Annual report and financial statement 2009 - United Utilities

In addition, resolutions will be proposed: to approve the directors’general authority to allot shares; to grant the authority to issueshares without first applying statutory rights of pre-emption; toauthorise the company to make market purchases of its own shares;to authorise the making of limited political donations by the companyand its subsidiaries; and to enable the company to continue to holdgeneral meetings on not less than 14 clear days’ notice.Share capital, transfers of shares and voting rightsAt 31 March 2009 the authorised share capital of the companywas £1,580,050,000, divided into 1,000,000,000 ordinary sharesof five pence each, 626,043,820 B shares of 170 pence each,273,956,180 deferred shares of 170 pence each and 50,000 nonvotingredeemable preference shares of £1 each, and the issuedshare capital of the company was £516,524,906 divided into681,485,632 ordinary shares of five pence each, 9,838,305 B sharesof 170 pence each, and 273,956,180 deferred shares of 170 penceeach. Details of the share capital and movements in the issued sharecapital are shown in note 25 to the financial statements on page 86.The ordinary shares represented 70.6 per cent and the B sharestogether with the deferred shares represented 29.4 per centrespectively of the total issued share capital as at 31 March 2009.All ordinary shares have the same rights, including the right to onevote at a general meeting, the right to an equal proportion of anydividend declared and payable, and to an equal amount of anysurplus assets which are distributed in the event of a winding up.All the outstanding B shares were redeemed and cancelled on 14April 2009. The deferred shares convey no right to income and noappreciable right to participate in any surplus capital in the eventof a winding up.The rights attaching to shares in the company are provided bythe articles of association, which may be amended or replaced bymeans of a special resolution of the company in general meeting.The company annually renews its power to issue and buy backshares at its annual general meeting and such resolutions willbe proposed at the 2009 annual general meeting. The directors’powers are conferred on them by UK legislation and by the company’sarticles. At the annual general meeting of United Utilities PLC on25 July 2008, the directors were authorised to issue relevantsecurities up to an aggregate nominal amount of £293,902,939,and were empowered to allot equity securities for cash on a nonpre-emptive basis to an aggregate nominal amount of £44,085,440.Electronic and paper proxy appointment and voting instructionsmust be received by the company’s registrars not less than 48hours before a general meeting and when calculating this period,the directors can decide not to take account of any part of a daythat is not a working day.There are no restrictions on the transfer of ordinary shares in thecompany, nor were there on the B shares whilst they were in issue,nor any limitations on the holding of shares in the company, save(i) where the company has exercised its right to suspend theirvoting rights or to prohibit their transfer following the omissionof their holder or any person interested in them to provide thecompany with information requested by it in accordance withPart 22 of the Companies Act 2006 or (ii) where their holder isprecluded from exercising voting rights by the Financial ServicesAuthority’s Listing Rules or the City Code on Takeovers and Mergers.There are no arrangements known to the company by whichfinancial rights carried by any shares in the company are held by aperson other than the holder of the shares, nor are there known tothe company any arrangements between holders of securities thatmay result in restrictions on the transfer of securities or on votingrights. All issued shares are fully paid.Major interests in sharesAt 20 May 2009, the directors had been notified of the followinginterests in the company’s issued ordinary share capital in accordancewith the Disclosure and Transparency Rules of the FinancialServices Authority:% of issued Direct or indirectShareholder share capital nature of holdingAXA S.A 4.999 direct and indirectCapital Group International Inc. 4.951 indirectTradewinds Global Investors, LLC 4.12 indirectPurchase of own sharesAt the annual general meeting of United Utilities PLC held on25 July 2008, shareholders authorised that company to purchase,in the market, up to 88,170,881 of its own ordinary shares of £1each. No shares were purchased pursuant to that authority duringthe year. Such authority from shareholders is normally soughtannually. Authorisation will be sought from shareholders of thecompany at the 2009 annual general meeting to grant authority topurchase up to 68,148,563 of its own ordinary shares of five penceeach, such authority to expire at the conclusion of the company’sannual general meeting in 2010 or if earlier on 30 September 2010.Change of controlThe trustee of the United Utilities Employee Share Trust, whichadministers the performance share plans, matching share plansand deferred share award scheme, has the ability to exercise votingrights at its discretion which relate to shares which it holds underthe trust deed constituting the trust. In the event of a takeoveroffer which could lead to a change of control of the company, thetrustee must consult with the company before accepting the offeror voting in favour of the offer. Subject to that requirement, thetrustee may take into account a prescribed list of interests andconsiderations prior to making a decision in relation to the offer,including the interests of the beneficiaries under the trust. In theevent of a change of control, the participants in the share incentiveplan would be able to direct the trustees how to act on their behalf.Directors’ indemnities and insuranceThe company has in place contractual entitlements for directorsof the company and of its subsidiaries to claim indemnificationby the company in respect of certain liabilities which might beincurred by them in the course of their duties as directors. Furtherdetails of these indemnities can be found in the corporate governancereport on page 27. The company also maintains an appropriatelevel of directors’ and officers’ liability insurance.Political and charitable donationsThe group’s policy is not to make any donations for politicalpurposes. However, the Companies Act 2006 requires certaintypes of expenditure on political events to be pre-approved byshareholders. At the 2008 annual general meeting, an authoritywas taken to cover such expenditure. Pursuant to that authority, inthe year, the group incurred expenditure of £27,702 (2008: £5,314)as part of the process of engaging in dialogue with governmentregionally and nationally. A similar resolution will be put to theshareholders at the 2009 annual general meeting to authorisethe company and its subsidiaries to make such expenditure.Charitable donations by the group in the year amounted to£4,262,520 (2008: £3,790,569).EmployeesThe company’s policies on employee consultation and on equalopportunities for disabled employees are contained within theEmployees section of the business review on page 15. The boardencourages employees to own shares in the company. Details ofemployee share schemes are in the remuneration report on page 40.Governanceunitedutilities.com 23