2011/2012 Annual Financial Report

Area

Change in level of risk

Why is it important?

What are we doing to mitigate the risk?

Security and resilience of IT, networks and data

As before

We operate communication networks across the UK and host data for customers alongside operating our own IT systems internally. This means that we are dependent on the secure operation and resilience of our information systems, networks and data.

We have various policies and procedures in place across the Group to ensure that we maintain best practice and appropriate compliance in relation to all of our key systems and networks.

All new starters are made aware of these policies and procedures through their induction and we have launched mandatory online training for all employees and contractors during the year.

The Risk Committee considers specifically information security at each meeting and monitors the ongoing mitigation of the specific risks identified.

We have held the ISO 27001 Information Security Management standard since 2007, which demonstrates the robustness of our security processes and the continuous improvement required by the standard.

Reliance on key third party partners and suppliers

As before

Our strategic agreements with BT and Phoenix IT Group mean we are dependent on the performance of these third parties to provide certain services to our customers.

We use dedicated teams to maintain close relationships with our key partners and suppliers. These relationships have continued to work well during the year. We have appropriate contracts and service levels in place and monitor performance to ensure that our customers are receiving the best

possible service at all times.

Business continuity

As before

Business continuity in the event of a crisis or disaster is a risk we continue to monitor and mitigate against.

It is essential to many of our customers that we can continue to provide services

even when a significant incident occurs.

This continues to be a key area of focus across the Group. We are currently working towards compliance with the BS 25999 Business Continuity standard and have now achieved this

in the Network Services, Managed Services and Collaboration activities of our Kcom brand.

A comprehensive testing programme has been implemented during the year to test our business continuity plans. Any learning points arising from these tests are fed back into the plans to ensure that these reflect the most efficient and effective way of keeping our critical processes operating in the event of an incident.

Customer service and delivery

Reduced

One of the ways in which we seek to differentiate ourselves from our competitors is in the service and delivery that we provide to our customers.

Failing to deliver a service that differentiates us would clearly result in us failing to meet one of our key business objectives.

Over the last year we have organised our Customer Operations team within our Kcom brand to ensure that our people are focused primarily on our customers and to ensure that wherever possible we strive to meet or exceed customer expectations.

We have invested also in upgrading our network monitoring systems to enable us to provide a much better quality service to our managed service customers. We have a dedicated Customer Experience team and measure regularly our performance with customers through customer satisfaction surveys, which we plan to continue.

Recruitment and retention of the right people

As before

People are our greatest asset and ensuring that we recruit and retain the right calibre of people with the right skill-set is key to the success of our business.

We have a comprehensive people strategy in place which aims to ensure that we recruit and retain the right people for our business. In the year the focus of the people strategy has been on strengthening the leadership capability within the business and on developing a clear set of values to drive the culture of the business. In the coming year, the focus will expand to identifying and managing our talent and ensuring that our recruitment, reward and retention strategies are strengthened further.