ARTICLES OF ASSOCIATION
The Company’s Articles of Association may only be amended by a special resolution at a general meeting of shareholders. At the Company’s AGM to be held on 26 May 2010, a resolution will be put to shareholders proposing amendments to the existing Articles of Association to incorporate changes introduced by the Companies Act 2006.
CONFLICTS OF INTEREST
During 2008, provisions in the Companies Act 2006 concerning a director’s duties in dealing with actual or potential conflicts of interest became effective. In accordance with these provisions, shareholders approved changes to the Company’s Articles of Association at the 2008 AGM to allow directors to authorise such conflicts.
The Board has adopted a policy and procedure for the disclosure and authorisation (if appropriate) of conflicts of interest, and these have been followed during 2009.
POWERS OF DIRECTORS
The directors may exercise all powers of the Company subject to applicable legislation and regulation and the Company’s Articles of Association.
SHARE CAPITAL
As at 31 December 2009, the Company’s issued share capital comprised 5,862,216,780 Ordinary shares each with a nominal value of 2.5p. Details of the Ordinary share capital can be found in Note 28 to the Financial Statements.
At the 2009 AGM, the Company was granted authority by shareholders to purchase up to 586,167,936 Ordinary shares, being 10% of the issued share capital of the Company as at 24 March 2009. In the year to 31 December 2009, no shares were purchased by the Company. This authority will expire at this year’s AGM. As such, a special resolution is proposed in the Notice of AGM seeking shareholder approval to renew this authority.
At the 2009 AGM, the directors were given the power to allot shares up to an amount of £48,358,855, being 33% of the issued share capital of the Company as at 24 March 2009. This authority will also expire at this year’s AGM. As such, a special resolution is proposed in the Notice of AGM seeking shareholder approval to renew this authority.
A further resolution is proposed, as set out in the Notice of AGM, that will, if approved by shareholders, authorise the directors to issue shares up to the equivalent of 5% of the Company’s issued share capital as at 22 March 2010 for cash without offering the shares first to existing shareholders in proportion to their holdings.
Detailed explanatory notes to these resolutions are set out in the Notice of AGM.
Other than the above, the directors have no current intention of issuing further share capital and no issue will be made which would effectively alter control of the Company without prior approval of shareholders in a general meeting.
SUBSTANTIAL SHARE INTERESTS
As at 22 March 2010, the Company had been advised of the following significant direct and indirect interests in the issued share capital of the Company:
(Download XLS:)  |
|
|
Number of Ordinary shares of 2.5p with direct voting rights |
Number of Ordinary shares of 2.5p with indirect voting rights |
Total interest |
|---|---|---|---|
|
AXA S.A and its group of companies |
3.04% |
1.27% |
4.31% |
|
Swiss Reinsurance Company Ltd |
3.93% |
0% |
3.93% |
|
Aviva Plc & its subsidiaries |
2.86% |
0% |
2.86% |
|
Schroders Plc |
0% |
5.04% |
5.04% |
|
Blackrock Inc |
0% |
5.21% |
5.21% |
DIVIDEND
The Company may, by ordinary resolution in a general meeting, declare dividends in accordance with the respective rights of the members, but no dividend can exceed the amount recommended by the Board. An interim dividend of 1.11p per share was paid on 1 October 2009. The directors propose a final dividend of 2.73p per Ordinary share. Subject to shareholder approval, the final dividend will be paid on 1 June 2010 to shareholders on the share register on 16 April 2010.
RELATED PARTY TRANSACTIONS
Details of related party transactions are set out in Note 40 to the Financial Statements.
USE OF FINANCIAL INSTRUMENTS
Information on the Group’s risk management process is set out in the Risk management section. More details on risk management and the financial instruments used are set out in Note 48 of the Financial Statements.
INDEMNITIES
The Company has agreed to indemnify, to the extent permitted by law, each of the directors against any liability incurred by a director in respect of acts or omissions arising in the course of their office. Qualifying pension scheme indemnities (as defined in section 235 of the Companies Act 2006) have been granted, to the extent permitted by law, to certain trustees of the Company’s pension schemes. The indemnities were in force throughout 2009 and remain so. Copies of the deeds of indemnity are available for inspection at the Company’s registered office and will also be available at the AGM.
CHARITABLE DONATIONS
During the period, the Group made charitable donations amounting to £2.8 million. Details of the Company’s charitable activities are set out in the Corporate social responsibility section.
POLITICAL DONATIONS
No political donations were made during 2009.
FORWARD-LOOKING STATEMENTS
The Directors’ Report is prepared for the members of the Company and should not be relied upon by any other party or for any other purpose. Where the Directors’ Report includes forward-looking statements, these are made by the directors in good faith based on the information available to them at the time of their approval of this report. Such statements should be treated with caution due to the inherent uncertainties underlying such forward-looking statements.
INSURANCE
The Company has arranged appropriate Directors’ and Officers’ Liability insurance for directors. This is reviewed annually.
INDEPENDENT AUDITORS
The Company’s auditors have expressed their willingness to continue in office and the Audit Committee has recommended their reappointment to the Board. A resolution to re-appoint PricewaterhouseCoopers LLP as auditors to the Company and to authorise the directors to determine their remuneration is proposed for the forthcoming AGM.
DIRECTORS’ INTERESTS
The Directors’ Report on Remuneration provides details of the interests of each director, including details of current incentive schemes and long term incentive schemes, the interests of directors in the share capital of the Company and details of their share options, as at 31 December 2009 and the changes in those interests that have occurred between 1 January 2010 and 22 March 2010 (being the last practicable date prior to publication of the Notice of the AGM).
DISCLOSURE OF INFORMATION TO AUDITORS
Each of the directors who held office at the date of approval of this Directors’ Report confirms that, so far as they are each aware, there is no relevant audit information of which the Company’s auditors are unaware and each of the directors have taken all reasonable steps they ought to have taken as directors to ascertain any relevant audit information and to ensure that the Company’s auditors are aware of such information. This confirmation is given in accordance with section 418(2) of the Companies Act 2006.
