UK Corporate governance, going concern, viability, risk management, robust assessment, stress testing, Brexit and other principal risks

Ferguson plc – Annual report – 31 July 2019

Industry: distribution

Governance (extract)
Directors’ Report – other disclosures (extract)
Going concern statement
The Group’s principal objective when managing cash and debt is to safeguard the Group’s ability to continue as a going concern for the foreseeable future. The Group retains sufficient resources to remain in compliance with the financial covenant of its bank facilities with substantial headroom. The Directors consider it appropriate to continue to adopt the going concern basis in preparing the financial statements.

Strategic report (extract)
Principal risks and their management

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Governance (extract)
How the Board operates (extract)
Oversight of risk and internal controls
The Board is responsible for determining the nature and extent of the principal risks it is willing to take in achieving its strategic objectives and for maintaining sound risk management and internal control systems. During the year, the Board and its Committees carried out a robust assessment of the risks facing the business. This assessment included a review of environmental, social and governance risks as appropriate as well as considering emerging risks. The Directors’ assessment of the Group’s longer-term viability and the viability statement are set out on pages 48 and 49.

The principal risks which the Board has focused on are set out in the Principal risks and their management section on pages 47 to 53. Whilst risk can never be eliminated entirely, it is also vital that the Board ensures the Company maintains sound risk management and internal control systems in order to mitigate risks. The effectiveness of these systems is reviewed through the work of the Audit Committee, described on pages 66 to 71.