RBS 2009 Annual Report Download - page 213

211RBS Group Annual Report and Accounts 2009
Governance
Going concern
The Group’s business activities and financial position, the factors likely
to affect its future development and performance and its objectives and
policies in managing the financial risks to which it is exposed and its
capital are discussed in the Business review. The risk factors which
could materially affect the Group’s future results are set out on pages 55
to 71. The Group’s regulatory capital resources and significant
developments in 2009 and anticipated future developments are detailed
on pages 120 to 126. Pages 154 to 160 describe the Group’s funding
and liquidity profile, including changes in key metrics, the build up of
liquidity reserves and the outlook for 2010.
Having reviewed the Group’s forecasts, projections and other relevant
evidence, the directors have a reasonable expectation that the Group
and the company will continue in operational existence for the
foreseeable future. Accordingly, the financial statements of the Group
and of the company have been prepared on a going concern basis.
Corporate governance
The company is committed to high standards of corporate governance.
Details are given on pages 214 to 222. The Corporate governance
statement forms part of this Report of the directors.
Ordinary share capital
In April 2009, the company issued 16,909,716,385 ordinary shares of
25p by way of a placing and open offer on the basis of three new
shares for every seven existing shares, raising £5.37 billion.
In December 2009, the company issued 51 billion B shares of 1p to HM
Treasury at 50p per share, raising £25.5 billion.
During 2009 any option exercises were satisfied using market purchase
shares. Therefore there was no increase to the ordinary share capital in
respect of any option exercises.
Details of the authorised and issued ordinary share capital at
31 December 2009 are shown in Note 27 on the accounts.
Preference share capital
Following the placing and open offer in April 2009, the company
redeemed the five million non-cumulative sterling preference shares of
£1 issued at £1,000 each (£5 billion in total) held by HM Treasury at 101
per cent of their issue price, the dividend accrued on the preference
shares from 1 December 2008 to the date of redemption and the
commissions payable to HM Treasury under the Second Placing and
Open Offer Agreement.
Details of the authorised and issued preference share capital at
31 December 2009 are shown in Note 27 on the accounts.
Additional information
Where not provided previously in the Report of the directors, the
following provides the additional information required to be disclosed by
Part 6 of Schedule 7 to the Report and Accounts Regulations 2008.
The rights and obligations attaching to the company’s ordinary shares
and preference shares are set out in the company’s Articles of
Association, copies of which can be obtained from Companies House in
the UK or at www.rbs.com.
On a show of hands at a general meeting of the company every holder
of ordinary shares and cumulative preference shares present in person
or by proxy and entitled to vote shall have one vote. On a poll, every
holder of ordinary shares present in person or by proxy and entitled to
vote shall have one vote for every share held. On a poll, holders of
cumulative preference shares present in person or by proxy and entitled
to vote shall have four votes for every share held. The Notices of Annual
General Meetings and General Meetings specify the deadlines for
exercising voting rights and appointing a proxy or proxies to vote in
relation to resolutions to be passed at the meeting.
The cumulative preference shares represent less than 0.01% of the total
voting rights of the company, the remainder being represented by the
ordinary shares.
There are no restrictions on the transfer of ordinary shares in the
company other than certain restrictions which may from time to time be
imposed by laws and regulations (for example, insider trading laws).
Pursuant to the Listing Rules of the Financial Services Authority, certain
employees of the company require the approval of the company to deal
in the company’s shares.
A number of the company’s share plans include restrictions on transfers
of shares while the shares are subject to the plans, in particular the
Employee Share Ownership Plan.
The rights and obligations of holders of non-cumulative preference
shares are set out in Note 27 on the accounts on pages 325 to 327.
Except in relation to the Dividend Access Share, the company is not
aware of any agreements between shareholders that may result in
restrictions on the transfer of securities and/or voting rights. There are
no persons holding securities carrying special rights with regard to
control of the company.
Under the rules of certain employee share plans, eligible employees are
entitled to acquire shares in the company, and shares are held in trust
for participants by The Royal Bank and Ulster Bank Dublin Trust
Company as Trustees. Voting rights are exercised by the Trustees on
receipt of participants’ instructions. If a participant does not submit an
instruction to the Trustee no vote is registered.
The Royal Bank of Scotland plc 1992 Employee Share Trust, The Royal
Bank of Scotland Group plc 2001 Employee Share Trust and The Royal
Bank of Scotland Group plc 2007 US Employee Share Trust hold shares
on behalf of the Group’s employee share plans. The voting rights are
exercisable by the Trustees, however, in accordance with investor
protection guidelines, the Trustees abstain from voting. The Trustees
would take independent advice before accepting any offer in respect of
their shareholdings for the company in a takeover bid situation.
Awards granted under the company’s employee share plans may be
met through a combination of newly issued shares and shares acquired
in the market by the company’s employee benefit trusts.