Effective risk management is integral to our objective of delivering sustainable long‑term value
The Board is committed to protecting and enhancing the Group’s
reputation and assets in the interests of shareholders as a whole,
while having due regard to the interests of all stakeholders. It has
overall responsibility for the Group’s system of risk management
and internal control.
The Group’s businesses are affected by a number of risks and
uncertainties. These may be impacted by internal and external
factors, some of which we cannot control. Many of the risks are
similar to those found by other companies of similar scale
The risks and uncertainties facing the Group have been
considered in the context of the continuing COVID-19 pandemic,
as well as the potential implications from any changes in the
trading relationship between the UK and the European Union (EU)
from 1 January 2021.
At the beginning of the COVID-19 outbreak in January 2020, our initial focus, working with our Chinese supply partners, was to ensure continuation of supply of critical materials and components to our various businesses in the UK, Continental Europe and Australasia. Whilst a number of our suppliers did have to stop operating for a period of time, the agility of our supply chain teams both in China and in our operating businesses, coupled with sensible inventory holdings in our businesses, enabled us to continue uninterrupted supply to our customers.
As the scale of the pandemic escalated through March and all of our businesses began to be impacted, our local management teams, supported by Group guidance and with regular sharing of information and learnings across the Group, moved quickly and with agility to ensure a safe working environment for all of our employees. Those employees able to work remotely were supported and helped to do so, whilst our production facilities were reviewed to ensure appropriate social distancing with enhanced cleaning, hygiene and protection measures such as temperature checking being adopted to ensure the safety of our employees. At the date of this report all of our facilities are operational.
We entered the COVID-19 crisis with a robust balance sheet and significant financial headroom within our banking facilities. Our teams acted decisively across the Group to reduce costs and to protect liquidity. The finance teams have also been performing additional cash forecasting and stress testing to ensure Volution has sufficient liquidity, not just to survive the current COVID-19 crisis but also to ensure the Group emerges in a strong position, able to invest for growth going forward, whether organically or through acquisition. Further detail on our financial response and liquidity actions and position can be found in the Financial Review on page 40.
People and talent is a key risk and rightly so, because it is only with our talented employees that we are able to navigate our way through these unprecedented times. Volution’s culture and values, notably commitment, professionalism and customer service, have also been critical to the resilient manner in which our teams have approached the challenges of COVID-19.
With the pandemic still very much prevalent, and ever changing government instructions and guidance, it is clear that COVID-19 will continue to affect our markets, customers, suppliers and employees. We have evaluated how COVID-19 has impacted and continues to impact our assessment of principal risks on pages 50 to 53.
- Economic risk
- Foreign exchange risk
- IT systems including cyber breach
- Regulatory environment
- Supply chain and raw materials
COVID-19 impact – the arrows show the risk direction as a result of the impact of COVID-19