This year's AGM will, as last year, include a detailed presentation by the Chief Executive on the current progress of the business and the opportunity for follow up questions on this or any of the resolutions before the meeting. Voting on all of the resolutions will be by poll, allowing all shareholder votes cast, whether by proxy or by people present at the meeting, to be taken into account. After the meeting, shareholders will have the opportunity to talk informally to the Board and Company staff and raise any further questions or issues they may have. The outcome of the poll vote and a copy of the AGM presentation will be posted on the Company website after the meeting.
The Company has complied throughout 2009/10 with the provisions of the Combined Code on Corporate Governance except in the following respects:
A.2.1. Although there has always been a clear and effective division of responsibilities between the Chairman and the Chief Executive in line with their respective roles of running the Board and the business, the Board has not felt it necessary to document these separate responsibilities in writing.
B.2.2. The remuneration of the Chairman is determined by the Board based on the recommendation of the Remuneration Committee. This allows the views of the executive as well as the non-executive directors to be taken into account.
The Board has overall responsibility for the Company's systems of internal control and risk management and for reviewing their effectiveness. The Audit and Risk Committee provides oversight and independent challenge in relation to internal control and risk management systems.
The directors and senior managers of the Group are committed to maintaining high standards of control and a risk aware culture to safeguard the Company's assets, reputation and franchise. The Company's activities are subject to high levels of regulatory oversight in many jurisdictions and significant resources are allocated to compliance.
The Board's role includes:
A fuller description of the Company's risk management processes, together with details of the principal risks faced, is given in the 'Risk Management' section of this Annual Report. These processes have been in place throughout the year and up to the date of this Annual Report and have been regularly reviewed by the Board.
The Company's systems of internal control aim to safeguard assets, maintain proper accounting records and provide assurance that the financial information used in the business and published externally is robust and reliable. The systems are designed to manage key risks rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss. The systems comply with the guidance given in ‘Internal Control: Revised Guidance for Directors on the Combined Code' (the 2005 Turnbull guidance).
Financial reporting controls
The financial reporting control system operating across the Company requires certification of the key controls over the financial reporting processes and certification of material income statement and balance sheet accounts. The system focuses on the financial reporting process over the most material financial statement line items and is designed to maintain proper accounting records and provide assurance that financial information used within the business and for publication is reliable.
Review of controls
The Board receives reports from the Risk Assurance Committee, Finance Committee and line management on the risks to the achievement of the Group's operational and financial objectives, together with assurance that the level of risk sustained is consistent with and being managed in accordance with the Company's risk appetite. Objective assurance on the operation and effectiveness of internal controls is provided by Internal Audit whose audit programme is targeted on the review and investigation of key risk controls. Further objective assurance on the effectiveness of risk controls is provided by other functions, including Group Risk, Legal and Compliance.
In addition to its ongoing monitoring of risk controls, the Board has conducted a specific year end review of the effectiveness of the Group's system of internal control and risk management during the year and for the period up to the date of this Annual Report. This review covered all controls – operational, financial and compliance – and risk management systems. No significant weaknesses or material failings in the system of internal controls were identified in this review. Management does, however, have an ongoing process for identifying, evaluating and managing significant risks faced by the Group and continually takes actions to improve internal controls as a result of its own initiatives and in response to reports from Internal Audit and other internal and external reviews.
Financial reporting and going concern
The directors are responsible for preparing the Annual Report and the Group financial statements in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. Explanations of the directors' responsibilities for preparing the financial statements and the auditors' responsibility for reporting on those statements are given here and here respectively.
The Group has considerable financial resources and as a consequence the directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook. The Group's business activities, together with factors likely to affect its future development, performance and position are set out in the Business Review. The Group's capital position is discussed here and its liquidity position in Note 13 to the financial statements. After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Jon Aisbitt
Chairman
Rachel Rowson
Company Secretary
