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Annual Report and Accounts 2014
DIRECTORS’ REPORT
Results and dividend
The Group consolidated income statement is shown on page 84. Segmental
operating profit amounted to £298m (2013: £322m) and profit before taxation
and discontinued operations amounted to £246m (2013: £249m).
The directors recommend a final dividend of 24.0p per share (2013: 22.5p per
share) on the ordinary share capital payable, subject to shareholder approval,
at the Annual General Meeting to be held on 7 May 2015 to shareholders on
the register at the close of business on 10 April 2015. Together with the interim
dividend of 13.6p per share paid on 19 September 2014, this final dividend will
bring the total distribution for the year to 37.6p per share (2013: 35.3p per share).
Research and development
The continuing cost of research and development expenditure charged directly
to the income statement was £45m (2013: £50m). In addition, amortisation of
capitalised intangible development costs amounted to £2m (2013: £2m) and
across the Group a further £6m (2013: £3m) was capitalised.
Shareholders’ funds
Shareholders’ funds decreased from £601m at the end of 2013 to £509m at
31 December 2014.
Share capital
As at 31 December 2014, the Company’s share capital comprised a single
class of share capital which was divided into ordinary shares of 28 4/7p each.
Details of the share capital of the Company are set out in section 4.6 to the
financial statements on pages 129 and 130. The Company’s ordinary shares
are listed on the London Stock Exchange.
The Company has a Level 1 American Depositary Receipt (‘ADR’) programme
for which Citibank, N.A. acts as depositary. The ADRs are traded on the US
over-the-counter market under the symbol IMIAY, where each ADR represents
two ordinary shares.
As at 31 December 2014, 1,725,101 shares were held in an employee trust for
use in relation to certain executive incentive plans representing 0.6% of the issued
share capital (excluding treasury shares) at that time. The independent trustee
of the trust has the same rights as any other shareholder. Participants in option
schemes do not hold any voting rights on the shares until the date of exercise.
During the year, 463,694 new ordinary shares were issued under employee share
schemes: 416,194 under save as you earn plans and 47,500 under executive
share plans. Shares acquired through Company share schemes and plans rank
equally with the shares in issue and have no special rights.
The rights and obligations attaching to the Company’s ordinary shares are set
out in the Company’s articles of association, copies of which can be obtained
from Companies House in the UK, from the Company’s website or by writing
to the Company Secretary. Changes to the articles of association must be
approved by a special resolution of the shareholders (75% majority required)
in accordance with the legislation in force at the time. Subject to applicable
statutes, shares may be issued with such rights and restrictions as the Company
may by ordinary resolution decide or (if there is no such resolution or so far as
it does not make specific provision) as the Board may decide.
Holders of ordinary shares are entitled to receive the Company’s report and
accounts, to attend, speak and vote at general meetings of the Company,
and to appoint proxies to exercise their rights. Holders of ordinary shares may
receive a dividend and on a liquidation may share in the assets of the Company.
Subject to meeting certain thresholds, holders of ordinary shares may requisition
a general meeting of the Company or propose resolutions at Annual General
Meetings. Voting rights for ordinary shares held in treasury are suspended and the
treasury shares carry no rights to receive dividends or other distributions of assets.
There are no restrictions on the transfer of ordinary shares in the Company
other than:
• certain restrictions as may from time to time be imposed by laws and
regulations (for example insider trading laws); and
• pursuant to the Company’s share dealing code whereby the directors
and certain employees of the Company require approval to deal in the
Company’s shares.
The Company is not aware of any arrangements between shareholders that
may result in restrictions on the transfer of ordinary shares or on voting rights.
None of the ordinary shares carry any special rights with regard to control of
the Company. The only restrictions on voting rights are those that apply to the
ordinary shares held in treasury. Electronic and paper proxy appointments and
voting instructions must be received by the Company’s registrars not later than
48 hours (excluding any non-working days) before a general meeting, or (subject
to the Company’s articles of association) any adjournment thereof.
Return of cash and share capital consolidation
On 21 January 2014, the Company announced the terms of a return of cash to
shareholders of 200p per existing ordinary share of 25p each and a share capital
consolidation of every 8 existing ordinary shares of 25p each into 7 new ordinary
shares of 28 4/7p each.
The return of cash was structured as a ‘B and C share’ scheme. Under its
terms, shareholders (subject to restrictions in respect of US shareholders and
certain other overseas shareholders), were able to elect whether to receive their
cash proceeds as: (i) an immediate income payment (the ‘Income Option’); (ii)
an immediate capital payment (the ‘Immediate Capital Option’); (iii) a capital
payment deferred until after 6 April 2014 (the ‘Deferred Capital Option’); or (iv)
any combination of the above.
The resolutions required for the return of cash and share capital consolidation
(including to amend the articles of association of the Company) were approved
by shareholders at a general meeting of the Company held on 13 February 2014.
The new ordinary shares of 28 4/7p were admitted to the Official List and to
trading on the London Stock Exchange’s main market for listed securities on
17 February 2014.
On 17 February 2014, the Company issued a total of: (i) 228,744,051 C shares
to satisfy elections (or deemed elections) for the Income Option; (ii) 75,928,619
redeemable B shares to satisfy elections for the Immediate Capital Option; and
(iii) 5,475,074 redeemable B shares to satisfy elections for the Deferred Capital
Option. On 18 February 2014, a dividend of 200p was declared on each C share
issued to satisfy an election (or deemed election) for the Income Option and all
such shares were then automatically reclassified as deferred shares (which were
later purchased by the Company, for an aggregate consideration of 1p). On the
same date, each B share issued to satisfy an election for the Immediate Capital
Option was redeemed by the Company for 200p per share. Each B share issued
to satisfy an election for the Deferred Capital election were redeemed for 200p
per share between 7 and 14 April 2014.
Further details can be found in the circular dated 21 January 2014, available on
the Company’s website.
Own shares acquired by the Company
In 2014 the Company did not make market purchases of its own ordinary shares.
The Company was granted authority at the Annual General Meeting held on 8
May 2014 to purchase up to 40,708,000 of its ordinary shares of 28 4/7p each.
This authority will expire at the conclusion of the next Annual General Meeting
to be held on 7 May 2015 where shareholders will be asked to give a similar
authority, details of which are contained in the separate Notice of Annual
General Meeting.
The directors present their report, together with the audited financial statements, for the year ended 31 December 2014.
The Strategic Report is on pages 6 to 23.
