GPG Report & Accounts 2003 - Guinness Peat Group plc

GUINNESS PEAT GROUP PLC • ANNUAL REPORT • 9Directors’ ReportThe directors present their annual report andaudited financial statements for the year ended31 December 2003.Review of ActivitiesThe Company is a strategic investment holdingcompany.Following the reverse takeover of Brunel Holdings plcin December 2002, this year has seen the consolidationof the assets and business of GPG (UK) Holdings plc(formerly Guinness Peat Group plc and referred toelsewhere in this Report & Accounts as “the formerGPG”or “GPGUKH”) by Guinness Peat Group plc(previously Brunel Holdings plc). Further details of theaccounting consequences and treatment of this 2002transaction are set out in Note 1 to the FinancialStatements on page 17.Significant EventsSignificant events during the year ended31 December 2003 are summarised below.During the year, the Group raised an additionalNZ$215 million through its subsidiary, GPG Finance plc,through a second issue of unsecured subordinatedfixed interest loan notes (“Capital Notes”) in NewZealand, this time bearing an interest rate of 8.7%(“the 2003 Notes”). In order to provide for the eventualpossible conversion of both issues of the CapitalNotes, the Company increased its authorised nominalshare capital to £250,000,000 by the creation of anadditional 3,000,000,000 ordinary shares of 5p each.There are no significant post balance sheet eventsto report.2003 Acquisitions and DisposalsIn February 2003,GPG transferred its investment inCoats plc to a subsidiary of Coats Group Ltd,a jointventure in which GPG has a 63.97% economic interestbut in which GPG’s voting rights are restricted to 50.00%.Further commentary on the above transactions andon other activities during the year and also on theoutlook for 2004 are set out in the accompanyingChairman’s Statement.Results and DividendsThe results of the Group are shown on page 12 andmovements on reserves are set out in note 27. A finaldividend of 1.0p per ordinary 5p share (“OrdinaryShare”) for the year ended 31 December 2003 isproposed, payable on 17 May 2004, and represents thetotal payable for the year. In respect of the year ended31 December 2002 GPG paid an interim dividend of0.91p, adjusted for the 2003 Capitalisation Issue, inMay 2003. This was the only dividend for that year.Scrip Dividend Alternative andCapitalisation IssueAt the 2004 Annual General Meeting a resolution willbe proposed extending the existing authority whichwas approved by shareholders at the ExtraordinaryGeneral Meeting on 3 May 2002 and which enables thedirectors to allot, in lieu of the cash dividend payable inany year,Ordinary Shares in the Company.The maximumperiod of time this authority may last is 5 years and sothe directors propose to extend the authority to a datenot exceeding 11 May 2009.The directors will alsopropose a resolution authorising the directors to allotup to 70,672,239 further shares on 24 May 2004 inrespect of the 2004 Capitalisation Issue in a ratio of1 new Ordinary Share for every 10 shares held.Share CapitalDuring 2003, 5,773,174 Ordinary Shares were allottedto those holders of the Group’s 8% ConvertibleSubordinated Loan Notes (“CLNs”) who exercised theirright to convert their CLN Redemption Amounts.As a consequence of the 2003 Share Buyback in July2003 10,419,320 Ordinary Shares were bought backand cancelled in exchange for the issue of 26,047,862convertible loan notes.These events, together with the exercise of options,the 2003 Scrip Dividend Alternative and the 2003Capitalisation Issue, resulted in a net increase duringthe year of 67,331,934 Ordinary Shares. Further detailsof changes to the Company’s share capital during theyear are set out in note 26 to the financial statements.