Annual Report 2016 - Page 41

Annual Report 2016 In order to assess the long-term viability and financial resilience of the Group to possible changing circumstances, sensitivity analysis has been applied to these financial forecasts to assess the impact on profitability, cash flows, liquidity, borrowing capacity and compliance with borrowing covenants of severe but plausible adverse changes to important assumptions made within these base projections, including those that are outside of the control of the Group. They include an increase in the required level of capital investment and operating costs (including those arising from principal risk events occurring - see principal risks above) and the level of inflation. The Directors have selected these assumptions as they believe it is these that could most significantly impact on the longer term viability of the Group and that could most materially deviate from the Group’s base assumptions over the longerterm. The period to 31 March 2019 covered by the assessment is considered to be appropriate for a Group of this size, complexity and structure. Based on the business plan, the related long-term financial projections and associated sensitivity analysis detailed above the Board of Directors has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of assessment to 31 March 2019. This expectation is based on the assumption that the Group continues to maintain its existing access to capital markets to fund its required investment programme and provide sufficient liquidity and, as such, have prepared the financial statements on a going concern basis. The Strategic Report on pages 4 to 39 is approved on behalf of the Board of Directors. A Page Group Chief Executive 22 August 2016 39