13th Jan 2011 14:02
Thomas Cook Group plc
(the "Company")
Annual Report & Accounts 2010 and Annual General Meeting
Further to the release of the Company's Preliminary Results announcement on 1 December 2010, the Company announces that it has today published its Annual Report & Accounts 2010.
In compliance with LR 9.6.1, the following documents have today been submitted to the National Storage Mechanism and will shortly be available for inspection at
www.hemscott.com/nsm.do:
1. Annual Report & Accounts 2010
2. Notice of Annual General Meeting ("AGM") 2011
3. Forms of Proxy
The AGM is scheduled to be held at 10.00am on Friday 11 February at The Lincoln Centre, 18 Lincoln's Inn Fields, London WC2A 3ED.
The Annual Report & Accounts 2010 and the Notice of AGM 2011 can also be viewed at or downloaded from the Company's corporate website at
www.thomascookgroup.com/ara2010.
The Company's Preliminary Results announcement of 1 December 2010 contained a management report as well as audited financial statements which were prepared in accordance with the applicable accounting standards. The financial information set out in the Company's Preliminary Results announcement of 1 December 2010 does not constitute the Company's statutory accounts for the year ended 30 September 2010. Statutory accounts for 2010 are included in the Annual Report & Accounts 2010, which will be delivered to the registrar of companies in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2010.
Included in this announcement is additional information, for the purposes of compliance with the Disclosure and Transparency Rules, which includes a responsibility statement from the Directors at Appendix A and information regarding the Company's principal risks and uncertainties at Appendix B, all as extracted from the Annual Report & Accounts 2010. This announcement should be read in conjunction with, and is not a substitute for, reading the full Annual Report & Accounts 2010. There are no related party transactions requiring disclosure.
For further information please contact:
Investors |
|
Derek Woodward, Group Company Secretary
| +44 (0) 20 7557 6415 |
Press |
|
Bronwen Griffiths-Barrasso Finsbury Faeth Birch Kirsty Flockhart | +44 (0) 1733 417268 +44 (0) 20 7251 3801 |
Appendix A
Statement of Directors' responsibilities
The Annual Report & Accounts 2010 contains the following statements regarding responsibility for 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 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 proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and the Group, and for ensuring 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.
By order of the Board
Derek Woodward
Group Company Secretary"
Appendix B
Principal risks and uncertainties
Thomas Cook Group plc, like all businesses, faces risks and uncertainties as we conduct our operations and execute our strategy. We place great importance on internal control and risk management, and the system and framework that the Board has put in place is described in the Corporate Governance Report on pages 57 to 58 of the Annual Report & Accounts 2010.
The table below lists the principal risks and uncertainties that may affect the Group and also highlights the mitigating actions that are being taken. The content in the table, however, is not intended to be an exhaustive list of all the risks and uncertainties which may arise.
Operational and strategic risks
Risk Impact Mitigation
Downturn in the economies of our source markets leading to a reduction in demand for our products and services | Pressure on volumes and margins | • Significant capacity reductions through our actions to maintain margins • Flexible and asset-light business model: - Approximately 5% of our hotel capacity is committed at the beginning of the summer season - Around 90% of our UK tour operator flying requirements are undertaken by our own fleet, allowing further flexibility to cut capacity without affecting our own airline - Changes in capacity can be accommodated late into the booking season • Utilising our buying power to manage accommodation costs across the Group • Tight cost discipline throughout the organisation with ability to cut costs further if necessary. Cost synergies identified between our various airlines • Efficiency improvements, such as automated yield management systems |
Fall in demand for traditional package tours and competition from internet distributors and low-cost airlines | Reduction of revenue and pressure on margins | • Strategy to establish Thomas Cook as a leading provider of independent travel and financial services • Continue to grow our position in the independent sector • Improvement of our online capabilities across the Group and targeting significant long-term growth in the European online travel agency market • Shift to higher margin all inclusive resorts • Ensuring our own in-house airlines remain cost competitive • Focus on medium haul destinations that are not as economically viable for low-cost airlines • Continued focus on expanding into new emerging markets |
Environmental concerns | Damage to the Company's brand and reputation | • Focus on environmental concerns. Development and approval of a sustainability strategy by the Health, Safety & Environmental Committee • Full sustainability programme as detailed in the Sustainability Report |
A major health and safety incident | Significant impact on reputation as a trusted brand would lead to reduction in bookings | • Health and safety management embedded in each business with central coordinating function complemented by destination audits • Group health and safety strategy in place, developed and approved by the Health, Safety & Environmental Committee |
Loss of, or difficulty in replacing, senior talent | Unplanned loss of critical talent from key positions adversely impacting business performance both in the short and medium term | • Regular succession and talent reviews within each business segment • Identification of key roles in line with business continuity plans • Succession planning established for senior roles - periodic review by the Board • Competitive package and career development opportunities |
Business interruption | Business disruption and loss of profits | • Established business continuity plan now in place with several tests carried out during the year |
Performance failure by outsourced partners | Business disruption and loss of profits | • Business continuity plan and service level agreements in place |
Natural catastrophe including closure of airspace | Loss of business and risk of loss of life or injury to customers and/or employees as a result of natural disasters | • Tried and tested emergency procedures in place to react quickly to the situation, including evacuation if necessary • Ability to switch to other markets and change capacity at short notice |
Financial risks
Risk Impact Mitigation
Commodity risk: fuel, foreign currency and interest rate risks | Costs incurred may not be recovered from customers
Brochure prices do not reflect actual cost of travel
Interest cost uncertainties | • Actively managed Board-approved hedging and treasury policies |
Liquidity and counterparty credit risks | Group is unable to meet its financial commitments as they fall due | • Actively managed Board-approved treasury policy • New £1.7bn refinancing agreed in May 2010 increased maturity profile and diversified funding sources • Focus on cash management throughout the organisation and regular review of counterparties |
Tax risk | Inability to utilise losses resulting in higher taxation charges | • Compliance with Board-approved tax policy • Regular monitoring of forecasts and high risk areas |
Pension liabilities | Size of deficit may restrict investments in the business | • Broadly diversified pension fund with limited exposure to single asset classes • Pension scheme assets and liabilities are closely monitored • Agreed timescales for funding any deficit • Our UK defined benefit schemes are under review |
Breakdown in internal controls | Inability to operate, loss of profit | • System of internal control in place, which is continually monitored • Internal audit function |
Other risks
Risk Impact Mitigation
Political, military, terrorist, security and health risks in source markets and key tourist destinations | Reduction of revenue and loss of profit | • Ongoing monitoring by management • Flexible and asset-light business model provides ability to switch to other markets and change capacity at short notice |
Competition law and anti-trust | Non-compliance with competition laws could result in substantial fines and loss of reputation | • Awareness of competition law raised across the Group with specific training programme for senior management • Internal audits monitor procedures and report findings |
Legal and regulatory risks, especially in respect of airline operating licences, insurance and financial services sectors, and legislative impacts | Inability to obtain operating and/or route licences leading, ultimately, to cessation of operation. Increased regulation will add extra costs to holidays | • Active legal and regulatory management programme in place • Ongoing programme to review airline operations and safety processes |
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