Annual Report Notification

RNS Number : 0812T

Home Retail Group Plc

01 June 2009

 



Home Retail Group plc

(the 'Company')

Annual Report and Financial Statements 2009

Notice of Annual General Meeting 2009

Proxy Form

The Company has today published the following documents on its website, www.homeretailgroup.com:

• Annual Report and Financial Statements 2009

• Notice of Annual General Meeting 2009

• Proxy Form

The Company has also submitted copies of the above documents to the UK Listing Authority. The documents will shortly be available for inspection at the UK Listing Authority's Document Viewing Facility, which is situated at The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London, E14 5HS.

The Company will hold its 2009 Annual General Meeting at the Jurys Inn Milton Keynes, Midsummer Boulevard, Milton Keynes, MK9 2HP on 1 July 2009 at 11.00 am. 

Attached to this announcement is the additional information required under Rule 6.3.5 of the Disclosure and Transparency Rules of the Financial Services Authority, including a description of the principal risk factors for the Company, as set out in the Annual Report and Financial Statements 2009, and a statement of directors' responsibilities.

ADDITIONAL INFORMATION

Principal risks and uncertainties

The principal risks and uncertainties that could impact the Group's performance and our mitigating activities are discussed below. For further information on how the Group manages risk, see the business review and pages 56 and 57 of the corporate governance statement within the Annual Report and Financial Statements 2009.

Area of principal  risk and uncertainty	Description and examples of mitigating activity
Economic and market risks Impact on sales, costs, profit and cash of: Economic conditions Cost of raw material products/services/ utilities Consumer preferences Competitor activity Seasonality/weather UK-centric store network Expansion/development  of store network Changing demographics Pension obligations	The economic environment, including the activities of other retailers, impacts on the Group's success in terms of sales, costs, profit and cash management.  Understanding the impact of the global financial crisis on our customers and suppliers, and maintaining competitive positions in our markets is of key importance to the Group. We have established initiatives to support our ability to manage margin levels effectively through sourcing developments as well as rigorous cost control.  Our strong financing position will also support our ability to remain competitive. The Argos brand is synonymous with choice, value and convenience and our internal processes ensure that Argos is well positioned to continue to deliver its customer proposition.  Investment has been made to extend the choice available at all price levels, particularly the Argos Value range and non-catalogue lines on the website.  Homebase has responded to customers' needs by developing further ranges centred around environmental awareness, as well as expanding its initiatives in e-commerce development.  Other mitigating activities include: Clear communication of choice and value-led product offering to customers Driving market share in targeted product categories  Focused and relevant customer service training in Argos and Homebase Store format development and technologies such as Check & Reserve and Quick Pay Kiosks Continued evolution of a broader home enhancement position at Homebase Regular review of pension trustee activities and plans to mitigate any fund deficit.
Operations Failure to ensure appropriate processes are in place to manage the complexity of retail operations, including sourcing of products and customer service	Like other retailers, the Group sources products from overseas, which increases the time between ordering and receiving products from suppliers. Efficient management processes are therefore needed to ensure stock is in the right place at the right time. We continuously re-evaluate our distribution infrastructure to drive further efficiency.   The Group aims to continually improve its already successful multi-channel capability, enhancing functionality and responding to customer feedback.   Communication with our customers is very important to us and we continually seek to balance shareholder value with customer value through promotional campaigns, particularly at key events such as Christmas and Easter. Other mitigating activities include: Improving the accuracy of stock forecasts Realigning our operating and distribution processes following organisational restructure Enhancing home delivery customer ordering functionality Improving clarity of promotional campaigns    Continuously improving catalogue production processes
Business interruption Acts of terrorism Failure or unavailability of operational and/or IT infrastructure Delay or interruption in service provided by third-party suppliers	A major incident could impact the ability of the Group to continue trading.  We maintain and routinely test our business continuity plans in order to reduce the potential impact of such events. Security measures are in place, where appropriate, to protect colleagues, customers and assets.  We are also vigilant to the vulnerability of suppliers during the current turbulent trading environment and work towards a sustainable outcome for all parties. Other mitigating activities include: Business continuity and recovery planning IT recovery plans Third-party supplier management
Infrastructure development/ projects Delay or failure to manage and implement major business and infrastructure projects effectively	The Group is committed to investing in the long term capability of systems and infrastructure.  Strategic projects to replace or enhance key systems and infrastructure carry a degree of risk; however, we have dedicated project teams in place with strong governance frameworks to manage them. Other mitigating activities include: Detailed approval and planning process prior to project commencement Board review of status/progress of major change programmes Post project implementation reviews Management expertise in significant infrastructure/change programmes
Product safety Failure to manage supplier relationships and/or ensure appropriate quality checks are in place	The safety and quality of our products is of high importance to the Group.  Suppliers are required to sign up to the Group's supply chain principles and to specific policies regarding products and their environmental impact.  Wherever possible, Argos and Homebase teams work in conjunction with suppliers to ensure improvement opportunities are explored. Other mitigating activities include: Quality assurance programme Supplier relationship protocols Terms and conditions for all suppliers
People  Reliance on key personnel	The Group values its colleagues and their contribution to the success of the organisation. Internal training schemes and the graduate recruitment programme maintain the succession pool.  We are committed to open communications during organisational restructure. We actively encourage promotion from within and monitor employee satisfaction through an annual Group-wide employee survey. Other mitigating activities include: Competitive remuneration packages Succession planning Management development and training programmes
Regulatory environment Changes in UK and overseas legislation and regulation, eg consumer protection, environmental regulation Changes in UK fiscal/employment policy, eg minimum wage	The Group is committed to good governance practices. In addition to ensuring compliance with existing requirements, we are active in monitoring potential future developments. We also lobby, often with other retailers, to support and develop the industry and the interests of consumers.   Other mitigating activities include: Membership of industry representative groups Direct engagement with government and regulators Dedicated working parties to manage operational change
Currency Purchase of products in currencies other than sterling, principally the US dollar and the euro	The Group is exposed to fluctuations in currency rates in its overseas product purchasing. The recent weakening in sterling has already substantially increased currency-associated risk for the year ahead. We attempt to mitigate these risks through adjustments to customer pricing and opportunities for further sourcing efficiencies. Other mitigating activities include: Forecast currency requirements Hedging policies

Statement of directors' responsibilities

The following statement, which should be read in conjunction with the reports of the auditors set out on pages 68 and 112 of the Annual Report and Financial Statements 2009, is made with a view to distinguishing for shareholders the respective responsibilities of the directors and of the auditors in relation to the annual report and financial statements.

The directors are responsible for preparing the annual report, the directors' remuneration report and 

the Group and the Parent Company 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 have prepared the Group financial statements in accordance with International 

Financial Reporting Standards (IFRSs) as adopted by the European Union, and the Parent Company 

financial statements in accordance with applicable law and United Kingdom Accounting Standards 

(United Kingdom Generally Accepted Accounting Practice). The Group and Parent Company financial

statements are required by law to give a true and fair view of the state of affairs of the Parent

Company and the Group and of the profit or loss of the Group for that period.

In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state that the Group financial statements comply with IFRSs as adopted

by the European Union and with regard to the Parent Company financial statements, that applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the Group and Company financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business, in which case there should be supporting assumptions or qualifications as necessary.

The directors are responsible for keeping proper accounting records that disclose with reasonable

accuracy at any time the financial position of the Parent Company and the Group and to enable them

to ensure that the Group financial statements and the directors' remuneration report comply with the

Companies Act 1985 and, as regards the Group financial statements, Article 4 of the IAS Regulation.

They are also responsible for safeguarding the assets of the Parent Company and the Group 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 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 listed on page 51 of the Annual Report and

Financial Statements 2009 confirms that, to the best of their knowledge:

• the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and loss of the Group; and

• the directors' report contained on pages 52 and 53 of the Annual Report and Financial Statements 2009 includes 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.

Gordon Bentley

Secretary

1 June 2009

 

END

 

 

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