G4S Annual Report and Accounts 2011

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Overview Strategic review Performance Notes to the consolidated financial statements continued 37 Share capital 2011 2010 G4S plc £ £ Issued and fully paid ordinary shares of 25p each 352,667,160 352,654,660 Nominal Number value £m Ordinary shares in issue At 1 January 2010 1,410,518,639 353 Shares issued on exercise of options: Executive Scheme 100,000 – At 1 January 2011 1,410,618,639 353 Shares issued on exercise of options: Executive Scheme 50,000 – At 31 December 2011 1,410,668,639 353 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company. No options over G4S plc shares remains outstanding at 31 December 2011. The proceeds from shares allotted under this scheme during the year amounted to £45,500 (2010: £127,338). 6,265,571 shares are held by an employee benefit trust as detailed in note 38. 38 Reserves Hedging reserve The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow instruments related to the hedged transactions that have not yet occurred (net of tax). Translation reserve The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations, as well as from the translation of liabilities that hedge the company’s net investment in foreign operations (net of tax). Merger reserve The merger reserve comprises reserves arising upon the merger between the former Group 4 Falck A/S and the former Group 4 Securitas BV in 2000 and the acquisition of Securicor plc by the group in 2004. Reserve for own shares An employee benefit trust established by the group held 6,265,571 shares at 31 December 2011 (2010: 5,029,315 shares) to satisfy the vesting of awards under the performance share plan and performance-related and synergy bonus schemes. During the year 4,626,711 shares were purchased by the trust, whilst 3,390,455 shares were used to satisfy the vesting of awards under the schemes. At 31 December 2011, the cost of shares held by the trust was £16,484,777 (2010: £12,125,010), whilst the market value of these shares was £17,029,822 (2010: £12,804,636). Shares held by the trust are treated as treasury shares, are deducted from equity, do not receive dividends and are excluded from the calculations of earnings per share. 118 G4S plc Annual Report and Accounts 2011
Governance Financial statements Shareholder information 39 Analysis of net debt A reconciliation of net debt to amounts in the consolidated statement of financial position is presented below: Cash and cash equivalents 433 351 Investments 70 82 Net cash and overdrafts included within disposal groups classified as held for sale (10) – Bank overdrafts (53) (45) Bank loans (932) (687) Loan notes (1,180) (1,153) Fair value of loan note derivative financial instruments 120 96 Obligations under finance leases (64) (70) Total net debt (1,616) (1,426) 2011 £m 2010 £m An analysis of movements in net debt in the year is presented below: Increase in cash, cash equivalents and bank overdrafts per consolidated cash flow statement 87 14 Sale of investments (10) (5) Movement in debt and lease financing (222) 38 Change in net debt resulting from cash flows (145) 47 Borrowings acquired with subsidiaries (5) (4) Net additions to finance leases (11) (9) Movement in net debt in the year (161) 34 Translation adjustments (29) (27) Net debt at the beginning of the year (1,426) (1,433) Net debt at the end of the year (1,616) (1,426) 2011 £m 2010 £m 40 Contingent liabilities Contingent liabilities exist in respect of agreements entered into in the normal course of business, none of which are individually or collectively significant. Details of unprovided contingent tax liabilities are presented in note 36. 41 Operating lease arrangements The group as lessee At the balance sheet date, the group had outstanding commitments under non-cancellable operating leases, which fall due as follows: 2011 £m 2010 £m Within one year 138 149 In the second to fifth years inclusive 310 335 After five years 197 215 Total operating lease commitments 645 699 The group leases a number of its office properties, vehicles and other operating equipment under operating leases. Property leases are negotiated over an average term of eight years, at rates reflective of market rentals. Periodic rent reviews take place to bring lease rentals in line with prevailing market conditions. Some but not all lease agreements have an option to renew the lease at the end of the lease term. Leased vehicles and other operating equipment are negotiated over an average lease term of four years. Certain leased properties have been sub-let by the group. Sub-leases are negotiated on terms consistent with those of the associated property. The total future minimum sub-lease payments expected to be received by the group from sub-let properties amount to £10m (2010: £10m). G4S plc Annual Report and Accounts 2011 119
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