Annual Report 2020 and Notice of Meeting 2020

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: [phone]

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 Brexit) and macroeconomic conditions impact our customers' budgets and force customers to reappraise the concepts of value and loyalty in a way in which we are unable to respond.	There is continued volatility and uncertainty with the need for customer reassurance on both value and quality; however we feel that we have the right strategy and processes in place to monitor this risk. No risk movement	· We have a value, price, promotions and Clubcard strategy that drives our business priorities with governance and oversight mechanisms. · We have a consistent approach to building impactful customer propositions, offering high-quality and competitive value while improving the customer experience. · 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 our transformation objectives due to poor prioritisation, ineffective change management and a failure to understand and deliver the technology required, results in an inability to progress sufficiently quickly to maintain or increase operating margin and generate sufficient cash to meet business objectives.	The risk has decreased driven by on-going delivery of key programmes to meet our transformation objectives. Risk decreasing	· We have clear market strategies and business plans to address changes to business priorities, strategic objectives and external market factors. · We have executive-level governance and oversight for all the transformation activities to ensure programmes are adequately resourced, milestones achieved and to approve key rollout decisions. · Real-time independent assurance activities are conducted over the transformation programme.
Liquidity †
Failure of our business performance to deliver cash as expected; access to funding markets or facilities being restricted; failures in operational liquidity and currency risk management; Tesco Bank cash call; or adverse changes to the pension deficit funding requirement; create calls on cash higher than anticipated, leading to impacts on financial performance, cash liquidity or the ability to continue to fund operations.	The risk has decreased driven by a reduction in our debt levels and improving credit rating and debt metrics. Risk decreasing	· We maintain an infrastructure of systems, policies and reports to ensure discipline and oversight on liquidity matters, including specific treasury and debt-related issues. · Our treasury policies are communicated across the Group and are regularly reviewed by the Board, Executive Committee and management. · The Group's funding strategy is approved annually by the Board and includes maintaining appropriate levels of working capital, undrawn committed facilities and access to the capital markets. · The Audit Committee reviews and annually approves the 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 an effective, coherent and consistent strategy to respond to our competitors and changes in market conditions results in a loss of market share and failure to improve profitability.	We continue to face the ongoing challenge of a changing competitive landscape and price pressure across most of our markets. No risk movement	· Our Board develops and regularly challenges the strategic direction of our business to enhance our ability to remain competitive on price, range and service. This includes the development of our online channels and multiple formats to allow us to compete in different markets. · 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 brand reappraisal opportunities to improve quality, value and service perceptions as well as meet climate and sustainability expectations results in a negative impact on the trust which our stakeholders place in our brand.	We continue to implement a number of initiatives and activities aligned to our strategic priorities, thereby helping reappraise the brand and continue to build and maintain trust. No risk movement	· Our Group policies, procedures and our Code of Business Conduct sets out detailed expectations and behaviours around how we can make the right decisions for our customers, colleagues, suppliers, communities and investors. · We listen to our customers and stakeholders as part of our communication and engagement programmes. We reflect these needs in our plans including building upon health, community, sourcing, climate and 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 infrastructure or key IT systems results in a loss of information, inability to operate effectively, financial or regulatory penalties, and negative impacts on our reputation. Further, failure to build resilience at the time of investing in and implementing new technology, results in potential loss of operating capability.	There continues to be a growing dependence on technology throughout the Group. We continue to make improvements and invest in disaster recovery and business continuity measures which are helping to limit exposure to external threats. No risk movement	· Our multi-year programme continues to enhance our technology infrastructure and resilience capabilities. This involves significant investment in our hosting strategy, partnering with cloud providers and re-engineering some of our legacy retail systems, while building redundancy for key business systems. · Our new data centre facility provides greater resiliency and oversight for our key systems. · Our technology security programme continues to enhance information security capabilities thereby 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 with legal or regulatory requirements relating to data security and data privacy in the course of our business activities, results in reputational damage, fines or other adverse consequences. This includes criminal penalties and consequential litigation which may result in an adverse impact on our financial performance or unfavourable effects on our ability to do business.	As a retail organisation we hold a large amount of customer and colleague personal data, and the threat landscape has been ever growing. Since the introduction of General Data Protection Regulation (GDPR) we have seen an increase in individuals' awareness levels, as well as an increase in the financial penalties which can be levied by the data protection authorities. No risk movement	· We put our customers and colleagues at the heart of all decisions we make in relation to the processing of personal data. Our multi-year technology security programme is driving the enhancement of our data security capabilities. · We have an established team in our security operations centre to detect, report and respond to security incidents. · We have a third-party supplier assurance programme focusing on third-party data security and privacy risks. · We invest significantly across the Group to help us comply with the requirements of GDPR in Europe, and 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 with legal and other requirements as the regulatory environment becomes more restrictive, due to changes in the global political landscape, results in fines, criminal penalties for Tesco or colleagues, consequential litigation and an adverse impact on our reputation, financial results, and/or our ability to do business.	Long-term changes in the global political environment, including that in some markets there is a push towards greater regulation of foreign ownership of companies resulting in favouring of local companies. No risk movement	· Wherever we operate, we aim to ensure that the impact of political and regulatory changes is incorporated in our strategic planning and policies. · We have compliance programmes and committees to manage our most important risks (e.g. anti-bribery and competition law). · Our compliance programmes ensure that controls are implemented to mitigate the risk and we conduct assurance activities for each risk area. · 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 standards in relation to our workplace, results in death or injury to our customers, colleagues or third parties and leads to adverse financial and reputational consequences.	This risk has increased primarily driven by a shift in the regulatory landscape which may lead to an increase in penalties and fines. Group-wide injury statistics continue to improve alongside identifying continuous improvement opportunities to further embed controls. Risk increasing	· We have a business-wide, risk-based safety framework which defines how we implement and report on safety controls to ensure that colleagues, contractors and customers have a safe place to work and shop. · Each business is required to maintain a comprehensive risk register and a safety improvement plan to document and track enhancements. · Governance and oversight is established in the form of our Group Risk and Compliance Committee and 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, retain and develop the required capability and continue to evolve our culture results in an impact on the delivery of our purpose and strategic drivers.	Market competitiveness continues to affect our ability to attract and retain key specialist talent. There is a continued challenge from fast-changing and complex legislation. No risk movement	· Our talent planning and people development processes are established across the Group. · Talent and succession planning are regularly discussed by line management and the Executive Committee with regular oversight by the Nominations and Governance Committee and the Board. · 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 safety standards results in death, injury or illness to customers. Failure to ensure that products are sourced responsibly across our supply chain (including fair pay for workers, adhering to human rights, clean and safe working environments, meeting climate change and sustainability commitments) and that all social and environmental standards are met results in supply chain disruption, regulatory breaches, and reputational impacts of not meeting societal expectations.	Given the evolution in external standards and expectations we recognise the importance of sourcing safe products in a responsible manner. We continue to monitor and improve our controls to ensure we have a sustainable supply chain. No risk movement	· We have product standards, policies and guidance covering both food and non-food, as well as goods and services not for resale, to help ensure that products are safe, legal and of the required quality. · Assurance, improvement and empowerment are our three human rights pillars in place to appropriately monitor conditions and progress, tackle endemic sector risks and address wider community needs. Measures include policies and guidance to help to ensure the rights of workers are respected and environmental impacts are managed responsibly. Refer to pages 21 to 23 for specific actions highlighted under our LHP. · Supplier audit and product analysis programmes are in place to monitor product safety, traceability and integrity, human rights and environmental standards, including unannounced audits of supplier sites and facilities. · 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 for the UK's future trading relationship with the EU (whatever form that may take) results in disruption to and creates uncertainty around our business and our ability to supply our customers. Any disruption or uncertainty could have an adverse effect on our business, financial results and operations.	The UK entered the standstill transition period on 31 January 2020 and uncertainty over the longer-term trade issues could remain until 31 December 2020 and potentially beyond. The risk of business disruption and cost increases therefore remain unchanged. No risk movement	· With the UK's future trading relationship with the EU (and others) still to be determined, we continue to contribute to important public policy discussions and engage with government, regulatory bodies and industry e.g. sharing of analysis and data, to aid policy makers' understanding of food and product supply chains. · We continue to assess and monitor the potential risks and impacts on our customers, colleagues and shareholders, while taking appropriate mitigation measures to address challenges including logistics, resourcing and supply. · 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 to a number of risks, the most significant of which are operational risk, regulatory risk, credit risk, funding and liquidity risk, market risk and business risk.	The Bank continues to actively manage the risks to which it is exposed. No risk movement	· The Bank has a formal structure for reporting, monitoring and managing risks. This comprises, at its highest level, the Bank's risk appetite, approved by the Bank Board and supported by the risk management framework. · 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 and global spread of the COVID-19 may have a significant and prolonged impact on global economic conditions, disrupt our supply chain (including our supplier base, specifically regarding business closure and consolidation, labour shortage, raw material supply and potential cost inflation), increase employee absenteeism and adversely impact our operations. Governments and public bodies in affected countries have introduced temporary emergency public measures such as travel bans, quarantines and public lockdowns (also impacting our 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).	The COVID-19 outbreak has become a global pandemic moving from an emerging risk to becoming a principal risk for the business. New risk	· The safety and wellbeing of our colleagues and customers has been and continues to be our overriding priority. Our Executive Committee are monitoring events closely with regular Board oversight evaluating the impacts and designing appropriate response strategies. · The availability of cash resources and committed facilities together with strong cash flow, support Tesco's liquidity and longer-term viability. · Our teams are working tirelessly to implement specific actions to minimise disruption faced by our customers in these challenging times. Our business continuity and crisis management plans have been mobilised in all parts of the Group and additional measures have been implemented including increasing our retail store colleague headcount (with redeployment of colleagues where possible), securing additional supply chain capacity to meet changes in demand (including measures to prevent customer stockpiling), implementing changes to stores (including hours, additional security, hygiene and social distancing measures), and extending support to colleagues and customers at increased risk.

† 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.

 

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