CRH has primary listings on the Irish and London Stock Exchanges and its American Depository Receipts are listed on the New York Stock Exchange (NYSE). The Directors are committed to maintaining the highest standards of corporate governance and this statement describes how CRH applies the main and supporting principles of section 1 of the Combined Code on Corporate Governance (June 2008) published by the Financial Reporting Council in the UK. A copy of the Combined Code can be obtained from the Financial Reporting Council’s website, www.frc.org.uk.
Board of Directors
Role
The Board is responsible for the leadership and control of the Company. There is a formal schedule of matters reserved to the Board for consideration and decision. This includes Board appointments, approval of strategic plans for the Group, approval of financial statements, the annual budget, major acquisitions and significant capital expenditure, and review of the Group’s system of internal controls.
The Board has delegated responsibility for the management of the Group, through the Chief Executive, to executive management. The roles of Chairman and Chief Executive are not combined and there is a clear division of responsibilities between them, which is set out in writing and has been approved by the Board. The Chief Executive is accountable to the Board for all authority delegated to executive management.
The Board has also delegated some of its responsibilities to Committees of the Board. Individual Directors may seek independent professional advice, at the expense of the Company, in the furtherance of their duties as a Director.
The Group has a Directors’ and Officers’ liability insurance policy in place, which indemnifies the Directors in respect of legal action taken against them.
Membership
It is the practice of CRH that a majority of the Board comprises non-executive Directors and that the Chairman be non-executive. At present, there are four executive and ten non-executive Directors. Biographical details are set out in the Board of Directors section. The Board considers that, between them, the Directors bring the range of skills, knowledge and experience, including international experience, necessary to lead the Company.
Directors are appointed for specified terms and subject to the Memorandum and Articles of Association of the Company.
Independence
All of the Directors bring independent judgement to bear on issues of strategy, performance, resources, key appointments and standards, and the Board has determined that each of the non-executive Directors is independent. In reaching that conclusion, the Board has considered the principles relating to independence contained in the Combined Code, the guidance provided by a number of shareholder voting agencies, and has taken the view that independence is determined by a Director’s character, objectivity and integrity. Those principles and guidance address a number of factors that might appear to affect the independence of Directors, including former service as an executive, extended service on the Board and cross-directorships. However, they also make clear that a Director may be considered independent notwithstanding the presence of one or more of these factors. In the case of Mr. Liam O’Mahony, the Board took account of his service as a former executive of the Company and was satisfied that this did not compromise his ability to exercise independent judgement and to act in the best interests of the Group.
Chairman
Mr. Kieran McGowan has been Chairman of the Group since May 2007. On his appointment as Chairman, Mr. McGowan met the independence criteria set out in the Combined Code. The Chairman is responsible for the efficient and effective working of the Board. He ensures that Board agendas cover the key strategic issues confronting the Group; that the Board reviews and approves management’s plans for the Group; and that Directors receive accurate, timely, clear and relevant information. While Mr. McGowan holds a number of other directorships (see details in the Board of Directors section), the Board considers that these do not interfere with the discharge of his duties to CRH.
Senior Independent Director
The Board has appointed Mr. Nicky Hartery as the Senior Independent Director. Mr. Hartery is available to shareholders who have concerns that cannot be addressed through the Chairman, Chief Executive or Finance Director.
Company Secretary
The appointment and removal of the Company Secretary is a matter for the Board. All Directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that Board procedures are complied with.
Terms of appointment
The standard terms of the letter of appointment of non-executive Directors is available, on request, from the Company Secretary.
Induction and development
New Directors are provided with extensive briefing materials on the Group and its operations. Directors meet with key executives and, in the course of twice-yearly visits by the Board to Group locations, see the businesses at first hand and meet with local management teams.
Remuneration
Details of remuneration paid to the Directors (executive and non-executive) are set out in the Report on Directors’ Remuneration. The 2009 Report will be presented to shareholders for the purposes of an advisory non-binding vote at the Annual General Meeting to be held on 5th May 2010.
Share ownership and dealing
Details of the shares held by Directors are set out in the Directors' Interests in Share Capital section. CRH has a policy on dealings in securities that applies to Directors and senior management. Under the policy, Directors are required to obtain clearance from the Chairman and Chief Executive before dealing in CRH securities. Directors and senior management are prohibited from dealing in CRH securities during designated prohibited periods and at any time at which the individual is in possession of inside information (as defined in the Market Abuse (Directive 2003/6/EC) Regulations 2005). The policy adopts the terms of the Model Code, as set out in the Listing Rules published by the Irish Stock Exchange and the UK Listing Authority.
Performance appraisal
The Senior Independent Director conducts an annual review of corporate governance, the operation and performance of the Board and its Committees and the performance of the Chairman. This is achieved through discussion with each Director.
A review of individual Directors’ performance is conducted by the Chairman and each Director is provided with feedback gathered from other members of the Board. Performance is assessed against a number of measures, including the ability of the Director to contribute to the development of strategy, to understand the major risks affecting the Group, to contribute to the cohesion of the Board, to commit the time required to fulfil the role and to listen to and respect the views of other Directors and the management team.
Directors’ retirement and re-election
The Board has determined that a non-executive Director who has served on the Board for more than nine years, or who has been a former executive of the Company, will be subject to annual re-election. At least one-third of Directors retire at each Annual General Meeting and Directors must submit themselves to shareholders for re-election every three years. Re-appointment is not automatic. Directors who are seeking re-election are subject to a performance appraisal, which is overseen by the Nomination Committee.
Directors appointed by the Board must submit themselves to shareholders for election at the Annual General Meeting following their appointment.
Board succession planning
The Board plans for its own succession with the assistance of the Nomination Committee. In so doing, the Board considers the skill, knowledge and experience necessary to allow it to meet the strategic vision for the Group.
The Board engages the services of independent consultants to undertake a search for suitable candidates to serve as non-executive Directors.
Meetings
There were eight full meetings of the Board during 2009. Details of Directors’ attendance at those meetings are set out in the Attendance at Board and Board Committee meetings table. The Chairman sets the agenda for each meeting, in consultation with the Chief Executive and Company Secretary. Two visits are made each year by the Board to Group operations; one in Europe and one in North America. Each visit lasts between three and five days and incorporates a scheduled Board meeting. In 2009, these visits were to Finland and to Tampa, Florida in the United States. Additional meetings, to consider specific matters, are held when and if required. Board papers are circulated to Directors in advance of meetings.
The non-executive Directors met twice during 2009 without executives being present.
Committees
The Board has established five permanent Committees to assist in the execution of its responsibilities. These are the Acquisitions Committee, the Audit Committee, the Finance Committee, the Nomination Committee and the Remuneration Committee. Ad hoc committees are formed from time to time to deal with specific matters.
Each of the permanent Committees has terms of reference, under which authority is delegated to them by the Board. The terms of reference are available on the Group’s website, www.crh.com. The Chairman of each Committee reports to the Board on its deliberations and minutes of all Committee meetings are circulated to all Directors.
The current membership of each Committee is set out in the Board of Directors. Attendance at meetings held in 2009 is set out in the Attendance at Board and Board Committee meetings table.
Chairmen of the Committees attend the Annual General Meeting and are available to answer questions from shareholders.
During the year each of the relevant Committees reviewed its performance and terms of reference.
The role of the Acquisitions Committee is to approve acquisitions and capital expenditure projects within limits agreed by the Board.
The Audit Committee consists of four non-executive Directors, considered by the Board to be independent. The Board has determined that Mr. Jan Maarten de Jong and Mr. Dan O’Connor are the Committee’s financial experts. It will be seen from the Directors’ biographical details, appearing in the Board of Directors, that the members of the Committee bring to it a wide range of experience and expertise.
The Committee met 14 times during the year under review. The Finance Director and the Head of Internal Audit normally attend meetings of the Committee, while the Chief Executive and other executive Directors attend when necessary. The external auditors attend as required and have direct access to the Committee Chairman at all times. During the year, the Committee met with the Head of Internal Audit and with the external auditors in the absence of management.
The main role and responsibilities are set out in written terms of reference and include:
- monitoring the integrity of the Group’s financial statements and reviewing significant financial reporting issues and judgements contained therein;
- reviewing the effectiveness of the Group’s internal financial controls;
- monitoring and reviewing the effectiveness of the Group’s internal auditors;
- making recommendations to the Board on the appointment and removal of the external auditors and approving their remuneration and terms of engagement;
- seeking to ensure co-ordination of the work of the external auditors with the activities of the internal audit function;
- monitoring and reviewing the external auditors’ independence, objectivity and effectiveness, taking into account professional and regulatory requirements; and
- reviewing the Company’s procedures for detecting fraud.
These responsibilities are discharged as follows:
- the Committee reviews the trading statements usually issued by the Company in January and July and the interim management statements issued in May and November;
- the Committee reviews the Company’s preliminary results announcement/Annual Report and accounts. The Committee receives reports at that meeting from the external auditors identifying any accounting or judgemental issues requiring its attention;
- the Committee also meets with the external auditors to review the Annual Report on Form 20-F, which is filed annually with the United States Securities and Exchange Commission;
- in August, the Committee reviews the interim report;
- the external auditors present their audit plans in advance to the Committee and the Committee reviews the audit engagement letter;
- the Committee approves the annual internal audit plan;
- regular reports are received from the Head of Internal Audit on reviews carried out;
- the Head of Internal Audit also reports to the Committee on other issues including, in the year under review, updates in relation to Section 404 of the Sarbanes-Oxley Act 2002 and the arrangements in place to enable employees to raise concerns, in confidence, in relation to possible wrongdoing in financial reporting or other matters. (A copy of Section 404 of the Sarbanes-Oxley Act 2002 can be obtained from the United States Securities and Exchange Commission’s website, www.sec.gov); and
- the Committee receives copies of periodic assessments of the Internal Audit function, which are carried out by management and validated by an independent third party assessor, and receives updates on the status of the implementation of any resulting recommendations.
In trading and interim management statements issued during 2009 and to date in 2010, updates on the annualised savings under Group cost-reduction programmes were announced. The Head of Internal Audit was asked to review these savings and related costs to implement, and has reported his findings to the Committee.
As noted above, one of the duties of the Audit Committee is to make recommendations to the Board in relation to the appointment of the external auditors. A number of factors are taken into account by the Committee in assessing whether to recommend the auditors for re-appointment or to seek other competitive bids for the audit. These include:
- the quality of reports provided to the Audit Committee and the Board, and the quality of advice given;
- the level of understanding demonstrated of the Group’s business and industry;
- the objectivity of the auditors’ views on the financial controls around the Group and their ability to co-ordinate a global audit, working to tight deadlines; and
- the results of formal evaluations of the auditors, which the Audit Committee has decided should be carried out every five years with periodic interim reviews.
Ernst & Young have been the Group’s auditors since 1988. Following an evaluation carried out in 2009, the Committee has recommended to the Board that Ernst & Young be retained as the Group’s external auditors. There are no contractual obligations which act to restrict the Audit Committee’s choice of external auditor.
The Committee has put in place safeguards to ensure that the independence of the audit is not compromised. Such safeguards include:
- seeking confirmation that the auditors are, in their professional judgement, independent from the Group;
- obtaining from the external auditors an account of all relationships between the auditors and the Group;
- monitoring the Group’s policy prohibiting the employment of former staff of the external auditors, who were part of the CRH audit team, in senior management positions until two years have elapsed since the completion of the audit, monitoring the number of former employees of the external auditors currently employed in senior positions in the Group and assessing whether those appointments impair, or appear to impair, the auditors’ judgement or independence;
- considering whether, taken as a whole, the various relationships between the Group and the external auditors impair, or appear to impair, the auditors’ judgement or independence; and
- reviewing the economic importance of the Group to the external auditors and assessing whether that importance impairs, or appears to impair, the external auditors’ judgement or independence.
The Group has a policy governing the conduct of non-audit work by the auditors. Under that policy, the auditors are prohibited from performing services where the auditors:
- may be required to audit their own work;
- participate in activities that would normally be undertaken by management;
- are remunerated through a ‘success fee’ structure, where success is dependent on the audit; or
- act in an advocacy role for the Group.
Other than the above, the Group does not impose an automatic ban on the Group auditors undertaking non-audit work. The auditors are permitted to provide non-audit services that are not, or are not perceived to be, in conflict with auditor independence, providing they have the skill, competence and integrity to carry out the work and are considered by the Committee to be the most appropriate to undertake such work in the best interests of the Group. The engagement of the external auditors to provide any non-audit services must be pre-approved by the Audit Committee or entered into pursuant to pre-approval policies and procedures established by the Committee.
The Group audit engagement partner rotates every five years. Details of the amounts paid to the external auditors during the year for audit and other services are set out in Note 4 to the financial statements.
The Terms of Reference of the Audit Committee are reviewed annually. They were updated in December 2009 in relation to membership of the Committee, fraud detection, extending the Committee’s responsibilities in overseeing the relationship with the external auditor and in respect of other minor amendments.
The Finance Committee, which advises the Board on the financial requirements of the Group and on appropriate funding arrangements:
- considers and makes recommendations to the Board in relation to the issue of shares/debt instruments, share/bond buy-backs and bank financing;
- considers and makes recommendations to the Board in relation to dividend levels on the Ordinary Shares;
- keeps the Board advised of the financial implications of Board decisions in relation to acquisitions; and
- assists management, at their request, in considering any financial (including taxation) aspect of the Group’s affairs.
The Nomination Committee assists the Board in ensuring that the composition of the Board and its Committee is appropriate to the needs of the Group by:
- assessing the skills, knowledge, experience and diversity required on the Board and the extent to which each are represented;
- establishing processes for the identification of suitable candidates for appointment to the Board; and
- overseeing succession planning for the Board and senior management.
To facilitate the search for suitable candidates to serve as non-executive Directors, the Committee uses the services of independent consultants.
During 2009, the Committee identified, and recommended to the Board, a suitable candidate for appointment as a non-executive Director.
The Terms of Reference of the Nomination Committee, which were updated in December 2009 in relation to membership of the Committee, are reviewed annually.
The Remuneration Committee, which consists solely of non-executive Directors considered by the Board to be independent:
- determines the Group’s policy on executive remuneration;
- determines the remuneration of the executive Directors;
- monitors the level and structure of remuneration for senior management; and
- reviews and approves the design of all share incentive plans.
The Committee receives advice from leading independent firms of compensation and benefit consultants when necessary and the Chief Executive is fully consulted about remuneration proposals. The Committee oversees the preparation of the Report on Directors’ Remuneration.
In 2009, the Committee determined the salaries of the executive Directors and awards under the performance-related incentive plans; approved the terms of a long-term incentive plan (2009-2013) for the Chief Executive; set the remuneration of the Chairman; and reviewed the remuneration of senior management. It also approved the award of share options to the executive Directors and key management and the conditional allocation of shares under the Performance Share Plan. In addition, the Committee approved the partial release of awards made under the Performance Share Plan in 2006. Details of the factors taken into account when assessing the level of vesting under the Performance Share Plan are set out in the Report on Directors’ Remuneration.
Also in 2009, the Committee, with the assistance of external advisers, undertook a review of the Company’s compensation arrangements for executive Directors and senior managers. Further commentary on this review is contained in the Report on Directors’ Remuneration.
The Terms of Reference of the Remuneration Committee, which were updated in February 2010 in relation to membership of the Committee, are reviewed annually.
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Corporate Social Responsibility
Corporate Social Responsibility is embedded in all CRH operations and activities. Excellence in environmental, health, safety and social performance is a daily key priority of line management. Group policies and implementation systems are summarised in the Corporate Social Responsibility section and are described in detail in the CSR Report on the Group’s website, www.crh.com. During 2009, CRH was again recognised by several key rating agencies as being among the leaders in its sector in respect of sustainability performance.
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Code of Business Conduct
The CRH Code of Business Conduct is applicable to all Group employees. The Code is available on the Group’s website, www.crh.com. Regional hotline facilities are in place, to enable employees to report suspected breaches of the Code.
| Substantial Holdings |
|
|
| As at 1st March 2010, the Company had received notification of the following interests in its Ordinary share capital: |
| Name |
Holding/Voting Rights |
% |
| Capital Research and Management Company (CRMC)* |
84,225,434 |
12.06% |
| UBS AG |
26,380,604 |
3.77% |
| BlackRock, Inc. |
24,701,820 |
3.53% |
* On 7th January 2010, The Growth Fund of America, Inc. (GFA) advised the Company that, with effect from 1st January 2010, it no longer exercised voting rights in respect of its holding of 30,131,457 shares (4.31%). CRMC has separately advised that, with effect from 1st January 2010, it has been granted proxy voting authority by various Capital Group funds, including GFA, that previously voted independently from CRMC.
On 3rd February 2010, Capital Group International, Inc., which notifies its holding independently of CRMC, notified the Company that its interest in the Company had fallen below 3%.
On 22nd July 2009, Irish Life Investment Managers notified the Company that its interest in the Company had fallen below 3%.
On 30th April 2009, Bank of Ireland Asset Management Limited notified the Company that its interest in the Company had fallen below 3%.
On 14th April 2009, FMR LLC (Fidelity North America)(FMR) and FIL Limited Fidelity (Fidelity Asia Pacific, Europe and the Middle East)(FIL), which previously advised their shareholding in a joint notification, informed the Company that their holdings had been disaggregated and would be notified separately in future. FMR notified that its holding on 14th April 2009 was 16,081,428 shares (2.30%), while FIL notified that its holding was 15,405,831 shares (2.20%).
BlackRock, Inc. has advised that its interests in CRH shares arise by reason of discretionary investment management arrangements entered into by it or its subsidiaries. |
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Memorandum and Articles of Association
The Company’s Memorandum of Association sets out the objects and powers of the Company. The Articles of Association detail the rights attaching to each share class; the method by which the Company’s shares can be purchased or re-issued; the provisions which apply to the holding of and voting at general meetings; and the rules relating to the Directors, including their appointment, retirement, re-election, duties and powers. Further details in relation to the Purchase of the Company’s own shares are included in the Directors’ Report.
A copy of the Memorandum and Articles of Association can be obtained from the Group’s website, www.crh.com.
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Communications with Shareholders
Communications with shareholders are given high priority and there is regular dialogue with institutional shareholders, as well as presentations at the time of the release of the annual and interim results. Conference calls are held following the issuance of trading statements, interim management statements and major announcements by the Group, which afford Directors the opportunity to hear investors’ reactions to the announcements and their views on other issues.
Trading statements are usually issued in January and July and interim management statements are issued in May and November. Major acquisitions are notified to the Stock Exchanges in accordance with the requirements of the Listing Rules. In addition, development updates, giving details of other acquisitions completed and major capital expenditure projects, are usually issued in January and July each year.
|
Attendance at Board and Board Committee meetings during the year ended 31st December 2009
|
|
Board |
Acquisitions |
Audit |
Finance |
Nomination |
Remuneration |
|
A |
B |
A |
B |
A |
B |
A |
B |
A |
B |
A |
B |
| G.A. Culpepper |
8 |
8 |
1 |
1 |
|
|
5 |
5 |
|
|
|
|
| W.P. Egan |
8 |
8 |
|
|
|
|
|
|
4 |
4 |
8 |
8 |
| U-H. Felcht |
8 |
8 |
|
|
14 |
12 |
6 |
5 |
|
|
|
|
| N. Hartery |
8 |
8 |
|
|
|
|
|
|
4 |
3 |
8 |
8 |
| J.M. de Jong |
8 |
8 |
|
|
14 |
14 |
|
|
|
|
|
|
| J.W. Kennedy* |
4 |
4 |
|
|
|
|
|
|
1 |
1 |
2 |
2 |
| M. Lee |
8 |
8 |
1 |
1 |
|
|
6 |
6 |
4 |
4 |
|
|
| K. McGowan |
8 |
8 |
1 |
1 |
|
|
6 |
6 |
4 |
4 |
8 |
8 |
| A. Manifold |
8 |
8 |
1 |
1 |
|
|
|
|
|
|
|
|
| T.V. Neill |
8 |
8 |
1 |
- |
5 |
5 |
|
|
4 |
4 |
8 |
8 |
| D.N. O’Connor |
8 |
7 |
1 |
- |
14 |
12 |
|
|
|
|
|
|
| J.M.C. O’Connor |
8 |
8 |
|
|
14 |
14 |
|
|
|
|
|
|
| W.I. O’Mahony |
8 |
8 |
1 |
1 |
|
|
6 |
5 |
|
|
|
|
| M.S. Towe |
8 |
8 |
|
|
|
|
|
|
|
|
|
|
Column A – indicates the number of meetings held during the period the Director was a member of the Board and/or Committee.
Column B – indicates the number of meetings attended during the period the Director was a member of the Board and/or Committee.
* Appointed on 24th June 2009 |
During 2009, the Board received reports from management on the issues raised by investors in the course of presentations following the annual and interim results.
The Group’s website, www.crh.com, provides the full text of the Annual and Interim Reports, the Annual Report on Form 20-F, which is filed annually with the United States Securities and Exchange Commission, the CSR Report, trading statements, interim management statements and copies of presentations to analysts and investors. News releases are made available in the News & Media section of the website immediately after release to the Stock Exchanges. Webcasts of key investor briefings are broadcast live and are made available as recordings in the News & Media section.
In addition, the Company responds throughout the year to numerous letters from shareholders on a wide range of issues.
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General Meetings
The Company’s Annual General Meeting (AGM), which is held in Ireland, affords individual shareholders the opportunity to question the Chairman and the Board. All Directors attended the 2009 AGM. The Notice of the AGM, which specifies the time, date, place and the business to be transacted, is sent to shareholders at least twenty working days before the meeting. At the meeting, resolutions are voted on by means of an electronic voting system. The votes of shareholders present at the meeting are added to the proxy votes received in advance and the total number of votes for, against and withheld for each resolution are announced. This information is made available on the Company’s website following the meeting.
All other general meetings are called Extraordinary General Meetings (EGMs). An EGM called for the passing of a special resolution must be called by at least twenty-one clear days’ notice. Provided shareholders have passed a special resolution at the immediately preceding AGM and the Company continues to allow shareholders to vote by electronic means, an EGM to consider an ordinary resolution may, if the Directors deem it appropriate, be called at fourteen clear days’ notice.
A quorum for a general meeting of the Company is constituted by five or more shareholders present in person and entitled to vote. The passing of resolutions at a general meeting of the Company, other than special resolutions, requires a simple majority. To be passed, a special resolution requires a majority of at least 75% of the votes cast.
Shareholders have the right to attend, speak, ask questions and vote at general meetings. In accordance with Irish company law, the Company specifies record dates for general meetings, by which date shareholders must be registered in the Register of Members of the Company to be entitled to attend. Record dates are specified in the notes to the Notice of a general meeting. Shareholders may exercise their right to vote by appointing a proxy/proxies, by electronic means or in writing, to vote some or all of their shares. The requirements for the receipt of valid proxy forms are set out in the notes to the Notice convening the meeting. A shareholder, or a group of shareholders, holding at least 5% of the issued share capital of the Company, has the right to requisition a general meeting. A shareholder, or a group of shareholders, holding at least 3% of the issued share capital of the Company, has the right to put an item on the agenda of an AGM or to table a draft resolution for inclusion in the agenda of a general meeting, subject to any contrary provision in Irish company law.
The Group’s website, www.crh.com, contains answers to questions frequently asked by shareholders, including questions regarding shareholder rights in respect of general meetings. The FAQ can be accessed in the Investor Relations section of the website under ‘Shareholder Services’.
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Internal Control
The Directors have overall responsibility for the Group’s system of internal control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can provide only reasonable and not absolute assurance against material misstatement or loss.
The Directors confirm that the Group’s ongoing process for identifying, evaluating and managing its significant risks is in accordance with the updated Turnbull guidance (Internal Control: Revised Guidance for Directors on the Combined Code) published in October 2005. The process has been in place throughout the accounting period and up to the date of approval of the Annual Report and financial statements and is regularly reviewed by the Board.
Group management has responsibility for major strategic development and financing decisions. Responsibility for operational issues is devolved, subject to limits of authority, to product group and operating company management. Management at all levels is responsible for internal control over the respective business functions that have been delegated. This embedding of the system of internal control throughout the Group’s operations ensures that the organisation is capable of responding quickly to evolving business risks, and that significant internal control issues, should they arise, are reported promptly to appropriate levels of management.
The Board receives, on a regular basis, reports on the key risks to the business and the steps being taken to manage such risks. It considers whether the significant risks faced by the Group are being identified, evaluated and appropriately managed, having regard to the balance of risk, cost and opportunity. In addition, the Audit Committee meets with internal auditors on a regular basis and satisfies itself as to the adequacy of the Group’s internal control system. The Audit Committee also meets with and receives reports from the external auditors. The Chairman of the Audit Committee reports to the Board on all significant issues considered by the Committee and the minutes of its meetings are circulated to all Directors.
The Directors confirm that they have conducted an annual review of the effectiveness of the system of internal control up to and including the date of approval of the financial statements. This had regard to the material risks that could affect the Group’s business (as outlined in the Directors’ Report), the methods of managing those risks, the controls that are in place to contain them and the procedures to monitor them.
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Going Concern
The Company’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Executive’s Review. The financial position of the Company, its cash flows, liquidity position and borrowing facilities are described in the Finance Review. In addition, Notes 21 to 25 to the financial statements include the Company’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.
The Company has considerable financial resources and a large number of customers and suppliers across different geographic areas and industries. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook.
The Directors have a reasonable expectation that the Company, and the Group as a whole, have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
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Compliance
In the period under review, CRH complied with the provisions set out in section 1 of the Combined Code. The Company also complied with the rules issued by the United States Securities and Exchange Commission to implement the Sarbanes-Oxley Act 2002, in so far as they apply to the Group.