Aviva 2009 Annual Report Download - page 85

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Aviva plc Directors’ report
Annual Report and Accounts 2009
The directors submit their annual report and accounts for
Aviva plc, together with the consolidated financial statements
of the Aviva Group of companies, for the year ended
31 December 2009.
The Companies Act 2006 requires the directors to present a
“business review” in this Directors’ Report. The information that
fulfils this requirement can be found in the Performance Review
on pages 9 to 66, which includes a review of the Group’s
operations, current position and future prospects, a description
of the principal activities of the Group, and principal risks and
uncertainties. This Performance Review, the Corporate
Governance Report and the Directors’ Remuneration Report are
incorporated by reference into this Directors’ Report. Details of
material acquisitions and disposals made by the Group during
the year are contained in note 3 to the consolidated financial
statements.
Results
The Group results for the year are shown in the consolidated
income statement on page 143.
Dividends
The directors are recommending a final dividend of 15.00 pence
per ordinary share (2008: 19.91 pence), which, together
with the interim dividend of 9.00 pence per ordinary share paid
on
17 November 2009 (2008: 13.09 pence), produces a total
dividend for the year of 24.00 pence per ordinary share (2008:
33.00 pence). The total cost of ordinary dividends paid in
2009, was £775 million (2008: £902 million). Subject to
shareholder approval at the 2010 Annual General Meeting, the
final dividend for 2009 will be paid on 17 May 2010 to all
holders of ordinary shares on the Register of Members at the
close of business on 26 March 2010 (and approximately five
business days later for holders of American Depositary Receipts).
Share capital and control
The issued ordinary share capital of the Company was increased
by 108,909,750 ordinary shares during the year. 951,455 shares
were allotted under the Group’s employee share and incentive
plans and 107,958,295 shares were allotted under the Aviva
Scrip Dividend Scheme for the May 2009 and November 2009
dividends. At 31 December 2009 the issued ordinary share
capital totalled 2,766,611,374 shares of 25 pence each and the
issued preference share capital totalled 200 million shares of £1
each. Accordingly, the issued ordinary share capital constituted
78% of the Company’s total issued share capital and the issued
preference share capital constituted 22% of the Company’s
total issued share capital at 31 December 2009. All the
Company’s shares are fully paid up and quoted on the Main
Market of the London Stock Exchange. The Company is listed
on the New York Stock Exchange (NYSE) in the form of
American Depositary Shares, referenced to ordinary shares,
under a depositary agreement with Citibank. Details of the
Company’s share capital and shares under option at
31 December 2009 and shares issued during the year are given
in notes 28 to 31 to the consolidated financial statements.
The rights and obligations attaching to the Company’s
ordinary shares and preference shares as well as the powers of
the Company’s directors, are set out in the Company’s Articles
of Association, copies of which can be obtained from
Companies House and the Company’s website,www.aviva.com,
or by writing to the Company Secretary.
Performance review
Corporate responsibility
Governance
Shareholder information
Financial statements IFRS
Financial statements MCEV
Other information
With the exception of restrictions on transfer of ordinary shares
under the Company’s employee share incentive plans while the
shares are subject to the rules of the plan, there are no
restrictions on the voting rights attaching to the Company’s
ordinary shares or the transfer of securities in the Company.
Where, under an employee share plan operated by the
Company, participants are the beneficial owners of shares,
but not the registered owners, the voting rights are normally
exercised at the discretion of the participants. No person holds
securities in the Company carrying special rights with regard to
control of the Company. The Company is not aware of any
agreements between holders of securities that may result in
restrictions in the transfer of securities or voting rights. Unless
expressly specified to the contrary in the Articles of Association
of the Company, the Company’s Articles of Association may
only be amended by special resolution of the Company’s
shareholders in general meeting. At the 2010 Annual General
Meeting shareholders will be asked to adopt new Articles of
Association and further details can be found in the Notice of
Meeting accompanying this annual report and accounts. There
are a number of agreements that take effect, alter or terminate
upon a change of control of the Company, such as commercial
contracts and joint venture agreements. None is considered to
be significant in terms of their potential impact on the business
of the Group as a whole. All of the Company’s employee share
and incentive plans contain provisions relating to a change of
control. Outstanding awards and options would normally vest
and become exercisable on a change of control, subject to the
satisfaction of any performance conditions and pro rata
reduction as may be applicable under the rules of the employee
share incentive plans.
At the forthcoming Annual General Meeting, shareholders
will be asked to renew the directors’ authority to allot shares.
Details are contained in the Notice of Meeting.
Authority to purchase own shares
At the Company’s Annual General Meeting held on 29 April
2009, shareholders renewed the Company’s authorities to make
market purchases of up to 265 million ordinary shares, up to
100 million 83/4% preference shares and up to 100 million
83/8% preference shares. These authorities were not used during
the year. With effect from 1 October 2009, section 725 of the
Companies Act 2006 was repealed with the effect that the
Company is no longer subject to a limit of 10% of its total
issued share capital in respect of the number of its own shares
that the Company may buy back and hold in treasury. The
regulation repealing section 725 also extended the validity
period of the authority given to a company to purchase its own
shares, from a maximum of 18 months to a maximum of five
years. The Company will continue to follow guidelines which
recommend the annual renewal of this authority as a matter
of best practice for listed companies, unless such guidelines
change. At the forthcoming Annual General Meeting,
shareholders will be asked to renew this authority for another
year and the resolution will also retain the 10% maximum
aggregate number of ordinary shares which the Company
can purchase. Details are contained in the Notice of Meeting.
The Company held no treasury shares during the year.
Governance