquidity levels and sources of cash are regularly
reviewed, and the Group maintains access to committed
credit facilities and debt capital markets.
* While recognising that Tesco Bank is financially
separate from Tesco PLC, there is ongoing monitoring
of the activities of Tesco Bank that could give rise
to risks to Tesco PLC.
--------------------------- ------------------------------------------------------------
Competition and markets
Failure to deliver We continue to face
an effective, coherent the ongoing challenge * Our Board develops and regularly challenges the
and consistent strategy of a changing competitive strategic direction of our business to enhance our
to respond to our landscape and price ability to remain competitive on price, range and
competitors and changes pressure across most service. This includes the development of our online
in market conditions of our markets. channels and multiple formats to allow us to compete
results in a loss in different markets.
of market share and No risk movement
failure to improve
profitability. * Our Executive Committee and operational management
regularly review markets, trading opportunities,
competitor strategy and activity.
* We engage in market scanning and competitor analysis
to refine our customer proposition.
--------------------------- ------------------------------------------------------------
Brand, reputation and trust
Failure to create We continue to implement
brand reappraisal a number of initiatives * Our Group policies, procedures and our Code of
opportunities to and activities aligned Business Conduct sets out detailed expectations and
improve quality, to our strategic behaviours around how we can make the right decisions
value and service priorities, thereby for our customers, colleagues, suppliers, communities
perceptions as well helping reappraise and investors.
as meet climate and the brand and continue
sustainability to build and maintain
expectations trust. * We listen to our customers and stakeholders as part
results in a negative of our communication and engagement programmes. We
impact on the trust No risk movement reflect these needs in our plans including building
which our stakeholders upon health, community, sourcing, climate and
place in our brand. sustainability initiatives as part of our LHP on
pages 21 to 23.
* We continue to maximise the value and impact of our
brand with the advice of specialist external agencies
and in-house marketing expertise.
* Our Corporate Responsibility Committee oversees all
corporate responsibility activities and initiatives,
including climate and sustainability programmes which
ensures alignment with customer priorities and our
brand strategy.
--------------------------- ------------------------------------------------------------
Technology
Failure of our IT There continues to
infrastructure or be a growing dependence * Our multi-year programme continues to enhance our
key IT systems results on technology throughout technology infrastructure and resilience
in a loss of information, the Group. We continue capabilities. This involves significant investment in
inability to operate to make improvements our hosting strategy, partnering with cloud providers
effectively, financial and invest in disaster and re-engineering some of our legacy retail systems,
or regulatory penalties, recovery and business while building redundancy for key business systems.
and negative impacts continuity measures
on our reputation. which are helping
Further, failure to limit exposure * Our new data centre facility provides greater
to build resilience to external threats. resiliency and oversight for our key systems.
at the time of investing
in and implementing No risk movement
new technology, results * Our technology security programme continues to
in potential loss enhance information security capabilities thereby
of operating capability. strengthening our infrastructure and information
technology general controls.
* We have combined governance processes covering both
technology disaster recovery and business continuity
to ensure alignment.
--------------------------- ------------------------------------------------------------
Data security and data privacy
Failure to comply As a retail organisation
with legal or regulatory we hold a large amount * We put our customers and colleagues at the heart of
requirements relating of customer and colleague all decisions we make in relation to the processing
to data security personal data, and of personal data. Our multi-year technology security
and data privacy the threat landscape programme is driving the enhancement of our data
in the course of has been ever growing. security capabilities.
our business activities, Since the introduction
results in reputational of General Data Protection
damage, fines or Regulation (GDPR) * We have an established team in our security
other adverse we have seen an increase operations centre to detect, report and respond to
consequences. in individuals' awareness security incidents.
This includes criminal levels, as well as
penalties and an increase in the
consequential financial penalties * We have a third-party supplier assurance programme
litigation which which can be levied focusing on third-party data security and privacy
may result in an by the data protection risks.
adverse impact on authorities.
our financial performance
or unfavourable effects No risk movement * We invest significantly across the Group to help us
on our ability to comply with the requirements of GDPR in Europe, and
do business. any other relevant legislation globally.
* We have a privacy compliance programme, which
includes assessment and monitoring of risk across our
global business.
* There is regular reporting on progress and results of
the security and privacy programmes to governance and
oversight committees.
* We recognise the importance of training and
communication to help prevent data security and
privacy-related incidents and have regular induction,
awareness and refresher courses for our colleagues.
* Our data privacy and protection policies clearly set
out how we can protect and appropriately restrict
customer, supplier and colleague data.
* Next generation behaviour-based anti-virus and
malware solutions, data and payment encryption and
threat detection tools help us reduce the likelihood
of being compromised.
--------------------------- ------------------------------------------------------------
Political, regulatory and compliance
Failure to comply Long-term changes
with legal and other in the global political * Wherever we operate, we aim to ensure that the impact
requirements as the environment, including of political and regulatory changes is incorporated
regulatory environment that in some markets in our strategic planning and policies.
becomes more restrictive, there is a push towards
due to changes in greater regulation
the global political of foreign ownership * We have compliance programmes and committees to
landscape, results of companies resulting manage our most important risks (e.g. anti-bribery
in fines, criminal in favouring of local and competition law).
penalties for Tesco companies.
or colleagues,
consequential No risk movement * Our compliance programmes ensure that controls are
litigation and an implemented to mitigate the risk and we conduct
adverse impact on assurance activities for each risk area.
our reputation, financial
results, and/or our
ability to do business. * Our Code of Business Conduct and various policies
(e.g. gifts and entertainment, conflicts of interest)
are supported by new starter and annual compliance
training and other tools such as our whistleblowing
hotline.
* The engagement of leadership and senior management is
critical to the successful management of this risk
area. Structured communication plans are established
to provide a clear tone, from the top, for our
colleagues.
--------------------------- ------------------------------------------------------------
Health and safety
Failure to meet safety This risk has increased
standards in relation primarily driven * We have a business-wide, risk-based safety framework
to our workplace, by a shift in the which defines how we implement and report on safety
results in death regulatory landscape controls to ensure that colleagues, contractors and
or injury to our which may lead to customers have a safe place to work and shop.
customers, colleagues an increase in penalties
or third parties and fines. Group-wide
and leads to adverse injury statistics * Each business is required to maintain a comprehensive
financial and reputational continue to improve risk register and a safety improvement plan to
consequences. alongside identifying document and track enhancements.
continuous improvement
opportunities to
further embed controls. * Governance and oversight is established in the form
of our Group Risk and Compliance Committee and
Risk increasing business unit-specific health and safety committees.
These committees review critical metrics and monitor
the effectiveness of related controls.
* Safety audits, whistleblowing arrangements and annual
colleague survey results, informs management on
delivery of targeted safety initiatives including
communication plans.
* Second and third line of defence assurance activities
such as store and distribution compliance reviews,
safety health checks and audits help us assess
compliance with established policies and processes
and continuously seek to identify areas of potential
improvement.
--------------------------- ------------------------------------------------------------
People
Failure to attract, Market competitiveness
retain and develop continues to affect * Our talent planning and people development processes
the required capability our ability to attract are established across the Group.
and continue to evolve and retain key specialist
our culture results talent. There is
in an impact on the a continued challenge * Talent and succession planning are regularly
delivery of our purpose from fast-changing discussed by line management and the Executive
and strategic drivers. and complex legislation. Committee with regular oversight by the Nominations
and Governance Committee and the Board.
No risk movement
* We have clear potential and performance criteria and
talent principles which are underpinned by our
employer value proposition and strategy.
* An independent assessment of all promotions and
external hires is conducted at leadership level to
ensure capability, potential, leadership and values.
* The Remuneration Committee agrees objectives and
remuneration arrangements for senior management.
* 'How to' and 'when to' speak up has been relaunched
across all areas and our protector line and complaint
process allows colleagues to confidentially raise any
workplace concerns e.g. dishonest activity or
something endangering colleagues, the public or the
environment.
* We have a Group Inclusion strategy to ensure we
provide equal opportunities for growth and
development to all our colleagues.
--------------------------- ------------------------------------------------------------
Responsible sourcing and supply chain
Failure to meet product Given the evolution
safety standards in external standards * We have product standards, policies and guidance
results in death, and expectations covering both food and non-food, as well as goods and
injury or illness we recognise the services not for resale, to help ensure that products
to customers. importance of sourcing are safe, legal and of the required quality.
Failure to ensure safe products in
that products are a responsible manner.
sourced responsibly We continue to monitor * Assurance, improvement and empowerment are our three
across our supply and improve our controls human rights pillars in place to appropriately
chain (including to ensure we have monitor conditions and progress, tackle endemic
fair pay for workers, a sustainable supply sector risks and address wider community needs.
adhering to human chain. Measures include policies and guidance to help to
rights, clean and ensure the rights of workers are respected and
safe working environments, No risk movement environmental impacts are managed responsibly. Refer
meeting climate change to pages 21 to 23 for specific actions highlighted
and sustainability under our LHP.
commitments) and
that all social and
environmental standards * Supplier audit and product analysis programmes are in
are met results in place to monitor product safety, traceability and
supply chain disruption, integrity, human rights and environmental standards,
regulatory breaches, including unannounced audits of supplier sites and
and reputational facilities.
impacts of not meeting
societal expectations.
* We run colleague training programmes on food and
product safety, responsible sourcing, hygiene
controls, and also provide support for stores. We
also provide targeted training for colleagues and
suppliers dealing with specific challenges such as
modern slavery.
* Crisis management procedures are embedded within
operations to quickly resolve issues if non-compliant
products are produced or sold with clear escalation
protocols.
* Our LHP pages 21 to 23 references the creation of a
fourth pillar, Planet, and the steps being
implemented to cover climate and sustainability.
--------------------------- ------------------------------------------------------------
Brexit
Failure to prepare The UK entered the
for the UK's future standstill transition * With the UK's future trading relationship with the EU
trading relationship period on 31 January (and others) still to be determined, we continue to
with the EU (whatever 2020 and uncertainty contribute to important public policy discussions and
form that may take) over the longer-term engage with government, regulatory bodies and
results in disruption trade issues could industry e.g. sharing of analysis and data, to aid
to and creates uncertainty remain until 31 December policy makers' understanding of food and product
around our business 2020 and potentially supply chains.
and our ability to beyond. The risk
supply our customers. of business disruption
Any disruption or and cost increases * We continue to assess and monitor the potential risks
uncertainty could therefore remain and impacts on our customers, colleagues and
have an adverse effect unchanged. shareholders, while taking appropriate mitigation
on our business, measures to address challenges including logistics,
financial results No risk movement resourcing and supply.
and operations.
* We have developed a detailed Brexit contingency plan
for any political and macroeconomic changes that
could have a material impact on our market and
customer proposition with clear oversight by our
senior leaders through the Brexit Governance Group.
--------------------------- ------------------------------------------------------------
Tesco Bank
Tesco Bank is exposed The Bank continues
to a number of risks, to actively manage * The Bank has a formal structure for reporting,
the most significant the risks to which monitoring and managing risks. This comprises, at its
of which are operational it is exposed. highest level, the Bank's risk appetite, approved by
risk, regulatory the Bank Board and supported by the risk management
risk, credit risk, No risk movement framework.
funding and liquidity
risk, market risk
and business risk. * The Tesco PLC Board also reviews and approves the
financial risk appetite. Risk appetite defines the
type and amount of risk that the Bank is prepared to
accept in order to meet its strategic objectives. It
forms a link between day-to-day risk management of
the business and its strategic priorities, long-term
plan, capital planning and stress testing. Adherence
to risk appetite is monitored monthly.
* The risk management framework brings together
governance, risk appetite, the three lines of defence
,
the policy framework and the risk management tools to
support the business in managing risk as part of
day-to-day activities.
* There is Bank Board risk reporting throughout the
year, with updates to the Tesco PLC Audit Committee
provided by the Bank's Chief Financial Officer, and
Audit Committee Chairman. A member of the Tesco PLC
Board is also a member of the Bank's Board to enhance
visibility and knowledge sharing.
--------------------------- ------------------------------------------------------------
COVID-19
The recent outbreak The COVID-19 outbreak
and global spread has become a global * The safety and wellbeing of our colleagues and
of the COVID-19 may pandemic moving from customers has been and continues to be our overriding
have a significant an emerging risk priority. Our Executive Committee are monitoring
and prolonged impact to becoming a principal events closely with regular Board oversight
on global economic risk for the business. evaluating the impacts and designing appropriate
conditions, disrupt response strategies.
our supply chain New risk
(including our supplier
base, specifically * The availability of cash resources and committed
regarding business facilities together with strong cash flow, support
closure and consolidation, Tesco's liquidity and longer-term viability.
labour shortage,
raw material supply
and potential cost * Our teams are working tirelessly to implement
inflation), increase specific actions to minimise disruption faced by our
employee absenteeism customers in these challenging times. Our business
and adversely impact continuity and crisis management plans have been
our operations. mobilised in all parts of the Group and additional
Governments and public measures have been implemented including increasing
bodies in affected our retail store colleague headcount (with
countries have introduced redeployment of colleagues where possible), securing
temporary emergency additional supply chain capacity to meet changes in
public measures such demand (including measures to prevent customer
as travel bans, stockpiling), implementing changes to stores
quarantines (including hours, additional security, hygiene and
and public lockdowns social distancing measures), and extending support to
(also impacting our colleagues and customers at increased risk.
mall operations).
Should these continue
for an extended period
of time, they would
increase pressure
on our supply chain
and operations (including
Tesco Bank due to
an economic downturn).
--------------------------- ------------------------------------------------------------
Indicates that the principal risk has been included as part of
the longer-term viability scenarios as detailed on page 19.
Internal control.
The key elements of the Group's internal control framework are
monitored throughout the year and the Audit Committee has conducted
a review of the effectiveness of the Group's risk management and
internal control systems on behalf of the Board. To support the
Board's annual assessment, Group Audit and Advisory prepared a
report on the Group's principal risks and internal controls. This
describes the risk management systems and key internal controls, as
well as the work conducted in the year to improve the risk and
control environment including the level of assurance undertaken.
The internal control framework is intended to effectively manage
rather than eliminate the risk of failure to achieve business
objectives. It can only provide reasonable, but not absolute,
assurance against the risk of material misstatement or financial
loss.
Statement of Directors' responsibilities
In compliance with DTR 4.1.12R, the Annual Report and Financial
Statements 2020 contains a Directors' responsibility statement.
This is reproduced below, in line with DTR 6.3.5R. The statement
relates to and is extracted from the Annual Report and Financial
Statements 2020 and does not attach to the extracted information
presented in this announcement or the preliminary results
announcement released on 8 April 2020.
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union and Article 4 of the International
Accounting Standard (IAS) Regulation and have also chosen to
prepare the Parent Company financial statements in accordance with
Financial Reporting Standard (FRS) 101 Reduced Disclosure
Framework. Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and of
the profit or loss of the Company for that period.
In preparing the Parent Company financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether FRS 101 Reduced Disclosure Framework has been
followed, subject to any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
In preparing the Parent Company financial statements, the
Directors are required to:
-- properly select and apply accounting policies;
-- 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 IFRSs are insufficient to enable users to
understand the impact of particular transactions, other events and
conditions on the entity's financial position and financial
performance; and
-- make an assessment of the Company's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities. The Directors are responsible
for the maintenance and integrity of the corporate and financial
information included on the Company's website. Legislation in the
United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions. Each of the Directors, whose names and functions are
set out on pages 27 to 30, confirm that, to the best of their
knowledge:
-- the financial statements, prepared in accordance with the
relevant financial reporting framework, 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
taken as a whole;
-- the strategic report 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; and
-- the Annual Report and Financial Statements, taken as a whole,
are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's position and
performance, business model and strategy.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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