Directors' report
The directors present their report and
the audited financial statements for
the year ended 31 March 2009.
Principal activities and business review
Experian provides information, analytical tools and marketing services to organisations around the world, ranging from small start-up businesses to multinational corporations. The Group also helps individuals to manage their credit relationships and to minimise the risk of identity theft. Experian reports its financial performance on a geographical basis across four regions: North America, Latin America, UK and Ireland and EMEA/Asia Pacific.As described in the business review, the Group’s activities in these regions are grouped into the four principal business lines of Credit Services, Decision Analytics, Marketing Services and Interactive.
Details of the development and performance of the Group’s businesses during the year, an indication of the key performance indicators and information regarding principal risks and uncertainties are set out, together with information equivalent to that required for a business review, in the business review section of the annual report and are incorporated into this report by reference.
Research and development
Research and development plays a key role in supporting Experian’s activities. Further details of research and development activities can be found in the business review section of the annual report.Profit and dividends
The Group income statement shows a profit for the financial year ended 31 March 2009 of US$506m (2008: US$452m). The directors have announced the payment of a second interim dividend in lieu of a final dividend of 13.25 US cents per ordinary share (2008: 12 US cents) to be paid on 24 July 2009 to shareholders on the register of members on 26 June 2009. An interim dividend of 6.75 US cents per ordinary share was paid on 30 January 2009 giving a total dividend for the year of 20 US cents per ordinary share (2008: 18.5 US cents).Directors
The names and biographical details of the directors are shown on the board of directors pages. Sean FitzPatrick resigned as a director of the Company on 18 December 2008. Chris Callero was appointed as a director of the Company on 1 April 2009.Particulars of directors’ remuneration, service contracts and their interests in the ordinary shares of the Company are shown in the report on directors’ remuneration. There were no changes in the directors’ interests in the Company’s ordinary shares between the end of the financial year and 19 May 2009.
In accordance with the Company’s articles of association, each director is required to retire at the annual general meeting held in the third calendar year following the year in which he or she was elected or last re-elected by the Company. In order to ensure an orderly re-election process, John Peace, Laurence Danon and Sir Alan Rudge will retire at the annual general meeting in July 2009 and, being eligible, will offer themselves for re-election. Formal evaluations of board performance, the performance of the principal board committees and the performance of individual directors were carried out during the year ended 31 March 2009 and the board is satisfied that each of the three directors retiring at the annual general meeting contributes effectively and demonstrates commitment to the role. Further details regarding the evaluations are contained in the corporate governance statement.
Chris Callero will also retire at the annual general meeting, being the first annual general meeting following his appointment and, being eligible, will offer himself for election.
Insurance and third party indemnification
During the year, the Company maintained liability insurance and third party indemnification provisions for its directors.Acquisitions and disposals
Details of acquisitions and disposals made during the year are contained in the business review and in note 33 to the Group financial statements.Substantial shareholdings
Substantial shareholders are required to notify their interests in accordance with the Company’s articles of association, which obliges shareholders to comply with the notification obligations to the Company contained in the Disclosure and Transparency Rules. As at 19 May 2009, the Company had been notified of the interests below in its issued ordinary share capital or voting rights.
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Substantial shareholdings |
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Date of notification |
Shareholder |
Direct/indirect |
Number of |
Percentage |
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12 May 2009 |
Viking Global Investors LP and associated companies |
Direct |
50,961,747 |
4.96% |
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Share capital
Details of the authorised and issued share capital of the Company and changes to the Company’s share capital during the year ended 31 March 2009 are set out in note K to the Company’s financial statements. The rights and obligations attaching to the ordinary and deferred shares are set out in the articles of association of the Company, a copy of which can be obtained on request from the Company Secretary.The Company has a Level 1 American Depositary Receipt (‘ADR’) programme in the USA for which the Bank of New York Mellon acts as depositary. The ADRs are traded on the US over-the-counter market, where each ADR represents one Experian plc ordinary share. Further details are given in the shareholder information section of the annual report.
Significant agreements – change of control
There are a number of agreements to which the Group is party that take effect, alter or terminate, or have the potential to do so, upon a change of control of the Company following a takeover bid. Details of the agreements of this nature are as follows:- The Group’s banking facilities contain provisions which, in the event of a change of control of the Company, could result in a renegotiation or withdrawal of such facilities.
- The £203m 6.375% Eurobonds due 2009 and the £334m 5.625% Euronotes due 2013, issued by the Group, provide that holders may require repayment of the respective bonds or notes in the event that a rating agency re-rates the bonds or notes to below investment grade following a change of control of the Company.
- The Group is party to a joint venture with The First American Corporation (FARES), pursuant to which the Group holds a 20% interest in FARES. The joint venture agreement provides The First American Corporation with a call right to purchase the Group’s interest in FARES in the event of a change of control of the Company.
- Details of provisions relating to a change of control in directors’ service contracts are described in the report on directors’ remuneration.
- All of Experian’s share based employee 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 at that time.
- The Group is party to a limited number of operational arrangements which can be terminated or altered upon a change of control of the Company, but these are not considered to be individually significant to the business of the Group as a whole or, in certain cases, it is considered that their disclosure would be seriously prejudicial to the Company.
Contractual arrangements
The licences granted to Group companies by governmental entities in respect of the operation of its credit bureaux in key jurisdictions are essential to the Group’s business. The Group also has several key agreements with its technology and data providers. Although the Group has numerous other third party contractual arrangements, none of these is considered essential to its business.Appointment and removal of directors
Both the Company by ordinary resolution and the directors may elect any person to be a director, but the number of directors shall not exceed the maximum number (if any) fixed by the articles of association of the Company. Any person appointed by the directors shall only hold office until the next annual general meeting and shall then be eligible for election. The office of a director shall be vacated on the occurrence of any of the events listed in article 92 of the articles of association of the Company. The Company may, in accordance with the provisions of the Companies (Jersey) Law 1991, remove any director from office and elect another person in place of a director so removed.Articles of association
The articles of association of the Company may be amended by the passing of a special resolution.
Restrictions on transfers of shares and/or voting rights
The Company is not aware of any
agreements between shareholders
that may result in restrictions on
the transfer of securities and/or
voting rights and, apart from those
matters described below, there are no
restrictions on the transfer of ordinary
shares in the capital of the Company
and/or voting rights:
- Certain restrictions on transfers of shares may from time to time be imposed by law, for example, insider dealing regulations. In accordance with the Listing Rules of the UK Financial Services Authority, certain employees are required to seek the approval of the Company to deal in its shares.
- Some of Experian’s share based employee incentive plans include restrictions on transfer of shares while the shares are subject to the plan.
- As described in the report on directors’ remuneration, non-executive directors receive a proportion of fees in shares which may not normally be transferred during a director’s period of office. Where, under a share based employee incentive plan operated by Experian, participants are the beneficial owners of the shares but not the registered owner, the voting rights are normally exercised by the registered owner at the direction of the participant.
- No member shall, unless the directors otherwise determine, be entitled in respect of any share held by him/her to vote either personally or by proxy at a shareholders’ meeting or to exercise any other right conferred by membership in relation to shareholders’ meetings if any call or other sum presently payable by him/her to the Company in respect of that share remains unpaid.
- No member shall, unless the directors otherwise determine, be entitled to vote either personally or by proxy at a shareholders’ meeting or to exercise any other right conferred by membership in relation to shareholders’ meetings if he/she fails within the prescribed period to provide the Company with information concerning interests in those shares required to be provided after being duly served with a notice pursuant to the articles of association of the Company.
- In accordance with the articles of association of the Company and save for certain limited circumstances, if the number of shares in the Company beneficially owned by residents of the USA exceeds a defined permitted maximum and the directors give notice to the holder(s) of such shares, such shares shall not confer on the holder(s) thereof the right to receive notice of, attend or vote at general meetings of the Company.
Financial risk management, objectives and policies
Descriptions of the use of financial instruments and Experian’s treasury and risk management objectives and policies are set out in the financial review within the business review section of the annual report and also in note 3 to the Group financial statements.Own shares
The existing authority for the Company to purchase its own shares, which expires at the end of this year’s annual general meeting, was given at the annual general meeting held on 16 July 2008 and permitted the Company to purchase, in the market, up to 102,000,000 of its own shares. The Company did not utilise the authority to make any purchases of its own shares during the year under review.Details of the new authority being requested are contained in the circular to shareholders, which accompanies this annual report or is available on the Company’s website at www.experianplc.com.
The Companies (Jersey) Law 1991 permits the Company to hold any shares bought back as treasury shares as an alternative to immediately cancelling them and the directors intend to decide whether to cancel shares pursuant to this authority or hold them as treasury shares based on the interests of the Company and shareholders as a whole at the relevant time.
Details of the shares in the Company purchased by and held under The Experian plc Employee Share Trust and the Experian UK Approved All Employee Share Plan are set out in note L to the Company’s financial statements.
Charitable donations
During the year the Group donated US$1.95m to charitable causes. Funds from the GUS Charitable Trust disbursed through Experian during the year totalled US$0.42m.In addition to cash contributions, the Group’s employees are encouraged to give their time and skills for the benefit of a variety of charitable causes.
Political donations
Experian did not make any donations to EU political parties or candidates during the year ended 31 March 2009.Employment of people with disabilities
People with disabilities have equal opportunities when applying for vacancies. In addition to complying with legislative requirements, procedures are in place to ensure that disabled employees are fairly treated and that their training and career development needs are carefully managed. For those employees becoming disabled during the course of their employment, the Group is supportive, whether through re-training or re-deployment, so as to provide an opportunity for them to remain with the Group whenever possible.
Employee involvement
Experian is committed to employee involvement throughout the business and is intent on motivating and keeping staff informed on matters that concern them in the context of their employment and involving them through local consultative procedures. Where there are recognition agreements with trade unions, the consultation process is established through national and local trade union representatives and through joint consultation committees. Employees are kept well informed on matters of concern and the financial and economic factors affecting the Group’s performance through management channels, conferences, meetings, publications and intranet sites.Experian continues to support employee share ownership through the provision of save as you earn and other all-employee share plan arrangements which are intended to align the interests of employees with those of shareholders.
Creditor payment
For all trade creditors, it is Group policy to:- Agree and confirm the terms of payment at the commencement of business with that supplier;
- Pay in accordance with any contract agreed with the supplier or as required by law; and
- Continually review payment procedures and liaise with suppliers as a means of eliminating difficulties and maintaining good working relationships.
Trade creditors of the Group at 31 March 2009 were 22 days based on the ratio of Group trade creditors at the end of the year to the amounts invoiced during the year by trade creditors. The Company has no trade creditors.
Going concern
Details of the adoption by the Company of the going concern basis in preparing the financial statements are set out in the financial review within the business review section of the annual report and are incorporated into this report by reference.Relevant audit information
As at 19 May 2009, so far as each director is aware, there is no relevant audit information, being information needed by the auditors in connection with preparing their report, of which the auditors are unaware and each director has taken all steps that he/ she ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the auditors are aware of that information.Annual general meeting
The 2009 annual general meeting of the Company will be held at The Merrion Hotel, Upper Merrion Street, Dublin 2, Ireland at 9.30am on Wednesday 15 July 2009. Shareholders who are unable to attend in person may submit questions beforehand via email to agmquestions@experianplc.com or on the prepaid card sent to shareholders with the notice of meeting. The questions will be addressed at the meeting, via the Company’s website at www.experianplc.com or individually as appropriate. The notice of meeting has been circulated to shareholders and can also be viewed at the Company’s website.Auditors
The auditors, PricewaterhouseCoopers LLP, have indicated their willingness to continue in office and a resolution that they be re-appointed as auditors of the Company will be proposed at the annual general meeting.
By order of the board
Charles Brown
Company Secretary
19 May 2009
Corporate headquarters:
Newenham House
Northern Cross
Malahide Road
Dublin 17
Ireland
Registered office:
22 Grenville Street
St Helier
Jersey
JE4 8PX