REG - Card Factory PLC - Annual Financial Report and Notice of AGM <Origin Href="QuoteRef">CARDC.L</Origin> - Part 2
15/07/2015 14:26
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any concerns in complete confidence. Responsibility for managing and monitoring compliance within each of the Group's key operational teams sits with the relevant member
of the senior management team.The Group has appointed a combined General Counsel and Company Secretary to oversee and co-ordinate compliance in the Group as a whole with
the senior management team being required to liaise with him and external advisers to ensure that potential issues are identified and managed. In addition, the
responsibility for compliance by the Group with governance and listing requirements sits with General Counsel and Company Secretary.
Information Technology The Group is dependent on reliable and efficient information technology (IT) systems and processes. These include all systems and processes supporting our retail operations (both physical and online), our head office function and our in-house design and printing operations. A failure to adequately maintain the Group's IT systems or any prolonged system performance problems could seriously affect our ability to implement the Group's strategy and to carry on the business. In early 2014, the Group appointed a Group Chief Information Officer to further develop and oversee the implementation of the Group's IT strategy and to ensure it is
aligned with the long-term strategy of the Group as a whole. The Group's IT strategy is reviewed regularly to ensure it supports the day-to-day operational needs of the
business. IT strategy and governance generally form part of the Audit and Risk Committee's remit for review. The continuing rollout of EPOS systems across the Group's
store network is a core part of the Group's IT strategy to continue the rollout plan in line with expectations. The Group's principal IT risks are documented and agreed
service levels for recovery of key business systems are in place and form part of the Group's overall business continuity plan.
Online The Group's online presence in the personalised greeting card and gift market, principally via our Getting Personal transactional website, is relatively new to our business. There can be no assurance that our transactional websites will compete effectively in a very competitive market with relatively low barriers to entry. If the Group fails to develop our transactional websites in line with changing customer tastes and evolving technology, they may not deliver the anticipated growth in sales. This may also adversely impact our reputation and our customers' perception of our brands. Development of the Group's online offering is one of our four growth pillars. Following the acquisition of Getting Personal in 2011, the Group has further developed the
extensive in-house web development capabilities that were acquired with that business. Responsibility for review and development of online strategy has been given to a
steering group chaired by the Group's Chief Information Officer and whose members include the Group's Chief Executive Officer, Getting Personal's Managing Director and
other key members of the senior management team. The steering group has responsibility for developing all areas of the strategy from technical delivery to the strength of
the online retail proposition and customer experience. The online strategy also forms part of the Group's wider IT strategy to ensure it remains aligned with the Group's
overall technology goals.
Online
The Group's online presence in the personalised greeting card and gift market,
principally via our Getting Personal transactional website, is relatively new
to our business. There can be no assurance that our transactional websites
will compete effectively in a very competitive market with relatively low
barriers to entry. If the Group fails to develop our transactional websites in
line with changing customer tastes and evolving technology, they may not
deliver the anticipated growth in sales. This may also adversely impact our
reputation and our customers' perception of our brands.
Development of the Group's online offering is one of our four growth pillars.
Following the acquisition of Getting Personal in 2011, the Group has further
developed the extensive in-house web development capabilities that were
acquired with that business. Responsibility for review and development of
online strategy has been given to a steering group chaired by the Group's
Chief Information Officer and whose members include the Group's Chief
Executive Officer, Getting Personal's Managing Director and other key members
of the senior management team. The steering group has responsibility for
developing all areas of the strategy from technical delivery to the strength
of the online retail proposition and customer experience. The online strategy
also forms part of the Group's wider IT strategy to ensure it remains aligned
with the Group's overall technology goals.
Directors' Responsibility Statement
The Annual Report and Accounts 2015 contains a responsibility statement by
Richard Hayes, Chief Executive Officer, and Darren Bryant, Chief Financial
Officer, by order of the Board in the following form:
"We confirm that to the best of our knowledge:
· the financial statements, prepared in accordance with the applicable set
of accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
· the Strategic Report includes a fair review of the development and
performance of the business and the position of the issuer and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Group's position and performance, business model
and strategy."
Related Party Transactions
The only material transactions with related parties during the financial year
ended 31 January 2015 were:
· the Relationship Agreement entered into between the Company and the
Charterhouse Funds;
· the Underwriting Agreement entered into between the Company and the
Principal Shareholder; and
· the following transactions (further details of which are set out in note
28 of the financial statements on page 103 of the Annual Report and Accounts
2015):
Transactions with Key Management Personnel
The key management personnel of the Group comprise the Card Factory plc Board
of Directors and the Operational Board. Disclosures relating to remuneration
of key management personnel are included in note 6 of the financial
statements. Further details of Directors' remuneration are set out in the
Directors' Remuneration Report on pages 50 to 65 of the Annual Report and
Accounts 2015. Directors of the Company control 6.4% of the ordinary shares of
the Company;
Charterhouse General Partners (IX) Limited, as general partner of funds
managed by it, controlled 17.8% of the ordinary share capital on the date the
financial statements were approved (41.3% immediately following the IPO) and
were represented on the Board of Directors by Graeme Coulthard, Non-Executive
Director, prior to his resignation on 3 February 2015. The total aggregate fee
for Director services payable to Charterhouse was £45,000 per annum (pre IPO:
£40,000 per annum);
Settlement of shareholder loan notes
In May 2014, as detailed in the IPO prospectus, the Company issued 50.7
million ordinary shares at market value in full settlement of all outstanding
14% loan notes totalling £114.0 million which included settlement of the loan
notes amounts due to related parties; and
Residual management equity
In May 2014, as detailed in the IPO prospectus, the Company issued 4.375
million ordinary shares at nominal value in relation to residual management
equity. Included in this amount were 1.875 million shares issued to Darren
Bryant, Chief Financial Officer and 1.875 million shares to other key
management personnel who are not Directors of Card Factory plc.
Further details of the Relationship Agreement and the Underwriting Agreement
are set out in the Directors' Report on page 69 of the Annual Report and
Accounts 2015.
This information is provided by RNS
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