REG - Sage Group PLC - Half-year Report <Origin Href="QuoteRef">SGE.L</Origin> - Part 4
05/05/2016 07:06
- Part 4: For the preceding part double click ID:nRSE3000Xc
In progress:· On-going review and development of Strategic Partner network
#7 3rd Party RelianceSage does not understand and manage its 3rd party ecosystem Strategic Alignment: Revolutionise Business Several Sage customer service offerings are delivered or supported using 3rd parties, whilst Sage remains accountable for any (non) performance. The 3rd party ecosystem must be understood and effectively managed, in order to limit Sage's exposure. · A global procurement function is in place to ensure key controls are applied in the selection and on-boarding of third parties· The business is responsible
for defining its needs and requirements· The global procurement function supports the business with the selection of third parties and negotiation of contracts·
Legal resources are used in contract negotiation· Management review and control is applied through the Investment Approval Process, and appropriate approval is
required before any expenditure can be authorised
In progress:· As part of the transition to the global operating model, and an Excellence in Governance initiative to support this transition, a global Third Party
Lifecycle Governance Framework is in final stages of development, and will be implemented during the financial year
#8 Supporting Control EnvironmentSage's control environment, business processes and technology infrastructure does not support the efficient and effective operation of the business Sage's global footprint has developed through acquisition. Aligning and rationalising these systems and processes, is required to support the 'One Sage' operating model. · Global and Regional Risk Committees are established, and membership drives the tone-from-the-top· CBCs are built around core systems to underpin operation and
expansion, including Salesforce CRM and Sage's own X3 for General Ledger activity· All new customers for CBC supported products are being entered directly into these
systems
In progress:· The implementation of Sage's X3 General Ledger, and associated migration of systems, is progressing in line with plans· New global finance
organisational model is being implemented in line with plans· Excellence in Governance initiative will deliver a Sage policy suite and management committee structure
during the financial year
#9 Information Management and Protection (including cyber)Sage fails to adequately understand, manage and protect information Sage's global footprint has developed through a process of acquisition, each arriving with its own processes and activities appropriate to a smaller business, but which did not develop in line with Sage's growth.Harmonising and rationalising these, as necessary, is required to support the 'One Sage' operating model and to allow a global view on all internal and external data being held and processed, including how this is managed and protected. · Accountability defined within 'OneIT' and 'Product' for all internal and external data being processed by Sage. OneIT and Product report to the Chief Information
Officer and Chief Product Delivery Officer respectively· A network of Information Security Officers oversees compliance with the IT Controls Framework, which defines
the key controls which are required· Maintenance of formal certification schemes, such as PCI, across specific parts of the business, with internal and external
validation of compliance· Ongoing assurance activities are performed across the estate by Internal Audit against the IT Controls Framework. Results are tracked and
reported to the Audit and Risk Committee· Global Incident Management framework is defined, including rating of incidents and required escalation In progress:·
Excellence in Governance initiative being undertaken across revised ways of working and policies to enhance effectiveness, and initial policies under review·
Information Management and protection awareness training being rolled out
#10 Regulatory and Legal FrameworkSage does not understand and operate within the applicable regulatory and legal framework Sage's services operate within a complex regulatory and legal environment. Monitoring this evolving regulatory and legal environment enables timely and appropriate steps to ensure on-going compliance.The approach initiated during FY15 is being continued and enhanced. · All legal resources across Sage report directly to the global Legal Director· The legal function uses internal and external resources to monitor planned and
realised changes in legislation· All product contracts are reviewed and approved through the global legal function· A suite of policies are in place to support
key legislation, including Data Protection and anti-Bribery· A Code of Ethics policy is in place across the business which provides clarity over how colleagues are
expected to behave. Completion of training and associated understanding is recorded and monitored· A Whistleblowing facility is in operation, to allow colleagues to
raise issues without fear of recrimination, and to provide early oversight of issues
In progress:· Creation of a Compliance function to re-enforce the drive towards a 100% compliance culture· Review of all legal and regulatory policies underway
as part of the defined Excellence in Governance initiative· Update of the Whistleblowing policy to reflect the revisions made to the Incident Management Policy, and
ensure alignment
#10 Regulatory and Legal FrameworkSage does not understand and operate within the applicable regulatory and legal
framework
Sage's services operate within a complex regulatory and legal environment. Monitoring this evolving regulatory and legal
environment enables timely and appropriate steps to ensure on-going compliance.The approach initiated during FY15 is being
continued and enhanced.
· All legal resources across Sage report directly to the global Legal Director· The legal function uses internal
and external resources to monitor planned and realised changes in legislation· All product contracts are reviewed and
approved through the global legal function· A suite of policies are in place to support key legislation, including
Data Protection and anti-Bribery· A Code of Ethics policy is in place across the business which provides clarity over
how colleagues are expected to behave. Completion of training and associated understanding is recorded and monitored·
A Whistleblowing facility is in operation, to allow colleagues to raise issues without fear of recrimination, and to
provide early oversight of issues
In progress:· Creation of a Compliance function to re-enforce the drive towards a 100% compliance culture· Review
of all legal and regulatory policies underway as part of the defined Excellence in Governance initiative· Update of
the Whistleblowing policy to reflect the revisions made to the Incident Management Policy, and ensure alignment
Statement of Directors' Responsibilities
Responsibility statement of the directors on the Annual Report & Accounts
The condensed consolidated half-yearly financial report for the six months ended 31 March 2016 includes the following
responsibility statement.
Each of the directors confirms that, to the best of their knowledge:
- the Group consolidated condensed financial statements, which have been prepared in accordance with IAS34, "Interim
Financial Reporting" as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and
profit of the Group; and
- the Directors' report includes a fair review of the development and performance of the business and the position of
the Group, together with a description of the principal risks and uncertainties that it faces.
The Directors also confirm that the Interim Management Report herein includes a fair review of information required by
4.2.8R of the DTR (Disclosure and Transparency Rules).
On behalf of the Board
S Hare
Chief Financial Officer
4 May 2016
Independent review report to The Sage Group plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report
for the six months ended 31 March 2016 which comprises consolidated income statement, consolidated statement of
comprehensive income, consolidated balance sheet, consolidated statement of cash flows, consolidated statement of changes
in equity and the related explanatory notes 1 to 12. We have read the other information contained in the half yearly
financial report and considered whether it contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in International Standard on Review
Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the
Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
As disclosed in the group accounting policies, the annual financial statements of the group are prepared in accordance with
IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted
by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the
half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board
for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland)
and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial
statements in the half-yearly financial report for the six months ended 31 March 2016 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
London
4 May 2016
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