The Board of Directors of Thomas Cook Group plc is committed to the principles of corporate governance contained in the Combined Code on Corporate Governance (the "Code"). In determining its governance arrangements, the Board also has to have regard to the provisions of the Relationship Agreement between the Company and Arcandor AG ("Arcandor"). This is explained below.

This report sets out how the Company applied the Code principles and the extent to which the Company complied with the provisions of Section 1 of the Code in the period 1 November 2007 to 30 September 2008 (the "Financial Period").

The position of Arcandor as major shareholder

Arcandor holds (directly or indirectly) 52.8% of the Company’s shares. Upon the merger between MyTravel Group plc and Thomas Cook AG in June 2007, to form Thomas Cook Group plc (the "Company"), Arcandor and the Company entered into a Relationship Agreement (the "Relationship Agreement"). The Relationship Agreement sets out certain aspects of the Company’s governance arrangements. The Board considers that these arrangements are in the best interest of the Company in view of its ownership structure. In particular, the Relationship Agreement covers the following matters:

• Arcandor has the right to appoint two Non-Executive Directors; Thomas Middelhoff and Peter Diesch were appointed under this provision, as will Dr Karl-Gerhard Eick, with effect from 22 December 2008, when Peter Diesch steps down from the Board. For so long as Arcandor holds at least 40% or more of the shares in the Company, it also has the right to appoint one of those Directors as Chairman. Thomas Middelhoff was appointed under this provision.
• At all times the Independent Non-Executive Directors will constitute a majority of the Board, excluding the Chairman.
• The two Arcandor appointed Non Executive Directors have the right to membership of the Audit & Risk Management Committee, the Management Development & Remuneration Committee and the Nominations Committee. However, the Relationship Agreement provides that those Committees should also comprise no fewer than three Independent Non-Executive Directors, one of whom will be appointed Committee Chairman. In respect of the Audit & Risk Management Committee and Management Development & Remuneration Committee, due to the arrangement provided by the Relationship Agreement, the Company is not compliant with the Code provisions A.3.1 and A.2.2.
• For so long as Arcandor holds 40% or more of the shares in the Company, the Board cannot appoint a new Chief Executive Officer without the prior written consent of Arcandor.
• Provided the nomination processes as set out in the Relationship Agreement are followed, Arcandor’s voting rights, in respect of the election or re-election of any Director at General Meetings, will be restricted to two-thirds of the voting shares in issue which are not held or controlled by Arcandor.
• The Company carries on its businesses independently from Arcandor. Any proposed transactions and relationships between the Company and Arcandor are to be on a normal commercial basis and are subject to the prior approval of a Committee comprising the Independent Non-Executive Directors and to the provisions of Chapter 11 of the Listing Rules of the UK Financial Services Authority (Related Party Transactions). In circumstances where Chapter 11 of the Listing Rules would require a proposed transaction to be approved by shareholders, Arcandor shall not vote its shares on that resolution. Although not covered in the Relationship Agreement, the Company’s financing arrangements, including the £1.4 billion credit facility referred to in the Financial Review, are ringfenced from Arcandor.
• The Relationship Agreement will terminate in the event of Arcandor’s shareholding falling below 30%.

The Board of Directors

An effective Board of Directors leads and controls the Group and has a schedule of matters reserved for its approval. This schedule and the terms of reference for the Audit & Risk Management, Management Development & Remuneration, Nominations, and Health, Safety & Environmental Committees are available on request and on the Company’s website at www.thomascookgroup.com. The powers of the Directors are set out in the Company’s Articles of Association. These are also available on the Company’s website.

The Board is specifically responsible for:

• approval of the Group’s strategy and its budgetary and business plans;
• approval of significant investments and capital expenditure;
• approval of annual and half-year results and interim management statements, accounting policies, and the appointment and remuneration of the external auditors;
• approval of interim, and recommendation of final, dividends;
• changes to the Group’s capital structure and the issue of any securities;
• maintenance of the Group’s system of internal control, governance and approval authorities;
• executive performance and succession planning;
• determining standards of ethics and policy in relation to health, safety, environment, social and community responsibilities.

One of the Board’s meetings during the year is specifically devoted to the development of the Group’s strategy. Strategy is continually monitored and reviewed by the Board.

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Board meetings and attendance

The Board has regular scheduled meetings throughout the year and supplementary meetings are held as and when necessary. The Board held ten scheduled and ten unscheduled supplementary meetings during the Financial Period. A table detailing individual Director attendance at scheduled Board and Committee meetings during the Financial Period is set out below. Non-attendance at meetings was due to prior business commitments. All Directors who were unable to attend specific Board or Committee meetings reviewed the relevant briefing papers and provided their comments to the Chairman of the Board or Committee, as appropriate. The Chairman and each Non Executive Director has provided assurance to the Board that they remain fully committed to their respective roles and can dedicate sufficient time to meet what is expected of them.

The table below shows the number of scheduled Board and Committee meetings attended by each Director out of the number convened during the time served by each Director on the Board or relevant Committee during the Financial Period.

Current Directors:

Name	Board	Nominations Committee	Audit & Risk Management Committee	Management Development & Remuneration Committee	Health, Safety & Environmental Committee
Thomas Middelhoff (Non-Executive Chairman)	9/10	2/2	10/12	6/9	–
David Allvey (Independent Non-Executive Director)	9/10	–	12/12	–	2/2
Michael Beckett (Deputy Chairman & Senior Independent Director)	10/10	2/2	11/12	9/9	2/2
Jürgen Büser (Chief Financial Officer)1	2/2	–	–	–	–
Roger Burnell (Independent Non-Executive Director)	9/10	2/2	12/12	8/9	2/2
Peter Diesch (Non-Executive Director)	7/10	1/2	8/12	6/9	–
Manny Fontenla-Novoa (Chief Executive Officer)	10/10	–	–	–	2/2
Hemjö Klein (Independent Non-Executive Director)	9/10	–	–	7/9	2/2
Bo Lerenius (Independent Non-Executive Director)	7/10	–	12/12	–	–
Nigel Northridge (Independent Non-Executive Director)2	2/2	–	–	2/3	–

Former Directors who served during the year:

Name	Board	Nominations Committee	Audit & Risk Management Committee	Management Development & Remuneration Committee	Health, Safety & Environmental Committee
John Bloodworth3	2/2	–	–	–	–
Ludger Heuberg4	8/8	–	–	–	–
Peter McHugh5	2/2	–	–	–	–
Angus Porter6	5/6	–	–	4/5	–

Notes

1. Jürgen Büser was appointed to the Board on 1 July 2008
2. Nigel Northridge was appointed to the Board on 1 August 2008
3. John Bloodworth resigned from the Board on 31 December 2007
4. Ludger Heuberg resigned from the Board on 1 July 2008
5. Peter McHugh resigned from the Board on 31 December 2007
6. Angus Porter resigned from the Board on 25 April 2008

Board and Committee composition

The Board comprises two Executive Directors and eight Non-Executive Directors, six of whom are considered to be independent. Biographical details of the Directors can be found in Board of Directors. Peter Diesch will step down from the Board with effect from 22 December 2008. He will be replaced as an Arcandor nominated Non-Executive Director by Dr Karl-Gerhard Eick, who will be appointed a Director with effect from 22 December 2008.

As part of its annual review of corporate governance, the Board considered the independence of the Non-Executive Directors against the criteria specified in the Code and determined that David Allvey, Michael Beckett, Roger Burnell, Hemjö Klein, Bo Lerenius and Nigel Northridge remained independent. The Arcandor nominated Directors Thomas Middelhoff, Peter Diesch (and Karl-Gerhard Eick who will replace him on 22 December 2008), are not considered as independent.

The roles of the Chairman and Chief Executive Officer are separate and distinct and each has a written statement of his respective responsibilities, a summary of which can be found within the Corporate Governance compliance statement at www.thomascookgroup.com.

The Chairman, Thomas Middelhoff, is responsible for leading the Board and chairing Board and general meetings of the Company.

The Chief Executive Officer, Manny Fontenla-Novoa, is responsible for the development of strategy and, once approved by the Board, its implementation and the day-to-day executive management of the Group.

The Senior Independent Director, Michael Beckett, is available to shareholders if they have concerns which have not, or cannot, be resolved through discussion with the Chairman or the Executive Directors. Mr Beckett chairs meetings of the Independent Non Executive Directors, who meet periodically throughout the year.

There is a formal, rigorous and transparent process in place for the appointment of new Directors to the Board. This process is described in the section on the Nominations Committee. In accordance with the Code and the Company’s Articles of Association, all Directors are subject to election by shareholders at the first Annual General Meeting ("AGM") following their appointment to the Board and thereafter are subject to re-election every third year. Other than in respect of the Arcandor appointed Directors and Michael Beckett, Non-Executive Directors are initially appointed for a three-year term and, subject to rigorous review and re-election, can serve up to a maximum of three such terms.

Upon the recommendation of the Nominations Committee, David Allvey will be proposed for re-election and Jürgen Büser, Nigel Northridge and Karl-Gerhard Eick, having been appointed to the Board since the last AGM, will each retire and offer himself for re-appointment by shareholders at the 2009 AGM.

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Operation of the Board

Before each Board meeting, Directors received a comprehensive pack of papers and reports on the matters to be discussed at the meeting. Senior executives below Board level also attended relevant parts of Board meetings in order to make presentations on their areas of responsibility. This gave the Board access to a broader group of executives.

Between Board meetings, Directors are provided with relevant information on matters affecting the business.

The Group Company Secretary, who was appointed by the Board, is responsible for advising and supporting the Chairman and the Board on corporate governance matters. All Directors have access to the advice and services of the Group Company Secretary and, through him, have access to independent professional advice in respect of their duties at the Company’s expense. The Company maintains Directors’ and Officers’ liability insurance.

The Code provides that the Chairman and Non-Executive Directors should meet without executives present; such meetings have taken place. However, because of the governance structure adopted under the Relationship Agreement, the Company believes that the spirit of the Code is also served by the meetings of Independent Non-Executive Directors. As stated above, these meetings are chaired by the Deputy Chairman, who is also the Senior Independent Director.

Board evaluation

An evaluation of the Board and its Committees was conducted during the Financial Period. The Board evaluation focused on the following areas:

• the Board, its size, structure, effectiveness, range of skills and appropriateness of its delegated authorities;
• the appropriateness of information circulated to the Board for meetings and with regard to financial and operational matters;
• compliance with legislation, regulation and codes and advice on corporate governance;
• the establishment, competence and terms of reference of Board Committees.

The evaluation highlighted a small number of issues and appropriate actions have been taken to address them. In addition, the Chairman was responsive to suggestions made by the Independent Non-Executive Directors regarding the operation and focus of the Board. In line with best practice, the Company has adopted an online evaluation system, which will be used to conduct an evaluation of the Board and its Committees in the current year.

The Independent Non-Executive Directors reviewed the performance of the Chairman. As part of the Company’s performance management system that applies to management at all levels across the Group, the performance of the Chief Executive Officer and the Chief Financial Officer is reviewed by the Management Development & Remuneration Committee.

Board training and induction

An induction programme tailored to meet the needs of individual Directors is provided for each new Director. Overall, the aim of the induction programme is to introduce new Directors to the Group’s business, its operations and its governance arrangements. Nigel Northridge’s induction programme, for example, included meetings with senior management, visits to the Company’s offices in different geographical locations, presentations on key business areas and relevant documentation.

Directors also receive training throughout the year. At Board meetings and, where appropriate, Committee meetings, the Directors receive regular updates and presentations on changes and developments to the business, and to the legislative and regulatory environments. During the Financial Period, the Board was provided with updates on the business environment and briefings on their codified duties, conflicts of interest and a presentation on the law relating to corporate manslaughter.

Directors’ conflicts of interest

From 1 October 2008, a Director has had a statutory duty to avoid a situation in which he has, or can have, an interest that conflicts or possibly may conflict with the interests of the Company. A Director will not be in breach of that duty if the relevant matter has been authorised in accordance with the Articles of Association by the other Directors. The Articles of Association were amended to include the relevant authorisation for Directors to approve such conflicts by a resolution of shareholders at the AGM held on 10 April 2008.

Prior to 1 October 2008, the Board conducted a review of actual or possible conflicts of interest in respect of each Director. At its meeting in September 2008, the Board approved a set of guiding principles on managing conflicts; considered the process that had been adopted for identifying current conflicts; authorised the conflicts that had been identified and stipulated conditions in accordance with the guiding principles; and agreed a process to identify and authorise future conflicts. It was also agreed that the Nominations Committee would review the authorised conflicts every six months, or more frequently if the potential conflict situation materialises.

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Committees of the Board

The Board has delegated authority to its Committees on specific aspects of management and control of the Group. Matters discussed and agreed at the Committees are reported to the next Board meeting.

Group Executive Board

The Chief Executive Officer chairs the Group Executive Board which meets ten times a year to oversee the strategic development and operational management of the Group’s businesses. The current members of the Group Executive Board, together with their biographies, are set out within the Group Executive Board.

Finance & Administration Committee

To facilitate swift and efficient operational management decisions, the Board has established the Finance & Administration Committee (comprising the Chief Executive Officer and the Chief Financial Officer) which has delegated authority, within clearly identified parameters, in relation to day-to-day financing and administrative matters.

Audit & Risk Management Committee

Role of the Committee

The Board has delegated to the Committee responsibility for overseeing the financial reporting and internal risk management control functions and for making recommendations to the Board in relation to the appointment of the Company’s internal and external auditors.

In accordance with its terms of reference, the Committee, which reports its findings to the Board, is authorised to:

• monitor the integrity of the interim and annual financial statements, including a review of the significant financial reporting judgements contained in them;
• review the Company’s internal financial controls, internal control and risk management systems;
• monitor and review the effectiveness of the Company’s internal audit function;
• establish and oversee the Company’s relationship with the external auditors, including the monitoring of their independence; and
• monitor matters raised pursuant to the Company’s whistleblowing arrangements.

The full terms of reference of the Committee are available on www.thomascookgroup.com or from the Group Company Secretary at the registered office.

The composition of the Committee

All members of the Committee are Non-Executive Directors. Consistent with the Relationship Agreement, the two Arcandor appointed Non-Executive Directors, Thomas Middelhoff and Peter Diesch (and Karl-Gerhard Eick who will replace him on 22 December 2008), who do not meet the test of independence, are members of the Committee. However, the other four members of the Committee are Independent Non-Executive Directors. There were no changes to the composition of the Committee during the Financial Period. The composition of the Committee at 30 September 2008 was:

David Allvey (Chairman) *
Michael Beckett *
Roger Burnell *
Peter Diesch
Bo Lerenius *
Thomas Middelhoff

* Independent Non-Executive Directors

David Allvey is considered by the Board to have recent and relevant financial experience as required by the Code.

Meetings and attendance

The Committee, which meets as often as required, met twelve times during the Financial Period, which included meetings held by teleconference, to approve matters such as the provision of financial information to Arcandor pursuant to the Relationship Agreement. Attendance by Committee members at each meeting is set out in the attendance table.

During the Financial Period, the Committee met twice privately with the external auditors, PricewaterhouseCoopers LLP, and separately with representatives from Ernst & Young LLP who have been appointed as the internal auditors of the Company.

Business conducted during the Financial Period

• Review of the annual and half-yearly results and interim management statements;
• Review of the accounting judgements and policies adopted in connection with the above, and the quarterly submission of financial information to Arcandor;
• Policy in relation to taxation;
• Fuel hedging strategy;
• Treasury policies and procedures;
• Review and approval of the internal audit plan and the results of the audits conducted under that plan;
• Review and approval of the external audit plan; and
• Review of the principal risks.

Support to the Committee

The Committee received information and support from management during the year to enable it to carry out its duties and responsibilities effectively.

External auditors

The Committee has developed a policy for the provision of non-audit services by the auditors and pre-approves material fees for non-audit services in accordance with that policy in order to ensure that the provision of non-audit services does not impair the external auditor’s independence or objectivity. The policy, which is appended as a schedule to the Audit & Risk Management Committee’s terms of reference, is published on the Company’s website at www.thomascookgroup.com. An analysis of the fees earned by the Group’s auditors for audit and non-audit services is disclosed in Note 10 to the Financial Statements.

PricewaterhouseCoopers LLP (PwC) were appointed as sole auditors of the Company, having previously been joint auditors, following a tender process conducted at the beginning of the Financial Period. They were appointed by shareholders at the AGM held on 10 April 2008. Upon the recommendation of the Audit & Risk Management Committee, PwC will be proposed for re-election by shareholders at the AGM to be held on 19 March 2009. PwC have confirmed their independence as auditors of the Company in a letter addressed to the Directors.

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Nominations Committee

Role of the Committee

The Board has delegated to the Committee responsibility for reviewing and proposing appointments to the Board and for recommending any other changes to the composition of the Board or the Board Committees. The principal responsibility of the Committee is to make recommendations to the Board on all new appointments to the Board, as well as Board balance and composition. The Committee ensures that there is clarity in respect of the role description and capabilities for such appointments.

The full terms of reference of the Committee are available on www.thomascookgroup.com or from the Group Company Secretary at the registered office.

The composition of the Committee

All of the members of the Committee are Non-Executive Directors, two of whom, Thomas Middelhoff and Peter Diesch (who will be replaced by Karl-Gerhard Eick on 22 December 2008), do not meet the test of independence. Angus Porter resigned from the Board, and therefore ceased to be a member of the Committee, on 25 April 2008. During the period from 25 April to 1 August 2008, the Code requirement that a majority of the Nominations Committee comprise Independent Non-Executive Directors was not satisfied. Nigel Northridge joined the Board, and was appointed to the Committee, on 1 August 2008. At 30 September 2008 the composition of the Committee was:

Michael Beckett (Chairman)*
Roger Burnell *
Peter Diesch
Thomas Middelhoff
Nigel Northridge *

* Independent Non-Executive Directors

Board appointments

Appointments to the Board are made on merit and against objective criteria. This process is led by the Nominations Committee which, after evaluating the balance of skills, knowledge and experience of each Director, makes recommendations to the Board.

Meetings and attendance

During the Financial Period, the Committee had two formal meetings. Attendance by Committee members at each meeting is given in the attendance table.

Principal activities during the Financial Period

The Committee considered the appointment of a new Chief Financial Officer following the decision of Ludger Heuberg to step down from the Board for personal reasons and move back to Germany to assume the role of CFO for the Group’s Continental European business segment. In line with succession plans, the Nominations Committee recommended Jürgen Büser, formerly CFO for the UK & Ireland Division, as the new Chief Financial Officer and he was appointed with effect from 1 July 2008.

The Committee engaged the services of an external search agency and other professional firms for the recruitment of Non-Executive Directors. This process resulted in the recommendation to the Board of the appointment of Nigel Northridge with effect from 1 August 2008.

Management Development & Remuneration Committee

A report detailing the composition, responsibilities and work carried out by the Management Development & Remuneration Committee during the year, including an explanation of how it applies the principles of the Code in respect of Executive Directors’ remuneration, is included within the Remuneration Report.

The Management Development & Remuneration Committee does not determine the Chairman’s remuneration and therefore does not comply with the Code. An explanation of this is set out in the Remuneration Report.

All members of the Committee are Non-Executive Directors. Consistent with the Relationship Agreement, the two Arcandor appointed Directors, Thomas Middelhoff and Peter Diesch, neither of whom meet the Code’s test of independence, are members of the Committee. However, each of the other four members, being a majority of the Committee, has been determined by the Board as being independent as defined by the Code.

Health, Safety & Environmental Committee

Role of the Committee

The Board has delegated to the Committee responsibility to review, develop and oversee consistent policy, standards and procedures for managing health, safety and environmental risks to the Group’s business. It is also responsible for the review and oversight of compliance with relevant legislation and regulation relating to health, safety and the environment across the Group.

The full terms of reference of the Committee are available on www.thomascookgroup.com or from the Group Company Secretary at the registered office.

The composition of the Committee

The composition of the Committee at 30 September 2008 was:

Roger Burnell (Chairman) *
David Allvey*
Michael Beckett*
Manny Fontenla-Novoa
Hemjö Klein*

* Independent Non-Executive Directors

Meetings and attendance

During the Financial Period the Committee met twice; there was also a presentation and discussion on corporate manslaughter at a Board meeting. Attendance by Committee members at each meeting is set out in the attendance table.

During the Financial Period, the Committee reviewed and agreed the Group’s Health, Safety & Environmental report, reviewed the process of health and safety reporting across the Group and agreed the Group objectives in the fields of health, safety and the environment for 2007/08.

The Group’s corporate social responsibility report for 2007/08 is available on www.thomascookgroup.com and contains the Group’s health, safety and environmental policies, an explanation of how Thomas Cook manages corporate social responsibility and progress against targets. A summary of the online report is contained within Corporate Social Responsibility in the Business review.

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Shareholder communication

The Board promotes open communication with shareholders, which is formalised within a framework of investor relations and includes formal presentations of full year and interim results, trading statements and regular meetings between executive management and institutional investors. In addition, the Board responds to ad hoc requests for information and all shareholders have an opportunity to question the Board at the AGM.

A review of the performance and financial position of the Group and business segments and an explanation of the Group’s strategy is provided within Our Strategy and Our Strategy in Action in the Business review.

The Deputy Chairman, who is also the Senior Independent Director, met a number of major institutional shareholders during the year to discuss the Group’s remuneration policy and governance arrangements, and to gain a first-hand understanding of any issues or concerns they may have had.

At its 2008 AGM, the Company passed a resolution allowing the website and email to be used as the primary means of communication with its shareholders. This arrangement provides significant benefits for shareholders and the Company in terms of timeliness of information, reduced environmental impact, and cost. Shareholders may still opt to receive their communications in a paper format. The Company’s website contains information for shareholders, including share price and news releases and can be found at www.thomascookgroup.com.

Risk management and internal control

The Board recognises its ultimate accountability for maintaining an effective system of internal control that is appropriate in relation to both the scope and the nature of the Group’s activities and complies with the Turnbull Committee Guidance on the Combined Code and has approved the framework and the standards implemented. The Board has delegated responsibility for the implementation of the Group Risk Management Policy to the Chief Financial Officer. The Chief Financial Officer has formed the Group Risk Management Committee comprising senior executives from across the Group, to support him in fulfilling this responsibility.

The Group Risk Management Committee is responsible for:

• supervising a thorough and regular evaluation of the nature and extent of the risks to which the Company is exposed;
• reviewing the corporate risk profile and recommending risk management strategies; and
• supervising and assessing the overall effectiveness of the risk management process.

To support the Group Risk Management Committee, there are segment risk management committees, each comprising the respective segment Chief Executive Officer, Chief Financial Officer and other senior managers. The Group has established five segment risk committees which report into and support the work of the Group Risk Management Committee:

• UK and Ireland;
• Continental Europe;
• Northern Europe;
• North America; and
• Airlines Germany.

By implementing the risk management policy, the segments are responsible for:

• maintaining and updating risk reporting;
• managing risk action implementation and measurement systems; and
• maintaining and reviewing risk performance and measurement systems.

Risk registers are compiled and submitted by each segment for review quarterly. The Group Risk Management Committee prepares a half-yearly risk report for the attention of the Audit & Risk Management Committee based on the feedback from the segment risk management committees. The report identifies the principal risks to the business and assesses the adequacy of controls and procedures in place to mitigate the likelihood and the impact of these risks. The regular risk reporting regime has created an environment for the development and improvement of risk management procedures across the Group. The Audit & Risk Management Committee reviews the reports of the Group Risk Management Committee and makes recommendations to improve risk management and internal control. This process of risk identification, measurement and reporting provides a comprehensive ongoing assessment of the significant risks facing the Group and the mitigating actions taken in respect of those risks. This process ensures that the Group complies with the relevant corporate governance best practice in relation to risk management, including the guidance issued under the Turnbull Report. The Group’s internal audit function reports directly to the Chairman of the Audit & Risk Management Committee. Internal audit makes recommendations to that Committee in relation to the maintenance of a sound control environment throughout the Group.

The Group encourages employees to report any concerns which they feel need to be brought to the attention of management and has adopted a whistleblowing policy and guidance on theft and fraud reporting policy. These are published on the Group’s intranet sites, allowing such matters to be raised in confidence through the appropriate channels. The Group has a code of ethics which deals with:

• prohibitions on employees using their position for personal gain;
• prohibitions on improper business practices;
• a requirement for compliance with all internal approval and authorisation procedures and legal requirements; and
• a requirement to disclose potential conflicts of interest and potential related party contracts.

This code of ethics is contained within the Group’s internal policies guide, which is available to all employees and, in particular, those with responsibility for procurement or other dealings with third party suppliers. In addition, the Group Company Secretary is available for advice on any matter which may give rise to cause for concern in relation to the code of ethics.

During the year, the Board, through the work of the Audit & Risk Management Committee, has conducted a review of the Group’s system of internal control. There is an ongoing process for the identification and evaluation of risk management and internal control processes which has been in place throughout the year and remains in place up to the date of the financial statements. The Board, in reviewing the effectiveness of the system of internal control, can confirm that necessary actions have been, or are being, taken to remedy any significant failings or weaknesses identified from that review.

Going concern

After making appropriate 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. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

Disclosure of information to auditors

Each of the Directors who held office at the date of approval of this Directors’ report confirms that: so far as he is aware, there is no relevant audit information of which the Company’s auditors are unaware; and that he has taken all steps that he ought to have taken as a Director to make him aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.

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 estimates that are reasonable and prudent;
• 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 to enable them to ensure that the financial statements and the Directors’ Remuneration report comply with the Companies Act 1985 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.

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