AGM Information • Dec 12, 2013
AGM Information
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Dear Shareholder
I am pleased to inform you that the Imperial Tobacco Group PLC (the Company) 2013 Annual Report and Accounts has now been published.
If you have requested a printed copy of the Annual Report and Accounts, it is enclosed with this letter together with the associated documents. If you requested to receive your Annual Report and Accounts electronically or did not return the election card previously sent to you, please accept this letter as notification that the Annual Report and Accounts and associated documents have now been published on the Investors section of our website (www.imperial-tobacco.com/reports). We have also published a brief summary of the Company's performance which I hope you will find useful and which, if you are receiving this letter in hardcopy, is included with this letter or is available on the Company's website.
Our annual general meeting (AGM) will be held at the Bristol Marriott Hotel City Centre on Wednesday, 5 February 2014 at 2.30pm. The notice of the AGM, particulars of the resolutions on which you can vote and details of the administrative arrangements we have made for the AGM are set out on the following pages.
At the AGM all resolutions will be voted on a poll. If you are unable to attend the AGM you can still use your vote if you appoint a proxy. To appoint a proxy you can complete your proxy form electronically at www.sharevote.co.uk. To do this you will need your personal voting reference which is shown on your enclosed proxy form. Alternatively, you can complete your paper proxy form and return it to the Company's registrar, Equiniti Limited, in the enclosed reply paid envelope. Please note all proxy forms, whether completed electronically or on paper, must be received by the Company's registrar not less than 48 hours before the start of the AGM.
The result of the polls will be announced on both a regulatory information service and the Company's website shortly after the AGM.
Your Directors believe that all the proposals to be considered at the AGM are in the best interests of both the Company and its shareholders. They unanimously recommend shareholders to vote in favour of all the resolutions set out in the notice. Your Directors will all be voting in favour of the resolutions in respect of their own shareholdings.
If you have recently sold or transferred all of your shares in the Company, please pass both this document and the accompanying associated documents, if any, to the purchaser, transferee or agent through whom the transfer was effected for transmission to the purchaser or transferee.
For the safety and comfort of those attending the AGM, large bags, other large items, cameras, recording equipment and mobile phones with built in cameras will not be allowed into the auditorium; anyone attempting to use recording and/or camera equipment will be asked to leave the auditorium. Small bags may be searched before you are permitted to take them into the auditorium. Cloakroom facilities will be provided but for security reasons the hotel may not accept large bags or other large items. The Company does not accept any liability or responsibility for any items deposited in the cloakroom. Please ensure mobile phones and similar devices are switched off during the AGM.
Yours sincerely
Iain Napier Chairman
Notice is hereby given that the annual general meeting (the AGM) of Imperial Tobacco Group PLC (the Company) will be held at the Bristol Marriott Hotel City Centre, 2 Lower Castle Street, Old Market, Bristol, BS1 3AD on Wednesday, 5 February 2014 at 2.30pm (doors open from 1.30pm) for the transaction of the following business:
To consider and, if thought fit, pass resolutions 1 to 15 as ordinary resolutions:
THAT the Annual Report and Accounts for the financial year ended 30 September 2013 be received.
THAT the Directors' Remuneration Report (excluding the Director's Remuneration Policy) set out on pages 62 to 82 of the Annual Report and Accounts for the financial year ended 30 September 2013 be received and approved.
THAT the Directors' Remuneration Policy, the full text of which is contained on pages 64 to 69 of the Annual Report and Accounts for the financial year ended 30 September 2013 be received and approved.
THAT a final dividend for the financial year ended 30 September 2013 of 81.2 pence per ordinary share of 10 pence payable on 17 February 2014 to those shareholders on the register at the close of business on 17 January 2014 be declared.
THAT Dr K M Burnett be re-elected as a Director of the Company.
THAT Mrs A J Cooper be re-elected as a Director of the Company.
THAT Mr D J Haines be re-elected as a Director of the Company.
THAT Mr M H C Herlihy be re-elected as a Director of the Company.
THAT Ms S E Murray be re-elected as a Director of the Company.
THAT Mr M R Phillips be re-elected as a Director of the Company.
THAT Mr O R Tant be elected as a Director of the Company.
THAT Mr M D Williamson be re-elected as a Director of the Company.
THAT Mr M I Wyman be re-elected as a Director of the Company.
THAT PricewaterhouseCoopers LLP be reappointed as Auditor of the Company to hold office until the conclusion of the next general meeting at which accounts are laid before the Company.
THAT the Directors be authorised to set the remuneration of the Auditor.
To consider and, if thought fit, pass resolutions 16 and 17 as ordinary resolutions and resolutions 18 to 20 as special resolutions:
THAT in accordance with section 366 of the Companies Act 2006, the Company and all companies that are subsidiaries at any time during the period for which this resolution has effect are hereby authorised, during the period commencing on the date of this resolution and ending at the conclusion of the next AGM of the Company after the passing of this resolution or, if earlier, at the close of business on 31 March 2015, to:
THAT
THAT
THAT in accordance with the Companies Act 2006, the Company is hereby generally and unconditionally authorised for the purposes of section 701 of the Companies Act 2006 to make market purchases (within the meaning of section 693(4) of the Companies Act 2006) of Ordinary Shares on such terms and in such manner as the Directors may from time to time determine, provided that:
All previous unutilised authorities for the Company to make market purchases of Ordinary Shares are revoked, except in relation to the purchase of Ordinary Shares under a contract or contracts concluded before the date of this resolution and where such purchase has not yet been executed.
THAT a general meeting of the Company other than an AGM of the Company may be called on not less than 14 clear days' notice.
Registered Office: By order of the Board 121 Winterstoke Road John M Downing Bristol BS3 2LL Company Secretary Registered in England and Wales No: 3236483
You may appoint your proxy electronically at www.sharevote.co.uk. You will need the Voting I.D., Task I.D. and Shareholder Reference which together make up your personal voting reference number printed on the front of the proxy form enclosed with this notice. Alternatively, if you have already registered with Equiniti's online portfolio service, Shareview, you can submit your proxy form at www.shareview.co.uk (click on the link to vote). For further information, see the instructions printed on the proxy form.
As an alternative to appointing your proxy electronically a proxy form is enclosed with this notice and instructions for its completion are shown on the form. Proxy forms and the power of attorney or other authority, if any, under which it is signed or a certified copy of such power or authority need to be deposited with the Company's registrar, Equiniti Limited, not less than 48 hours before the scheduled start of the AGM or any adjournment thereof.
Completion of a proxy form, either in electronic or paper format, does not preclude a member attending and voting in person at the AGM. A vote withheld option is provided on the proxy form to enable you to instruct your proxy not to vote on any particular resolution. It should, however, be noted that a vote withheld in this way is not a 'vote' in law and will not be counted in the calculation of the proportion of the votes 'For' and 'Against' a resolution.
A member must inform the Company's registrar in writing of any termination of the authority of a proxy.
A person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a Nominated Person) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the AGM. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
The statements of the rights of members in relation to the appointment of proxies in this notice do not apply to a Nominated Person. The rights of members in relation to the appointment of proxies can only be exercised by registered members of the Company. Nominated Persons are reminded that they should contact the registered holder of their Ordinary Shares (and not the Company) on matters relating to their investments in the Company.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Company's AGM to be held on 5 February 2014 and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Limited's (EUI) specifications and must contain the information required for such instructions, as described in the CREST Manual (available via www.euroclear.com). The message, regardless of whether it constitutes the appointment of a proxy or relates to an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer's agent (ID RA19) by the latest time(s) for receipt of proxy appointments specified in the notice of the AGM. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his/her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
The Directors of the Company must present the Company's Annual Report and Accounts to the AGM.
In line with legislation, this vote will be advisory and in respect of the overall remuneration package. The vote will not be specific to individual levels of remuneration. You can find the Directors' Remuneration Report on pages 62 to 82 of the 2013 Annual Report and Accounts which is available on the Company's website www.imperial-tobacco.com.
Shareholders are asked to approve the Directors' Remuneration Policy which is set out in full on pages 64 to 69 of the 2013 Annual Report and Accounts which is available on the Company's website www.imperial-tobacco.com. Once the Directors' Remuneration Policy is approved the Company will not be able to make a remuneration payment to a current or prospective director or a payment for loss of office to a current or past director, unless that payment is consistent with the policy or has been approved by a resolution of the members of the Company.
A final dividend can only be paid after the shareholders at a general meeting have approved it. A final dividend of 81.2 pence per Ordinary Share is recommended by the Directors for payment to shareholders who are on the register at the close of business on 17 January 2014. If approved, the date of payment of the final dividend will be 17 February 2014. An interim dividend of 35.2 pence per Ordinary Share was paid on 16 August 2013.
The Company's Articles of Association require that all Directors retire from office at each AGM and that those wishing to serve again shall submit themselves for election or re-election by the shareholders. Brief biographies of all the Directors, including Mr O R Tant who is standing for election, for the first time, appear on pages 44 and 45 of the 2013 Annual Report and Accounts and appear on the Company's website at www.imperial-tobacco.com. Having considered the performance of and contribution made by each of the Directors standing for election or re-election, the Board is satisfied that the performance of each Director continues to be effective and to demonstrate commitment to the role and as such recommends their election or re-election. Messrs Napier and Setrakian will be retiring at the conclusion of the Annual General Meeting and are not standing for re-election. As previously announced Mr Dyrbus will be retiring from the business on 31 December 2013.
Resolutions 14 and 15 propose the reappointment of PricewaterhouseCoopers LLP as Auditor of the Company and authorise the Directors to set its remuneration.
Part 14 of the Companies Act 2006, amongst other things, prohibits the Company and its subsidiaries from making donations to an EU political party or other EU political organisation or to an independent election candidate in the EU of more than £5,000 in any 12 month period unless they have been authorised to make donations by the Company's shareholders.
The Companies Act 2006 defines political organisations widely. It includes organisations which carry on activities which are capable of being reasonably regarded as intended to affect public support for a political party or an independent election candidate in any EU Member State or to influence voters in relation to any referendum in any EU Member State. As a result, it is possible that the definition may include bodies, such as those concerned with policy review and law reform or with the representation of the business community or sections of it, which the Company and/or its subsidiaries may see benefit in supporting.
Accordingly, the Company wishes to ensure that neither it nor its subsidiaries inadvertently commits any breaches of the Companies Act 2006 through the undertaking of routine activities, which would not normally be considered to result in the making of political donations and political expenditure being incurred. The resolution authorise the Company and its subsidiaries to:
in the period commencing on the date of the resolution and ending at the conclusion of the AGM of the Company held in 2015 or, if earlier, the close of business on 31 March 2015.
Neither the Company nor any of its subsidiaries has any intention of making political donations nor incurring any political expenditure under the terms of this resolution.
For the purpose of this resolution the terms "political donations", "political parties", "independent election candidates", "political organisations" and "political expenditure" have the meanings set out in sections 363 to 365 of the Companies Act 2006.
The Directors may only allot Ordinary Shares or grant rights over Ordinary Shares if authorised to do so by shareholders. The authority granted at the last AGM to allot Ordinary Shares or grant rights to subscribe for, or convert any security into, Ordinary Shares is due to expire at the conclusion of this year's AGM. Accordingly, this resolution seeks to grant a new authority under section 551 of the Companies Act 2006 to authorise the Directors to allot Ordinary Shares or grant rights to subscribe for, or convert any security into, Ordinary Shares and will expire at the conclusion of the next AGM of the Company in 2015 or, if earlier, the close of business on 31 March 2015.
If passed Resolution 17 would give the Directors authority to allot Ordinary Shares or grant rights to subscribe for, or convert any security into, Ordinary Shares up to an aggregate nominal value of £14,500,000 representing approximately 15 per cent of the Company's existing issued share capital (excluding Ordinary Shares held in treasury) and calculated as at 4 December 2013 (being the latest practicable date prior to publication of this notice).
There is no present intention of exercising this authority. However, it is considered prudent to maintain the flexibility that this authority provides. If the Directors do exercise this authority, the Directors intend to follow best practices as regards its use, as recommended by the ABI. As at 4 December 2013, the Company held 101,956,532 Ordinary Shares in treasury, which represent approximately 9.5 per cent of the total ordinary share capital in issue (excluding Ordinary Shares held in treasury) as at 4 December 2013. The Directors intend to renew this authority annually.
Under section 561(1) of the Companies Act 2006, if the Directors wish to allot any shares or grant rights over shares or sell treasury shares for cash (other than pursuant to an employee share scheme) they must in the first instance offer them to existing shareholders in proportion to their holdings. There may be occasions, however, when the Directors will need the flexibility to finance business opportunities by the issue of Ordinary Shares for cash without a pre-emptive offer to existing shareholders. This cannot be done under the Companies Act 2006 unless the shareholders have first waived their pre-emption rights. Resolution 18 asks shareholders to do this and, apart from rights issues or any other pre-emptive offer concerning equity securities, the authority will be limited to the issue of Ordinary Shares for cash up to a maximum aggregate nominal value of £5,330,000 (which includes the sale on a non pre-emptive basis of any Ordinary Shares held in treasury for cash), which is equivalent to approximately 5 per cent of the Company's issued ordinary share capital as at 4 December 2013 (being the latest practicable date prior to publication of this notice). The Directors do not intend to issue more than 7.5 per cent of the issued share capital of the Company for cash on a non-pre-emptive basis in any rolling three year period without prior consultation with shareholders and Investment Committees of the Association of British Insurers and the National Association of Pension Funds etc. Shareholders will note that this resolution also relates to Ordinary Shares held in treasury and will be proposed as a special resolution.
This resolution seeks a disapplication of the pre-emption rights on a rights issue or other pre-emptive offer so as to allow the Directors to make exclusions or such other arrangements as may be appropriate to resolve legal or practical problems which, for example, might arise with overseas shareholders. If given, the authority will expire at the conclusion of the next AGM of the Company in 2015 or, if earlier, the close of business on 31 March 2015. The Directors intend to renew this authority annually.
In certain circumstances it may be advantageous for the Company to purchase its own Ordinary Shares and Resolution 19 seeks the authority from shareholders to continue to do so. Authority was given to the Company to make market purchases up to an aggregate of 106,794,000 of its Ordinary Shares at the AGM held on 30 January 2013 (being equal to approximately 10 per cent of the Company's issued ordinary share capital as at 6 December 2012, the latest practicable date prior to the publication of the notice for the AGM held on 30 January 2013). This authority is due to expire at the end of the AGM and it is proposed that the Company be authorised to continue to make market purchases up to an aggregate of approximately 10 per cent of the Company's issued ordinary share capital as further described below. The Directors will continue to exercise this power only when, in the light of market conditions prevailing at the time, they believe that the effect of such purchases will be to increase earnings per share and will be likely to promote the success of the Company for the benefit of its members as a whole. Other investment opportunities, appropriate gearing levels and the overall position of the Company will be taken into account when exercising this authority. Any Ordinary Shares purchased in this way will either be held in Treasury or cancelled and the number of Ordinary Shares in issue reduced accordingly. If the Directors consider it appropriate to do so, the Company may hold in treasury any of its own Ordinary Shares that it purchases pursuant to the Companies Act 2006 and the authority conferred by this resolution, as an alternative to cancelling them. This gives the Company the ability to reissue Ordinary Shares held in treasury quickly and cost effectively and provides the Company with greater flexibility in the management of its capital base. It also gives the Company the opportunity to satisfy employee share scheme awards with Ordinary Shares held in treasury. Ordinary Shares held in treasury may subsequently be cancelled, sold for cash or used to satisfy share options and share awards under employees' share schemes. Once held in treasury, the Company is not entitled to exercise any rights, including the right to attend and vote at meetings, in respect of the Ordinary Shares. Further, no dividend or other distribution of the Company's assets may be made to the Company in respect of the Ordinary Shares held in treasury.
The proposed authority would be limited to purchases of up to 106,794,000 Ordinary Shares which is equal to approximately 10 per cent of the Company's issued ordinary share capital as at 4 December 2013 (being the latest practicable date prior to publication of this notice). The resolution specifies the maximum and minimum prices at which the Company's Ordinary Shares may be bought.
The minimum price which may be paid for each Ordinary Share is 10 pence (exclusive of all expenses). The maximum price which may be paid for each Ordinary Share is the higher of the amount equal to 105 per cent of the average of the middle market prices shown in the quotations for the Ordinary Shares in the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the Ordinary Share is purchased and the amount stipulated by article 5(1) of the Buyback and Stabilisation Regulations 2003 (in each case exclusive of all expenses).
For information, as at 4 December 2013 (being the latest practicable date prior to publication of this notice) there were outstanding 5,292,764 awards and options to subscribe for Ordinary Shares, representing 0.55 per cent of the Company's issued ordinary share capital (excluding Ordinary Shares held in treasury). If the new authority and the existing authority were exercised in full, the awards and options would represent 0.69 per cent of the Company's issued ordinary share capital (excluding Ordinary Shares held in treasury).
Resolution 19 will be proposed as a special resolution to provide the Company with the necessary authority. If given, this authority will expire at the conclusion of the next AGM of the Company in 2015 or, if earlier, the close of business on 31 March 2015.
The Directors intend to seek renewal of this power at subsequent AGMs.
The notice period required by the Companies Act 2006 for general meetings of the Company is 21 days unless shareholders approve a shorter period which cannot, however, be less than 14 clear days. AGMs must always be held on at least 21 clear days' notice. At the AGM held on 30 January 2013, shareholders authorised the calling of general meetings other than an AGM on not less than 14 clear days' notice, and it is proposed that this authority be renewed. The authority granted by Resolution 20, if passed, will be effective until the Company's next AGM, when it is intended that a similar resolution will be proposed. In order to be able to call a general meeting on less than 21 clear days' notice, the Company must make a means of electronic voting available to all shareholders for that meeting. Resolution 20 seeks the approval of shareholders to renew the authority to be able to call general meetings (other than an AGM) on 14 clear days' notice. The flexibility offered by Resolution 20 will only be used where, taking into account the circumstances, the Directors consider this appropriate in relation to the business of the meeting and in the interests of the Company and shareholders as a whole.
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