Directors' report - the Admiral Group plc

DIRECTORS’ REPORTDirectors’ reportThe directors present their Annual Reportand the audited financial statements forthe year ended 31 December 2004.Principal activity, businessreview and futuredevelopmentsThe Company is the holding Company forthe Admiral Group of companies. TheGroup’s principal activity continues to bethe selling and administration of privatemotor insurance and related products.Detailed descriptions of the Group’sactivities, results and prospects arecontained in the Chairman’s statement,the Chief Executive’s statement and thefinancial review.Group results and dividendsThe profit for the year, after tax butbefore dividends, amounted to £86.6m(2003: £39.2m).Dividends totalling £52.0m were paidduring 2004. In addition, the directors areproposing a final dividend of 9.3p pershare, payable on 25 May 2005.Share CapitalAs a consequence of the listing of the Company’s shares on the London StockExchange in September 2004, the Company’s share capital has been increased from254,706 ordinary shares of 10p each to 258,595,400 ordinary shares of 0.1p each.Further details of share capital movements are set out in note 23 to the accounts.Other than the holdings of the directors as disclosed in the remuneration report, sofar as the directors are aware, or have been notified pursuant to section 198 of theCompanies Act 1985, the following shareholders have interests in 3% or more of theordinary share capital of the Company at 18 March 2005:Directors and their interestsThe present directors of the Companyare shown on the inside cover of thisreport, whilst directors’ interests in theshare capital of the Company are set outin the remuneration report.Charitable and politicaldonationsDuring the year the Group donated£75,000 (2003: £41,000) to various localand national charities. The Group hasnever made political donations. Referto the corporate responsibility reportfor further detail.Number %of sharesMunich Re 37,479,400 14.49%Barclays Plc 33,465,850 12.94%Fidelity Investments 15,558,000 6.02%Goldman Sachs Group, Inc 13,219,390 5.11%Jupiter Asset Management 12,361,774 4.78%Employee policiesDetailed information on the Group’semployment practices is set out in thecorporate responsibility report.The Group purchases appropriate liabilityinsurance for all staff and directors.Creditor payment policyIt is the policy of the Group to pay allpurchase invoices by their due date, andappropriate quality measures are in placeto monitor and encourage this. At theend of the year outstanding invoicesrepresented 24 days purchases (2003: 19).

DIRECTORS’ REPORTPAGES 37 38Annual General MeetingIt is proposed that the next AGMbe held at The Celtic Manor Resort,Coldra Woods, Chepstow Rd, Newport,Gwent NP18 1HQ on 18 May 2005, at11.00 am, notice of which is set outat the back of the report and accounts.Directors’ responsibilitiesCompany law requires the directors toprepare financial statements for eachfinancial year which give a true and fairview of the state of affairs of theCompany and Group and of the profit orloss for that period. In preparing thosefinancial statements, the directors arerequired to:• select suitable accounting policiesand then apply them consistently• make judgements and estimates thatare reasonable and prudent• state whether applicable accountingstandards have been followed, subjectto any material departures disclosedand explained in the financialstatements• prepare the financial statements onthe going concern basis unless it isinappropriate to presume that theGroup will continue in businessThe directors are responsible for keepingproper accounting records which disclosewith reasonable accuracy at any time thefinancial position of the Company and toenable them to ensure that the financialstatements comply with the CompaniesAct 1985. They have general responsibilityfor taking such steps as are reasonablyopen to them to safeguard the assets ofthe Group and to prevent and detectfraud and other irregularities.AuditorThe Company’s auditor, KPMG Audit Plc,has indicated willingness to continue inoffice and as stated above, resolutions toreappoint it and to authorise thedirectors to fix its remuneration will beproposed at the Annual General Meeting.By order of the BoardStuart ClarkeCompany Secretary18 March 2005