TIDMBAB
RNS Number : 9915H
Babcock International Group PLC
13 June 2017
Babcock International Group PLC ('the Company') - Annual Report
and AGM Documents
Copies of each of the following documents have today been posted
or otherwise made available to shareholders and copies have been
submitted to the National Storage Mechanism and will shortly be
available for inspection at: www.morningstar.co.uk/uk/NSM.:-
1. Annual Report and Accounts for the year ended 31 March 2017
2. Notice of Annual General Meeting to be held on 13 July 2017
3. Form of Proxy
Copies of the above documents (excluding the Form of Proxy) are
also available on Babcock International Group PLC's website,
www.babcockinternational.com.
Jack Borrett
Group Company Secretary and General Counsel
Babcock International Group PLC
13 June 2017
Compliance with Disclosure and Transparency Rule 6.3.5 ("DTR
6.3.5") - Extract from the 2017 Annual Report and Accounts
The information set out below is extracted from the Company's
Annual Report and Accounts 2017 (page references are to pages in
the Annual Report) and should be read in conjunction with the
Company's Full Year Results 2017 announcement issued on 24 May
2017. Both documents can be found at www.babcockinternational.com
and together constitute the material required by DTR 6.3.5 to be
communicated to the media in unedited full text through a
Regulatory Information Service. This material is not a substitute
for reading the Company's Annual Report 2017 in full.
Principal risks and management controls
The following report is extracted from pages 68 to 79 of the
Annual Report and Accounts.
Our principal risks and how we manage them
Babcock has an established formal process that aims to identify
and evaluate risks and how they are to be managed. A range of
internal control processes is in place as part of the risk
management regime. The Board, principally through the Audit and
Risk Committee, keeps under review the risks facing the Group,
including the appropriateness of the level of risk the Group may
accept in order to achieve its strategic objectives. The Board
ensures that it controls the risk appetite of the Group through its
delegated authorities, which impose strict controls on the Group -
for example, all acquisitions and disposals, all material capital
expenditure, all material non--ordinary course tenders (material
ordinary course tenders are approved by the Chief Executive and the
Group Finance Director) and all financing arrangements (unless
delegated to the Board's Finance Committee) must be approved by the
Board. The Board considers and reviews the controls and mitigation
plans in place; these are intended to manage and reduce the
potential impact of the risks the Company takes to ensure, so far
as possible, that the assets and reputation of the Group are
protected.
The Group's risk management and internal control systems can,
however, only seek to manage, not eliminate, the risk of failure to
achieve business objectives, as any system can only provide
reasonable, not absolute, assurance against material misstatement
or loss.
Principal risks, risk mitigation and controls
The risks and uncertainties described below through to page 79
are those that the Board currently considers to be of greatest
significance to Babcock in that they have the potential to affect
materially and adversely Babcock's business, the delivery of its
strategy and/or its financial results, condition or prospects. For
each risk there is a short description of the Company's view of the
possible impact of the risk on the Group should it occur, and the
mitigation and control processes in place to manage the risk (which
should be read in conjunction with the information above about our
risk management approach and general controls).
Babcock is, however, a large and developing group of businesses,
and factual circumstances, business and operating environments will
change with new risks being identified or the evaluation of the
significance of existing risks changing or being better appreciated
and understood. This means that the risks identified below are not
and cannot be an exhaustive list of all principal risks that could
affect the Group.
Risks and uncertainties which might affect businesses in general
and that are not specific to the Group are not included, but
Babcock, of course, faces such risks as well.
Our customer profile
We rely heavily on winning and retaining large contracts with a
relatively limited number of major customers, whether in the UK or
overseas. Many of our major customers are (directly or indirectly)
owned or controlled by government (national or local) and/or are
(wholly or partly) publicly funded. Our single biggest customer is
currently the UK Ministry of Defence (MOD). These customers are
affected by political and public spending decisions. Commercial
customers are also affected by conditions in their market sector
which affect their levels of, and priorities for, spending.
Risk Description
Policy changes (following a change of political administration
or otherwise) and spending constraints on customers are material
factors for the Group's business and outlook.
Whilst the Board believes that policy changes, spending reviews
and restraints can offer significant opportunities to the Group to
assist in the delivery of services to customers more efficiently
and at lower cost, these factors inevitably also carry risk.
Large customers, whether public or private sector, have
significant bargaining power and the ability (contractual or
otherwise) to cancel contracts without, or on short, notice, often
without cause, or they can exert pressure to renegotiate them in
their favour.
The consequences for the Group's business of the UK vote to
leave the European Union are difficult to predict, as there is
likely to be a period of uncertainty over the effects on the
nature, timing and scope of the policies and procurement plans of
both our current and potential customers in the UK and
overseas.
Potential impact
Periods of uncertainty as to the course of customer policy and
spending can result in the delay, suspension or withdrawal of
tendering processes and the award of contracts.
Whilst customer policy changes or spending constraints can
potentially offer more outsourcing opportunities for us to pursue,
they can also be a risk in that they could lead to changes in
customer outsourcing strategy and spend, which could include:
-- reductions in the number, frequency, size, scope,
profitability and/or duration of future contract opportunities;
-- in the case of existing contracts, early termination,
non-extension or non-renewal or lower contract spend than
anticipated and pressure to renegotiate contract terms in the
customer's favour;
-- favouring the retention or return of in-house service
provision, either generally or in the sectors in which
we operate;
-- favouring of small or medium-sized suppliers or adopting a
more transactional rather than cooperative, partnering approach to
customer/supplier relationships; and
-- imposing new or extra eligibility requirements as a condition
of doing business with the customer that we may not be able readily
to comply with or that might involve significant extra costs,
thereby impacting the profitability of doing business with
them.
Mitigation
We have extensive and regular dialogue with key customers,
involving, as appropriate, our Chief Executive, sector Chief
Executives and/or other members of the senior management team.
We actively monitor actual and potential political and other
developments and spending constraints that might affect our
customers' demand for our services.
We aim to be innovative and responsive in helping customers meet
their needs and challenges.
The nature of our contracts, bid processes and markets
We seek to win relatively long-term contracts for the provision
of complex and integrated services to our customers. Bidding for
these contracts typically involves a protracted and detailed
tendering process, often under public procurement rules. There are
typically only a relatively limited number of customers in each of
the market sectors we serve. The contracts we bid for often entail
a substantial transfer of risk from the customer to the
supplier.
Failure to realise the pipeline of opportunities and to secure
rebids can mean missed opportunities for growth and loss of
revenue.
Risk Description
Bidding requires a substantial investment in terms of manpower
resource and is very expensive. Bids can be subject to
cancellation, delays or changes in scope.
Contract award decisions made under public procurement rules can
be subject to legal challenge by losing bidders.
Given the size and often long-term nature of the contracts we
bid for and the relatively limited numbers of customers in the
markets we serve, significant contracting opportunities tend not to
arise on a regular or frequent basis.
When we are bidding for such contracts we have to price for the
long term and for risk transfer, and the scope for later price
adjustment may be limited or not exist.
Our contracts typically impose strict performance conditions and
use key performance indicators (KPI) that if not complied with
trigger compensation for the customer and/or may result in loss of
the contract.
Bid and rebid success rates determine how much of the pipeline
of opportunities is realised and turned into profitable business
and how much existing business is retained.
Potential Impact
If we lose a bid or a bid process is aborted by the customer or
we withdraw due to scope changes as it progresses, this is a
significant waste of limited resource and substantial expenditure
that has to be written off.
If we win a public procurement bid and this is challenged, this
could lead to delay in contract award, expensive legal proceedings
or the competition having to be re-run.
Not winning a new bid can be a significant missed opportunity
for growth which may not soon be replaced by another.
Not winning rebids could mean the loss of significant existing
revenue and profit streams.
If we underestimate or under-price actual risk exposure or the
cost of performance, this could significantly and adversely affect
our future profitability, cash generation and growth.
Compensation to the customer for poor KPI performance, could
significantly impair profitability under the contract and damages
following termination could be substantial.
Unsuccessful bids or rebids may adversely impact the strategic
development and growth plans of the Group.
A lack of success in exporting the Group's business model
outside the UK and its current core markets could adversely impact
the growth prospects and strategic development of the Group.
Mitigation
We have a clear business strategy to target a large bid
pipeline, both in the UK and internationally, and will only tender
bids for contracts we consider have a clear alignment with the
Group strategy and where we believe we stand a realistic chance of
success, both in the UK and overseas.
There are formal and rigorous reviews and gating processes.
These at key stages of each material bid are intended to reduce the
risk of underestimating risks and costs and ensure that limited bid
resources are targeted at opportunities where we consider that we
have the best prospects of winning or retaining business.
Group policies and procedures set a commercial, financial and
legal framework for all bids.
Contractual performance is continuously under review (at a
business unit, sector and/or senior Group executive level as
appropriate) with a view to highlighting at an early stage risks to
delivery and profitability.
Reputation
Given the nature of our customers and the markets in which we
operate, our reputation is a fundamental business asset. Our
businesses include activities that have a high public profile
and/or if they were to involve adverse incidents or accidents, they
could attract a high level of publicity.
Risk Description
We have a relatively limited number of customers and potential
customers in our market sectors and they typically have high public
profiles.
We are involved in the direct delivery to the public on behalf
of our customers of high-profile and sensitive services. We also
provide services which are critical to our customers' ability to
discharge their own public responsibilities or delivery critical
services to their customers.
Failings or misconduct (perceived or real) in dealing with a
customer or in providing services to them or on their behalf could
substantially damage our reputation with that customer or more
generally. The same would be true of high-profile incidents or
accidents.
Attitudes to the outsourcing of services generally or in a
particular sector can also be adversely affected by the poor
performance or behaviour of other service providers or incidents in
which we are not involved.
As well as our reputation for service delivery, our ethical
reputation is key.
Potential Impact
Given our dependence on individual major customers and the
relatively narrow customer base in the markets in which we
currently operate, loss of our reputation (whether justified or
not) with a major customer or more generally could put at risk
substantial existing business streams and the prospect of securing
future business from that or other customers in that or other
sectors.
Non-compliance with anti-bribery and corruption laws could
result in debarment from bidding as well as criminal penalties.
Mitigation
Senior management at Group and sector level are keenly aware of
reputational risks, which can come from many sources. Our risk
control procedures relating to contract performance, anti-bribery
and corruption, health and safety performance and other matters
that could impact our reputation are described elsewhere on pages
58 to 67. (See also health, safety and environmental risks on page
75).
Regulatory and compliance burden
Our major businesses are dependent on being able to comply with
applicable customer or industry-specific requirements or
regulations. Following the UK vote to leave the European Union, the
terms of British exit will have implications on the requirements or
regulations that are applicable to the business of the Group,
including where a licence to operate in the European Union is
required.
Risk Description
The cost of compliance can be high.
Requirements can change.
Compliance with some regulatory requirements is a precondition
for being able to carry on a business activity at all.
For example:
-- Our Mission Critical Services business is subject to a high
degree of regulation relating to aircraft airworthiness and
certification and also to ownership and control requirements (for
example, European air operators must be majority-owned and
controlled by European Economic Area nationals - see page 137 for
more information).
-- Our civil and defence-related nuclear businesses operate in a
highly regulated environment. For example, as part of Brexit, the
UK may leave the Euratom treaty and it is unclear what agreements
will replace the existing arrangements and what the impact of those
new agreements will be.
Potential Impact
Failure to maintain compliance with applicable requirements
could result in the loss of substantial business streams (and
possible damages claims) and opportunities for future business.
A change in requirements could entail substantial expenditure
which may not be recoverable (either fully or at all) under
customer contracts.
Mitigation
We seek to maintain a clear understanding of ongoing regulatory
requirements and to maintain good working relationships with
regulators.
We have suitably qualified and experienced employees and/or
expert external advisers to advise and assist on regulatory
compliance.
We have management systems involving competent personnel with
clear accountabilities for operational regulatory compliance.
Our Articles of Association empower us to take steps to protect
our European air operating licences, if necessary, by controlling
the level and/or limiting the rights of non-European Economic Area
owners of our shares (see pages 137 to 138 for more information).
However we will be taking steps to structure our Mission Critical
Services business such that it continues to satisfy the
requirements of the relevant regulation.
Health, safety and environmental
Some of our operations entail the potential risk of significant
harm to people, property or the environment.
Risk Description
Many of our businesses involve working in potentially hazardous
operations or environments, which need to be properly managed and
controlled to minimise the risk of injury or damage.
Some, for example the mission critical operations of our
helicopter services, involve an inherent degree of risk that is
compounded by the nature of the services provided (offshore oil and
gas crew change services, firefighting, search and rescue, air
ambulance and emergency services) or the environments in which they
operate (low-altitude flying in adverse weather, terrains or
operational conditions).
Potential Impact
Serious accidents can have a major impact on the lives of those
directly involved and on their families, friends, colleagues and
community, as can serious environmental incidents.
To the extent that we have caused or contributed to an incident
as a result of failings on our part, or because as a matter of law
we would be strictly liable without fault, the Group could be
exposed to substantial damages claims, not all of which exposure
may be insured against, and also to criminal proceedings which
could result in substantial penalties.
Such incidents (which may have a high public profile given the
nature of our operations) may also seriously and adversely affect
the reputation of the Group or its brand (whether that would be
justified or not), which could lead to a significant loss of
business or future business opportunities.
Mitigation
Health, safety and environmental performance receives close and
continuous attention and oversight from the senior management
team.
We have specific health, safety and environmental governance
structures in place and extensive and ongoing education and
training programmes for staff.
The Board receives half-yearly reviews of health and safety and
environmental performance and the management reports tabled at each
of its meetings also address health, safety and environmental
issues on an ongoing basis.
We believe we have appropriate insurance cover against civil
liability exposures.
Nuclear risks: we believe having regard to the statutory regime
for nuclear liability in the UK, the terms on which we do nuclear
engineering business and the terms of indemnities given to us by
the UK Nuclear Decommissioning Authority and the UK MOD in respect
of the nuclear site licensee companies in which we are interested
that the Group would have adequate protection against risk of
liability for injury or damage caused by nuclear contamination or
incidents, but a reputational risk as a result of any serious
incident would remain.
People
Our business delivery and future growth depend on our ability
adequately and successfully to plan for management succession and
for our continuing and future need to recruit, develop and retain
experienced senior managers, business development teams and highly
skilled employees (such as suitably qualified and experienced
engineers, technicians, pilots and other specialist skills
groups).
Risk Description
Competition for the skilled and experienced personnel we need is
intense and they are likely to remain in limited supply for the
foreseeable future. This poses risks in both recruiting and
retaining such staff.
Potential Impact
Losing experienced senior managers for any reason without plans
for their replacement could have a material adverse effect on the
prospects for, or performance of, the Group and the delivery of our
strategy.
If we have insufficient experienced business development or
bidding personnel, this could impair our ability to achieve
strategic aims and financial targets or to pursue business in new
areas.
If we have insufficient qualified and experienced employees,
this could impair our service delivery to customers or our ability
to pursue new business, with consequent risks to our financial
results, growth, strategy and reputation and the risk of contract
claims.
The cost of recruiting or retaining the suitably qualified and
experienced employees we need might increase significantly
depending on market conditions, and this could impact our contract
profitability.
Mitigation
We give a high priority and devote significant resources to
recruiting skilled professionals, training and development,
succession planning and talent management.
The Board, the Nominations Committee and the Group Executive
Committee regularly receive reports on and/or discuss these
matters.
Apprentice and graduate recruitment programmes are run in all
sectors.
Further information about this subject and how we address it is
on pages 63 to 65 of this Annual Report.
Pensions
The Group has significant defined benefit pension schemes. These
provide for a specified level of pension benefits to scheme
members, the cost of which is met from both member and employer
contributions paid into pension scheme funds and the investment
returns made in those funds over time.
Risk Description
The level of our contributions is based on various assumptions,
which are subject to change, such as life expectancy of members,
investment returns, inflation, etc. Based on the assumptions used
at any time, there is always a risk of a significant shortfall in
the schemes' assets below the calculated cost of the pension
obligations.
When accounting for our defined benefit schemes, we have to use
corporate bond-related discount rates to value the pension
liabilities. Variations in bond yields and inflationary
expectations can materially affect the pensions charge in our
income statement from year to year as well as the value of the net
difference between the pension assets and liabilities shown on our
balance sheet.
Potential Impact
Should the assets in the pension schemes be judged insufficient
to meet pension liabilities, we may be required to make increased
contributions and/or lump sum cash payments into the schemes. This
may reduce the cash available to meet the Group's other obligations
or business needs, and may restrict the future growth of the
business.
Accounting standards for pension liabilities can lead to
significant accounting volatility from year to year due to the need
to take account of macro-economic circumstances beyond the control
of the Company.
There is a risk that future accounting, regulatory and
legislative changes may also adversely impact pension valuations
and costs for the Group.
Mitigation
Continuous strategic monitoring and evaluation is undertaken by
Group senior management of the assets and liabilities of the
pension scheme and, as appropriate, the execution of mitigation
opportunities.
The Company and the scheme trustees have agreed a long-term
investment strategy and risk framework intended to reduce the
impact of the schemes' exposure to changes in inflation and
interest rates.
Longevity swaps have been used to reduce the impact of the
schemes' exposure to increasing life expectancy.
IT and security
Our ability to deliver secure IT and other information assurance
systems to maintain the confidentiality of sensitive information is
a key factor for our customers.
During the coming year the Group expects to continue rolling out
a new Enterprise Resource Planning (ERP) application for our 'back
office' operations which also provides some front end
functionality.
Risk Description
Despite controls designed to protect such information, there can
be no guarantee that security measures will be sufficient to
prevent all risk of security breaches or cyber-attacks being
successful in their attempts to penetrate our network security and
misappropriate confidential information. The risk of loss of
information or data by other means is also a risk that cannot be
entirely eliminated.
Installing major new IT systems carries the risk of key system
failures and disruption.
Potential Impact
A breach or compromise of IT system security or physical
security at a physical site could lead to loss of reputation, loss
of business advantage, disruptions in business operations and
inability to meet contractual obligations. This could have an
adverse effect on the Group's ability to win future contracts and,
consequently, on our results of operations and overall financial
condition.
Failure adequately to plan and resource the implementation of
the new ERP systems or difficulties experienced in doing so could
cause both trading and financial reporting difficulties that could
be material.
Mitigation
We have made and will continue to make significant investment in
enhancing IT security and security awareness generally.
We have formal security and information assurance governance
structures in place to oversee and manage cyber-security and
similar risks.
The Board receives reports at least quarterly on security and
information assurance matters.
The ERP implementation project is overseen and closely monitored
by steering and working groups, is regularly reported on to the
Group Executive Committee and will be implemented in a phased
approach (with parallel running of old and new systems for a
period) to what we believe is a realistic timetable.
Currency exchange rates
As we expand outside the UK, our financial results are
increasingly exposed to the impact of currency exchange rates.
Risk Description
We prepare our consolidated results in Sterling and translate
the value of assets, liabilities and turnover reported or accounted
for in non-Sterling currencies.
Exchange rate movements can therefore affect the Sterling
financial statements and results of the Group.
Expenses or commitments may be incurred in a currency that is
different from the related turnover or income needed to discharge
them.
Non-Sterling currencies to which we are currently most exposed
are the Euro and South African Rand.
Potential Impact
If the currencies in which our non-UK business is conducted are
weak or weaken against the value of Sterling, this will adversely
affect our reported results and the value of any dividend income
received by the Company from non-UK operations. If the cost of an
operation or a contractual commitment is denominated or incurred in
a currency different from the currency of the income received from
that operation or that is being relied on to discharge that
commitment, movements in exchange rates can reduce the
profitability of the operation and increase the effective cost of
discharging the commitment.
Mitigation
We seek to mitigate exposure to movements in exchange rates in
respect of material foreign currency denominated transactions (for
example, through use of derivative instruments).
Although we do not use these to hedge against the currency
effect of translating for our financial statements the net assets
and income of non-UK subsidiaries and long-term equity accounted
investments, we maintain foreign currency borrowings to limit, in
part, the net foreign currency exposure.
Acquisitions
The Group has grown and expects to continue to grow by making
acquisitions as well as organically.
Risk Description
The financial benefits of acquisitions may not be realised as
quickly and as efficiently as expected.
Potential Impact
Failure to realise the anticipated benefits of an acquisition,
or delay or higher than expected costs in so doing, could adversely
affect the strategic development, business, financial condition,
results of operations or prospects of the Group.
The diversion of management attention to unexpected difficulties
encountered with acquisitions could adversely affect the Group's
business.
Post-acquisition performance of the acquired business may not
meet the financial performance expected at the time the acquisition
terms were agreed and could fail to justify the price paid, which
could adversely affect the Group's future results and financial
position.
Mitigation
Full financial and other due diligence is conducted as far as
may reasonably be achievable in the context of each acquisition and
a detailed business case, with forward looking projections, is
submitted to the Board in respect of each acquisition. Integration
risk is considered at an early stage as part of the review of
acquisition opportunities and detailed integration planning takes
place before completion of the acquisition.
We believe we have a good track record in, and experience of,
integrating acquisitions, both large and small.
The following extract from the Annual Report and Accounts is
Note 34 on pages 195 and 196.
Related party transactions
(a) The following related parties either sell to or receive
services from the Group. Loans to joint ventures and associates are
detailed in note 13.
2017 2017
Year Year
2017 2017 end end
Revenue Purchases debtor creditor
to from balance balance
GBPm GBPm GBPm GBPm
------------------------------------ -------- ---------- -------- ---------
Joint ventures and associates
Holdfast Training Services Limited 73.9 (0.1) 7.3 (0.1)
ABC Electrification Limited 28.2 - 3.2 -
First Swietelsky Operation and
Maintenance 10.6 - 2.2 (1.5)
FSP (2004) Limited - (0.6) - -
Ascent Flight Training (Management)
Limited 1.9 - - -
Ascent Flight Training Holdings
Limited 0.7 - - -
Advanced Jet Training Limited 1.8 - 0.1 -
Rear Crew Training Limited 2.9 - 0.5 -
AirTanker Services Limited 8.9 - 0.5 -
ALC (Superholdco) Limited 2.2 - - -
Naval Ship Management (Australia)
Pty Limited 3.8 - 0.4 -
Cura Classis (UK) Limited 5.3 - - -
Cura Classis (US) LLC 5.6 - - -
Cura Classis Canada (Hold Co)
Inc. 11.3 - - -
Cavendish Dounreay Partnership
Limited 4.3 (0.1) 0.3 -
Cavendish Fluor Partnership
Limited 22.1 (0.1) 2.3 -
Cavendish Boccard Nuclear Limited 1.4 - 0.4 -
------------------------------------ -------- ---------- -------- ---------
184.9 (0.9) 17.2 (1.6)
------------------------------------ -------- ---------- -------- ---------
All transactions noted above arise in the normal course of
business.
(b) Defined benefit pension schemes.
Please refer to note 24 for transactions with the Group defined
benefit pension schemes.
(c) Key management compensation is shown in note 6 and in the
Remuneration report.
(d) Transactions in employee benefits trusts are shown in note
22.
(a) The following related parties either sell to or receive
services from the Group. Loans to joint ventures and associates are
detailed in note 13.
2016 2016
Year Year
2016 2016 end end
Revenue Purchases debtor creditor
to from balance balance
GBPm GBPm GBPm GBPm
------------------------------------ -------- ---------- -------- ---------
Joint ventures and associates
Debut Services (South West)
Limited 11.4 - - -
Holdfast Training Services Limited 69.7 (0.1) 7.5 -
ABC Electrification Limited 25.0 - 2.2 -
First Swietelsky Operation and
Maintenance 11.1 - 1.9 (2.2)
FSP (2004) Limited - (0.6) - -
Ascent Flight Training (Management)
Limited 0.9 - 0.4 -
Ascent Flight Training Holdings
Limited 1.1 - - -
Advanced Jet Training Limited 1.6 - 0.2 -
Rear Crew Training Limited 0.8 - 0.1 -
Airtanker Services Limited 8.1 - 1.1 -
ALC (Superholdco) Limited 2.3 - 0.5 -
Naval Ship Management (Australia)
Pty Limited 2.5 - 0.2 -
Cura Classis (UK) Limited 5.7 - (0.4) -
Cura Classis (US) LLC 5.2 - - -
Cura Classis Canada (Hold Co)
Inc. 11.9 - 0.3 -
Cavendish Dounreay Partnership
Limited 0.2 - - -
Cavendish Fluor Partnership
Limited 24.5 (0.3) 3.2 -
Cavendish Boccard Nuclear Limited 2.0 - 0.2 -
------------------------------------ -------- ---------- -------- ---------
184.0 (1.0) 17.4 (2.2)
------------------------------------ -------- ---------- -------- ---------
All transactions noted above arise in the normal course of
business.
(b) Defined benefit pension schemes.
Please refer to note 24 for transactions with the Group defined
benefit pension schemes.
(c) Key management compensation is shown in note 6.
(d) Transactions in employee benefits trusts are shown in note
22.
Directors' responsibility statement
The following statement is extracted from pages 140 and 141 of
the Annual Report and Accounts.
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the Directors
have prepared the group financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union and the company financial statements in
accordance with UK Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 101 "Reduced
Disclosure Framework", and applicable law). 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 Group and the Company and of the profit or loss of
the Group and Company for that period. In preparing the financial
statements the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable IFRS as adopted by the European
Union have been followed for the group financial statements and
United Kingdom Accounting Standards, comprising FRS 101, have been
followed for the company financial statements, subject to any
material departures disclosed and explained in the financial
statements;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis,
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and the Company, and
enable them to ensure that the Group's financial statements and the
Directors' Remuneration report comply with the Companies Act 2006
and, as regards the Group financial statements, Article 4 of the
IAS Regulation.
The Directors are also responsible for safeguarding the assets
of the Group and the Company, and hence for taking reasonable steps
for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the Company's website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
The Directors consider that the annual report and accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group and
Company's performance, business model and strategy.
Each of the Directors, whose names and functions are listed in
the Directors' report confirm that, to the best of their
knowledge:
-- the company financial statements, which have been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 101
"Reduced Disclosure Framework", and applicable law), give a true
and fair view of the assets, liabilities, financial position and
profit of the Company;
-- the group financial statements, which have been prepared in
accordance with IFRSs as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
profit of the Group; and
-- the Directors' report includes a fair review of the
development and performance of the business and the position of the
Group and Company, together with a description of the principal
risks and uncertainties that it faces.
In the case of each Director in office at the date the
Directors' report is approved:
-- so far as the director is aware, there is no relevant audit
information of which the Group and Company's auditors are unaware;
and
-- they have taken all the steps that they ought to have taken
as a Director in order to make themselves aware of any relevant
audit information and to establish that the Group and Company's
auditors are aware of that information.
Each of the Directors listed below (being the Board of Directors
at the date of this Annual Report and these financial statements)
confirms that to the best of his or her knowledge:
-- the Group financial statements (set out on pages 150 to 202)
which have been prepared in accordance with IFRS as adopted by the
EU, give a true and fair view of the assets, liabilities, financial
position and profit of the Group taken as a whole; and the
Strategic report and Directors' report contained on pages 1 to 141
include a fair review of the development and performance of the
business and the position of the Group, together with a description
of the principal risks and uncertainties that it faces.
In addition, each of the Directors listed below considers that
the Annual Report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company's position, performance,
business model and strategy.
Mike Turner Chairman
Archie Bethel Chief Executive
Franco Martinelli Group Finance Director
Bill Tame Chief Executive, Global Growth and Operations
John Davies Chief Executive, Land
Sir David Omand Non-Executive Director
Ian Duncan Non-Executive Director
Anna Stewart Non-Executive Director
Jeff Randall Non-Executive Director
Myles Lee Non-Executive Director
Prof. Victoire de Margerie Non-Executive Director
This information is provided by RNS
The company news service from the London Stock Exchange
END
NOAOKNDKABKDNAD
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June 13, 2017 12:08 ET (16:08 GMT)
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