Our directors are recommending a final dividend of 25.14 pence per ordinary share for the year ended 31 March 2015, which, together with the interim dividend of 12.56 pence, gives a total dividend for the year of 37.70 pence per ordinary share (the interim and final dividends we paid in respect of the 2013/14 financial year were 12.01 pence and 24.03 pence per ordinary share respectively). Subject to approval by our shareholders at our AGM, our final dividend will be paid on 3 August 2015 to shareholders on the register at the close of business on 26 June 2015.
The biographical details, together with the skills and experience of our directors who served during the financial year ended 31 March 2015, can be found in the Board of directors. During the year, Nick Salmon retired from the board at our AGM on 25 July 2014 and we appointed Stephen Carter to the board on 1 September 2014.
Our articles of association provide that our directors must retire at the third annual general meeting following their last election or reappointment by our shareholders. However, our board, being mindful of the recommendation contained within the UK Corporate Governance Code published in 2012 ('the 2012 Code') that all directors should be subject to annual election by shareholders, has decided that all of our directors will retire at the 2015 AGM and offer themselves for election/reappointment, as happened at the AGMs in 2011, 2012, 2013 and 2014. Information regarding the appointment of our directors is included in our corporate governance report.
Details of the interests in the company's shares held by our directors and persons connected with them are set out in our directors' remuneration report which is hereby incorporated by reference into this directors' report.
|Corporate governance statement|
The corporate governance report is hereby incorporated by reference into this directors' report. Further details of our compliance with the 2012 Code is given in the Governance section. Our statement includes a description of the main features of our internal control and risk management systems in relation to the financial reporting process and forms part of this directors' report. A copy of the 2012 Code, as applicable to the company for the year ended 31 March 2015, can be found at the Financial Reporting Council's website frc.org.uk. Copies of the matters reserved to the board and the terms of reference for each of the main board committees can be found on our website: corporate.unitedutilities.com
Our corporate governance statement also includes the consideration given by our directors to the factors relevant to the adoption of the going concern basis of accounting and a long term viability statement. We can confirm that during the financial year 2014/2015 there have been no breaches of our anti-bribery and competition policies and no investigations or enforcement activity against us in respect of these matters.
At 31 March 2015, the issued share capital of the company was £499,819,926 divided into 681,888,418 ordinary shares of five pence each and 273,956,180 deferred shares of 170 pence each. Details of our share capital and movements in our issued share capital are shown in note 22 to the financial statements. The ordinary shares represented 71.3 per cent and the deferred shares represented 28.7 per cent respectively of the shares in issue as at 31 March 2015.
All our ordinary shares have the same rights, including the rights to one vote at any of our general meetings, to an equal proportion of any dividends we declare and pay, and to an equal amount of any surplus assets which are distributed in the event of a winding-up.
Our deferred shares convey no right to income, no right to vote and no appreciable right to participate in any surplus capital in the event of a winding-up. The rights attaching to our shares in the company are provided by our articles of association, which may be amended or replaced by means of a special resolution of the company in general meeting. The company renews annually its power to issue and buy back shares at our AGM and such resolutions will be proposed at our 2015 AGM. Our directors' powers are conferred on them by UK legislation and by the company's articles. At the AGM of the company on 25 July 2014, the directors were authorised to issue relevant securities up to an aggregate nominal amount of £11,364,806 and were empowered to allot equity securities for cash on a non pre-emptive basis to an aggregate nominal amount of £1,704,721.
Electronic and paper proxy appointment and voting instructions must be received by our registrars (Equiniti) not less than 48 hours before a general meeting and when calculating this period, the directors can decide not to take account of any part of a day that is not a working day.
There are no restrictions on the transfer of our ordinary shares in the company, nor any limitations on the holding of our shares in the company, save (i) where the company has exercised its right to suspend their voting rights or to prohibit their transfer following the omission of their holder or any person interested in them to provide the company with information requested by it in accordance with Part 22 of the Companies Act 2006; or (ii) where their holder is precluded from exercising voting rights by the Financial Conduct Authority's Listing Rules or the City Code on Takeovers and Mergers.
There are no agreements known to us between holders of securities that may result in restrictions on the transfer of securities or on voting rights. All our issued shares are fully paid.
At 20 May 2015, our directors had been notified of the following interests in the company's issued ordinary share capital in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority:
|Per cent of|
|Direct or indirect|
nature of holding
|Purchase of own shares|
At our last AGM held on 25 July 2014, our shareholders authorised the company to purchase, in the market, up to 68,188,841 of our ordinary shares of five pence each. We did not purchase any shares under this authority during the year. We normally seek such an authority from our shareholders annually. At our 2015 AGM, we will seek authority from our shareholders to purchase up to 68,188,841 of our ordinary shares of five pence each with such authority expiring at the end of our AGM held in 2016.
|Change of control|
As at 31 March 2015, Equiniti Trust (Jersey) Limited was the trustee that administered our executive share plans and had the ability to exercise voting rights at its discretion which related to shares that it held under the trust deed constituting the trust. In the event of a takeover offer which could lead to a change of control of the company, the trustee must consult with the company before accepting the offer or voting in favour of the offer. Subject to that requirement, the trustee may take into account a prescribed list of interests and considerations prior to making a decision in relation to the offer, including the interests of the beneficiaries under the trust.
In the event of a change of control, the participants in our share incentive plan (ShareBuy) would be able to direct the trustee of the share incentive plan, Equiniti Share Plan Trustees Limited, how to act on their behalf.
|Information required by UK listing rule 9.8.4|
Details of the amount of interest capitalised by the group during the financial year can be found in note 5 to the financial statements. In line with current UK tax legislation, the amount is fully deductible against the group's corporation tax liability resulting in tax relief of £4.4 million.
There are no other disclosures to be made under listing rule 9.8.4.
|Directors' indemnities and insurance|
We have in place contractual entitlements for the directors of the company and of its subsidiaries to claim indemnification by the company in respect of certain liabilities which might be incurred by them in the course of their duties as directors. These arrangements, which constitute qualifying third party indemnity provision and qualifying pension scheme indemnity provision, have been established in compliance with the relevant provisions of the Companies Act 2006 and have been in force throughout the financial year. They include provision for the company to fund the costs incurred by directors in defending certain claims against them in relation to their duties as directors of the company or its subsidiaries. The company also maintains an appropriate level of directors' and officers' liability insurance.
We do not support any political party and do not make what are commonly regarded as donations to any political party or other political organisations. However, the wide definition of donations in the Political Parties, Elections and Referendums Act 2000 covers activities which form part of the necessary relationship between the group and our political stakeholders. This includes promoting United Utilities' activities at the main political parties' annual conferences, and occasional stakeholder engagement in Westminster.
The period 2014/15 saw us engage with our stakeholders along a number of policy themes as the Water Bill made its way through Parliament and Market Reform planning continued. The group incurred expenditure of £21,600 (2014: £12,235) as part of this process. At the 2014 AGM, an authority was taken to cover such expenditure. A similar resolution will be put to our shareholders at the 2015 AGM to authorise the company and its subsidiaries to make such expenditure.
Our policies on employee consultation and on equal opportunities for our disabled employees can be found in the 'Our responsible approach to doing business'. The company's business principles make clear how it and all our employees must seek to act with integrity and fairness and observe legal requirements. Anyone with serious concerns that the company may not be adhering to these principles is encouraged to speak up via their line manager or through a confidential telephone line.
Importance is placed on strengthening employees' engagement, measuring their views annually, then taking action to improve how they feel about the company and understand its direction. Employees are provided with regular information to enable them to understand the financial and economic factors affecting the company's performance. The board encourages employees to own shares in the company through the all employee share incentive plan (ShareBuy). For further information on our average number of employees during the year, see note 2.
|Environmental, social and community matters|
Details of our approach to corporate responsibility, relating to the environment and social and community issues, can be found in the 'Our responsible approach to doing business' section.
|Essential contractual relationships|
Certain suppliers we use contribute key goods or services, the loss of which could cause disruption to our services. However, none are so vital that their loss would affect our viability as a group as a whole nor are we overly dependent on any one individual customer.
|Approach to technology development|
We are committed to using innovative, cost-effective and practical solutions for providing high quality services and we recognise the importance of ensuring that we focus our investment on the development of technology and that we have the right skills to apply technology to achieve sustainable competitive advantage and also that we continue to be alert to emerging technological opportunities.
Our risk management objectives and policies in relation to the use of financial instruments can be found in note A3 to the financial statements.
|Property, plant and equipment|
The group holds significant land assets; however, the vast majority of these are water catchment assets which are an integral and essential part of the operation of the group's regulated business. The nature of these assets, which are primarily moorland areas and which could not be sold by the group, means that it is impracticable to obtain meaningful market values for the land. Other land owned by the group, the majority of which relates to operational sites, does not have a market value materially different from historic cost.
|Events occurring after the reporting period|
Details of events after the reporting period are included in note 25 to the consolidated financial statements.