The Group’s first brand, set up in 1993 – mainly targeting those who traditionally pay higher than average premiums, including drivers under-35 and those living in big cities. www.admiral.com
Bell was set up in 1997 – its main target market being drivers with zero or low no claims bonus. www.bell.co.uk elephant.co.uk is the Group’s main online car insurance service. Elephant passes on cost savings generated by being an online brand to customers in the form of lower premiums. www.elephant.co.uk
P R O F I T B E F O R E T A X
C L O S I N G A C T I V E C U S T O M E R S
A D J U S T E D E A R N I N G S P E R S H A R E 4
As one recent report on the ever changing role of the Chairman put it, the prime job of the Chairman is to run the Board, not the organisation: that is the job of the Chief Executive. It is for the Board, led by the Chairman, to ensure that the Company has strategies, quality of management, and all the resources – financial, human, technology – to create wealth on a consistent basis. At the same time, the Chairman has to ensure that the business is run with value and integrity, not only meeting governance codes but also the expectations of customers, employees, suppliers and wider stakeholders.
This is a remit that I am very happy to embrace as Chairman. I shall, therefore, leave it to Henry Engelhardt, our Chief Executive, to review in detail the achievements of the Group during an exceptional year and shall content myself with the headlines.
It was hugely satisfying to follow this success by winning Business of the Year at the 2004 National Business Awards, a much deserved reflection of our listing positioning – “Admiral is different”. To create that difference, Admiral combines commercial creativity, exemplified by its reinsurance structure, high ratio of ancillary sales, and multi-branding, with a distinctive culture of openness, informality, team work and delegation of responsibility made possible by excellent management information and effective control systems.
Our listing brought with it significant changes to our Board. Owen Clarke and Pratt Thompson, who respectively had represented the interests of Barclays Private Equity and XL, stepped down as non-executive directors. Our thanks to them for many years of active involvement and sound advice and support. In their place we have been joined by Martin Jackson and John Sussens. Martin brings a wealth of experience of financial management in the insurance sector, having, as Finance Director, taken Friends Provident through demutualisation. We are delighted to have him as Chairman of our Audit
our executive team gives me confidence in our Board’s ability to chart an effective strategy for Admiral and identify correctly the resources we require to implement this strategy.
Admiral’s strategy is clear and straightforward – to continue to grow our share of the direct private motor market, maximising the value derived from each customer relationship. Along the way we will identify profitable opportunities to exploit the knowledge, skills and resources attaching to our core business. As an example, Confused, the intelligent automated car insurance shopper that we set up in 2000, last year handled 1.4 million quotes.
Well, 2004 was that kind of year for the Admiral Group.
As you will see from reading these accounts, this was a smashing year for the Group. Smashing as in smashing records for things like: profit, premium income, expense ratio and more.
Clearly the highlight reel starts with our successful public offering and listing on the London Stock Exchange; changing our status from a private Company to a public Company.
What stands out for me is that a large number of investors who previously didn’t know much (anything?) about us decided that ours was a Company worth buying a stake in. It was a highlight because everyone at Admiral (in particular, the finance and communications departments) pitched in and worked together to ensure that the process of going public was a smooth one. It was also a highlight because it was a validation of all the hard work we have put into our business over 12 years; becoming quoted was a tangible, cumulative measurement of our achievements. Admiral didn’t just pop up in the summer of 2004 and decide to be a publicly quoted Company. Over 12 years a lot of people have put a lot of effort into making Admiral a great Company and the listing was another, albeit highly visible, tick in our scorecard of success.
So, let’s get into the meaty bits. Let me try and list some of the other things that brought a smile to our faces in 2004: • made a record core profit of £100.6m, up 30% from 2003
• total turnover for the year was £548m, up 28% from 2003
• gave more than 6.25m quotes, of which 5m started on the internet (82%)
• won Business of the Year at the National Business Awards
• named by The Sunday Times as the 20th best place to work in the UK in its ‘Top 100 Places To Work in the UK’ competition. This listing is in its fifth year and we’re one of only 11 firms to be in the list in all five years
• winner of the Best small/mid cap IPO of the Year at the Financial News Awards
Henry Engelhardt, CEO, with Andrew Probert, Finance Director and David Stevens, Chief Operating Officer at the London Stock Exchange
What We Do: For those of you looking through our accounts for the first time, Admiral’s primary business is to sell car insurance direct to the public in the UK. We are not your typical insurance underwriting operation as we primarily distribute insurance on behalf of reinsurance partners, taking only 25% of the underwriting risk for our own account. However, we do own all our customers and have the ability to sell other products and services to them.
This is our first set of accounts as Admiral Group plc, a public Company.
In 1999 we also put in place a long-term co-insurance agreement with Great Lakes UK, a wholly-owned subsidiary of Munich Re, the world’s largest reinsurer. In 2001 we extended this agreement and it currently runs through at least 2008. In 2002 Munich Re also became a shareholder in AGL and it currently owns 14% of the Group.
Key Performance Information: Our total premium written for 2004, before sharing premium with our reinsurance partners, was £470m, accounting for 86% of our total turnover. The number of customers we service rose to 1,041,000 from 808,000 (+29%). All our growth has been organic.
In 2004 75% of our premium was underwritten by two external reinsurers. Therefore, the Group’s net premium written was £117m. In 2005 Admiral Group will once again take 25% of the premium income to its own account. Munich Re, through Great Lakes, will take 65%, Axis and Gen Re will each take 5% respectively.
• earned expense ratio, less government levies, down to 12.5% from 13.5%
• combined ratio, including all levies, 82%, up from last year’s phenomenal
“There is the will to conquer, the impulse to fight, to prove oneself superior to others. There is the joy of creating, of getting things done, or simply exercising one's energy and ingenuity.” Joseph Shumpeter 13531 Admiral AR a/w 5/4/05 9:59 am Page 8
The bar chart above shows the development of the loss ratios for the back years on an underwriting year basis. The years noted at the bottom of the chart are the underwriting years. The coloured bars represent the reported loss ratios published in the Annual Accounts over the last five years. So, for example, in the 2003 Accounts the loss ratio for the 2001 underwriting year was 63%, down from 71% in the previous year’s accounts.
The UK Car Insurance Market Cycle: Drive Carefully Last year I said that the car insurance market was turning, albeit slowly. I explained that premiums would not keep up with claims inflation in 2004. And this is, indeed, what has happened. On average, rates probably fell by 2-4% across the market, while claims costs continued to rise faster than inflation at 4-6%. Therefore, when all the results are tallied, the market should show deterioration of several points.
The private car market finished 2003 with a combined ratio around 102%. The result for 2004 is unlikely to be better than 104%. In previous cycles, the worst point in one cycle is typically seven years from the worst point in the next cycle. 1991 was the worst year of that cycle and seven years later 1998 was the worst year of the next cycle. In both 1991 and 1998 combined ratios were around 120%. We are now seven years on from 1998 and the market’s combined ratio is nowhere near 120%. To my mind, this indicates the rise of a new cyclical pattern. I think this pattern will be characterised by being more gentle, less good in the good times and correspondingly less bad in the bad times. The reasons for this new pattern lie in the changing dynamics of the market. There are three key factors which have provoked such change: • consolidation
PAGES 07 08C H I E F E X E C U T I V E ’ S S TAT E M E N T
In short, I believe that the market is still cyclical and there is no reason to think that it won’t remain so. However, I believe the movements of the market will be less severe, with the best times of the cycle less good than previous cycles and the worst times of the cycle less bad.
U N D E R W R I T I N G Y E A R
PAGES 09 10C H I E F E X E C U T I V E ’ S S TAT E M E N T
Structural Changes: In September 2004 we took the Company public on the London Stock Exchange. In spite of a difficult market for new offerings, the Admiral listing went well. We priced just above the middle of the range and the offer was more than 10 times oversubscribed. By the end of the year the share price had risen from the listing price of £2.75 to £3.23.
We did not take on any additional debt in the year. We did pay down the anticipated portion of our existing debt and the appropriate amount of interest (£4m). As at year-end our debt figure was £33m. To put this in context, interest cover was 42 times for 2004. (This means profits were 42 times the interest payable!)
It’s been a great year beyond the results too. Shortly after we did the Management Buyout (MBO) in 1999 we set up the Staff Trust. When the firm went public in September the value of this Trust was £57m. Over 1,400 members of staff shared in the value of this Trust. The amount each member of staff received was greatly influenced by how loyal they’d been to the Group.
The best day of my working life was the day after the listing when my fellow executive directors and I walked through our offices congratulating staff on their success. Staff were not only pleased because of the financial gain they were about to realise but, what impressed me most, was the fierce pride they showed in the Group and its success. All our staff have played a key part in the success of the business and the listing publicly recognised them for such. The staff were very grateful to management for going out of its way to include them in the financial side of the Group’s success. In return management was very grateful to the staff for making Admiral such a success. As I said, it was a very special day, one I will never forget.
As Alastair has noted, the makeup of our Board has changed. In particular two nonexecutive directors have stepped down, Pratt Thomson and Owen Clarke. We wish both gentlemen well and thank them for their respective contributions over the years. In particular, I’d like to thank Owen, who was the driving force behind Barclays Private Equity’s investment in Admiral in 1999. Again, here was an individual who believed in our potential. Over the course of the last five years I’ve come to know Owen quite well and learned a number of things from him, most notably a) the art of stepping back to weigh alternatives, b) how to better blend rational thought with emotion and c) that you actually can trust a venture capitalist! I am sorry to lose him from our Board but certainly wish him continued success for the future. I’d also like to welcome Martin Jackson and John Sussens to the Board. I’m sure I have a lot to learn from both of these experienced (but still young!) businessmen.
C U S T O M E R S B Y B R A N D
The Group also achieved significant core profit growth – of over 30% during 2004, as shown in the table below.
• intermediary activities – primarily the selling of ancillary motor products, but also from Gladiator Commercial and Confused.com
C O R E P R O F I T G R O W T H
G R O U P T U R N O V E R
Total premium 470,400 371,600 Gross other income 69,457 50,783 Net investment return 8,135 4,881
The remaining 35% is underwritten through two Admiral Group entities – Admiral Insurance Company Limited (AICL) and Admiral Insurance (Gibraltar) Limited (AIGL), both of which commenced trading in 2003. 10% of the total business was reinsured to Converium Re (Converium) under a proportional quota share contract through AIGL (as in 2003) on a funds withheld basis. The net effect of this is that the Group retained a net share of 25% of the total book.
The quota share contract with Converium was terminated at the end of 2004 and has been replaced with two new contracts (each for 5% of the total book) – with Gen Re (part of the Berkshire Hathaway Group and rated AAA by Standard & Poors) and Axis Re (rated A by Standard & Poors).
For the 2000 to 2002 underwriting years, the Group’s retained share of the motor business was underwritten through the Group’s Syndicate (Syndicate 2004) at Lloyd’s of London. The Group is currently managing the run-off of Syndicate 2004, and the last year of account (2002) remained open at the end of 2004. A decision is to be made during 2005 as to the closure of the 2002 year, and the release of any remaining capital held at Lloyd’s.
In 2004, the Group has again generated significant underwriting profits, reflecting both superior loss and expense ratios. The aggregate of these – the combined ratio – is again expected to rank highly in the UK motor market and has led to an underwriting profit of £28.0m (before reinsurance profit commissions), compared to £31.0m in 2003. This decrease is due to a combination of the higher loss ratios experienced on the more recent underwriting years (a factor of the motor insurance cycle) and the higher level of reserve releases realised in 2003 following the favourable development of the earlier underwriting years.
Growth in total premium written was 27% in 2004, up from £371.6m to £470.4m. This was due to targeted increases in marketing spend, and the continuing, highly successful development of elephant.co.uk – the Group’s internet-only brand. This growth generated an increase in the Group’s market share, and an even more notable increase in its share of the internet motor market.
Premium rates were on average around 3% lower in 2004 than in 2003. This reduction was implemented as a strategy to take advantage of the Group’s superior combined ratio to help achieve the substantial growth in both policies and premiums written while delivering attractive combined ratios, both for the Group and our reinsurers.
2004’s loss ratio (excluding claims handling expenses – which are allocated to net claims incurred but are included in expenses for this analysis) is 67.0%, up from 52.1% in 2003. The 2003 ratio was flattered by substantial reserve releases (£16.1m) resulting from the favourable development of earlier underwriting years. The 2003 releases accounted for a reduction of over 20 points in the reported loss ratio, compared to £9.2m of releases, or an 8.5 point reduction in the loss ratio in 2004.
As regards expense ratios, the Group’s direct distribution model, focussed on the internet and telesales, is highly cost effective – especially in terms of the cost of acquiring new business. Passing on a share of these costs to its co-insurance and reinsurance partners also means the Group is able to benefit from economies of scale.
Continued growth of internet sourced business has, along with tight control of costs within the Group, led to a further improvement in the expense ratio (including claims handling costs) to 15.0% in 2004, down from 15.6% in 2003. These ratios are derived as follows: Analysis of reserve releases
Net operating expenses per technical account 13,796 10,308 add back: claims handling costs 2,352 2,230 deduct: non-recurring Lloyd’s charges - (193)
Profit Commission The Group receives profit commission through both its proportional co-insurance and reinsurance arrangements. The amount of commission receivable is dependent on the volume and profitability of the insurance business, measured by reference to loss and expense ratios.
For the 2003 and 2004 underwriting years, the Group earned profit commission from Converium, depending on the loss ratio returned on these underwriting years. During 2004, £3.1m of commission was recognised, compared to £1.2m in 2003. This contract is operated on a funds withheld basis.
The Group also receives profit commission from Great Lakes, based on the size and profitability of the business written. £16.7m of commission has been recognised in the 2004 results, although, as referred to in the financial highlights section above, £6.0m of this commission relates to premium earned in 2003.
Net other income 56,916 38,701 * adjustments relate to intra-group sales. Confused.com is a trading name of Inspop.com Limited.
Grand total cash plus investments 322,619 239,000 13531 Admiral AR a/w 5/4/05 9:59 am Page 18
Reconciliations of profit and shareholders’ equity will be provided in order to set out the major differences between the 2004 UK GAAP and IFRS numbers.
The Group has considered the impact of the ‘stable platform’ of IFRS standards on the financial results to 31 December 2004 and the position at the balance sheet date. The directors are confident that, based on the guidance currently in existence, no material reconciling items (other than in respect of accounting for dividends and goodwill amortisation) will be required when the 2004 figures are restated and reconciled in 2005.
The Group established an ESOT during 2000, under which a specified number of Admiral Group Limited shares were to be made available for issue to the Trust if the Group listed or if it was subject to take-over. Staff have been granted units since 2000, which gave them a proportional entitlement (at no cost) in the shares to be issued.
If the Group’s TSR matches or exceeds that produced by the FTSE 350, the following measures will be applied to the Group’s growth in EPS to calculate the amount of shares to vest: • if the Group’s EPS growth over the vesting period equals the RFR then each individual will receive 10% of their maximum award
• to obtain the maximum award, the Group’s EPS growth would have to average 10 percentage points better than the return available for a cash investment – the RFR
For the purposes of calculating EPS for 2004 as the base value for the computation of the awards, the tax credit resulting from the ESOT will be adjusted to reflect a more normalised tax charge. The 2004 EPS will also be adjusted to reflect changes arising from International Accounting Standards, specifically the goodwill write-off.
Award proposals are submitted to the Remuneration Committee by the executive directors. Individual awards in excess of 100% of salary require individual discussion and justification to the Committee.
Corporate governance Introduction In the period leading up to the Company’s listing on 28 September 2004, the Board implemented a number of changes to the governance environment. These were actioned in order to achieve a structure that ensured the interests of all shareholders were best served following the changes brought about by the listing, and further to ensure that the provisions of the Combined Code Principles of Good Governance and Code of Best Practice (the Combined Code) are fully complied with.
• reviewing the Group’s systems of financial control and risk management
The Board has delegated the following responsibilities to the Executive Management team: • the development and recommendation of strategic plans that reflect the longer-term objectives and priorities established by the Board
• day to day monitoring of the operating and financial results against plans and budgets
Directors and Directors’ independence The Board currently comprises the Chairman (whom the Board considers to be independent), three independent non-executive directors, one nonindependent non-executive director and three executive directors. Including the Chairman, the independent nonexecutive directors represent 50% of the Board.
The Board has appointed John Sussens as Senior Independent Director. He is always available to meet shareholders on request and ensure that the Board is aware of shareholder concerns not resolved through the existing mechanisms for investor communication.
The induction is supplemented by visits to the Group's two locations and meetings with members of the senior management team and their departments. Throughout their period in office the directors are continually updated on the Group's business, legal matters concerning their role and duties, the competitive environments in which the Group operates and any other changes affecting the Group and the industry in which it operates.
Re-election Subject to the Company's Articles of Association, the Companies Act and satisfactory annual performance evaluation, non-executive directors are appointed without a maximum period of appointment. Their contracts may, however, be terminated by either party giving one month's notice, or three months for the Chairman (without compensation).
The Board is conscious of the requirement of the Combined Code and at such a time as a non-executive director’s length of service goes beyond that recommended to be considered independent, the board will review the position. Manfred Aldag’s appointment is contingent upon his continued employment with Munich Re.
All directors will attend the Annual General Meeting, and shareholders will be invited to ask questions during the meeting and to meet the directors after the formal proceedings have ended. The Company's first Annual General Meeting since listing will be held on 18 May 2005.
Major shareholders will be given the opportunity to meet new non-executive directors on appointment.
The figures in brackets indicate the maximum number of meetings during 2004 in which each director was a Board or Committee member.
Ongoing training is provided to all members, and this is intended to cover relevant developments in financial reporting, company law and the various regulatory frameworks.
The terms of reference set out the objectives of the Committee and are available on the Group’s website. This is to ‘ensure the effectiveness and appropriateness of the systems of internal control and risk management by which the management of the Group and its subsidiaries ensure full compliance with the requirements of all relevant regulations and legislation’.
The Committee reviews its terms of reference annually, and also assesses its own effectiveness. The Group Board also performs a similar review of the Committee on an annual basis.
The Committee is authorised (at the Group’s expense) to obtain independent legal or other professional advice if it feels this is necessary. The Board has undertaken to provide the Committee with all the appropriate resources to allow it to discharge its duties.
Having the right to attend all meetings The Chairman and any non-executive director of the Company
*A representative from the external auditor is required to attend the meeting at which the Annual Report is approved for recommendation to the Group Board.
The key activities within the remit of the Committee are as follows: 1. Financial reporting matters
The Committee is charged with monitoring the integrity of the Group’s financial statements (including accompanying narrative statements) along with any formal announcements relating to the Group’s financial performance – especially where this is of a price sensitive nature.
The Committee’s reviews of the above focus on inter alia the following areas: • critical accounting policies and any changes therein
The Committee is responsible for monitoring and reviewing the effectiveness of the Group’s Internal Audit function. This involves, inter alia: • reviewing, assessing and approving the annual internal audit programme
The Audit Committee regularly monitors the non-audit services being provided to the Group by its external auditor and in 2005 will develop a formal Auditor Independence Policy.
The policy will include four key principles that underpin the provision of non-audit services by the external auditor. The auditor should not: • audit its own firm’s work
Prior approval of the Committee is required for any services provided by the external auditor where the fee is likely to be in excess of £30,000. In any case, activities that may be perceived to be in conflict with the role of the external auditor must be submitted to the Committee for approval prior to engagement, regardless of the amounts involved.
The Committee reviews and assesses the procedures put in place throughout the Group to enable employees to raise concerns (in confidence) over any possible wrongdoing in relation to financial reporting or other matters. The Committee ensures that the arrangements in place allow for reasonable, independent investigation of the matters and appropriate follow-up action.
During the year and prior to this reorganisation, the Committee initiated the search for two independent nonexecutive directors. The Board began the process by defining the requirements of the roles considering the plans for listing, and identifying the core competencies required of the candidates to carry out that role.
The selection process was initiated by an external recruitment firm and the Committee presented the Board with two recommended candidates after interviewing a number of possible candidates. The search resulted in the appointment of Martin Jackson and John Sussens.
The Nominations Committee’s terms of reference can be found on the Group’s website.
Any director appointed in the year is subject to automatic resignation and re-election by shareholders at the first Annual General Meeting of the Company after their appointment.
The Committee met once during the year to approve the individual remuneration packages for the executive directors.
• reviewing the salary structure and terms, conditions and benefits of employment of other Group Executive Committee members, and
• approving the rules and launch of any Group share, share option or cash based incentive scheme and the grant, award, allocation or issue of shares, share options or payments under such schemes
The Committee is chaired by the Group Finance Director, with the other members being the Chief Operating Officer and the Group Company Secretary.
In addition to the above, the Group’s senior managers meet on a monthly basis, as do departmental managers. Brand managers meet with the Chief Executive on a weekly basis. These meetings cover a wide range and varying level of issues, including brand performance, operational matters and other business issues.
Internal control and risk management Overall responsibility for risk and the Group’s systems of internal control lies with the Board. In order to ensure these responsibilities are properly discharged, the Board has delegated the task of supervising risk management and internal control to the Risk Management Committee – which is discussed further below. In accordance with the Combined Code, the Board (through the Risk Management Committee and the systems and processes set out below) has ensured that there is an ongoing process for identifying, evaluating and managing the risks faced by the business. Such systems have operated during the financial year and up to the date of this report. The Group’s Risk Management Strategy is regularly reviewed by the Board.
The Group’s system of internal control is designed to manage, rather than eliminate the risk of failure to achieve business objectives, and is only designed to provide reasonable, not absolute assurance against material misstatement or loss. The Board has reviewed the effectiveness of internal controls during 2004.
• prepare relevant and useful risk management information for use by the Audit Committee and Board
Primarily he is responsible for interpreting regulatory requirements and determining how they apply to the regulated companies within the Admiral Group. He will recommend compliant courses of action for the Risk Management Committee to consider and if approved, adopt. He provides support and advice to the management team, helping them to comply with their regulatory responsibilities.
The Compliance Officer is responsible for developing and implementing a risk-based compliance monitoring programme. He monitors to ensure that compliance with regulatory requirements is maintained, reporting to the Risk Management Committee with recommended courses of action should he have any concerns. A quarterly Report of the Compliance Officer is issued to the Boards of the Group's regulated companies that highlights any compliance matters of note. In 2005 this report will also be issued to the Audit Committee.
The Internal Audit function assists management by providing them with timely, independent assurance that the controls established are operating effectively. This includes: • regular reviews of internal control systems and business processes, including compliance systems and procedures
An overview of the regulatory regimes in which the Group operates is as follows: Underwriting entities
Prior to the 2003 financial year, the insurance business retained by the Group was underwritten through Syndicate 2004, which, along with the Group’s Lloyd’s Managing Agency was regulated by Lloyd’s of London. As such, the Group has been obliged to comply with Lloyd’s Acts, Byelaws and Codes of Practice for some time and hence has operated a robust control and risk management environment since (and prior to) the MBO and formation of the Admiral Group in
The applicable rules add another level of regulatory burden on the Group, although this was anticipated and well planned for. A significant amount of the Compliance Officer’s time and resource has been focussed on ensuring the intermediaries fully comply with the regulatory requirements. The Board is satisfied this was the case when the new intermediary regulation came into effect, a fortnight after the balance sheet date.
Going concern The directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future and therefore consider it appropriate to prepare the financial statements on the going concern basis.
The Committee is chaired by John Sussens, with the other member being Martin Jackson. Both are independent non-executive directors. Prior to the Company’s listing on the London Stock Exchange the members were Alastair Lyons, Henry Engelhardt and Owen Clarke (who resigned from the Board on 7 September 2004). The Chairman and Chief Executive are invited to meetings as appropriate.
Executive director remuneration policy The current executive directors are all founding directors. They and the Committee have taken the view that the significant shareholdings held by them provide a sufficient alignment of their interest in the performance of the Group with the interests of other shareholders. The Committee has not, therefore, established a specific performance-related element within their total remuneration.
Martin Jackson Indefinite (terminable on one month’s notice from either party)
Keith James Indefinite (terminable on one month’s notice from either party)
Directors’ service contracts The Company entered into new service contracts with the three executive directors in September 2004 which supersede all previous agreements. New notice periods have been agreed, which are set out opposite.
The Company has also entered into letters of appointment with its nonexecutive directors. Summary details of terms and notice are set out opposite. Again, there is no provision for compensation for early termination of the appointments.
Directors’ remuneration (audited) Remuneration for the year ended 31 December is as set out opposite.
Directors’ shareholdings (audited) Directors’ interests in the ordinary shares of the Company are as set out opposite. As a result of the listing on September 28 2004, the Company’s share capital was significantly restructured. Refer to note 23 for further detail.
R E M U N E R AT I O N R E P O RT
Share options (audited) Keith James received and exercised options over 56,000 0.1p shares in Admiral Group plc on 7 and 9 September respectively. No other director received or holds share options.
The exercise price was 0.1p per share and there was no charge for the grant of the options. The fair value of each share at exercise was £2.75. The gain on the exercise of the options was £154,000, which is not included in the detailed remuneration table above. The options were granted to recompense Keith James for time, over and above that required by his terms of appointment, spent working with the Board in preparation for the listing.
Total shareholder return The graph opposite sets out a comparison of total shareholder return for Admiral Group plc shares with that of the FTSE 350 Index, of which the Company is a constituent. The graph measures the period from the commencement of conditional listing on 23 September 2004 up to 31 December 2004.
Held at Options Options Held at 31 1 January granted exercised December
The Admiral Group is committed to maintaining high standards of integrity and fair dealing with all stakeholders and this translates into its actions and policies towards staff, the community in which the Group operates and in which staff live and also the impact of the Group’s operations on the environment.
• 100 Best Workplaces in the EU – included in both years lists
In order to help achieve these aims, the Group provides employees with regular information on its financial performance, other information that concerns them and provides a forum for employee representatives to give their views on the Group’s activities. Every member of staff is also invited to attend a Staff General Meeting where a variety of information concerning the Group is communicated.
In considering applications for employment from disabled people, the Group ensures fair consideration is given to the abilities and aptitudes of the applicant, while having regard to the requirements of the job for which he or she has applied. Employees who become unable to carry out the job for which they are employed are given individual consideration and depending on the nature, severity and duration of the disability, may be considered for alternative work. The Group continues to train and encourage the career development of disabled persons in its employment.
The Admiral Group is committed to maintaining high standards of integrity and fair dealing with all stakeholders
Admiral Brand Manager, Jane Stone with the ugly sisters. Admiral sponsored one week of the Cinderella pantomime in Cardiff.
As well as these contributions, the Group backs a large number of events within South Wales including: • South Wales Echo Champion Child of Courage Award
• the cabaret marquee at the Cardiff Lesbian and Gay Mardi Gras
In addition to local initiatives, the Group also supports a number of much larger charities through its brands. During 2004, these included: • the Sir Steve Redgrave Charitable Trust through the Admiral brand. The Trust aims to improve the quality of children’s lives, especially in relation to medical, social, educational and economic needs within the UK
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Total awards to these three organisations during 2004 were over £55,000.
The key elements of the Group’s environmental policies are: • widespread recycling schemes (including paper, cups and cans, PCs, printing and photocopying cartridges)
• staff are offered loans and discounts to incentivise the use of public transport
Henry Engelhardt and rugby legend, Gareth Edwards present the award for the South Wales Champion Child of Courage 2004
Children having fun at the Admiral Kids Christmas Party in Cardiff
Jane Stone with two drag queens, Admiral sponsors the Cabaret Marquee at the Cardiff Lesbian and Gay Mardi Gras 13531 Admiral AR a/w 5/4/05 9:59 am Page 36
Finance Limited, non-executive Chairman of Buy as you View Holdings Limited and a non-executive director of the
Kingdom, United States and France. He has an MBA from Insead.
Andrew is responsible for finance, information technology, facilities and commercial negotiations. He is a founder manager, joining Admiral in 1992, being appointed a director in 1995.
Interest Group, London office. Prior to working for McKinsey & Co, he worked for Cadbury Schweppes in the United
Manfred was appointed a non-executive director of the Company in 2003 as a representative of Munich Re. He graduated from University of Essen and has a degree in economics/business management (Diplom-Kaufmann).
Friends Provident plc between 2001 and 2003 and Friends’ Provident Life Office between 1999 and 2001. Prior to that he was the Group Finance Director at London
& Manchester Group plc from 1992 to 1998, up to the date of its acquisition by Friends’ Provident Life Office.
Keith was appointed a non-executive director in December 2002. He is
Phoenix IT Group plc, Searchspace Ltd and Anglo & Overseas Trust plc.
May 2004 having been on the board of the Company since 1989. Prior to joining Misys, he was Manufacturing
(left to right) David Stevens, Manfred Aldag, Stuart Clarke (Company Secretary), Henry Engelhardt, Alastair Lyons, Martin Jackson, Andrew Probert, Keith James and John Sussens 13531 Admiral AR a/w 5/4/05 9:59 am Page 38
The directors present their Annual Report and the audited financial statements for the year ended 31 December 2004.
Group results and dividends The profit for the year, after tax but before dividends, amounted to £86.6m (2003: £39.2m).
Dividends totalling £52.0m were paid during 2004. In addition, the directors are proposing a final dividend of 9.3p per share, payable on 25 May 2005.
Charitable and political donations During the year the Group donated £75,000 (2003: £41,000) to various local and national charities. The Group has never made political donations. Refer to the corporate responsibility report for further detail.
The Group purchases appropriate liability insurance for all staff and directors.
Creditor payment policy It is the policy of the Group to pay all purchase invoices by their due date, and appropriate quality measures are in place to monitor and encourage this. At the end of the year outstanding invoices represented 24 days purchases (2003: 19).
Annual General Meeting It is proposed that the next AGM be held at The Celtic Manor Resort, Coldra Woods, Chepstow Rd, Newport, Gwent NP18 1HQ on 18 May 2005, at 11.00 am, notice of which is set out at the back of the report and accounts.
Directors’ responsibilities Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and Group and of the profit or loss for that period. In preparing those financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently
Directors’ report 13531 Admiral AR a/w 5/4/05 9:59 am Page 40
This report is made solely to the company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part of the directors' remuneration report to be audited have been properly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the directors' report is not consistent with the financial statements, if the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and transactions with the group is not disclosed.
We read the other information contained in the Annual Report, including the corporate governance statement and the unaudited part of the directors' remuneration report, and consider whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements.
Basis of audit opinion We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the directors' remuneration report to be audited. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group's circumstances, consistently applied and adequately disclosed.
Gross premiums written 3 165,343 129,851 Outwards reinsurance premiums (48,606) (38,555) Net premiums written 116,737 91,296
Claims paid: - Net claims paid (51,701) (39,079) Change in the provision for claims: - Net change in claims provisions (22,571) (4,478)
Consolidated profit and loss account – Technical account (general business) For the year ended 31 December 2004
Consolidated profit and loss account – Non-technical account For the year ended 31 December 2004
Investment income 8,602 7,599 Net unrealised losses on investments (197) (2,518) Investment expenses and charges (270) (200)
Other charges: - Amortisation of goodwill (3,906) (3,906) - ESOT / share scheme credit / (charges) 20 4,144 (6,900) - Bonuses in lieu of dividends (3,345) - - Total other charges (18,996) (24,054) Allocated investment return transferred to the technical account (8,135) (4,881)
Profit on ordinary activities before taxation 101,000 57,244 Taxation on ordinary activities excluding ESOT share award 8 (31,385) (18,031) Exceptional tax credit on ESOT share award 8 16,985 -
Profit for the financial year after tax 86,600 39,213 Dividends paid and proposed 10 (76,045) -
There are no recognised gains and losses in either year other than those reported above in the profit and loss account. In accordance with the amendment to FRS 3 (Reporting Financial Performance), no note of historical cost profits has been prepared, as the Group’s only material gains and losses on assets relate to the holding and disposal of investments.
Reinsurers’ share of technical provisions Provision for unearned premiums 22 21,289 17,046
Other assets Cash at bank and in hand 88,131 54,957 Cash on short term deposit 480 15,118
Capital and reserves Called up share capital 23 259 25 Share premium account 24 13,145 15,746 Capital redemption reserve 24 17 Profit and loss account 24 103,258 92,395 Shareholders’ funds attributable to equity interests 116,679 108,166
Technical provisions Provision for unearned premiums 73,139 59,660 Claims outstanding 142,968 115,169
Capital and reserves Called up share capital 23 259 25 Share premium account 24 13,145 15,746 Capital redemption reserve 24 17 Profit and loss account 24 55,764 74,943
Capital expenditure Purchases of fixed assets (1,394) (2,921) Sales of fixed assets 15 20
Consolidated cash flow statement For the year ended 31 December 2004
1. Basis of preparation The Group financial statements, which consolidate the financial statements of the Company and its wholly owned subsidiary undertakings, have been prepared in accordance with the provisions of Section 255A of, and Schedule 9A to, the Companies Act 1985. The balance sheet of the parent Company is prepared in accordance with the provisions of Section 226 of, and Schedule 4 to, the Companies Act 1985.
As permitted by Section 230 of the Companies Act 1985, the profit and loss account of the parent Company is not presented.
2. Accounting policies The following accounting policies have been applied consistently in dealing with items which are considered material to the group’s financial statements.
Claims incurred in respect of general business consist of claims and claims handling expenses paid during the period together with the movement in the provision of outstanding claims.
Whilst the directors consider that the gross provisions for claims and the related reinsurance recoveries are fairly stated on the basis of the information currently available to them, the ultimate liability will vary as a result of subsequent information and events and may result in significant adjustments to the amounts provided.
Adjustments to the amounts of claims provisions established in prior years are reflected in the financial statements for the period in which the adjustments are made and disclosed separately if material. The methods used, and the estimates made, are reviewed regularly.
Acquisition costs comprise all direct and indirect costs arising from the conclusion of insurance contracts. Deferred acquisition costs represent the proportion of acquisition costs incurred that corresponds to the unearned premiums provision at the balance sheet date.
PAGES 47 48N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
Provision is made at the balance sheet date for levies declared by the Financial Services Compensation Scheme and Motor Insurers’ Bureau before completion of the financial statements. Provision is also made if it is more likely than not that a levy will be raised based on premium income which has already been recognised in the financial statements.
The rental costs relating to operating leases are charged to the profit and loss account on a straight-line basis over the life of the lease.
Listed investments are stated at midmarket value on the balance sheet date, or on the last stock exchange trading day before the balance sheet date.
Improvement to short lease-hold properties 4 years 13531 Admiral AR a/w 5/4/05 9:59 am Page 50
The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.
The Group operates a number of defined contribution personal pension plans for its employees. The contributions payable to these schemes are charged in the accounting period to which they relate.
3. Analysis of underwriting results All insurance business written during both financial years is direct private motor insurance written in the United Kingdom. During 2004, the Group’s share of the business was underwritten by Admiral Insurance (Gibraltar) Limited (AIGL) and Admiral Insurance Company Limited (AICL).
Under the terms of the group's co-insurance arrangements, a proportion of the Group’s total expenses are incurred on behalf of the co-insurers, and are reimbursed.
Staff profit share scheme charges included in administrative expenses above 2,708 1,932 13531 Admiral AR a/w 5/4/05 9:59 am Page 52
5. Profit on ordinary activities before taxation Profit on ordinary activities before taxation is stated after charging the following items: In 2004, fees of £827,000 were paid to the Group’s auditor in respect of professional services relating to the listing, which have been debited against the share premium account.
Profit before tax, using longer-term investment return assumptions is not materially different to the reported profit before tax using actual investment returns.
Employee and director share scheme (credit) / charges (also refer to note 20) (4,144) 6,900
During 2004, profit commission was recognised in relation to the Group’s co-insurance and reinsurance arrangements, being credited to the technical and non-technical accounts respectively. Of the £18,604,000 recognised to 31 December 2004 in the non-technical account, £5,994,000 was attributable to premiums earned in the year to 31 December 2003.
The element relating to 2003 became capable of reliable measurement during 2004, as the basis of calculation of the profit commission was formalised and agreed between parties. Following this agreement, co-insurance profit commission will accrue in proportion to premiums earned.
Dividends paid during 2004 were paid before the Company’s share capital was reorganised (described in note 23) in advance of the listing. Both dividends paid per share figures above reflect share capital in issue at the time the dividend was paid.
Under / (over) provision relating to prior years – corporation tax 1,571 (107)
(Over) provision relating to prior years – deferred tax (877) -
Profit commission receivable Insurance business – allocated to the technical account 3,069 1,178
Dividends proposed (9.3p per share) payable 25 May 2005 24,049 -
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S PAGES 55 56N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
In accordance with the provision of FRS 14 (Earnings per share), the number of shares included in the EPS calculations for 2003 and 2004 has been adjusted to assume all bonus share issues arose at the start of 2003.
Details of the reorganisation of the Company’s share capital that took place before the Company’s flotation during September 2004 is set out in note 23.
The two elements of the capital reorganisation that were not bonus issues (i.e. the subscription for shares by the ESOT and the subdivision) had no impact on the resources of the Group, and hence it has been assumed these also arose at the start of 2003.
An adjusted EPS figure has been presented to eliminate the impact of the exceptional tax credit arising on the crystallisation of the ESOT which occurred during 2004.
All of the above goodwill is currently being amortised over a 20 year useful life.
Deposits with credit institutions 30,590 30,590 24,464 24,464 13531 Admiral AR a/w 5/4/05 9:59 am Page 58
Net book amounts include the following amounts relating to leased assets: Computer equipment and software 2,849 4,187
The Group established an ESOT during 2000, under which a number of Admiral Group shares were to be made available for subscription by the Trust on the event of a sale or listing of the Company’s shares.
The number of shares that were initially to be made available to the Trust was 14,706 C ordinary shares. However, following the reorganisation of the Company’s capital (as set out in note 23), the actual number of shares held in the Trust at flotation was 20,588,400 ordinary 0.1p shares. The Trust benefited from bonus issues to the same extent as ordinary shareholders.
The total value of shares issued to the Trust was £56.6m at flotation – representing 8% of the value of the Group at listing.
The cumulative charge recognised in the Group accounts up to 31 December 2004 in respect of the ESOT is £7.2m, being the employer’s National Insurance charge on the share awards to employees. Up to 31 December 2003, the Group had made provision of £11.7m, in the expectation that it would have to fund the Trust’s subscription for shares at their full market value. As the Trust was only eventually funded at the share’s par value, the Group’s 2004 profit and loss account includes a credit of £4.5m, representing the release of the provision made in excess of the employer’s National Insurance charge.
The Group benefited from a corporation tax deduction in respect of the award of shares to its employees under the ESOT. The tax credit of £17.0m (being 30% of the market value of the shares at listing) is shown as an exceptional item in the profit and loss account.
Two non-executive directors within the Admiral group (one, Keith James, a director of Admiral Group plc) were issued with share options during September 2004. Each was granted (free of charge) options over 56,000 Admiral Group plc 0.1p ordinary shares, and each exercised their options shortly after grant, also during September 2004. The exercise price per share was 0.1p, and the fair value of each option at grant and exercise was £2.75.
The 2004 profit and loss account includes a charge of £308,000 in respect of these options.
No director was granted options during 2003 and no director held unexercised options at 31 December 2003 or 2004.
Amounts falling due within one year Premiums receivable in advance of policy inception 23,960 - 16,495 -
There was a deferred tax asset provided in the Company accounts at the year-end of £5,000 (2003: £nil). There was an unprovided asset of £171,000 (2003: £171,000) relating to carried forward losses at the year-end.
22. Technical provisions and estimation techniques 22. Technical provisions and estimation techniques (cont.)
Estimation techniques are used in the calculation of the technical provision for claims outstanding, which represents a projection of the ultimate cost of settling claims that have occurred prior to the end of 2004 and remain unsettled at the end 2004.
The estimates of the ultimate cost of reported claims are based on the accurate setting of claim reserves on a case by case basis, for all but the simplest of claims.
The sum of these reserves are compared with projected ultimate costs using a variety of different projection techniques (including incurred and paid chain ladder and an average cost of claim approach) to allow an actuarial assessment of their likely accuracy and to include allowance for unreported claims.
Claims reserve carried forward 142,968 44,848 98,120 2003 Gross Reinsurance Net
The Company’s debt consists of a facility negotiated in 2002 with Lloyds TSB and Bank of Scotland. This consists of a £40m term loan (paid down during the year to £33m), along with a £10m revolving credit facility that was cancelled by the directors during 2004. The term loan is to be repaid according to a set repayment schedule over six years from October 2002.
b) A margin – as set out in the facility agreement, varying between 1.25% and 2.25%
Accrued interest is paid off at the end of quarterly interest periods. Security granted in respect of the facility is in the form of fixed and floating charges over most Group assets (excluding assets subject to regulatory restriction) and charges over the shares in some subsidiary companies.
Total outstanding 33,122 35,423 13531 Admiral AR a/w 5/4/05 9:59 am Page 64
• On 17 September 2004, according to the provisions of the Company’s Articles, the Company re-purchased 123,104 A shares, 27,722 D shares and 18,736 E shares for aggregate consideration of one penny. These shares were then cancelled
• On the same date, following the Company’s re-registration as a public company, the share capital of the Company (issued and unissued) was re-designated ordinary shares of 10p and then each share sub-divided into 100 ordinary shares of 0.1p The authorised share capital was increased to 500,000,000 ordinary shares of 0.1p
• Also on the same date, the directors capitalised a further £221,557.20 of the share premium account and effected a further bonus issue of six new to one existing share. Following the exercise of options by two Group directors of 56,000 ordinary shares each, this resulted in the issued capital being increased to 258,595,400 ordinary shares of 0.1p each, which was the year-end position
132,488 A ordinary shares of 10p - 13 60,176 B ordinary shares of 10p - 6 27,500 C ordinary shares of 10p - 3 29,836 D ordinary shares of 10p - 3 20,164 E ordinary shares of 10p - 2
Share Share Capital Profit and Total capital premium redemption loss account reserve account
Notes 1. Refer to note 23 for full details of share capital movements in 2004. 2. Relates to the exercise of options by two directors during 2004 – refer to note 20 for further detail. 3. As set out in note 23, the Company’s Articles provided for the cancellation of a number of shares (the “deferred shares”)
Net cash inflow from operating activities 157,517 96,229 b) Movement in opening and closing portfolio of investments, net of financing: Net cash inflow for the financial year: Cash flow 18,536 7,079 Portfolio investments 65,280 60,566 Movement in financing 3,810 12,384 Movement arising from cashflows 87,626 80,029 Changes in market values (197) (2,518)
Total movement in portfolio investments, net of financing 87,429 77,511 Opening portfolio investments, net of financing 199,784 122,273
Closing portfolio investments, net of financing 287,213 199,784 13531 Admiral AR a/w 5/4/05 9:59 am Page 68
2004 At 1 Cash Market At 31 January Flow Value December
Fixed income and other debt securities 90,099 56,880 (2,518) 144,461 Deposits with credit institutions 20,778 3,686 - 24,464
Section 89 of the Companies Act 1985 gives existing shareholders in a company certain pre-emption rights with respect to allotments of new shares. A company can only disapply these rights with the approval of its shareholders. Accordingly the purpose of this resolution is to allow the directors of the Company to allot ordinary shares in the Company for cash, or to transfer treasury shares for cash, other than to its existing shareholders on a pre-emptive basis up to a maximum amount of £12,930 which is equivalent to 5% of the issued ordinary share capital of the Company as at 11 April 2005 and is in line with the recommended guidelines issued by institutional investor bodies. As with Resolution 13, authority already exists for this by virtue of a resolution dated 17 September 2004. However, the directors feel that as a matter of good order it should be reaffirmed.
b) the minimum price which may be paid for an ordinary share is 0.1p c) the maximum price which may be paid for an ordinary share is an amount equal to 105% of the average of the middle market quotations for an ordinary share as derived from The London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the ordinary share is purchased, exclusive of expenses d) the authority conferred by this resolution shall, unless renewed, expire on the date falling 15 months after the date of the passing of this resolution, or, if earlier, at the conclusion of the next Annual General Meeting of the Company and e) the Company may make a contract to purchase ordinary shares under this authority before the expiry of the authority which will or may be executed wholly or partly after the expiry of the authority, and may make a purchase of ordinary shares in pursuance of any such contract
Notice is hereby given that the Annual General Meeting of Admiral Group plc will be held on Wednesday 18 May at 11.00am at The Celtic Manor Hotel, Coldra Woods, Newport, South Wales, NP18 1HQ.
12. To re-appoint KPMG Audit plc as the auditor of the Company from the conclusion of this meeting until the conclusion of the next General Meeting at which accounts are laid and to authorise the directors to determine their remuneration
Section 80 of the Companies Act 1985 provides that the directors of a company cannot issue new shares in its capital without the approval of its shareholders. Accordingly, the purpose of this resolution is to give the directors of the Company authority to issue new shares in the capital of the Company up to a maximum amount of £86,200, which is approximately equivalent to 33.3% of the issued share capital of the Company as at 11 April 2005. Authority for this already exists by virtue of a resolution dated 17 September 2004. However, the directors feel that as a matter of good order it should be reaffirmed. This resolution will allow the directors of the Company flexibility to act in the best interests of the Company and its shareholders by issuing new shares in appropriate circumstances.
The Companies (Acquisition of Own Shares) (Treasury Shares) Regulations 2003 (which came into force on 1 December 2003) enable companies to retain any of their own shares they have purchased as treasury shares with a view to their possible re-issue at a later date, rather than cancelling them as the law previously required. The Company will consider holding any of its own shares that it purchases pursuant to this resolution as treasury shares, which will give the directors flexibility in the management of the capital base of the Company. No dividends will be paid on treasury shares while held in treasury, and no voting rights will attach to them.
Recommendation Your Board considers each of the proposed resolutions to be in the best interests of the Company and its shareholders as a whole. Accordingly, your directors unanimously recommend that you vote in favour of the resolutions as they intend to do in respect of their own beneficial shareholdings.
Notes 1. A member entitled to attend and vote at the
Annual General Meeting (‘AGM’) may appoint a proxy (who need not be a member of the Company) to attend and, on a poll, to vote on his or her behalf. In order to be valid an appointment of proxy must be returned by one of the following methods: • in hard copy form by post, by courier or by hand to the Company’s registrars, Capita Registrars, Proxy Department, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU or
2. For an appointment of proxy returned in hard copy to be valid, it must be completed and deposited (together with any power of attorney or other written authority under which it is signed or a copy of such authority notarially certified or in some other way approved by the directors) with Capita Registrars, Proxy Department, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, not less than 48 hours before the meeting.
3. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so by utilising the procedures described in the CREST
Manual. CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in accordance with CRESTCo’s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it relates to the appointment of a proxy or to an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA10) by the latest time(s) for receipt of proxy appointments specified in the notice of meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. CREST members and, where applicable, their CREST sponsors or voting service providers should note that CRESTCo does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings 4. In the case of joint holdings, only one holder may sign and the vote of the senior who tenders a vote shall be accepted to the exclusion of the votes of the other joint holders, seniority for this purpose being determined by the order in which the names stand in the Register of members in respect of joint holdings.
6. The register of Directors’ interests kept by the Company under Section 325 of the Companies Act 1985 will be available for inspection at the meeting from 10.45am until the conclusion of the meeting.