General information is provided in note 1 of the financial statements.
Disclosure of all relevant information to auditors
The Directors who approved this report are satisfied that, as far as they are aware, there is no relevant audit information (as defined in the Companies Act 2006) of which the Company’s auditors are unaware. Each of the Directors has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.
The names of the Directors who served during the year are on the Board of Directors pages along with the biographical details of the Directors serving at the date of signing of this report. Further information regarding the Directors who served during the year can be found in the Remuneration report.
No political donations were made by the Group during the year (2014: £Nil).
Our people are a key asset and enable us to differentiate ourselves from our competitors. We therefore take great care to have employment strategies in place to help our people develop to their full potential whilst also driving our business performance. Our employment policies are designed to provide equal opportunities irrespective of age, disability, ethnicity, gender, gender reassignment, marital status and civil partnership, nationality, pregnancy and maternity, race, religion and belief, and sexual orientation.
All employees, whether part-time or full-time, temporary or permanent, are treated fairly and equally. We select employees for employment, promotion, training or other matters affecting their employment on the basis of aptitude and ability.
We take every opportunity to involve and consult with our employees and we believe that employee involvement is an essential contributor to the development of our business. Our Executive Directors regularly visit our different office locations to meet with our employees, provide updates on the performance of the business and to receive suggestions and feedback, through both roadshow presentations and informal meetings.
Regular video and news updates are provided to all employees through our intranet, and a weekly round-up email is sent to keep everyone informed of activities and developments across the business. There is also a monthly briefing document for managers to share with their teams.
We encourage our employees to become shareholders by offering a Share Incentive Plan (SIP) as we believe this is one opportunity to encourage greater employee engagement. More information about this can be found in the Remuneration report.
The Company has a single class of share capital which is divided into ordinary shares of 10 pence.
Rights and obligations attaching to shares
In a general meeting of the Company voting is as follows:
- on a show of hands, every member present in person shall have one vote;
- on a show of hands, every proxy present who has been duly appointed by one or more members shall have one vote; and
- on a poll, every member who is present in person or by proxy shall have one vote for every share of which he or she is the holder.
A member is not entitled to vote in respect of any share in the capital of the Company held by him or her, if there are sums payable to the Company in respect of such share which remain unpaid.
Full details of the deadline for exercising voting rights in respect of the resolutions to be considered at the AGM to be held on 31 July 2015 are set out in the Notice of Meeting.
All dividends are paid proportionately to the amounts paid up on the shares and are paid to those members whose names are on the share register at the date at which the dividend is declared, or at such other date as determined by the Directors or by an ordinary resolution of the Company.
If the Company is wound up, the liquidator, with the sanction of a special resolution of the Company or any other sanction required by law, may divide the whole or any part of the assets of the Company among the shareholders and may determine how the division of the assets will be carried out.
Transfer of shares
All transfers of uncertificated shares must be made in accordance with, and be subject to, the Uncertificated Securities Regulations 2001 as amended by the Uncertificated Securities (Amendment) Regulations 2013 and in accordance with any arrangements made by the Board.
All transfers of certificated shares must be in writing in a form which has been approved by the Directors; this is known as ‘the Instrument of Transfer’. The Instrument of Transfer must be signed by, or on behalf of, the transferor and the transferor will remain as the holder of the share until the name of the transferee is entered into the share register.
The Directors may refuse to register the transfer of any share which is not fully paid or which is in favour of more than four persons jointly. The Directors may also refuse to recognise an Instrument of Transfer if it is not lodged at the Company’s registered office or at any other place which the Directors have determined.
If the Directors refuse to register a transfer they will send to the transferee a notice of the refusal and the Instrument of Transfer within two months of the date on which the transfer was lodged with the Company.
Acquisition of own shares
At the AGM in 2014, the Company was authorised by members to purchase its own shares, up to a maximum of 51,660,391. During the year, the Company did not purchase any of its own shares.
The Company funds Employee Share Trusts (ESTs) to meet its obligations under the Company’s share schemes. During the year the ESTs purchased 4,170,000 (2014: 2,043,000) shares on the London Stock Exchange at a cost of £4,058,000 (2014: £1,778,000) with a nominal value of £417,000 (2014: £204,300). These shares represent 0.6 per cent of the called-up share capital and are held in trust until they vest; therefore the purchase of these shares does not reduce the share capital in issue. The total number of shares held in trust to meet obligations under the Company’s share schemes is:
|000’s of shares|
|As at 1 April 2014||205|
|As at 31 March 2015||165|
Further details around the purchase of shares in the year are set out in note 26 to the financial statements.
Shares held by ESTs
The trustees of the Kingston Communications 2000 EST and the Kingston Communications All Employee Share Plan vote any shares held in the ESTs as they wish, having due regard to the interests of the employees as potential beneficiaries.
There are two other ESTs, the Kingston Communications Qualifying Employee Share Ownership Trust and KCOM Group PLC Employee Benefit Trust, that are currently dormant and hold no shares.
Requirements of Listing Rule 9.8.4R
For financial years ending after 31 August 2014 the Listing Rules require certain specific disclosures to be provided in a single identifiable section unless the annual report includes a cross reference table indicating where that information is set out.
|Section of LR 9.8.4R||Topic||Where it is included|
|1||Interest capitalised.||Not applicable.|
|2||Publication of unaudited financial information.||Not applicable.|
|4||Details of long-term incentive schemes with Directors or future Directors as sole participants.||Not applicable.|
|5 and 6||Waiver of emoluments or future emoluments by a Director.||Not applicable.|
|7 and 8||Non pre-emptive issues of equity for cash by the Group or major subsidiary undertakings.||Not applicable.|
|9||Parent participation in a placing by a listed subsidiary.||Not applicable.|
|10||Contracts of significance in which a Director has a material interest or between the Group, or a subsidiary, and a controlling shareholder.||Not applicable.|
|11||Provision of services by a controlling shareholder.||Not applicable.|
|12 and 13||Shareholder waiver of dividends or future dividends.||Not applicable.|
|14||Agreements with controlling shareholders.||Not applicable.|
Significant agreements – change of control
The following significant agreements contain provisions entitling the counterparties to exercise termination or other rights in the event of a change of control of the Company:
- under our £200 million multi-currency revolving facility agreement dated 4 June 2014, the Company must notify Lloyds Bank PLC, the Agent of the agreement, within seven days of becoming aware of a change of control of the Company. Any bank or financial institution named within the facility agreement may then notify the Agent within seven days that they wish to cancel their commitments. The Agent must then give at least 21 days’ notice to the Company of this and all outstanding amounts due to that bank or financial institution will become immediately due and payable. For these purposes, a ‘change of control’ occurs if any person or group of persons acting in concert gains control of the Company; and
- the Company’s share schemes, details of which are contained in the Remuneration report, contain provisions which take effect in the event of a change of control, as a result of which options and awards may vest and become exercisable. The provisions do not entitle participants to a greater interest in the shares of the Company than that created by the initial grant or award under the relevant scheme.
The Company does not have any agreements with any Director or employee that would provide compensation for loss of office or employment resulting from a takeover.
Pursuant to Section 414c of the Companies Act 2006 the Strategic report contains disclosures in relation to future developments, dividends, financial risk management and the disclosure of the Greenhouse Gas emissions for which the Company is responsible.
Annual General Meeting (AGM)
Our AGM will be held at the KC Stadium, Hull, on Friday 31 July 2015 at 11.00am. The Notice of Meeting accompanies this annual report and is also available on our Group website at www.kcomplc.com. Five resolutions will be proposed as special business. Explanatory notes on these resolutions are set out in the Notice of Meeting.
The Directors consider that all the resolutions proposed are in the best interests of the Company and it is their recommendation that shareholders support these proposals as they intend to do so in respect of their own holdings.
This report has been reviewed and approved by the Board of KCOM Group PLC.
Signed on behalf of the Board
17 June 2015