RWS AR 23 Final Single pages - Flipbook - Page 96
Directors' Report (continued)
GOING CONCERN ACCOUNTING BASIS
DIRECTORS
In assessing the basis of preparation of the 昀椀nancial
statements for the year ended 30 September 2023, the
Directors have considered the principles of the Financial
Reporting Council’s ‘Guidance on Risk Management,
Internal Control and Related Financial and Business
Reporting, 2014’; particularly in assessing the applicability
of the going concern basis, the review period and
disclosures. The period of assessment is the 18 months
ending 31 March 2025.
The names and biographical details of the Directors of the
Company at the date of signing this report are set out on
pages 70 to 72.
As at 30 September 2023, the Group has net debt of £9.9m
comprising the Group’s US$220m revolving credit facility
(“RCF”) (£52.6m drawn at year end) and lease liabilities of
£33.5m, less cash and cash equivalents of £76.2m. The RCF
is for US$220 million and the term expiry is August 2026
with a one-year extension option. The facility is provided
by a consortium of banks. At year end the Group’s net
leverage ratio (as de昀椀ned by the RCF agreement) is -0.1 of
EBITDA, while its interest coverage ratio (as de昀椀ned by the
RCF agreement) is 39.9 of EBITDA and are well within the
covenants permitted by the Group’s RCF agreement.
In making their going concern assessment, the Directors
have considered the Group’s current 昀椀nancial position
and forecast earnings and cash昀氀ows for the 18-month
period ending 31 March 2025. The business plan used
to support this going concern assessment is derived
from the Board-approved budget. The Directors have
undertaken a rigorous assessment of going concern and
liquidity considering key uncertainties and sensitivities, the
committed funding and liquidity positions under its debt
covenants and its ability to continue generating cash from
trading activities.
In light of the Group’s principal risks and uncertainties
disclosed on pages 44 to 47 of the Strategic Report on the
Group’s pro昀椀tability and 昀椀nancial position, the Directors
believe that the appropriate sensitivity in assessing the
Group and Company’s ability to continue as a going
concern are to model a range of reasonably plausible
downside scenarios, including a 20% reduction to the
Group’s revenues and corresponding cash 昀氀ows, with
mitigating actions from management limited to equivalent
reductions in the Group’s controllable cost base.
No signi昀椀cant structural changes to the Group have been
assumed in any of the downside scenarios modelled with all
mitigating actions wholly within management’s control.
In each of these modelled downside scenarios, the Group
continues to have signi昀椀cant covenant and liquidity
headroom over the period through to 31 March 2025.
Consequently, the Directors are con昀椀dent that the Group
and Company will have su昀케cient cash reserves and
committed debt facilities to withstand reasonably plausible
downside scenarios and therefore continue to meet its
liabilities as they fall due for the period ending 31 March
2025 and therefore have prepared the 昀椀nancial statements
on a going concern basis.
96
RWS Holdings plc — Annual Report 2023 GOVERNANCE REPORT
Further information on Board composition,
responsibilities, commitments and re-election/election of
Directors can be found on pages 74 to 75 of the Corporate
Governance Report.
The interests of the Directors in shares during the year are
set out on page 94 in the Directors’ Remuneration Report.
DIRECTORS’ INDEMNITIES
To the extent permitted in is articles of association, the
Directors have the bene昀椀t of an indemnity - which is a
third-party indemnity provision - as de昀椀ned in section 234
of the Companies Act 2006. The Company also purchased
and maintained throughout the 昀椀nancial year, Directors’
and O昀케cers’ liability insurance cover for the directors
and o昀케cers of the Company and of all Group subsidiary
companies.
CORPORATE GOVERNANCE
Further information about the Audit and Remuneration
Committees and details of the Company’s remuneration
policy are set out on pages 82 to 94.
EMPLOYMENT OF DISABLED PERSONS
It is Company policy that people with disabilities should
have the same consideration as others with respect to
recruitment, retention and personal development. People
with disabilities, depending on their skills and abilities,
enjoy the same career prospects as other employees and
the same scope for realising their potential.
EMPLOYEE ENGAGEMENT
The Company’s policy is to consult and discuss with
employees matters likely to a昀昀ect employee interests.
This includes building common awareness of the 昀椀nancial
and economic factors a昀昀ecting the Group’s performance
through newsletters, all-colleague emails, quarterly
all-colleague calls with the CEO and CFO and local
'townhall' meetings with senior leadership. The Company
is committed to a policy of recruitment and promotion
on the basis of aptitude and ability irrespective of age,
sex, race or religion. All group companies endeavour
to provide equal opportunities in recruiting, training,
promoting and developing the careers of all employees.
