15 Jan 2016 11:05
15 January 2016
Thomas Cook Group plc
(the "Company")
Annual Report & Accounts 2015 and Annual General Meeting 2016
The Company has today released the below listed documents:
1. Annual Report & Accounts for the year ended 30 September 2015 ("Annual Report & Accounts 2015");
2. Notice of the Annual General Meeting 2016 ("AGM"); and,
3. Form of Proxy for the AGM.
In accordance with LR 9.6.1, these documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/nsm.
The Annual Report & Accounts 2015 and the Notice of AGM 2016 can also be viewed on the Company's corporate website at www.thomascookgroup.com.
The AGM is scheduled to be held at 10.30am on Tuesday 23 February 2016 at 1st Floor, North Building, 200 Aldersgate, London, EC1A 4HD.
The information contained in the Appendix below, which is extracted from the Annual Report & Accounts 2015, is included solely for the purposes of complying with DTR 6.3.5R. The information should be read in conjunction with the Company's Full Year results announcement made on 25 November 2015. This announcement and the Full Year results announcement together constitute the material required by DTR 6.3.5R to be communicated to the media in unedited full text. This material is not a substitute for reading the full Annual Report & Accounts 2015. Page numbers and cross references in the extracted information refer to page numbers and cross references in the Annual Report & Accounts 2015.
Enquiries:
Alice Marsden Group General Counsel and Company Secretary 020 7294 7007 | Alice Macandrew Group Communications Director 020 7557 6409 |
Appendix
Statement of Directors' responsibilities in respect of the Annual Report, the Directors' remuneration report and the financial statements
The Directors are responsible for preparing the Annual Report, the Directors' remuneration 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 have prepared the Group and the Company financial statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union. The financial statements are required by law to give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group 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 accounting estimates that are reasonable and prudent; and
· state that the financial statements comply with IFRSs as adopted by the European Union.
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
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 the Group, and enable them to ensure that the 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. They are also responsible for safeguarding the assets of the 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, and legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Each of the Directors, who were in office at the date of this report, whose names and functions are listed on pages 70 to 72, confirm 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 profit of the Group; and
· the Strategic and Directors' report contained on pages 16 to 65 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.
Principal risks and uncertainties
The table below lists the principal risks and uncertainties as determined by the Board that may affect the Group and highlights the mitigating actions that are being taken. The content of the table, however, is not intended to be an exhaustive list of all the risks and uncertainties that may arise.
Principal Risks | Mitigation | Opportunities | ||
1 | Our New Operating Model (NUMO), the next phase of our transformation, fails to deliver our strategic and operational targets. | >>Bi-weekly status reports on each project submitted to the Senior Management Team. >>Monthly Group Transformation Review meetings attended by senior management including CEO and CFO, during which progress and issues are discussed and addressed. >>Financial benefits and KPIs are incorporated in the FY16 - FY18 business plan and delivery is tracked as part of the business review process. | To deliver a best in class operating model which will provide a competitive advantage in our market. | |
2 | Failure to align our products and services to customer preferences may have an adverse impact on our ability to improve our customers' experience of Thomas Cook holidays*. | >>On-going monitoring of our hotel portfolio has allowed us to focus on the continuous improvement of our product offering, taking into account feedback from our customers. >>Our "One Tour Operator" initiative will harmonise processes, remove duplication and adopt same ways of working behind the scenes with suppliers and in the back-office. This will ensure that we have the right products and services in place to grow and improve our customers' experience across all markets. >>Our strategy includes a focus on developing best in class ancillaries which will improve our customers' holiday experience. >>There has been significant investment into the refurbishment of our hotel brands. >>The Hotel Investment Fund will accelerate our focus on improving our product portfolio. >>We have made major investments within our Group airlines through cabin refurbishment, purchase of new aircraft and addition of new routes. | Diverse product portfolio enabling us to match product offerings to change in customer preferences and demand. | |
3 | Failure to achieve growth in our digital distribution channel may have an adverse impact on our market share, profitability and future growth*. | >>We have made significant investment in our One Web platform, which has led to improvements in functionality and resulted in higher conversion rates and online bookings. >>As part of our new operating model, the "Omni-channel" initiative will ensure a seamless digital experience for our customers both in stores and online. >>Our Group Ecommerce Team has regular dialogues with management within our source markets to maintain oversight and provide digital support. >>Our new Companion App allows our customers to obtain information about their holiday, manage payments, and book excursions while in‑destination. | Flexible distribution model that fully meets the needs of our customers. Aligned to customer technology innovation. | |
4 | Failure to recruit or to retain the right people at the right time will lead to a lack of capability or capacity to enable the implementation of our business strategy. | >>Our performance management system was implemented in 2014 and tracks the performance and potential of all our employees. >>Our high potential talent is identified and nurtured through an Executive Development programme and our Emerging Talent programme is currently being developed. >>Reward schemes are regularly evaluated to drive and reward performance and to ensure retention of key talent. >>As part of succession planning, the top 130 positions have been assessed and 42 critical positions have been identified. >>Our annual engagement survey allows us to assess employee motivation and commitment and identify actions we need to implement to enable talent retention. | Employing the best people to continuously develop and evolve strategy and ensure on-going efficiency and operation of the business. | |
5 | IT architecture is unable to support the needs of the business. | >>The first phase of our IT transformation has been successfully completed and the second phase is proceeding as planned. >>Our simplified and automated service delivery process ensures requests from the business are addressed in a timely manner. >>Weekly reviews between business unit IT Heads to prevent any IT issues across the business. >>IT works closely with the business to ensure NUMO initiatives have the appropriate level of support. | To develop a modern, future proof IT Operating Model. | |
6 | Information security and cyber threats are currently a priority across all industries and remain a key Government agenda item. The Group recognises that we have high risk exposure in this area and has added this as a new principal risk. | >>Our Information Security Steering Group has been established to provide oversight of the cyber risk framework and ensure appropriate mitigations are in place. >>Our Security Improvement programme is underway and aims to provide the following mitigations: · Group Security Policies · Security Awareness Training · Detect and Respond Monitoring Service for websites, data centres and critical systems · Vulnerability Management service to test website and system security | To become thought leaders in developing a strategy to combat emerging cyber threats. | |
7 | A decision or a course of action is perceived negatively by the media, investors and/or general public, which in turn impacts the corporate reputation of the Group and its share price*. | >>As part of our risk management process, we identify all events that may have a potential reputational impact to the Group and ensure that controls are in place to manage these risks. >>We have a clear plan in place to respond to the potential reputational consequences of an event which includes close cooperation between investor relations, public relations, HR and legal teams to identify and prepare responses to incidents and potential issues. The plan has been strengthened this year based on the lessons learnt during the Corfu Inquest. >>We monitor stakeholder and governmental reactions to ensure we respond to emerging political and regulatory developments. | Promotion of the business and enhancement of brand value through positive media attention. | |
8 | Cash generation limits the ability to strategically manage debt repayment and/or dividend payment*. | >>We proactively monitor our short, medium and long-term cash requirements and liquidity headroom. >>Our cost-out and profit improvement initiatives are successfully contributing to cash availability. >>We continue to monitor all opportunities to manage liquidity requirements and maintain an adequate level of contingency as well as seeking to lower the average cost of debt over the medium term. | Sufficient cash to implement optimal financing strategies. | |
9 | Due to the nature of its business, the Group will always be exposed to a risk of a health and safety incident that may impact our customers or colleagues together with associated reputational damage. | >>We operate a robust safety management system (SMS) to ensure the implementation of our Health and Safety Policies and procedures. >>The Group Health, Safety, and Security team implement the SMS, which is further supported by a reputable external specialist (SGS). >>The Group regularly reviews and updates its safety and security training programmes to ensure they continue to reflect best practice. >>Our Health and Safety Audit programme, which is delivered by external specialists, measures standards and includes a clear escalation and decision process. The programme also includes a robust follow-up process. >>The assessment of Health and Safety risks is inbuilt into daily management routines and is monitored by a structure of health and safety committees that are in turn overseen by a corporate Health, Safety & Environmental Committee with Board level oversight. The report of the Health, Safety & Environmental Committee can be found on page 83. | To provide class leading health and safety programmes for the benefit of our customers and employees. | |
10 | Increasing security threats and general socio/political uncertainties negatively impacting our key markets and reduce the demand for travel related products*. | >>Our flexible business model allows us to align our committed capacity to fluctuating demand. >>As part of our destination strategy, we continue to add new destinations to our portfolio, thereby mitigating the effect of factors which may negatively impact demand for travel to certain regions. >>We actively monitor the socio/political landscape to ensure we have an early indication of emerging risk and are available to respond in an appropriate and timely manner. >>We have a dedicated Crisis Management Team who have the requisite resource and skills to ensure that adequate emergency response is provided to ensure the welfare of our customers. >>All of our senior management regularly participate in crisis management scenarios. | To deliver proactive capability to pre-emptively manage emerging geopolitical uncertainties. | |
11 | Failure to comply with regulatory, legislative and corporate social responsibility requirements in the legal jurisdictions where Thomas Cook operates. | >>We have a dedicated Legal Team to ensure full compliance with formal regulatory requirements which monitors all current and emerging regulatory developments in our source markets. The team receives regular training to provide awareness of critical changes in relevant legislation or case law. >>Our Code of Conduct is backed by a comprehensive training programme to ensure that it is fully embedded across the Group. >>Our Legal Risk Database enables communication and timely analysis of all risks related to regulatory, legislative and corporate social responsibility requirements. | Instilling values and positively influencing all of our key stakeholders. | |
* Principal risk with a direct link to the viability statement.