RBS 2007 Annual Report Download - page 96

RBS Group • Annual Report and Accounts 2007
94
Report of the directors
Governance
The directors have pleasure in presenting their report together
with the audited accounts for the year ended 31 December 2007.
Profit and dividends
The profit attributable to the ordinary shareholders of the
company for the year ended 31 December 2007 amounted to
£7,303 million compared with £6,202 million for the year ended
31 December 2006, as set out in the consolidated income
statement on page 120.
An interim dividend of 10.1p per ordinary share was paid on
5 October 2007 totalling £953 million (2006 – £771 million).
The directors now recommend that, subject to approval at the
Annual General Meeting, a final dividend of 23.1p per ordinary
share totalling £2.3 billion (2006 – £2.1 billion) be paid on
6 June 2008 to members on the register at the close of
business on 7 March 2008.
Business review
Activities
The company is a holding company owning the entire issued
ordinary share capital of The Royal Bank of Scotland, the
principal direct operating subsidiary undertaking of the
company. The “Group” comprises the company and all its
subsidiary and associated undertakings, including The Royal
Bank of Scotland and NatWest. Details of the principal
subsidiary undertakings of the company are shown in Note 16
on the accounts.
The Group is engaged principally in providing a wide range of
banking, insurance and other financial services. Further details
of the organisational structure and business overview of the
Group, including the products and services provided by each
of its divisions and the competitive markets in which they
operate, is contained on pages 30 to 32 of the Business
review.
Risk factors
The Group’s future performance and results could be
materially different from expected results depending on the
outcome of certain potential risks and uncertainties. Details of
the principal risk factors the Group faces are given on pages
32 and 33 of the Business review.
The reported results of the Group are also sensitive to the
accounting policies, assumptions and estimates that underlie
the preparation of its financial statements. Details of the
Group’s critical accounting policies and key sources of
accounting judgements are included in the Accounting policies
on pages 131 to 138.
The Group’s approach to risk management, including its
financial risk management objectives and policies and
information on the Group’s exposure to price, credit, liquidity
and cash flow risk is discussed in Note 31 on the accounts.
Financial performance
A review of the Group’s performance during the year ended
31 December 2007, including details of each division, and
the Group’s financial position as at that date is contained in
the Business review on pages 34 to 69.
Business developments
In October 2007, RFS Holdings B.V. (“RFS Holdings”), a
company jointly owned by the company, Fortis N.V., Fortis
SA/NV and Banco Santander S.A. (the “Consortium Banks”)
and controlled by the company, completed the acquisition of
ABN AMRO Holding N.V. (“ABN AMRO”).
In due course, RFS Holdings will implement an orderly
separation of the business units of ABN AMRO with the
company retaining the following ABN AMRO business units:
•Continuing businesses of Business Unit North America;
•Business Unit Global Clients and wholesale clients in the
Netherlands (including former Dutch wholesale clients) and
Latin America (excluding Brazil);
•Business Unit Asia (excluding Saudi Hollandi); and
•Business Unit Europe (excluding Antonveneta).
Certain other assets will continue to be shared by the
Consortium Banks.
Employees
As at 31 December 2007, the Group employed over 226,000
employees (full-time equivalent basis) throughout the world
including almost 90,000 employees in ABN AMRO. Details of
employee related costs are included in Note 2 on the accounts
on page 140.
Employee recruitment
Across the Group worldwide, over 30,000 employees are
recruited at different levels every year. The Group utilises a wide
range of recruitment channels including its in-house search
function, external executive search suppliers, general advertising,
an open internal jobs market, talent reviews and detailed
succession planning to ensure that the recruitment and
development of its employees is fully aligned to its organisational
requirements.
Employee reward
The Group recognises that its continuing success is closely
linked to the performance, skills and individual commitment of
its employees.
The Group aims to attract and retain the most talented people.
To stay ahead of the market, salaries are routinely compared
with those paid for similar roles by competitors, and individual
performance is recognised and rewarded.
The Group offers a comprehensive remuneration and benefits
package, Total Reward, to all employees. Total Reward is
externally recognised as offering one of the most innovative
and flexible remuneration and benefits programmes in the
financial services sector.