Annual Report and Accounts 2009 - BG Group

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64 Directors’ Report: Corporate Governance Other statutory information continued good faith, will be most likely to promote the Company’s success. In addition, the Directors are able to impose limits or conditions when giving such authorisation if they think this is appropriate. In exercising the power to authorise conflicts or potential conflicts of interest, the Board has adopted the guidelines issued by the GC100 (the Association of General Counsel and Company Secretaries of the FTSE 100) and appropriate procedures have been put in place to ensure that all Directors notify the Company of any situation where they have, or could have, a direct or indirect interest that conflicts, or possibly could conflict, with the Company’s interests. Once notified, all such matters are considered by the Nominations Committee and an appropriate recommendation is made to the Board on whether or not to authorise such matters, and, if so, on what terms. The Board believes that these procedures are operating effectively. Indemnities and insurance BG Group maintains liability insurance for its Directors and officers. The Directors, Company Secretary and members of the Group Executive Committee have also been granted a qualifying third-party indemnity, under Section 234 of the Act, which remains in force. Neither the Company’s indemnity nor insurance provides cover in the event that the indemnified individual is proved to have acted fraudulently or dishonestly. Directors’ borrowing powers So far as the Companies Acts (as defined in section 2 of the Act) allow, the Directors can exercise all the powers of the Company to (a) borrow money, (b) issue debentures and other securities, and (c) give any form of guarantee or security for any debt, liability or obligation of the Company or of any third party. The Directors must limit the Borrowings (as defined in the Articles) of the Company and exercise all voting and other rights or powers of control exercisable by the Company in relation to its subsidiary undertakings, so as to ensure that the total amount of all Borrowings by the Group outstanding at any time will not exceed twice the Adjusted Total of Capital and Reserves (as defined in the Articles) at such time. This limit may be exceeded if the Company’s consent has been given in advance by an ordinary resolution passed at a general meeting. Statement of disclosure of information to auditors As required by Sections 418 and 419 of the Act, each of the Directors has approved this Report and confirmed that, so far as they are aware, there is no relevant audit information (being information needed by the auditors in connection with preparing their Audit report) of which the Company’s auditors are unaware, and they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of that information. FINANCIAL Results and dividend For the year ended 31 December 2009, the total profit before tax was £3 862m (2008 £5 468m). A final dividend of 6.73p per ordinary share is proposed (2008 6.55p), making a total dividend for 2009 of 12.35p (2008 11.23p). The results are dealt with more fully in the Financial Statements on pages 65 to 128 and summarised in the Financial review on pages 24 to 29. The trustees of the BG Group New Employees Share Trust, the BG Group plc Employee Share Trust and the BG Group Share Incentive Plan have waived their right to receive dividends over 13 927, 267 195 and 30 085 shares respectively. GOING CONCERN The Group’s business activities, together with factors likely to affect its future development, performance and position, are set out in the Business Review on pages 2 to 37. The financial position of the Group, its cash flows, liquidity position and borrowing facilities, and the Group’s objectives, policies and processes for managing capital, are described on pages 24 to 29. Financial risk management objectives, details of financial instruments and hedging activities, and exposures to credit risk and liquidity risk are described in note 18, page 95. The Directors consider that the Group’s business activities and financial resources ensure it is well placed to manage its business risks successfully. The Directors are satisfied that the Group’s and the Company’s activities are sustainable for the foreseeable future, and that the business is a going concern and the accounts have therefore been prepared on this basis. www.bg-group.com STATEMENT OF DIRECTORS’ RESPONSIBILITIES FOR PREPARING THE FINANCIAL STATEMENTS The Directors are responsible for preparing the Annual Report, the Directors’ Remuneration report and the Financial Statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the Group and the parent company Financial Statements in accordance with International Financial Reporting Standards as adopted by the European Union and as applied in accordance with the provisions of the Act. The financial statements are required by law to give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. The Directors consider that, in preparing the Financial Statements on pages 65 to 128, the Company has used appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates, and all applicable accounting standards have been followed. The Company has complied with UK disclosure requirements in this Report in order to present a consistent picture to all shareholders. The Directors have responsibility for ensuring that the Company keeps accounting records that disclose with reasonable accuracy the financial position of the Company and of the Group and that enable them to ensure that the Financial Statements and the Directors’ Remuneration report comply with the Act and as regards the Group Financial Statements, Article 4 of the IAS Regulations. The Directors have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities, and have adopted a control framework for application across the Group. The Directors, having prepared the Financial Statements, have asked the auditors to take any steps and to undertake any inspections they consider to be appropriate to enable them to give their Audit report. The Directors confirm that the Audit Committee continues to review the adequacy of the system of internal control adopted by the Group. A copy of the Financial Statements of the Company is placed on the BG Group website. The work carried out by the auditors does not involve consideration of the maintenance of the BG Group website and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the Financial Statements since they were initially presented on the website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Pursuant to Rule 4.1.12 of the Disclosure and Transparency Rules, each of the Directors, the names and functions of whom are set out on pages 38 to 39, confirms that to the best of his or her knowledge: • the Group Financial Statements, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and • the management report represented by the Directors’ Report on pages 2 to 64 includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that the Group faces. By order of the Board Frank Chapman Chief Executive Ashley Almanza Chief Financial Officer 10 March 2010 Registered Office: 100 Thames Valley Park Drive Reading Berkshire RG6 1PT Registered in England & Wales No. 3690065
Financial Statements Independent Auditors’ report to the members of BG Group plc We have audited the Group and parent company Financial Statements (the ‘Financial Statements’) of BG Group plc for the year ended 31 December 2009 which comprise the Consolidated income statement, the Consolidated statement of comprehensive income, the Balance sheets, the Statements of changes in equity, the Cash flow statements, the Principal accounting policies and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company Financial Statements, as applied in accordance with the provisions of the Companies Act 2006. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS As explained more fully in the Statement of Directors’ Responsibilities for preparing the Financial Statements, the Directors are responsible for the preparation of the Financial Statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the Financial Statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS An audit involves obtaining evidence about the amounts and disclosures in the Financial Statements sufficient to give reasonable assurance that the Financial Statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s and the parent company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the Financial Statements. OPINION ON FINANCIAL STATEMENTS In our opinion: • the Financial Statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 December 2009 and of the Group’s profit and Group’s and parent company’s cash flows for the year then ended; • the Group Financial Statements have been properly prepared in accordance with IFRSs as adopted by the European Union; • the parent company Financial Statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and • the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Group Financial Statements, Article 4 of the IAS Regulation. OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion: • the part of the Remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006; and • the information given in the Directors’ Report for the financial year for which the Financial Statements are prepared is consistent with the Financial Statements. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following: Under the Companies Act 2006 we are required to report to you if, in our opinion: • adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; • the parent company Financial Statements and the part of the Remuneration report to be audited are not in agreement with the accounting records and returns; • certain disclosures of Directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. Under the Listing Rules we are required to review: • the Directors’ statement, set out on page 64, in relation to going concern; and • the parts of the Corporate Governance section of the Directors’ Report relating to the Company’s compliance with the nine provisions of the June 2008 Combined Code specified for our review. Nicholas Blackwood (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London 10 March 2010 BG Group Annual Report and Accounts 2009 65 Directors’ Report Business Review Directors’ Report Corporate Governance Financial Statements Shareholder Information
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A world leader in natural gas Annua
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Contents Directors’ Report: Busin
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ALGERIA UK NORWAY TUNISIA ITALY LIB
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E&P production (mmboe) 250 200 150
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Governance and risk One of the most
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Sustainability and safety BG Group
Page 13 and 14:
Performance A cost leader BG Group
Page 15 and 16: Australia QGC BG Group has made sig
Page 17 and 18: Outlook Market context The challeng
Page 19 and 20: The Buzzard field (BG Group 21.73%)
Page 21 and 22: FPSOs, with the first targeted to c
Page 23 and 24: Dragon LNG, UK During 2009, work on
Page 25 and 26: Power Generation BG Group has a pro
Page 27 and 28: expenditure was £1 651 million (20
Page 29 and 30: and associates amounted to approxim
Page 31 and 32: BG Group uses a range of long-term
Page 33 and 34: Commodity prices Principal risks an
Page 35 and 36: Credit Principal risks and uncertai
Page 37 and 38: communities, partners, contractors,
Page 39 and 40: involved. In 2009, BG Group complet
Page 41 and 42: 4 5 6 10 11 7. Jürgen Dormann Non-
Page 43 and 44: 3 4 5 8 9 10 5. Robert Booker Execu
Page 45 and 46: A DIRECTORS The Board The Board is
Page 47 and 48: evaluation. Accordingly, during 200
Page 49 and 50: Board Committees Sustainability Com
Page 51 and 52: Audit Committee and auditors Lord S
Page 53 and 54: Other external advisers also provid
Page 55 and 56: TSR performance for the Performance
Page 57 and 58: Director’s length of service. Fur
Page 59 and 60: DEFERRED BONUS PLAN Award date Ashl
Page 61 and 62: DIRECTORS’ INTERESTS IN ORDINARY
Page 63 and 64: Directors’ pension provisions wer
Page 65: Share capital In order to enable th
Page 69 and 70: REVENUE RECOGNITION Revenue associa
Page 71 and 72: Consolidated income statement Notes
Page 73 and 74: Balance sheets as at 31 December As
Page 75 and 76: Statements of changes in equity Cal
Page 77 and 78: Notes to the accounts 1 NEW ACCOUNT
Page 79 and 80: 2 SEGMENTAL ANALYSIS AND RESULTS PR
Page 81 and 82: 2 SEGMENTAL ANALYSIS AND RESULTS PR
Page 83 and 84: 3 OPERATING COSTS Included within t
Page 85 and 86: 4 DIRECTORS AND EMPLOYEES A) DIRECT
Page 87 and 88: 4 DIRECTORS AND EMPLOYEES continued
Page 89 and 90: 5 DISPOSALS, RE-MEASUREMENTS AND IM
Page 91 and 92: 8 DIVIDENDS £m 2009 2008 Pence per
Page 93 and 94: 12 PROPERTY, PLANT AND EQUIPMENT TH
Page 95 and 96: 13 INVESTMENTS continued THE COMPAN
Page 97 and 98: 17 BORROWINGS continued The effecti
Page 99 and 100: 18 FINANCIAL INSTRUMENTS continued
Page 105 and 106: 21 DEFERRED TAX Deferred taxes are
Page 107 and 108: 23 COMMITMENTS AND CONTINGENCIES co
Page 109 and 110: 25 PENSIONS AND POST-RETIREMENT BEN
Page 111 and 112: 25 PENSIONS AND POST-RETIREMENT BEN
Page 113 and 114: 26 NOTES TO THE CASH FLOW STATEMENT
Page 115 and 116: 27 PRINCIPAL SUBSIDIARY UNDERTAKING
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CONDENSED CONSOLIDATED INCOME STATE
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Special Purpose Auditors’ Report
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A) RESERVES ESTIMATED NET PROVED RE
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B) STANDARDISED MEASURE OF DISCOUNT
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C) CAPITALISED COSTS Capitalised co
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E) RESULTS OF OPERATIONS The result
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Five year financial summary (unaudi
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Shareholder Information Presentatio
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Index Item Page Accountants’ fees
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SHAREHOLDER PROFILE as at 31 Decemb
Page 137 and 138:
the Directors may determine and oth
Page 139 and 140:
ordinary share capital (excluding t
Page 141 and 142:
Appointing a corporate representati
Page 144:
BG Group plc 100 Thames Valley Park
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Annual Report and Accounts 2009 - BG Group

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