144
IMI plc
Information included in the Strategic Report
Important events since the year-end are described on page 23 of the Strategic
Report. All disclosures concerning greenhouse gas emissions (as required to
be disclosed by the Companies Act 2006 (Strategic Report and Directors’
Report) Regulations 2013) are contained on the previous page. Likely future
developments are also covered in the Strategic Report on pages 6 to 41.
Internal control
The Board has responsibility for oversight of the Group’s system of internal
control and confirms that the system of internal control takes into account the
Code and relevant best practice guidance including the Financial Reporting
Council’s publication, ‘Internal Control: Revised Guidance for Directors on the
Combined Code.’
All operating units prepare forward plans and forecasts which are reviewed in
detail by the Executive Committee and consolidated for review by the Board.
Performance against forecast is continuously monitored at monthly meetings
of the Executive Committee and, on a quarterly basis, by the Board. Minimum
standards for accounting systems and controls, which are documented and
monitored, are promulgated throughout the Group. Certified bi-annual reports
are required from senior executives of operating units, confirming compliance
with Group financial reporting requirements. The internal audit function, Group
Assurance, operates a rolling programme of internal assurance on site reviews
at selected operating units. Additionally, visits to operations are carried out
by senior Group finance personnel. These internal assurance processes
are co-ordinated with the activity of the Company’s external auditor.
Capital investments are subject to a clear process for investment appraisal,
authorisation and post-investment review, with major investment proposals
referred for consideration by the Executive Committee and, according to their
materiality, to the Board. In addition, the Executive Committee and the Board
regularly review the operation of corporate policies and controls including those
relating to ethics and compliance matters, treasury activities, environmental
issues, health and safety, human resources, taxation, insurance and pensions.
Compliance and internal Audit Reports are made to the Board, the Audit
Committee and the Executive Committee, to enable control issues and
developments to be monitored.
Control processes are dynamic and continuous improvements are made
to adapt them to the changing risk profile of operations and to implement
proportionate measures to address any identified weakness in the internal control
system. In the year we made further improvements to our control environment
including the introduction of a new internal controls declaration process with
appropriate assurance and follow up action plans. We are committed to further
strengthen the key financial control processes. More information in relation to
risk is given on page 30 under the heading ‘Principal Risks and Uncertainties’.
Through the procedures outlined here, the Board has considered the
effectiveness of all significant aspects of internal control for the year 2014 and up
to the date of this Annual Report. The Board believes that the Group’s system of
internal control, which is designed to manage rather than eliminate risk, provides
reasonable but not absolute assurance against material misstatement or loss.
Financial reporting processes
The use of the Group’s accounting manual and prescribed reporting
requirements by finance teams throughout the Group are important in ensuring
that the Group’s accounting policies are clearly established and that information
is appropriately reviewed and reconciled as part of the reporting process. The
use of a standard reporting package by all entities in the Group ensures that
information is presented in a consistent way that facilitates the production of
the consolidated financial statements.
Going concern
The Group’s business activities, together with the factors likely to affect its future
development, performance and position are set out in the Strategic Report
on pages 6 to 41. The financial position of the Group, its cash flows, liquidity
position and borrowing facilities are described in the financial statements. In
addition, section 4.4 to the financial statements includes the Group’s objectives,
policies and processes for managing its capital; its financial risk management
objectives; details of its financial instruments and hedging activities; and its
exposures to credit risk and liquidity risk. Section 4.5 to the financial statements
addresses the management of the funding risks of the Group’s employee
benefit obligations.
The Group has considerable financial resources together with long-standing
relationships with a number of customers, suppliers and funding providers across
different geographic areas and industries. The Group’s forecasts and projections,
taking account of reasonably possible changes in trading performance, show
that the Group is able to operate within the level of facilities either in place on
31 December 2014, or renewed since, without the need to renew any further
facilities before 26 February 2016. As a consequence, the directors believe that
the Group is well-placed to manage its business risks successfully despite the
uncertainties inherent in the current economic outlook.
After making enquiries, the directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the Annual Report and Financial Statements.
Disclosure of information to the auditor
Each director confirms that, so far as they are each aware, there is no relevant
audit information of which the Company’s auditor is unaware; and each director
has taken all the steps that he or she ought to have taken as a director to make
himself or herself aware of any relevant audit information and to establish that the
Company’s auditor is aware of that information.
Annual General Meeting
The Annual General Meeting will be held at the Hilton Birmingham Metropole
Hotel, National Exhibition Centre, Birmingham on Thursday 7 May 2015 at 10am.
Notice of the meeting will be published on the Company’s website.
Auditor
Resolutions for the re-appointment of Ernst & Young LLP as auditor of the
Company and to authorise the directors to determine their remuneration will
be proposed at the next Annual General Meeting.
By order of the Board
John O’Shea
Company Secretary
26 February 2015
IMI plc is registered in England No. 714275
Continued
DIRECTORS’ REPORT
