Share capital and voting rights
At December 31, 2008, the Company’s authorised share capital was £3,500,050,000.60 and comprised: 2,499,999,998 ordinary shares of 20p; 2,000,000,000,000 C Shares of 0.1p; 1,000,000,000,000 B Shares of 0.1p; one Special Share of £1; and 50,000 preference shares of £1.
On December 31, 2008, there were 1,843,740,136 ordinary shares and one Special Share in issue. The ordinary shares are listed on the London Stock Exchange. The first issue of C Shares took place on January 2, 2009. The C Shares are not listed.
Payments to shareholders
At the AGM on April 30, 2009, the directors will recommend an issue of 85.8 C Shares with a total nominal value of 8.58p for each ordinary share. Together with the interim issue on January 2, 2009 of 57.2 C Shares for each ordinary share with a total nominal value of 5.72p, this is the equivalent of a total annual payment to ordinary shareholders of 14.30p for each ordinary share.
Communication with shareholders
The Company attaches importance to the effectiveness of its communications with shareholders. It publishes an Annual review and summary financial statement as well as a full Annual report. There are also separate reports covering the environment and community relations.
The Company maintains a regular dialogue with institutional shareholders and the financial community. This includes presentations of the preliminary and interim results, regular meetings with major shareholders, participation in stockbroker’s seminars and site visits.
Each year the Group holds an investor’s seminar, in order to improve the financial community’s understanding of the Group and to introduce investors to a broader range of management. All shareholders can gain access to these and other presentations, as well as to the Annual report and other information about the Group, on the Group’s website at www.rolls-royce.com.
Holders of ordinary shares may attend the Company’s AGM at which the Company highlights key business developments during the year and at which shareholders have an opportunity to ask questions. The chairmen of the audit, remuneration, ethics, and nominations committees are available to answer any questions from shareholders on the work of their committees.
The Company confirms that it sends the AGM notice and relevant documentation to all shareholders at least 20 working days before the date of the AGM. For those shareholders who have elected to receive communications electronically, notice is given by email of the availability of documents on the Group’s website. Responsibility for maintaining regular communications with shareholders rests with the executive management team led by the Chief Executive. However, the Board is informed on a regular basis of key shareholder issues, including share price performance, the composition of the shareholder register and City expectations. Independent research is commissioned annually into institutional shareholder perceptions of the Group. The Chairman, the Senior Independent Director and the non-executive directors make themselves available to meet with shareholders as required.
Share class rights
The rights and obligations attaching to ordinary shares are set out in the Company’s Articles of Association.
Restrictions on transfer of shares and limitations on holdings
There are no restrictions on transfer or limitations on the holding of the ordinary shares or C Shares other than under the Articles of Association (as described below), under restrictions imposed by law or regulation (for example, insider trading laws) or pursuant to the Company’s share dealing code.
The Articles of Association provide that the Company should be and remain under United Kingdom control. As such, an individual foreign shareholding limit is set at 15 per cent of the aggregate votes attaching to the share capital of all classes (taken as a whole) and capable of being cast on a poll and to all other shares that the directors determine are to be included in the calculation of such holding.
Shareholder agreements and consent requirements
There are no known arrangements under which financial rights carried by any of the shares in the Company are held by a person other than the holder of the shares and no known agreements between the holders of shares with restrictions on the transfer of shares or exercise of voting rights.
No disposal may be made to a non-Group member which, alone or when Aggregated with, the same or a connected transaction, constitutes a disposal of the whole or a material part of either the nuclear business or the assets of the Group as a whole, without consent of the Special Shareholder.
Authority to issue shares
At the AGM in 2008, authority was given to the directors to allot new ordinary shares up to a nominal value of £128,748,950, equivalent to one third of the issued share capital of the Company at February 6, 2008. Such authority is valid until the AGM in 2009 or 18 months from May 7, 2008, whichever is the earlier. A further special resolution was passed to effect a disapplication of pre-emption rights for a maximum of five per cent of the issued share capital of the Company at February 6, 2008. The directors propose to renew these authorities at the AGM in 2009.
At the AGM in 2008, authority was given to the directors to allot new B Shares up to a nominal value of Dr John McAdam 350 million as an alternative to a cash dividend. Such authority is valid until the AGM in 2009 or 18 months from May 7, 2008, whichever is the earlier. The directors do not propose to renew this authority at the AGM in 2009.
At the AGM in 2008, authority was given to the directors to allot new C Shares up to a nominal value of £350 million as an alternative to a cash dividend. Such authority is valid until the AGM in 2009 or 18 months from May 7, 2008, whichever is the earlier. The directors propose to renew this authority at the AGM in 2009.
Authority to purchase own shares
At the AGM in 2008, the Company was authorised by shareholders to purchase up to 182,161,998 of its own ordinary shares representing ten per cent of its issued ordinary share capital as at February 6, 2008. The Company did not make use of this authority during 2008.
The authority for the Company to purchase its own shares expires at the conclusion of the AGM in 2009 and a resolution to renew it will be proposed at that meeting.
Deadlines for exercising voting rights
Electronic and paper proxy appointment and voting instructions must be received by the Company’s Registrars not less than 48 hours before a general meeting.
Voting rights for employee share plan shares
Shares are held in various employee benefit trusts for the purpose of satisfying Awards made under the various employee share plans. For shares held in a nominee capacity or if plan/trust rules provide the participant with the right to vote in respect of specifically allocated shares, the trustee votes in line with the participant’s instructions. For shares that are not held absolutely on behalf of specific individuals, the general policy of the trustees, in accordance with investor protection guidelines, is to abstain from voting in respect of those shares.
At February 11, 2009, the following companies had notified an interest in the issued ordinary share capital of the Company in accordance with the Financial Services Authority’s Disclosure and Transparency Rules:
|Company||Date notified||%of issued
ordinary share capital
|Invesco Limited||February 4, 2008||6.91|
|Legal and General Group Plc||December 4, 2008||4.99|