Annual Report 2011 - Mandarin Oriental Hotel Group
Annual Report 2011 - Mandarin Oriental Hotel Group
Annual Report 2011 - Mandarin Oriental Hotel Group
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<strong>Annual</strong> <strong>Report</strong> <strong>2011</strong> 79<br />
Senior executive share incentive schemes have also been established to provide longer-term incentives for executive<br />
Directors and senior managers. Share options are granted by the scheme trustee after consultation between the<br />
Chairman, the Managing Director and the <strong>Group</strong> Chief Executive and other Directors as they consider appropriate.<br />
Share options are granted at the then prevailing market prices and the scheme rules provide that they normally vest after<br />
the third anniversary of the date of grant. Grants may be made in a number of instalments. Share options are not granted<br />
to non-executive Directors.<br />
The Company purchases insurance to cover its Directors against their costs in defending themselves in civil proceedings<br />
taken against them in that capacity and in respect of damages resulting from the unsuccessful defence of any proceedings.<br />
To the extent permitted by law, the Company also indemnifies its Directors. Neither the insurance nor the indemnity<br />
provides cover where the Director has acted fraudulently or dishonestly.<br />
Directors’ responsibilities in respect of the financial statements<br />
The Directors are required under the Bermuda Companies Act 1981 to prepare financial statements for each financial<br />
year and to present them annually to the Company’s shareholders at the <strong>Annual</strong> General Meeting. The financial<br />
statements should present fairly in accordance with International Financial <strong>Report</strong>ing Standards (‘IFRS’) the financial<br />
position of the <strong>Group</strong> at the end of the year and the results of its operations and its cash flows for the year then ended.<br />
The Directors consider that applicable accounting policies under IFRS, applied on a consistent basis and supported by<br />
prudent and reasonable judgements and estimates, have been followed in preparing the financial statements.<br />
Going concern<br />
The Directors are required to consider whether it is appropriate to prepare financial statements on the basis that the<br />
Company and the <strong>Group</strong> are going concerns. The <strong>Group</strong> prepares comprehensive financial forecasts and, based on these<br />
forecasts, cash resources and existing credit facilities, the Directors consider that the Company and the <strong>Group</strong> have<br />
adequate resources to continue in business for the foreseeable future. For this reason, the Directors continue to adopt<br />
the going concern basis in preparing the financial statements.<br />
Code of Conduct<br />
The <strong>Group</strong> conducts business in a professional, ethical and even-handed manner. Its ethical standards are clearly set<br />
out in the Jardine Matheson group Code of Conduct, a set of guidelines to which every employee must adhere. The code<br />
requires that all <strong>Group</strong> companies comply with all laws of general application, all rules and regulations that are industry<br />
specific and proper standards of business conduct. The code prohibits the giving or receiving of illicit payments, and<br />
requires all employees to be treated fairly, impartially and with respect. It also requires that all managers must be fully<br />
aware of their obligations under the Code of Conduct and establish procedures to ensure compliance at all levels within<br />
their organizations. The <strong>Group</strong> has in place procedures by which employees can raise, in confidence, matters of serious<br />
concern in areas such as financial reporting or compliance.<br />
Risk management and internal control<br />
The Board has overall responsibility for the <strong>Group</strong>’s system of risk management and internal control. The system of<br />
internal control is designed to manage, rather than eliminate, business risk; to help safeguard the <strong>Group</strong>’s assets against<br />
fraud and other irregularities; and to give reasonable, but not absolute, assurance against material financial misstatement<br />
or loss.<br />
The principal risks and uncertainties facing the Company are set out on pages 82 and 83.