Substantial share ownership
As at 20 April 2015, the Company is aware of the following interests of 3% or more in the issued ordinary share capital:
| BlackRock Inc
The disclosed interest refer to the respective combined holdings of the entity and to interests associated with it.
The Company has not been notified of any other holdings of ordinary share capital of 3% or more.
Profits and dividends
The profit before tax for the year was £1,451.9 million (2013: £1,295.8 million). The directors declared a final dividend of 26.58p (2013: 23.65p) per share to be paid on 6 July 2015 to share owners on the register at 5 June 2015 which, together with the interim ordinary dividend of 11.62p (2013: 10.56p) per share paid on 10 November 2014, makes a total of 38.20p for the year (2013: 34.21p).
Change of control
All of our bonds contain provisions which are triggered on a change of control of the Company. The holders of such bonds have the right to repayment at par except for holders of our US$ bonds. The holders here have the right to redeem the bonds at 101% of par, if the Company is non-investment grade at the time of the change of control or becomes non-investment grade within 120 days of the announcement of the change of control.
In addition, the Group has a Revolving Credit Facility in the amount of $2,500 million due July 2019, the terms of which require the consent of the majority of the lenders if a proposed merger or consolidation of the Company would alter its legal personality or identity.
In general terms, awards granted under WPP’s incentive plans will usually vest on a change of control, albeit on a pro-rated basis. Where awards are subject to performance conditions, those conditions will still need to be met, also on a pro-rated basis. Certain incentive plans allow the Compensation Committee to require outstanding awards to be exchanged for equivalent awards in the acquiring company.
Articles of Association
There are no restrictions on amending the Articles of Association of the Company other than the need to pass a special resolution of the share owners.
The Company’s authorised share capital consists solely of 1,750,000,000 ordinary 10 pence shares. The Company operates an American Depositary Receipt program. The rights and obligations relating to the ordinary share capital are outlined in the Articles of Association; there are no restrictions on transfer, no restrictions on voting rights and no securities carry special voting rights with regard to control of the Company.
At the AGM on 25 June 2014, share owners passed resolutions authorising the Company, in accordance with its Articles of Association, to allot shares up to a maximum nominal amount of £45,069,659 of which £6,744,536 could be allotted for cash free of statutory pre-emption rights. In the year under review no shares were issued for cash free from pre-emption rights. Details of share capital movements are given in note 26 of the financial statements PDF (1.19MB).
Authority for purchase of own shares
At the AGM on 25 June 2014, share owners passed a special resolution authorising the Company, in accordance with its Articles of Association, to purchase up to 133,507,758 of its own shares in the market. In the year under review, 41,036,654 ordinary shares of 10 pence each were purchased at an average price of £12.45 per share.
The directors will propose a resolution at the AGM to re-appoint Deloitte LLP as auditors.
The directors are required to consider whether it is appropriate to prepare the financial statements on the basis that the Company and the Group are going concerns. As part of its normal business practice, the Group prepares annual and longer-term plans and in reviewing this information and in particular the three-year plan and budget, the directors believe that the Company and the Group have adequate resources for the foreseeable future. Therefore the Company and the Group continue to adopt the going concern basis in preparing the financial statements.
Further details of the Group’s financial position and borrowing facilities are described in note 10 of the financial statements PDF (1.19MB).
Statement of directors' responsibilities in respect of the preparation of financial statements
The directors are responsible for preparing the financial statements in accordance with applicable law and regulations. The directors have elected to prepare financial statements for the Group in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS) and have also elected to prepare financial statements for the Company in accordance with UK accounting standards. Company law requires the directors to prepare such financial statements in accordance with the Companies (Jersey) Law 1991.
International Accounting Standard 1 requires that financial statements present fairly for each financial year the Company’s financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board’s ‘Framework for the Preparation and Presentation of Financial Statements’.
In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRSs. Directors are also required to:
- properly select and apply accounting policies;
- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
- provide additional disclosures, when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance; and
- make an assessment of the Company’s ability to continue as a going concern.
The directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Company, for safeguarding the assets, for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the preparation of a Directors’ report and directors’ remuneration report.
The directors are responsible for the maintenance and integrity of the Company website. Jersey legislation and UK regulation governing the preparation and dissemination of financial statements differs from legislation in other jurisdictions.
The directors confirm that so far as they are aware, there is no relevant audit information of which the Company’s auditors are unaware. Each director has taken all the steps that he or she ought to have taken, as a director, in order to make himself or herself aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.
In accordance with the principles of the UK Corporate Governance Code, the Board has established arrangements to evaluate whether the information presented in the Annual Report is fair, balanced and understandable; these are described within the Review of the Audit Committee.
The Board considers the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for share owners to assess the Company’s performance, business model and strategy.
The letters from the chairmen of the Nomination and Governance, Audit and Compensation Committees, the statements regarding directors’ responsibilities and statement of going concern set out above and the directors’ remuneration and interests in the share capital of the Company set out within How we behave and how we’re rewarded, are included in the Directors’ report, which also includes the sections ‘Strategic report to share owners’, ‘What we think’ and ‘Who runs WPP’.
By Order of the Board:
20 April 2015