Annual Financial Report

Source: RNS
RNS Number : 0708K
Hochschild Mining PLC
17 April 2020
 

 

 

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17 April 2020

2019 Annual Financial Report and

2020 Annual General Meeting ("AGM")

 

Following the release of the 2019 full year results announcement on 19 February 2020 (the "Preliminary Announcement"), Hochschild Mining PLC (the "Company") announces the publication of its Annual Report and Accounts for the year ended 31 December 2019 (the "2019 Annual Report").

 

In accordance with LR 9.6.1 R, the following documents have been submitted to the National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

 

·      2019 Annual Report

·      2020 AGM circular (incorporating the Notice of 2020 AGM) 

·      Notice of Availability of the 2019 Annual Report and 2020 AGM circular

 

The above documents have been posted or otherwise made available to shareholders and, in accordance with the Disclosure Guidance and Transparency Rules ("DTR"), the 2019 Annual Report and the 2020 AGM circular have been published on the Company's website at www.hochschildmining.com

 

AGM ARRANGEMENTS

 

The 2020 AGM will be held at the offices of The Argyll Club, 33 St James's Square, London, SW1Y 4JS on Thursday 21 May 2020 at 9am and has been arranged on the assumption that the UK Government's measures to control the spread of Coronavirus (COVID-19) continue to apply at the date of the meeting.  Should this be the case, shareholders will not be allowed to attend the AGM in person and anyone who attempts to do so will be refused entry.  For the protection of those who are required to attend, physical attendance by company representatives will be kept to a minimum and, regrettably, there will not be a question and answer session.

 

Despite the practical challenges, we encourage shareholder engagement and shareholders are therefore requested to submit any questions they may have in connection with the formal business of the AGM as detailed in the 2020 AGM circular. Responses will be published on the shareholder section of the Company's website at www.hochschildmining.com

 

If there are any developments which affect the arrangements for the AGM (such as the easing of social restrictions), announcements will be made via the London Stock Exchange and updates will be posted on the shareholder section of the Company's website.

 

The appendices to this announcement contain the information required to be disclosed under DTR 6.3.5 R which has been reproduced from the 2019 Annual Report and should be read in conjunction with the Preliminary Announcement.  All page references and cross-references in the appendices are to the 2019 Annual Report.

 

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Enquiries:

Hochschild Mining PLC

Raj Bhasin                                                                                                                                                                                                                     +44 (0)20 3709 3263

Company Secretary

 

Hudson Sandler

Charlie Jack                                                                                                                                                                                                                    +44 (0)20 7796 4133

Public Relations

________________________________________________________________________________________________

About Hochschild Mining PLC

Hochschild Mining PLC is a leading precious metals company listed on the London Stock Exchange (HOCM.L / HOC LN) with a primary focus on the exploration, mining, processing and sale of silver and gold. Hochschild has over fifty years' experience in the mining of precious metal epithermal vein deposits and currently operates three underground epithermal vein mines, two located in southern Peru and one in southern Argentina. Hochschild also has numerous long-term projects throughout the Americas.

LEI: 549300JK10TVQ3CCJQ89

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APPENDICES

Appendix 1

Risk Management (reproduced from pages 50 to 54 of the 2019 Annual Report)

 

As with all businesses, management of the Group's operations and execution of its growth strategies are subject to a number of risks, the occurrence of which could adversely affect the performance of the Group. The Group's risk management framework is premised on the continued monitoring of the prevailing environment, the risks posed by it, and the evaluation of potential actions to mitigate those risks.

 

The Risk Committee is responsible for implementing the Group's policy on risk management and monitoring the effectiveness of controls in support of the Group's business objectives. It meets four times a year and more frequently if required. The Risk Committee comprises the CEO, the Vice Presidents, Country General Managers and the head of the Internal Audit function. A 'live' risk matrix is reviewed which maps the significant risks faced by the business as well as those considered to be emerging risks. The matrix is updated at each Risk Committee meeting, and the most significant current and emerging risks, as well as potential actions to mitigate them, are reported to the Group's Audit Committee, which has oversight of risk management on behalf of the Board. In addition, during 2019, the Board agreed that the Sustainability Committee would monitor actions plans to mitigate sustainability risks.

 

2019 RISKS

The key business risks affecting the Group set out in this report remain unchanged compared to those disclosed in the 2018 Risk Management report.

 

Reasons for the year-on-year change in the profile of a specific risk can be found in the commentary section of the relevant risk, which also provides an outlook on the risk for the current financial year.

 

1. FINANCIAL RISKS

 

a)        Commodity Price

Change in risk profile vs 2018: UNCHANGED

 

Impact

Adverse movements in precious metal prices could materially impact the Group in various ways beyond a reduction in the financial results of operations. These include impacts on the feasibility of projects, the economics of mineral resources, heightened personnel retention and sustainability related risks.

 

Mitigation

-       Constant focus on maintaining a low all-in sustaining cost of production and an efficient level of administrative expense.

-       Policy to maintain low levels of financial leverage to ensure flexibility through price cycles.

-       Flexible hedging policy that allows the Company to contract hedges to mitigate the effect of price movements taking into account the Group's asset mix and forecast production.

 

See the Market Review on pages 10 to 11 for further details on how commodity prices performed in 2019.

 

Commentary

The Group's principal strategy to mitigate against commodity price volatility is focused on conserving capital and optimising cash flow.  In 2019 this was achieved by:

 

-      Debt refinancing;

-      Controlling operating and administrative costs;

-      Optimising sustaining capital expenditure; and

-      Maintaining low working capital.

 

As previously reported, in December 2019 the Group refinanced its short-term debt with a $200 million medium-term loan at a comparable rate which, in addition to providing a two-year grace period, has supplemented the Group's cash resources with a further $50 million.

 

In addition, as reported in the Finance Review, 2019 working capital and production costs have been kept under control.

 

As reported earlier in this report, the Inmaculada mine had another record year in 2019 in terms of production and, as the lowest cost operation in the Group's portfolio, it has been key in reducing overall average production costs.

 

Even though currently no part of 2020 production has been hedged, the Group's flexible policy enables the Board to approve hedging contracts to protect cash flow as and when appropriate.

 

b)        Commercial Counterparty

Change in risk profile vs 2018: LOWER

 

Impact

Insolvency of a customer or other business counterparty (bank, insurance company, contractor, etc.) could result in the Group's inability to collect accounts receivable or to access funds or to receive services which could adversely impact the Group's profitability.

 

Mitigation

-       Periodic assessment of customers and business counterparties.

-       Risk mitigation practices seeking to diversify the Group's customer base and/or to limit the size of shipments.

-       Ongoing assessment of methods to mitigate collection risk.

 

Commentary

Prompted by a long-standing customer entering into bankruptcy protection in 2018, the Group strengthened its risk assessment procedures by taking the following steps:

 

-      Enhanced counterparty analysis: the enhancement of initial financial and business quality checks of both new customers and business counterparties, and more robust and more frequent evaluations of existing customers. These evaluations incorporated analysis of corporate governance, balance sheet strength and other aspects of credit quality. As a result, a revision of terms of sale to mitigate the Group's exposure has been implemented, emphasising prepayments before a sale is completed

 

-      Review of financial counterparties: the Group has implemented policies to identifying suitable financial counterparties to support the Group's treasury and insurance needs.

 

On an ongoing basis, the Group has adopted a number of practices such as the placing of limits on cash balances invested with financial institutions, monitoring of advanced payments from customers and identifying alternative suppliers for critical supplies and spare parts.

 

As a 2019 Audit Committee objective, see page 69 for more information

 

 

2. OPERATIONAL RISKS

 

a)        Operational Performance

Change in risk profile vs 2018: UNCHANGED

 

Impact

Failure to meet production targets and manage the cost base could adversely impact the Group's profitability. Failure in handling and storing tailings could result in environmental liabilities including fines, corrective measures and stoppage.

 

Mitigation

-      Close monitoring of operational performance, costs and capital expenditure as well as the overall profitability at all stages of the mining value chain.

-      Monitoring the adequacy and safety of key mining components such as tailing dams, waste rock deposits and pipelines in close liaison with relevant departments ensuring that procurement, construction and permitting are undertaken appropriately.

-      A specific tailings management framework is in place, including an independent third party review of Tailings Storage Facilities (TSFs)

 

Commentary

In 2019 the Group exceeded its production target by 1.7m attributable silver equivalent ounces with record performances at Inmaculada and San Jose.

 

2019 budgets across the Group continued to focus on maintaining controlled levels of costs, capital expenditure and expenses. As reported in the Financial Review on page 37, the all-in sustaining cost from operations was kept within the guidance for the year, at $11.9 per silver equivalent ounce.

 

As reported last year, the decision was taken to place the high cost Arcata mine on temporary care and maintenance. Measures have been taken to manage associated costs efficiently, close certain mining components, continue to explore for new resources and maintain community relations, all in order to secure the option of re-starting operations in the future.

 

The Group published information on its website regarding its TSFs, including their construction method and risk profile. It also continues to commission independent third party reviews of all such facilities and monitors on an ongoing basis their stability, with particular emphasis on older TSFs such as the Ares facility which is in the process of being closed.

 

b)        Business Interruption

Change in risk profile vs 2018: UNCHANGED

 

Impact

Assets used in the Group's operations may cease to function or the supply of electricity may be interrupted (e.g. as a result of technical malfunction or earthquake damage) thereby causing production stoppages with material effects.

 

Mitigation

-       Insurance coverage to protect against major risks.

-       Management reporting systems to support appropriate levels of inventory.

-       Annual inspections by insurance brokers and insurers assist management's efforts to understand and mitigate operational risks.

-       Negotiation of long-term power supply contracts and the procurement of contingent generators.

 

Commentary

In addition to acquiring insurance policies covering machinery breakdown, mitigating actions during the year include the following:

 

-       A site visit by insurance brokers and re-insurers' engineers to assess risk exposure;

-       A thorough review of critical supplies and inventory was performed with data uploaded onto the Maintenance Module of SAP HANA; Management reporting systems ensured that an appropriate level of inventory of critical parts is maintained;

-       Acquisition of back-up equipment to ensure power supply in Peru; and

-       Design of a Business Continuity Plan ("BCP") documenting the procedures to be implemented on the occurrence of certain disruptive events. Training and implementation, which was originally scheduled for Q4 2019, will take place in Q1 2020.

 

c)        Information security and cybersecurity

Change in risk profile vs 2018: UNCHANGED

 

Impact

Failure of any of the Group's business critical information systems as a result of unauthorised access by third parties may affect the Group's ability to operate

 

Mitigation

-       Compliance with ISO 27001, an internationally recognised certification to evaluate information security management systems.

-       Dedicated team within the IT department focused on preventing cyber-attacks.

-       Audits performed by the internal audit department and third parties to test systems and issue recommendations.

 

Commentary

As previously reported, a review of the Group's exposure to cyber risks was commissioned by a major audit firm in 2018 with the principal recommendations implemented, including testing which took place in two phases during the year to assure the robustness of systems security. In addition:

 

-       Industrial networks were incorporated into the Group's IS Management System ("ISMS") with associated security enhancements implemented;

-       ISMS was successfully recertified as compliant with ISO 27001; and

-       the use of SAP HANA as the Group's management information system incorporates best in class features to mitigate data loss risk.

 

 

 

d)        Exploration & Reserve and Resource Replacement

 

(d)(i) Impact

The Group's future operating margins and profitability depend upon its ability to find mineral resources and to replenish reserves.

 

Change in risk profile vs 2018: HIGHER

 

Mitigation

-       Implementing and maintaining an annual exploration drilling plan.

-       Ongoing evaluation of acquisition and joint venture opportunities to acquire additional ounces.

-       Establishment of a Permitting Committee.

 

Commentary

The key highlight of the 2019 brownfield exploration programme was the 46 million silver equivalent ounces of additional resources at Inmaculada close to the Angela vein. For further details, refer to page 28.

 

Land easements have been secured and other permits have been or are in the process of being secured to facilitate the 2020-2021 brownfield exploration programme. The Group has an internal Permitting Committee led by two Vice Presidents to co-ordinate efforts with a view to streamlining the permitting process. Senior executives actively participate in industry initiatives to simplify the permitting process.

 

Greenfield exploration in 2019 was driven by a number of earn-in/joint venture opportunities being secured. These provide the Group with a balanced portfolio of advanced and early-stage opportunities in stable jurisdictions in the Americas. Further details are provided on pages 15 and 19.

 

(d)(ii) Impact

Reserves stated in this Annual Report are estimates.

 

Change in risk profile vs 2018: UNCHANGED

 

Mitigation

-       Engagement of independent experts to undertake annual audit of mineral reserve and resource estimates.

-       Adherence to the JORC Code and guidelines therein.

 

Commentary

The Group has engaged P&E Consultants to undertake the annual audit of mineral reserve and resource estimates.

 

See page 161 for further details

 

(a) Personnel: Recruitment and Retention


Change in risk profile vs 2018: UNCHANGED

 

Impact

Inability to attract or retain personnel through a shortage of skilled personnel.

 

Mitigation

The Group's approach to recruitment and retention provides for the payment of competitive compensation packages, well defined career plans and training and development opportunities.

 

Commentary

The Group has undertaken a number of initiatives to improve the retention of employees. These include the use of non-financial benefits (e.g. flexible working arrangements for Head Office staff) and tailored personal development plans. In addition, a three-year Leadership programme continues to be implemented at all operations. The Group has also maintained the training programme for supervisors and hourly workers, and actively works to enhance the Group's employee value proposition. These include the launching of initiatives related to causes that are valued by employees; providing them with the opportunity to contribute to the relaunched purpose of the Company which includes innovation, community relations and environmental performance.

 

Retention plans in the form of the Company's Long-Term Incentive Plan and Restricted Share Plan were also in place for key personnel.

 

 

(b) Personnel: Labour Relations

 

Change in risk profile vs 2018: HIGHER

 

Impact

Failure to maintain good labour relations with workers and/or unions may result in work slowdown, stoppage or strike.

 

Mitigation

-    Development of a tailored labour relations strategy focusing on profit sharing, working conditions, management style, development opportunities, motivation and communication

-     Monthly meetings with mineworkers and unions to ensure a complete understanding of expectations and to keep all parties updated on the Group's financial performance

 

Commentary

For the first time since 2012, the Group's Peruvian operation generated sufficient taxable income to give rise to an entitlement to statutory profit sharing for Peruvian mineworkers.

 

As part of the salary increases agreed with the Peruvian labour unions, the Company has approved an additional bonus plan incorporating safety and productivity goals.

 

As reported last year, the decision was taken to place Arcata on care and maintenance. Where possible, workers were redeployed, and the redundancy process was completed in collaboration with the relevant unions and without disruption to the Group's other operations.

 

3. MACRO-ECONOMIC RISKS

 

Political, Legal and Regulatory

 

Change in risk profile vs 2018: HIGHER

 

Impact

Changes in the legal, tax and regulatory landscape could result in significant additional expense, restrictions on or suspensions of operations and may lead to delays in the development of current operations and projects.

 

Mitigation

•       Local specialist personnel continually monitor and react, as necessary, to policy changes

•       Participation in local industry organisations

 

Commentary

Peru went through a constitutional crisis which led to President Vizcarra dissolving Congress and calling for new congressional elections in January 2020. This situation led to increased political risk and reductions in public and private investment with lower than expected economic growth in 2019.

 

Mining continues to be a highly regulated industry where multiple permits are required leading to increased delays and costs. Moreover, the prior consultation process for indigenous communities has caused substantial delays in the permitting process for exploration and operational activities. In addition, in October 2019, President Vizcarra announced that he would be introducing legislation to modify the mining legal framework. A government-led commission has been tasked with studying potential reforms. This initiative has increased the legal and regulatory risk for the industry as the outcome is uncertain.

 

In terms of social conflicts, protests relating to the Las Bambas and Tia Maria projects have increased social demands and expectations, and have led to wider social unrest. Governmental authorities remain sensitive to conflicts between communities and mining companies and typically take a cautious approach by prioritising dialogue between parties.

 

Congressional elections in January 2020 resulted in the election of nine different political parties, with no single party having a majority. Given this fragmented nature, it is unlikely that any major reforms may be approved. Left wing and radical anti-establishment parties have increased their representations in the new Congress. Some of those radical parties obtained a majority of the vote in the regions where our mines are located, increasing the risk of populism and anti-mining sentiment in these regions.

 

In Argentina, 2019 was marked by the election of President Fernandez from the Peronist party. While the new President has publicly stated that he will promote the mining industry, it is still very early in the new Administration to fully understand the impact on the overall investment climate in Argentina and particularly on the extractive industry sector. It is expected, however, that in order to support the fragile Argentinian economy, new taxes may be under consideration by the Government.

 

4. SUSTAINABILITY RISKS

 

Health and Safety

Change in risk profile vs 2018: LOWER

 

Impact

Group employees working in the mines may be exposed to health and safety risks.

 

Failure to manage these risks may result in occupational illness, accidents, a work slowdown, stoppage or strike and/or may damage the reputation of the Group and hence its ability to operate.

 

Mitigation

-      Health & Safety operational policies and procedures reflect the Group's zero tolerance approach to accidents.

-      Use of world-class DNV safety management systems.

-      Dedicated personnel to ensure the safety of employees at the operations via stringent controls, training and prevention programmes.

-      Systematic programme of training, communication campaigns and other initiatives promoting safe working practices

-      Use of reporting and management information systems to monitor the incidence of accidents and enable preventative measures to be implemented

 

Commentary

2019 was a record breaking year in terms of safety performance with the Company meeting its ongoing objective of Zero Fatalities and key indicators demonstrating year-on-year reductions of 40% and 94% in accident frequency and accident severity respectively.

 

Management continued the implementation of the Safety Culture Transformation Plan to reinforce the Group's commitment to safety.

 

The Plan comprises the following pillars:

 

-       Leadership, with mine management enhancing safety awareness through support from specialist consultants and internally run lectures

-       Communications, focusing on initiatives to motivate and incentivise safe working practices

-       Training, covering induction of new personnel and improvements in operational practices throughout the mining and exploration process

-       Technical, with re-certification of the Group's risk information management systems to DNV´s Level 6. Work has begun in order to advance to Level 7 during 2020.

 

In addition, during the year:

 

-      The recommendations made in a third-party audit of the Group's safety procedures were fully implemented;

-      A High Potential Events Committee, led by the CEO, was established to investigate such cases and issue reports on lessons learned; and

-      The Group launched two technology based solutions to improve safety: a mobile app to log safety-related observations at the operations and the installation of software on the dashboard of personnel transportation to regulate speed and detect driver fatigue.

 

For further details on the above, please refer to the safety section of the Sustainability Report on pages 42 and 43.

 

Environmental

Change in risk profile vs 2018:

(a) In relation to those risks arising from the Group's environmental performance/ infrastructure: UNCHANGED

(b) In relation to those risks arising from the increased oversight of the environmental regulator: HIGHER

 

Impact

The Group may suffer from reputational risk and may be liable for losses arising from environmental hazards associated with the Group's activities and production methods, ageing infrastructure, or may be required to undertake corrective actions or extensive remedial clean-up action or pay for governmental remedial clean-up actions or be subject to fines and/ or penalties.

 

Mitigation

-      The Group has a dedicated team responsible for environmental management

-      The Group has adopted a number of policies and procedures to manage its environmental footprint. 

-      The Group has developed a tool which allows it to measure and manage environmental performance.

-      The Group continues to adopt measures to minimise natural resource use, with particular emphasis on water consumption in its operations.

-      A specific tailings management framework is in place for TSFs, including independent third party review.

 

Commentary

With regards to the countries where the Group operates, environmental permitting and agency oversight in Peru in particular remained rigorous during the year.

 

In 2019, the Group performed highly in its ECO Score (with a score of 4.82 out of 6), which allows us to quantify and distil in a single number our environmental performance and recognises the following aspects of environmental management:

 

-       Compliance with discharge regulatory limits;

-       Minimising the number of environmental incidents;

-       Minimising the number of findings from regulatory audits;

-       Efficient water consumption; and

-       Minimising domestic waste generation and maximising recycling of industrial waste.

 

For further details, please refer to the environmental section of the Sustainability report on pages 48 and 49.

 

In addition, during the year, the Environmental team:

 

-       Secured permits to support the Group's exploration programme  and operational requirements;

-       Held over 500 events, training and housekeeping campaigns across  all mine sites;

-     Is in the process of completing the proposed environmental infrastructure improvement action plan set in 2015. 22 water  treatment plants have been installed and overhauled with the  final two installations to be completed at Inmaculada;

-       Continued with the progressive closure of certain discontinued  mining components; and

-    Adopted measures to minimise water consumption, particularly at San Jose, which is located in an area with very low annual rainfall and which is experiencing a severe drought, which can lead to water shortages.

 

Community Relations

Change in risk profile vs 2018: HIGHER

 

Impact

Communities living in the areas surrounding the Group's operations may oppose the activities carried out at existing mines or, with respect to development projects and prospects, may invoke their rights to be consulted under new laws.

 

These actions may result in loss of production, increased costs and decreased revenues, longer lead times, additional costs for exploration and have an adverse impact on the Group's ability to obtain the relevant permits.

 

Mitigation

-      The Group has a dedicated team responsible for Community Relations

-      Constructive engagement with local communities based on several years of positive relations.

-      Community Relations strategy focuses on promoting education, health and nutrition, and sustainable development.

-      Policy to actively recruit workers from local communities.

-      Policy of hiring service providers from local communities.

-      The Group has also engaged with local governments to support public investment initiatives through technical assistance and direct investment.

 

Commentary

In Peru, protests relating to the Las Bambas and Tia Maria projects have increased social demands and expectations, and have led to wider social unrest.

 

A number of actions were taken during the year to maximise the Group's ability to work with partner communities which included:

 

-       Increased efforts to collect and process information and intelligence regarding potential social conflicts;

-       increased interaction with local governments and other key stakeholders;

-       the re-launching of its social programmes based on the results of a survey conducted among surrounding communities;

-       the launch of a collaboration with the Julian Baring Scholarship Fund  to fund six scholars from the local communities close to Inmaculada to pursue higher education in a number of mining-related disciplines.

 

Further details on the Group's activities to mitigate sustainability risks can be found in the Sustainability Report from page 41.

 

Appendix 2

Related-Party Balances and Transactions, and Compensation of key management personnel of the Group (reproduced from page 141 of the 2019 Annual Report)

 

 (a) Related-party accounts receivable and payable

The Group had the following related-party balances and transactions during the years ended 31 December 2019 and 2018. The related parties are companies owned or controlled by the main shareholder of the parent company or associates.

 

 

Accounts receivable as at 31 December

Accounts payable as at 31 December

 

2019

 

2018

2019

 

2018

 

US$000

 

US$000

US$000

 

US$000

Current related party balances

 

 

 

 

 

 

Cementos Pacasmayo S.A.A.1

569

 

76

56

 

7

Tecsup2

-

 

-

41

 

-

Universidad UTEC2

-

 

-

95

 

-

Total                                            

569

 

76

192

 

7

 

1 The account receivable relates to reimbursement of expenses paid by the Group on behalf of Cementos Pacasmayo S.A.A. The account payable relates to the payment of rentals.

2 Peruvian not for profit educational institutions controlled by Eduardo Hochschild.

 

As at 31 December 2019 and 2018, all other accounts are, or were, non-interest bearing.

 

No security has been granted or guarantees given by the Group in respect of these related party balances.

 

Principal transactions between affiliates are as follows:

 

Year ended

 

2019

 

2018

 

US$000

 

US$000

Expenses
Expense recognised for the rental paid to Cementos Pacasmayo S.A.A.


(200)

 


(200)

Expense recognised for the interests generated by the short-term loan from Banco de Credito del Peru

(480)

 

-

The Group enters into transactions with Banco de Credito del Peru at arm's length such as short-term loan and deposits which are undertaken in the normal course of a banker-customer relationship. This bank is controlled by Dionisio Romero who is a Non-Executive Director of the Group.

Transactions between the Group and these companies are on an arm's length basis.

 

(b) Compensation of key management personnel of the Group

 

 

As at 31 December

Compensation of key management personnel (including directors)

2019

US$000

 

2018

US$000

 

 

 

 

Short-term employee benefits

7,911

 

6,619

Long Term Incentive Plan, Deferred Bonus Plan and Restricted Share Plan

1,184

 

2,899

Total compensation paid to key management personnel

9,095

 

9,518

 

This amount includes the remuneration paid to the Directors of the parent company of the Group of US$4,238,000 (2018: US$4,601,000).

 

Appendix 3

Statements of Directors' Responsibilities

 

A)       Reproduced from page 60 of the 2019 Annual Report

 

The Directors confirm that to the best of their knowledge:

 

•       the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the consolidation taken as a whole; and

•       the Management 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.

 

 

B)        Reproduced from page 95 of the 2019 Annual Report

 

The Directors are responsible for preparing the Annual Report and the Group and Company financial statements in accordance with applicable law and regulations.

 

Company law requires the Directors to prepare Group and parent company financial statements for each financial year. Under that law the Directors have prepared the financial statements in accordance with International Financial Reporting Standards ('IFRS') as adopted by the EU.

 

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 parent company and of their profit or loss for that period. In preparing those 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 whether applicable IFRS have 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.

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' remuneration report and Corporate governance statement that comply with that law and those regulations.

 

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

 

- ends -

 


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