ANNUAL REPORT 2001 - Prudential plc

More documents

Recommendations

Info

REMUNERATION REPORT CONTINUED Directors’ Pensions continued Inland Revenue approved pension schemes continued Mark Tucker and Keith Bedell-Pearce, having commenced employment before 1989, are eligible for benefits from PSPS on all basic salary. Keith Bedell-Pearce also has a special arrangement whereby his pension accrued since the age of 50 has been enhanced to 1/30 for each year of service. Philip Broadley and Mark Wood are eligible for benefits from PSPS on basic salary up to the earnings cap. Jonathan Bloomer only receives a lump sum death benefit of four times basic salary up to the earnings cap from PSPS. The M&G Group Pension Scheme (MGGPS) is a contributory defined benefit scheme that provides a target pension of 2/3 of Final Pensionable Earnings on retirement at age 60 for an employee with 30 years or more potential service. The MGGPS also has an option to commute pension for a tax-free cash sum. The scheme provides on death in service, a lump sum of four times Pensionable Salary and a spouse’s pension of 50 per cent of prospective pension at 60 in accordance with the scheme rules. On death in retirement, a spouse’s pension of 50 per cent of the pension available at retirement before commutation is payable and a lump sum is also payable if death occurs in the first five years of retirement. Some of the pension payable is guaranteed to increase in line with the Retail Prices Index capped at five per cent, but in recent years all pensions have been increased fully in line with the Retail Prices Index. Members currently contribute 2.4 per cent of basic salary towards the cost of the benefits. Michael McLintock is eligible for benefits under MGGPS on basic salary up to the earnings cap. Supplementary arrangements Directors are entitled to taxable salary supplements calculated on a formula based on their basic salary not covered for pension benefits under an Inland Revenue approved scheme. Directors may elect to have this salary supplement paid directly to them or to a Funded Unapproved Retirement Benefit Scheme (FURBS) established in their name. In either case it is a taxable emolument. In addition directors are eligible for death benefits broadly equivalent to the PSPS death benefits (both the lump sum and the capitalised value of spouse’s and children’s pensions) on that part of their basic salary not covered by the Inland Revenue approved scheme under the Prudential Supplementary Life Assurance Scheme (PSLAS). The premiums paid by the Company to this scheme are a taxable benefit. Details of directors’ pension entitlements under Inland Revenue approved defined benefit schemes and the pre-tax contribution to salary supplements and/or FURBS are set out below: Additional pension earned Years of (excluding Accrued entitlement based Pre-tax contribution to salary pensionable inflation) on normal retirement age supplement and/or FURBS Age at service at in year 31 Dec 2001 31 Dec 2000* 2001 2000 31 Dec 2001 31 Dec 2001 £000 £000 £000 £000 £000 Keith Bedell-Pearce** 55 31 44 225 178 – – Jonathan Bloomer 47 – – – – 198 169 Philip Broadley 40 1 2 3 1 76 39 Michael McLintock 40 9 2 19 17 61 20 Mark Tucker 44 16 24 127 101 – – Mark Wood 48 less than 1 1 1 0 56 0 Total 391 228 *Or date of appointment to Board if later. **As Keith Bedell-Pearce has retired from the Board, the augmentation to pension described in previous reports is now incorporated in the accrued pension figures shown above. Total contributions to directors’ pension schemes including payments by the Company to PSPS, MGGPS and PSLAS were £575,000 (2000 – £571,000). Service Contracts of Directors Proposed for Election or Re-election Clark Manning and Mark Wood, who are proposed for election, and Mark Tucker, who is proposed for re-election, have service contracts of 12 months. Ann Burdus and Rob Rowley, who are proposed for re-election, do not have service contracts. On behalf of the Board of directors Sir David Barnes Sir Roger Hurn Chairman of the Remuneration Committee Chairman 14 March 2002 14 March 2002 32 Prudential plc Annual Report 2001
DIRECTORS’ REPORT Principal Activity and Business Review Prudential plc is the Group holding company and the principal activity of its subsidiary undertakings is the provision of financial services in Europe, the US and Asia. Particulars of principal subsidiary undertakings are given in note 30 on page 65. The Group’s business and likely future developments are reviewed in the Chairman’s Statement on page 2, the Group Chief Executive’s Review on pages 3 to 5, the Business Review on pages 6 to 13 and the Financial Review on pages 14 to 20. Particulars of important events affecting the Group which have occurred since the end of the financial year are detailed in note 35 on page 70. Financial Statements and Supplementary Information The consolidated balance sheet on pages 40 and 41 shows the state of affairs of the Group at 31 December 2001. The Company’s balance sheet appears on page 42 and the consolidated profit and loss account on pages 36 to 38. Information prepared on the achieved profits basis of financial reporting is provided on pages 74 to 85. A summary of the statutory basis results is shown on page 35. There is a five year review of the Group on pages 72 and 73. Dividends The directors have declared a final dividend for 2001 of 16.7 pence per share payable on 29 May 2002 to shareholders on the register at the close of business on 22 March 2002. The dividend for the year, including the interim dividend of 8.7 pence per share paid in 2001, amounts to 25.4 pence per share compared with 24.5 pence per share for 2000. The total cost of dividends for 2001 was £504 million. Payment Policy It is the policy of the Group to agree terms of payment when orders for goods and services are placed and to pay in accordance with those terms. Trade creditor days, based on the ratio of trade creditors at the year-end to the amounts invoiced by trade creditors during the year, were 22 days. Directors The present directors are shown on pages 22 and 23. Bridget Macaskill resigned as a director on 16 March 2001. Keith Bedell-Pearce retired as a director on 31 December 2001. Mark Wood and Clark Manning were appointed directors on 21 June 2001 and 2 January 2002 respectively and in accordance with the Articles of Association retire and offer themselves for election at the Annual General Meeting. Rob Rowley, Mark Tucker and Ann Burdus retire by rotation at the Annual General Meeting and offer themselves for reelection. Details of directors’ interests in the share capital of the Company and its listed subsidiary Egg plc are set out in the Remuneration Report on page 30. Employees The following information is given principally in respect of employees of the Group in the United Kingdom. The policy towards employees overseas is the same but the practical application of the policy varies according to local requirements. Equal Opportunity Our equal opportunities policy is to be fair, responsible and caring in all aspects of our business. We recognise, respect and value difference and diversity. We will treat everyone fairly and with dignity. We are working towards equality as part of our normal way of doing things because we believe it is the right thing to do for our people, our customers and our success. Full consideration is given to continuing the employment of staff who become disabled and to provide training and career development opportunities to disabled employees. Employee Involvement The Group has effective communication channels through which employees’ views can be sought on issues which concern them. Prudential’s European Employee Forum provides an opportunity for elected staff representatives to consult with senior management on strategic European business issues. Each Prudential business in Europe is represented on the Forum. M&G’s Staff Consultative Committee promotes communication throughout M&G and is the forum for dialogue on a range of issues of interest to staff. In 2001 employees were again invited to participate in the Prudential Savings-Related Share Option Scheme. The Scheme has now been operating for over 18 years and a majority of UK staff currently participate. The Prudential International Savings-Related Share Option Scheme (‘ISOS’) for employees in Hong Kong, Malaysia and Singapore has been operating for two years. In 2001 employees in Taiwan and India joined the Scheme. On average just over 30 per cent of employees in those countries covered by the ISOS currently participate. The trustees of each of the Group’s UK pension schemes include individuals elected by the members of those schemes. 33 Prudential plc Annual Report 2001
Page 1 and 2: PRUDENTIAL PLC ANNUAL REPORT 2001
Page 3 and 4: PRUDENTIAL AT A GLANCE PRUDENTIAL
Page 5 and 6: GROUP FINANCIAL HIGHLIGHTS 2001 200
Page 7 and 8: GROUP CHIEF EXECUTIVE’S REVIEW WE
Page 9 and 10: The fastest growing age group in th
Page 11 and 12: est growth prospects in the market
Page 13 and 14: Egg 2001 was another year of outsta
Page 15 and 16: Over the last five years, JNL has m
Page 17 and 18: equivalent (APE) basis were £434 m
Page 19 and 20: 69 per cent). The new business marg
Page 21 and 22: differences and other items. The in
Page 23 and 24: However, we have not been discussin
Page 25 and 26: CORPORATE SOCIAL RESPONSIBILITY REV
Page 27 and 28: Executive Directors 1. Jonathan Blo
Page 29 and 30: Nomination Committee Sir Roger Hurn
Page 31 and 32: REMUNERATION REPORT The Remuneratio
Page 33 and 34: Directors’ Long-term Incentive Pl
Page 35: Directors’ Share Options The Rest
Page 39 and 40: SUMMARY OF STATUTORY BASIS RESULTS
Page 41 and 42: Restated † 2001 2000 Long-term Bu
Page 43 and 44: CONSOLIDATED STATEMENT OF TOTAL REC
Page 45 and 46: Restated † 2001 2000 Liabilities
Page 47 and 48: CONSOLIDATED CASH FLOW STATEMENT YE
Page 49 and 50: 3. Significant Accounting Policies
Page 51 and 52: Reinsurance In the normal course of
Page 53 and 54: Linked business funds Certain long-
Page 55 and 56: 5. Supplemental Earnings Informatio
Page 57 and 58: 7. Segmental Information - New Busi
Page 59 and 60: 9. Segmental Information - Net Asse
Page 61 and 62: 11. Jackson National Life - Additio
Page 63 and 64: 15. Investment Expenses and Charges
Page 65 and 66: 16. Tax continued 2001 2000 £m £m
Page 67 and 68: 21. Fees Payable to Auditors KPMG K
Page 69 and 70: 27. Share Capital and Share Premium
Page 71 and 72: 31. Borrowings continued 2001 2000
Page 73 and 74: 32. Contingencies and Related Oblig
Page 75 and 76: INDEPENDENT AUDITORS’ REPORT TO T
Page 77 and 78: 2001 2000 1999 1998 1997 Analysis b
Page 79 and 80: SUMMARISED CONSOLIDATED PROFIT AND
Page 81 and 82: NOTES ON THE ACHIEVED PROFITS BASIS
Page 83 and 84: 6. Cost of Capital On the achieved
Page 85 and 86: 10. Short-term Fluctuations in Inve
Page 87 and 88:
14. Reconciliation of Movement in S
Page 89 and 90:
THE ACHIEVED PROFITS BASIS OF FINAN
Page 91 and 92:
HOW TO CONTACT US Prudential plc La
show all

ANNUAL REPORT 2001 - Prudential plc

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?