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Introduction
The Directors submit their report and the International Power plc Group and parent company audited financial statements for the year ended 31 December 2007. The principal activity of International Power plc (the Company) is to act as the holding company for a group of companies and a number of associated companies and joint ventures (the Group). The principal activities of the Group are the generation and sale of electricity, and closely related activities such as district heating and desalination.
Business review
The Company is required to present a fair review of the business and
the Group during the year ended
- Business and financial review
- Current Directors’ biographical details and Directors who served through the year
- Corporate governance
- Employees
- Directors’ remuneration
which are incorporated in this review by reference.
Dividend
Following the payment of the 2007 interim dividend of 2.77p per Ordinary Share, paid on 30 October 2007, the Directors propose to pay a final dividend of 7.39p per Ordinary Share in respect of the year ended
Charitable and political donations
The Group does not make political donations. Details of charitable donations are set out in the Corporate responsibility section.
Research and development
Pure research is not a core element of the business of the Company. For the period under review, the Company did not undertake any expenditure on research and development. The Company will look to take advantage of technical advances as they arise and will continue to seek to develop power stations in the regions in which the Group operates making effective use of current and new technology as and when available.
Share capital
The Company’s share capital consists of Ordinary Shares of 50p each which rank pari passu with each other in respect of all rights, including dividend, voting and return of capital. The Company has an unclassified share of £1.00 and 21 deferred shares of one pence each, which carry no rights.
During the period 1 January 2007 to 31 December 2007 the Company did not purchase any of its Ordinary Shares.
Resolutions will be proposed at the 2008 AGM to renew for a further year the Directors’ general authority to allot shares; to renew for a year the partial disapplication of shareholders’ statutory pre-emption rights over Ordinary Shares; and to renew the authority to purchase a proportion of the Company’s shares.
An explanation of these and other resolutions being proposed at the 2008 AGM will be provided in the Notice of AGM, which will be sent to shareholders during April 2008.
Shares held in trust
As at 31 December 2007 253,990 Ordinary Shares of the Company were held in trust for the benefit of employees of the Company and its subsidiaries. These shares had a nominal value of £126,995 and a market value of £1,151,845. The employee share plan for which these shares may be utilised is the 2002 Performance Share Plan.
Employee share schemes
No employee share schemes have any rights regarding control of the Company.
Substantial shareholdings
As at the date of this report, the Company is aware of interests in 3% or more of the issued share capital of the Company on behalf of the organisations as shown in the table below.
| Substantial shareholdings | Number of shares | |
|---|---|---|
| AXA S.A. | 172,827,826 | 11.49% |
| Invesco Perpetual | 95,854,537 | 6.38% |
| Legal and General Group plc | 60,765,891 | 4.04% |
| Standard Life | 58,397,077 | 3.88% |
| Fidelity Management & Research Co. | 55,475,789 | 3.69% |
Going concern
The Directors are satisfied that the Company and the Group have adequate resources to continue to operate for the foreseeable future. Accordingly, the Directors continue to adopt the ‘going concern’ basis for the preparation of the financial statements.
Disclosure of information to the auditor
The Directors who held office at the date of approval of this Directors’ Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company’s auditor is unaware; and each Director has taken all the steps that he ought to have taken as a Director to make himself aware of any relevant audit information and to establish that the Company’s auditor is aware of this information.
Auditor
A resolution to re-appoint KPMG Audit Plc as auditor of the Company and to authorise the Directors to agree the auditor’s remuneration will be proposed at the forthcoming AGM.
Amendments to the Company’s Articles of Association
Any amendment to the Company’s Articles of Association requires a special resolution (75% majority) to be passed at a duly held meeting of the shareholders.
Appointment and replacement of Directors
The Board has the power to appoint and replace any Director. Any Director appointed by the Board has to offer him/her self for re-election at the Company’s next AGM. The Company’s shareholders may by ordinary resolution (simple majority) appoint or remove any person as Director. All Directors offer themselves for re-election every three years. There is no agreement in place between the Company and any of the Directors providing for compensation for loss of office or employment that occurs because of a takeover bid.
Restrictions and transfers of securities
There are no restrictions on the transfer of securities in the Company or on voting rights except in the circumstances set out in the Articles of Association of the Company (for example, failure to disclose interest in shares and non-payment of calls).
Significant agreements
There are no significant agreements to which the Company is a party which take effect, alter or terminate upon a change of control.
Prompt payment policy
The Company aims to observe the highest standard of business practice as both a buyer and seller of products and services. The Company’s average number of days outstanding in respect of trade creditors at 31 December 2007 was 33 days.
By order of the Board
Stephen Ramsay
Company Secretary
5 March 2008
