Annual report and accounts 2009 (PDF) - Coventry Building Society

DIRECTORS’ REPORT(continued)The Society’s business activities, together with the factorslikely to affect its future development, performance,position, liquidity and capital structure are set out in theChairman’s Statement, Chief Executive’s Review and thisDirectors’ Report. In addition, the Risk Management Reportand note 40 to the financial statements includes furtherinformation on the Society’s objectives, policies andprocesses for managing its exposure to liquidity, credit andinterest rate risk, details of its financial instruments andhedging activities.The directors believe that the Society is well placed tomanage its business risks successfully despite the currentuncertain economic outlook. After considering factorsincluding default rates on loans, house price movementsand the Society’s capital and liquidity position, the directorsare confident that the Society has adequate resources tocontinue in business for the foreseeable future. Accordingly,they continue to adopt the going concern basis in preparingthe Annual Report & Accounts.DIRECTORS’ STATEMENT PURSUANT TO THEDISCLOSURE AND TRANSPARENCY RULESThe directors confirm that, to the best of each person’sknowledge and belief:However, the Society is well placed to succeed. It continuesto earn an adequate return from its assets, it is well fundedand it is not exposed to the scale of impairment lossesfaced by some competitors. And although there hasundoubtedly been a significant increase in the cost ofacquiring and retaining retail funding, this is reflected in themarket price for new prime mortgage lending.From the start of the credit crunch, it was the board’s beliefthat the Society had the right business model for thesedifficult conditions. Subsequent events have shown this tobe the case and the board continues to believe thatCoventry remains well placed to report further progress in2010 and beyond.On behalf of the boardDavid HardingChairman1 March 2010• The financial statements, prepared in accordance withIFRS as adopted by the EU, give a true and fair view ofthe assets, liabilities, financial position and profit of theGroup and Society; and• The management report contained in this Directors’Report and the Risk Management Report includes a fairreview of the development and performance of thebusiness and the position of the Group and Society,together with a description of the principal risks anduncertainties that they face.AUDITORSFollowing a thorough review by the Audit Committee, theboard has agreed that a resolution proposing the reappointmentof Ernst & Young LLP as auditors of theSociety will be submitted at the Society’s 2010 AGM.FUTURE DEVELOPMENTSThere can be little doubt that market conditions will remainchallenging throughout 2010. The impact of very lowinterest rates, a restricted financial market and furtherregulatory changes, including those affecting capital andliquidity, will put pressure on profitability. There is also thepossibility that the recent revival in the housing market andwider economy could reverse.18