TIDMKGF

RNS Number : 2467R

Kingfisher PLC

26 June 2020

26 June 2020

KINGFISHER PLC

(the "Company")

Annual Report and Accounts 2019/20 and Notice of 2020 Annual General Meeting

The Company's Annual Report and Accounts for the year ended 31 January 2020 (the 'Annual Report') and Notice of Annual General Meeting to be held on 24 July 2020 have been published on the Company's website www.kingfisher.com (together 'the Documents'). The Documents have also been posted or otherwise made available to shareholders, depending on their elected method of communication.

In accordance with Listing Rule 9.6.1 a copy of the Documents, together with the Form of Proxy have also been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .

The final results for the year ended 31 January 2020, released by the Company on 17 June 2020, include the information required pursuant to Rules 4.1 and 6.3.5R of the UK Disclosure Guidance and Transparency Rules, excepting publication of the responsibility statement of the Directors in respect of the 2020 Annual Report, a description of the principal risks and uncertainties facing the Company, and the related party transactions carried out by the Company and its subsidiaries during the year, which are detailed below:

   1.   Principal risks 

The principal risks and uncertainties facing the Company are set out below.

 
 1. LEVEL AND IMPACT OF CHANGE 
 As we continue to evolve our business, there are significant 
  programmes of work underway targeting improvements in our offer, 
  market positions and cost base. These programmes may not achieve 
  their objectives and have the potential to disrupt our business 
  if we fail to properly prioritise activity and manage change 
  effectively. Failure to realise programme targets and/or business 
  disruption could result in weaker than anticipated sales growth 
  and a failure to maintain operating margins or generate sufficient 
  cash to meet our objectives. 
 Link to strategic priorities 
 
        *    'Focus and fix' in 2020 
 
 
        *    Move to a balanced, simpler local-group operating 
             model with an agile culture 
 
 
        *    Grow e-commerce sales 
 
 
        *    Build a mobile-first, service orientated customer 
             experience 
 
 
        *    Differentiate and grow through own exclusive brands 
             (OEB) 
 
 
        *    Test new store concepts and adapt our store footprint 
 
 
        *    Source and buy better, reduce our costs and our 
             inventory 
 How our risks have changed 
 No change. Change has been a constant feature of our business 
  for some time and we have established processes in place to 
  manage, monitor and report the delivery of strategic activities 
  arising from these programmes. 
 How we manage and monitor the risk 
 
        *    Central Transformation & Results Delivery Office 
             established with Group Executive-level leadership. 
 
 
        *    Clearly prioritised strategic change taskforces 
             established with Group Executive ownership and 
             measurable outcomes. 
 
 
        *    Monthly tracking against key milestones and reporting 
             to the Group Executive and the Board. 
 
 
        *    Regular strategic updates to the Board. 
 
 
        *    Retail banner Transformation Directors in place to 
             design and deliver change into the business. 
 
 
        *    Periodic reviews of governance and enabling 
             activities undertaken by Internal Audit. 
 2. CONTAGIOUS DISEASES 
 A prolonged global health threat could adversely affect our 
  business by disrupting our and our partners operations, causing 
  a significant reduction in footfall and consumer spending and 
  by negatively impacting our ability to receive products from 
  affected countries. Also, high levels of absence in our workforce 
  could impact our ability to operate stores or provide appropriate 
  functional support to our business. 
  Such restrictions and/or reductions in demand could adversely 
  affect our financial condition and results of operations. 
 Link to strategic priorities 
 
        *    'Focus and fix' in 2020 
 
 
        *    Responsible business 
 How our risks have changed 
 New risk. 
 How we manage and monitor the risk 
      We monitor the development of such events closely, convening 
       a Group-led Crisis Committee to bring together functional leaders 
       to determine the additional actions necessary to manage the 
       consequences of a situation and its impact on our people and 
       operations. 
       We started to convene the Group Crisis Committee in late January 
       to consider the impact of the Covid-19 outbreak. Since then, 
       the Committee has met frequently to monitor events and response 
       strategies closely. The Board provides regular oversight to 
       evaluate the impact of Covid-19 on Kingfisher, including impact 
       on long term viability and going concern. 
       The health and safety of our colleagues and customers has remained 
       our top priority, alongside supporting governments to limit 
       the spread of the virus. We have mobilised business continuity 
       and crisis teams in each of our markets with response measures 
       including: 
        *    Implementing changes to our stores (the majority 
             initially closed for browsing, with a move to 
             contactless click and collect or home delivery models 
             and a limit on ranges to essential items. Almost all 
             of our stores are now open with strict hygiene and 
             social distancing measures enforced). 
 
 
        *    Redeploying or furloughing selected Group colleagues. 
 
 
        *    Moving office-based staff to a work from home basis. 
 
 
        *    Significantly reducing discretionary spend, including 
             freezing of pay reviews and recruitment. 
 
 
        *    Stopping all non-committed capital expenditure. 
 
 
        *    Taking advantage of other working capital 
             optimisation measures, e.g. delays or holidays for 
             rates and taxes. 
 
 
        *    Reprioritisation of sourcing requirements and 
             adjusting purchasing plans. 
 
 
       We will continue to adjust our response activities as publicly 
       available information evolves. 
 3. BUSINESS RESILIENCE 
 Technology is key to our business and the achievement of our 
  strategic objectives. We are increasingly reliant on resilient 
  and secure systems and networks to maintain our operations. 
  Similarly, we are dependent on complex supply chains and delivery 
  solutions to deliver our products to our customers. A significant 
  failure of our IT infrastructure or key systems could result 
  in the loss of data or an inability to operate efficiently, 
  with an adverse financial, regulatory or reputational impact. 
  A disruption to our supply chain could have a similar impact. 
 Link to strategic priorities 
 
        *    Grow e-commerce sales 
 
 
        *    Build a mobile-first, service orientated customer 
             experience 
 
 
        *    Source and buy better, reduce our costs and our 
             inventory 
 How our risks have changed 
 No change. We recognise that complexity in our business and 
  supply chain inevitably results in a high level of risk. We 
  maintain a programme of continuous improvement to understand 
  and manage the evolving risk landscape. 
 How we manage and monitor the risk 
              IT infrastructure: 
                *    A common IT infrastructure is in place across our 
                     markets. We work closely with our suppliers to 
                     maintain the stability of our environment. 
 
 
                *    We operate from highly resilient data centres that 
                     are tested regularly. 
 
 
                *    We have tested and proven everything that is 
                     essential/common to the 'infrastructure stack'. We 
                     continue to learn and enhance both our solution and 
                     our understanding. 
 
 
                *    We have been operating core solutions with 
                     volume/stress for some time and we continue to assess 
                     the efficiency and capability of the 
                     solution/infrastructure. Where appropriate we have 
                     taken action to ensure we have an environment that is 
                     fit for purpose. 
 
 
                *    We deploy a robust suite of tools to identify and 
                     manage internal and external threats to our 
                     infrastructure, systems and platforms. 
 
 
                *    Service continuity is embedded with our IT culture. 
 
 
               Supply chain: 
                *    A new three-year Supply and Logistics roadmap will be 
                     developed in 2020/21 which will consider our future 
                     logistics capacity needs based upon the various 
                     sourcing, inventory and sales generative strategies 
                     identified in the Group's strategic planning 
                     activities. 
 
 
                *    A full review of our business continuity plans is 
                     underway looking at our internal points of failure 
                     and key partner disaster-recovery plans to ensure 
                     that a response to supplier and logistics failures is 
                     also built into the actions. Plans are being tested 
                     live as part of our Covid-19 response activities. 
 
 
                *    The Group Supply Chain function has established a 
                     programme management office that governs all major 
                     supply chain change programmes. This links into the 
                     overall Group strategic governance framework. 
 
 
                *    We identify key suppliers by category to establish 
                     capacity and volumes and assess the impact of an 
                     interruption in supply. 
 
 
                *    See Principal Risk 7 for more detail about Brexit 
                     planning. 
 4. COMPETITION 
 Intensifying competition, including online, may put downward 
  pressure on sales and margins and could have an adverse effect 
  on our revenues and profitability. We compete with many companies 
  in each of our markets. Targeted actions by competitors could 
  negatively impact our market share, the value of our assets 
  and our financial results. 
 Link to strategic priorities 
 
        *    Build a mobile-first, service orientated customer 
             experience 
 
 
        *    Differentiate and grow through own exclusive brands 
             (OEB) 
 
 
        *    Source and buy better, reduce our costs and our 
             inventory 
 How our risks have changed 
 New risk. 
 How we manage and monitor the risk 
      We monitor our performance to react quickly to targeted actions 
       by competitors via: 
        *    Enhanced rapid-insight key performance metrics. 
 
 
        *    Reinforced performance reviews tracked by the Offer 
             and Sourcing board to respond to risks. 
 
 
       We are building a differentiated offer through: 
        *    Customer trend monitoring in all our markets to 
             anticipate and develop an appropriate offer. 
 
 
        *    A clearly defined set of range principles and 
             customer projects to create a compelling offer and to 
             reinforce differentiation of our offer to build sales 
             growth and margin improvement. 
 
 
        *    Periodic review of the offer strategy and range 
             review roadmap to prioritise key programmes. 
 
 
        *    Building strong programmes, deployed across the Group, 
             to benefit from volume and lower purchase price to be 
             able to compete on prices. 
 
 
       We are focusing on a strong customer journey, including: 
        *    End-to-end project planning activities to ensure 'in 
             full, in time' delivery. 
 
 
        *    Supplier management processes in place covering 
             selection, risk assessment, monitoring of supplier 
             responses and communication. 
 
 
        *    Clear minimum standards for suppliers covering credit, 
             sustainability, quality and technical. 
 
 
        *    Dual sourcing where needed to avoid disruption in the 
             event of supplier failure. 
 5. CHANGING CUSTOMER PREFERENCES 
 As customer preferences change, we must ensure we have innovative 
  digital channels supported by a strong and agile infrastructure, 
  including supply chain and logistics capability and an optimised 
  property portfolio, to make our product sufficiently compelling 
  to customers and available when and where they want it. Failure 
  to optimise our channels could affect our ability to stimulate 
  spend and deliver the desired sales growth. It could also adversely 
  impact the value of our assets and our financial results. 
 Link to strategic priorities 
 
        *    Focus and fix' in 2020 
 
 
        *    Grow e-commerce sales 
 
 
        *    Build a mobile-first, service orientated customer 
             experience 
 
 
        *    Test new store concepts and adapt our store footprint 
 How our risks have changed 
 Increasing. Failure to keep pace with changing customer preferences 
  is a key risk for us and an area we recognise is evolving rapidly. 
  We continue to enhance our priorities and processes to manage 
  and monitor the risk. 
 How we manage and monitor the risk 
 
        *    During the year, we made eight new appointments to 
             the Group Executive, two of which were the roles of 
             Chief Customer and Digital Officer and Chief Supply 
             Chain Officer. We have also brought together the 
             Digital and IT teams to better align their 
             activities. 
 
 
        *    A Group digital strategy has been developed, with 
             various digital priority programmes underway. 
 
 
        *    We have an established regular Digital Governance 
             Forum to monitor financial and project portfolio 
             performance and to prioritise upcoming digital 
             initiatives. 
 
 
        *    We have launched a number of strategic programmes 
             which include store concepts and service platforms, 
             offer and range, and our digital journey. 
 6. POLITICAL AND MARKET VOLATILITY 
 Geopolitical uncertainty and local volatility, including strikes 
  and work stoppages, exist across all the markets in which we 
  operate, exposing us to potential risks which may impact consumer 
  confidence, availability of our workforce or negatively impacting 
  our ability to receive products from affected countries potentially 
  disrupting the day-to-day operations of our business. 
 Link to strategic priorities 
 
        *    Move to a balanced, simpler local-group operating 
             model with an agile culture 
 How our risks have changed 
 Increasing. We have seen an increased level of uncertainty 
  relating to the economy across our key markets, heightened 
  geopolitical tensions, disruption in some of our markets and 
  continued currency volatility. 
 How we manage and monitor the risk 
      Treasury mitigations 
        *    The provision of supply chain finance programmes to 
             support suppliers. Additional information on these 
             arrangements can be found in note 21 of the 
             consolidated financial statements. 
 
 
        *    Portfolio of international banking partners that 
             provide flexibility and reliable local retail cash 
             and card payment processing services. 
 
 
        *    Access to funding, both debt funding, including an 
             up-to-date Debt Capital Markets programme, and 
             significant committed liquidity facilities. 
 
 
        *    Diversification of cash holdings across a number of 
             financial institutions with the strongest short-term 
             credit rating. 
 
 
        *    An appropriate and prudent mix of hedging policies, 
             cash deposits and debt financing to minimise the 
             impact of foreign exchange currency volatility on the 
             company. 
 
 
        *    Offer and pricing strategies designed to address 
             consumer confidence. 
 
 
       Monitoring and engagement activities 
        *    The Corporate Affairs team actively monitors the 
             political and economic situations in the countries in 
             which we operate or which may impact our operations. 
 
 
        *    Strategies in place to identify, monitor and aim to 
             influence changes to legislation which may impact the 
             business. 
 
 
        *    The Corporate Affairs team oversees direct policy and 
             political engagement with dedicated resource in the 
             UK, France, Belgium, Poland and Romania. This is 
             supported by local representatives in our retail 
             banners and our membership of key business trade 
             associations in every market. 
 
 
        *    Crisis management processes and teams in place to 
             monitor and manage situations as they arise. 
 
 
        *    Group Offer and Sourcing teams manage supplier 
             relationships with the aim of managing cost and 
             quality and maintaining appropriate levels of product 
             availability through periods of disruption. 
 7. BREXIT 
 Following completion of the UK exit agreement, significant 
  risks remain from the ongoing negotiation of the future trade 
  agreement with the European Union and possible divergence of 
  the UK regulatory framework. Failure to reach an adequate agreement 
  within the currently agreed transition period may impact our 
  purchase costs, the continuity of our supply chain and our 
  ability to operate our European businesses as we do today. 
  These conditions also present economic uncertainty impacting 
  UK consumer confidence. 
 Link to strategic priorities 
 
        *    Move to a balanced, simpler local-group operating 
             model with an agile culture 
 How our risks have changed 
 No change. This risk has reduced since the conclusion of the 
  UK exit agreement at the end of January 2020 and avoidance 
  of the previous no-deal Brexit scenario. However, the risks 
  surrounding the ongoing trade negotiations remain significant. 
 How we manage and monitor the risk 
 
             *    A multi-functional Kingfisher Brexit Steering Group 
                  has been in place since the 2016 referendum. This 
                  group is responsible for monitoring the Brexit 
                  process and agreeing actions. 
 
 
             *    We continue to engage directly with Government and 
                  alongside key trade bodies. 
 
 
             *    We continue to consider different Brexit scenarios, 
                  preparing mitigation plans across key operational 
                  areas, including: 
 
 
             *    Import duties and related import costs and 
                  mitigations through alternative sourcing 
                  arrangements. 
 
 
             *    Improvements to importation and customs clearance 
                  processes to avoid delays at borders. 
 
 
             *    Supply chain disruption risks and use of alternative 
                  ports and distribution arrangements. 
 
 
             *    Working closely with our suppliers to ensure they 
                  have similarly made adequate preparation. 
 
 
             *    Updating our product standards and documentation to 
                  ensure products remain compliant for sale in both EU 
                  and UK markets. 
 
 
             *    Monitoring and updating our regulatory procedures 
                  generally. 
 8. ATTRACTING, RETAINING AND INVESTING IN OUR PEOPLE CAPABILITY 
 Our colleagues are critical to the successful delivery of our 
  strategy and business. Failure to achieve an effective organisational 
  design, appropriate ways of working and the right balance of 
  skills, capability and capacity as well as adequate succession 
  plans, could impact our ability to meet our business objectives. 
 Link to strategic priorities 
 
        *    'Focus and fix' in 2020 
 
 
        *    Move to a balanced, simpler local-group operating 
             model with an agile culture 
 
 
        *    Lead the industry in Responsible Business practices 
 How our risks have changed 
 No change. We continue to monitor and manage this risk closely. 
  While the risk exposure is significant we have a clear understanding 
  of the scale of the change and have plans in place to manage 
  these. 
 How we manage and monitor the risk 
 
        *    We have announced the appointment of a new Chief 
             People Officer to the Group Executive. 
 
 
        *    Work has continued through the year to ensure our HR 
             processes, policies and guidelines are fit for 
             purpose and in line with our ambition with a focus on 
             recruitment, reward, talent and engagement. 
 
 
        *    The Nomination Committee oversees the Board 
             composition and succession planning, and the 
             Remuneration Committee oversees the reward policy. 
 
 
        *    We have ensured time allocated at Group Executive and 
             Board meetings to work on succession planning, 
             holding leaders accountable for developing their own 
             successors. 
 
 
        *    We have continued to invest in leadership and talent 
             programmes to strengthen succession pipelines and 
             drive change. These include development activities 
             for our store-based colleagues and how we support and 
             recognise the role of our customer advisors across 
             the organisation. 
 
 
        *    Delivery of Home Improvement and Range Academies to 
             build capability and inform colleagues of new ways of 
             working and product ranges. 
 
 
        *    Engagement processes are in place to enable us to 
             check across all our colleagues our ability to drive 
             the changes we need whilst being able to respond to 
             insights which may impact on our duty of care as an 
             employer. 
 9. LEGAL AND REGULATORY 
 The Group's operations are subject to an increasing range of 
  regulatory requirements in the markets in which it operates. 
  A major corporate issue or crisis, a significant fraud or material 
  non-compliance with legislative or regulatory requirements 
  would impact our brand and reputation, could expose us to significant 
  fines or penalties and would require significant management 
  attention. 
 Link to strategic priorities 
 
        *    Source and buy better, reduce our costs and our 
             inventory 
 
 
        *    Lead the industry in Responsible Business practices 
 How our risks have changed 
 Increasing. Regulatory requirements are increasing in many 
  areas and therefore we see this as an area of increasing risk. 
 How we manage and monitor the risk 
 
        *    Employees and suppliers working for or with 
             Kingfisher must conduct themselves according to our 
             minimum standards of ethics and behaviours as defined 
             by our Code of Conduct. 
 
 
        *    Group-wide mandatory training on Code of Conduct 
             (which includes a module on anti-bribery and 
             corruption) was rolled out in 2019 and will be 
             continued in 2020. 
 
 
        *    Responsibility for compliance with our Code of 
             Conduct rests with each retail banner Chief Executive 
             Officer. 
 
 
        *    Appropriate resources are available to our retail 
             banners to ensure that both colleagues and suppliers 
             are aware of, and comply with, the Code of Conduct. 
 
 
        *    Legal teams at Group-level and in each of our retail 
             banners work and communicate together to form a legal 
             and compliance network. 
 
 
        *    Communications teams at Kingfisher and each of our 
             retail banners work together to form a communications 
             network. 
 
 
        *    A Crisis Communications team is in place to manage 
             major incidents. 
 
 
        *    Policies and procedures are in place to support the 
             health and safety, environmental, ethical, fraud, 
             data protection, crisis management, legislative and 
             regulatory areas. Health & safety data is reported 
             quarterly to the Board. 
 
 
        *    Modern Slavery Steering and Working Groups oversee an 
             action plan to address risks of modern slavery and 
             our annual transparency statement, which is published 
             in line with legal requirements. 
 
 
        *    Data Protection training is in place for all 
             colleagues and a Fair Competition training module is 
             available to key individuals in high--risk areas. 
 
 
        *    Anti-bribery training is in place and all key 
             individuals must complete this training. 
 
 
        *    A whistleblowing hotline, facilitated by an 
             independent third party, is in place throughout the 
             Group. All calls are followed up and investigated 
             where necessary. Statistics and trends are monitored 
             at the local Audit Committee level and reported 
             regularly to the Board. 
 
 
        *    A risk-based third-party due diligence process is in 
             place to assess and mitigate risks such as bribery 
             and corruption, personal data processing and modern 
             slavery. 
 
 
        *    A Group policy and training is in place for 
             appropriate colleagues to make them aware of their 
             obligations under the Market Abuse Regulation. 
 10. CYBER AND DATA SECURITY 
 The risk of a sustained cyber-attack has increased in the retail 
  sector. Failure to meet our legal and regulatory obligations 
  in respect of data privacy and security could result in financial 
  penalties and adverse reputational damage, as well as impacting 
  our ability to maintain efficient operations. 
 Link to strategic priorities 
 
        *    Grow e-commerce sales 
 
 
        *    Build a mobile-first, service orientated customer 
             experience 
 
 
        *    Lead the industry in Responsible Business practices 
 How our risks have changed 
 Increasing. In line with other organisations we continue to 
  see an increase in the frequency and sophistication of cyber-attacks 
  and security incidents which require us to remain vigilant 
  in this area. The risk is extending beyond traditional IT environments 
  into business processing and supply chain increasing the risk 
  landscape. 
 How we manage and monitor the risk 
           Cyber security 
             *    Cyber security continues to receive Group 
                  Executive-level sponsorship and Board focus. 
 
 
             *    Dedicated IT Governance boards are established to 
                  monitor this evolving risk and the associated 
                  mitigating controls. 
 
 
             *    As part of our IT planning processes, we have 
                  established a roadmap which covers security, 
                  governance and identity initiatives to continue to 
                  mature the tools and capabilities we have available 
                  to us. 
 
 
             *    Independent reviews are performed of our cyber 
                  security processes and initiatives on an annual 
                  basis. 
 
 
             *    We regularly review the cyber threats facing 
                  Kingfisher and have been working with partners and 
                  security specialists to implement tools and processes 
                  to better identify and remediate vulnerabilities. 
 
 
            Data protection 
             *    A data protection organisational structure has been 
                  deployed within the Group. 
 
 
             *    We have data protection and management policies in 
                  place. 
 
 
             *    Data protection has been enhanced in light of GDPR 
                  including: 
 
 
             *    Data privacy impact assessments. 
 
 
             *    Assessments for new and existing suppliers. 
 
 
             *    Annual e-learning awareness training for all 
                  colleagues. 
 
 
             *    Checkpoints within IT developments to ensure 
                  compliant design and delivery. 
 11. REPUTATION AND TRUST 
 Our customers, colleagues, suppliers and the communities in 
  which we operate expect us to conduct our business in a way 
  that is responsible. Our Code of Conduct establishes the behaviours 
  we expect of ourselves and others and we have publicly communicated 
  ambitious Responsible Business targets. Failure to deliver 
  on our obligations and commitments could undermine trust in 
  Kingfisher, damage our reputation and impact our ability to 
  meet our strategic objectives. 
 Link to strategic priorities 
 
        *    'Focus and fix' in 2020 
 
 
        *    Lead the industry in Responsible Business practices 
 How our risks have changed 
 New risk. 
 How we manage and monitor the risk 
      Governance 
        *    Our Code of Conduct establishes the core behaviours 
             we expect of ourselves and others and we have 
             publicly communicated ambitious Responsible Business 
             principles and measures. See principal risk 9 for 
             more detail. 
 
 
        *    A new Responsible Business Committee of the Board has 
             been established (see the Responsible Business 
             section on pages 22 to 25). 
 
 
        *    Our annual reward measures help to ensure that 
             Environment, Social and Governance (ESG) issues and 
             stakeholder concerns are further prioritised. 
 
 
        *    Issues Tracking and Stakeholder Dialogue 
 
 
        *    Monitoring of external stakeholders' views of our 
             company through traditional and digital media for all 
             our companies. 
 
 
        *    Regular stakeholder engagement and employee 
             engagement means that listening and responding to 
             stakeholder concerns is fully entrenched within the 
             corporate strategy. 
 
 
        *    For colleagues, this ranges from established Employee 
             Forums and Works' Councils in all of our businesses 
             including a collective forum that meets with the CEO 
             and members of the Board, including the Chairman. 
 
 
        *    Externally we have regular engagement with NGO 
             partners in our key markets, including Shelter, Forum 
             for the Future, Green Alliance, and the Centre for 
             European Reform, which helps to ensure that the 
             company remains close to social and environmental 
             concerns. (Read more about company stakeholder 
             engagement on pages 18 to 19 and Board stakeholder 
             engagement on pages 56 to 57). 
 
 
       Due Diligence and External Assurance 
        *    Our Annual Report covers how we manage our business 
             in the interests of all stakeholders in line with 
             section 172 of the Companies Act while our annual 
             Responsible Business report covers our approach and 
             performance on ESG issues in greater depth. 
 
 
        *    Our due diligence of suppliers covers a range of ESG 
             issues, from environment to modern slavery; and 
             includes our policy framework and supplier standards 
             which we expect suppliers to adhere to; supplier 
             training and capacity building; and auditing of 
             high-risk suppliers. 
 
 
        *    Our due diligence extends to the data we disclose. 
             Selected ESG data in the annual Responsible Business 
             report and Modern Slavery Statement is independently 
             audited by DNV GL. 
 
 
        *    Independent ratings agencies also monitor and rate 
             our ESG performance throughout the year - including 
             MSCI, CDP, Sustainalytics and ISS ESG. 
 
 
        *    Communications and Issues Management 
 
 
        *    Kingfisher and its companies have a network of 
             communications teams, who undertake comprehensive 
             communications planning for key developments and 
             issues. We work with a network of external reputation 
             advisers in all our key markets. 
 
 
        *    Kingfisher plc maintains a Crisis Management 
             Framework and Business Continuity Plans for all the 
             Group. This includes a Crisis Communications Plan and 
             core central team made up of the Internal Audit and 
             Risk Director; Director of Enterprise Risk; Corporate 
             Affairs Director; and Head of Media Relations. 
 12. ACQUISITIONS AND DISPOALS 
 As part of the optimisation of our business activities we may 
  from time to time divest activities or acquire new businesses. 
  Divestments or acquisitions are based on detailed plans that 
  assess the value creation opportunity for the company. These 
  plans are inherently uncertain and provide execution and market 
  risks which might have been overlooked or incorrectly forecasted. 
  If an existing, or future, divestment or acquisition effort 
  is delayed or is not successful, we may incur additional costs 
  and the value of our asset may decrease significantly and have 
  an adverse effect on our revenues and profitability. 
 Link to strategic priorities 
 
        *    Focus and fix' in 2020 
 
 
        *    Move to a balanced, simpler local-group operating 
             model with an agile culture 
 How our risks have changed 
 New risk. 
 How we manage and monitor the risk 
 
        *    We have created a Group Investment Committee (GIC) 
             and strengthened review and approval activities of 
             potential acquisition and disposal activity through 
             the Finance Committee. 
 
 
        *    The Group delegation of authority requires Kingfisher 
             plc Board scrutiny and approval of all mergers and 
             acquisitions (M&A) activity exceeding GBP10 million 
             in value and CEO approval for all activity below 
             GBP10 million. 
 
 
        *    Our long-term business plan process regularly 
             assesses the business strategy and performance of 
             each entity within the portfolio against strategic 
             KPIs. 
 
 
        *    The Group Executive conducts periodic deep dives on 
             portfolio performance. 
 
 
        *    The Audit Committee receives a rolling review of 
             business unit risks and operations throughout the 
             year. 
 
 
        *    We have a dedicated M&A function with appropriately 
             skilled experts and use of approved external 
             advisors. Clear accountability for M&A process rests 
             with the Chief Transformation and Development 
             Officer. 
 
 
        *    We have a structured M&A project management approach 
             including a transaction playbook and project 
             governance that ensures all relevant functional 
             experts are consulted in the M&A process. 
 
   2.   Details of related party transactions 

During the year, the Company and its subsidiaries carried out a number of transactions with related parties in the normal course of business and on an arm's length basis. The names of the related parties, the nature of these transactions and their total value are shown below:

 
                                                2019/20               2018/19 
 GBPmillions                        Income   Receivable   Income   Receivable 
                                   -------  -----------  -------  ----------- 
 Transactions with Koçtas 
  Yapi Marketleri Ticaret 
  A.S. in which the Group 
  holds a 50% interest 
 
  Commission and other income          0.3            -      0.4            - 
                                   -------  -----------  -------  ----------- 
 Transactions with Crealfi 
  S.A. in which the Group 
  holds a 49% interest 
 
  Provision of employee services 
  Commission and other income          0.1            -      0.6            - 
                                       4.9          0.2      5.7          0.3 
                                   -------  -----------  -------  ----------- 
 Transactions with Kingfisher 
  Pension Scheme 
 
  Provision of administrative 
  services                             1.0          0.2      1.5            - 
                                   -------  -----------  -------  ----------- 
 

Services are usually negotiated with related parties on a cost-plus basis. Goods are sold or bought on the basis of the price lists in force with non-related parties.

The remuneration of key management personnel is given in note 8.

Other transactions with the Kingfisher Pension Scheme are detailed in note 27.

   3.   Directors' Statement of Responsibility 

The Directors confirm that to the best of their knowledge:

-- the financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets, liabilities, financial position and profit or loss of the parent company and the undertakings included in the consolidation taken as a whole;

-- the Strategic report includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face; and

-- the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the company's position and performance, business model and strategy.

Paul Moore, Group Company Secretary

Tel: +44 (0)207 644 1041

Kingfisher plc

3 Sheldon Square, London W2 6PX

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ACSSEMFSMESSEDM

(END) Dow Jones Newswires

June 26, 2020 06:40 ET (10:40 GMT)

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