Annual Report and Accounts 2014

 

Report of the Directors

The Directors of DCC plc present their report and the audited financial statements for the year ended 31 March 2014.

Results and Review of Activities+-

Revenue for the year amounted to £11,231.7 million (2013: £10,572.7 million). The profit for the year attributable to owners of the Parent amounted to £121.2 million (2013: £106.3 million). Adjusted earnings per share amounted to 191.20 pence (2013: 171.20 pence). Further details of the results for the year are set out in the Group Income Statement.

The Chairman’s Message on this page, the Chief Executive’s Review on this page, the Operating Reviews on this page and the Financial Review on this page contain a review of the development and performance of the Group’s business during the year, of the state of affairs of the business at 31 March 2014, of recent events and of likely future developments. Information in respect of events since the year end as required by the Companies (Amendment) Act, 1986 is included in these sections and in note 48.

Dividends +-

An interim dividend of 26.12 pence per share, amounting to £22.167 million, was paid on 29 November 2013. The Directors recommend the payment of a final dividend of 50.73 pence per share, amounting to £42.5 million. Subject to shareholders’ approval at the Annual General Meeting on 18 July 2014, this dividend will be paid on 24 July 2014 to shareholders on the register on 30 May 2014. The total dividend for the year ended 31 March 2014 amounts to 76.85 pence per share, a total of £64.7 million. This represents an increase of 10% on the prior year’s total dividend per share.

The profit attributable to owners of the Parent, which has been transferred to reserves, and the dividends paid during the year ended 31 March 2014 are shown in note 39.

Share Capital and Treasury Shares +-

DCC’s authorised share capital is 152,368,568 ordinary shares of €0.25 each, of which 83,861,964 shares (excluding treasury shares) and 4,367,440 treasury shares were in issue at 31 March 2014. All of these shares are of the same class. With the exception of treasury shares which have no voting rights and no entitlement to dividends, they all carry equal voting rights and rank for dividends.

The number of shares held as treasury shares at the beginning of the year (and the maximum number held during the year) was 4,535,981 (5.14 % of the issued share capital) with a nominal value of €1.134 million.

A total of 168,541 shares (0.19% of the issued share capital) with a nominal value of €0.042 million were re-issued during the year at prices ranging from €0.25 to €23.35 consequent to the exercise of share options under the DCC plc 1998 Employee Share Option Scheme and the DCC plc Long Term Incentive Plan 2009, leaving a balance held as treasury shares at 31 March 2014 of 4,367,440 shares (4.95% of the issued share capital) with a nominal value of €1.092 million.

At the Annual General Meeting held on 19 July 2013, the Company was granted authority to purchase up to 8,822,940 of its own shares (10% of the issued share capital) with a nominal value of € 2.206 million. This authority has not been exercised and will expire on 18 July 2014, the date of the next Annual General Meeting of the Company. A special resolution will be proposed at the Annual General Meeting to renew this authority.

At each Annual General Meeting, in addition to the authority to buy back shares referred to above, the Directors seek authority to exercise all the powers of the Company to allot shares up to an aggregate amount of €7,352,400, representing approximately one third of the issued share capital of the Company.

The Directors also seek authority to allot shares for cash, other than strictly pro-rata to existing shareholdings. This proposed authority is limited to the allotment of shares in specific circumstances relating to rights issues and other issues up to approximately 5% of the issued share capital of the Company.

Details of the share capital of the Company are set out in note 36 and are deemed to form part of this Report.

Principal Risks and Uncertainties +-

Under Irish company law (Regulation 37 of the European Communities (Companies: Group Accounts) Regulations 1992, as amended), DCC is required to give a description of the principal risks and uncertainties facing the Group. These are addressed in the Risk Report on this page.

Directors +-

The names of the Directors and a short biographical note on each Director appear on this page.

In accordance with the UK Corporate Governance Code, all Directors submit to re-election at each Annual General Meeting.

With the exception of Tommy Breen, who has a service agreement with a notice period of twelve months, none of the other Directors has a service contract with the Company or with any member of the Group.

Details of the Directors’ interests in the share capital of the Company are set out in the Remuneration Report on this page.

Corporate Governance +-

The Corporate Governance Statement on this page sets out the Company’s appliance of the principles and compliance with the provisions of the UK Corporate Governance Code, the Group’s system of risk management and internal control and the adoption of the going concern basis in preparing the financial statements. The Corporate Governance Statement shall be treated as forming part of the Report of the Directors.

DCC plc is fully compliant with the 2012 edition of the UK Corporate Governance Code, which applied to the Company for the year ended 31 March 2014.

For the purposes of the European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006, details concerning the appointment and the re-election of Directors and the amendment of the Company’s Articles of Association are set out in the Corporate Governance Statement.

General Meetings +-

The Company’s Annual General Meeting (‘AGM’) affords shareholders the opportunity to question the Chairman and the Board. The chairmen of the Audit, Nomination and Governance and Remuneration Committees are also available to answer questions at the AGM. The Chief Executive presents at the AGM on the Group’s business and its performance during the prior year and answers questions from shareholders.

Notice of the AGM, the Form of Proxy and the Annual Report are sent to shareholders at least 20 working days before the AGM. At the AGM, resolutions are voted on by a show of hands of those shareholders attending, in person or by proxy. After each resolution has been dealt with, details are given of the level of proxy votes cast on each resolution and the numbers for, against and withheld.

If validly requested, resolutions can be voted by way of a poll. In a poll, the votes of shareholders present and voting at the AGM are added to the proxy votes received in advance of the AGM and the total number of votes for, against and withheld for each resolution are announced.

All other general meetings are called Extraordinary General Meetings (‘EGM’). An EGM called for the passing of a special resolution must be called by at least twenty one clear days’ notice. Provided shareholders have passed a special resolution to that effect at the immediately preceding AGM and the Company continues to allow shareholders to vote by electronic means, an EGM to consider an ordinary resolution may be called at fourteen clear days’ notice.

A quorum for an AGM or an EGM of the Company is constituted by three shareholders, present in person, by proxy or by a duly authorised representative in the case of a corporate member. The passing of resolutions at a general meeting, other than special resolutions, requires a simple majority. To be passed, a special resolution requires a majority of at least 75% of the votes cast.

Shareholders have the right to attend, speak, ask questions and vote at general meetings. In accordance with Irish company law, the Company specifies record dates for general meetings, by which date shareholders must be registered in the Register of Members of the Company to be entitled to attend. Record dates are specified in the notes to the Notice convening the meeting.

Shareholders may exercise their right to vote by appointing a proxy/proxies, by electronic means or in writing, to vote some or all of their shares. The requirements for the receipt of valid proxy forms are set out in the notes to the Notice convening the meeting.

A shareholder or a group of shareholders, holding at least 5% of the issued share capital of the Company, has the right to requisition a general meeting. A shareholder or a group of shareholders, holding at least 3% of the issued share capital, has the right to put an item on the agenda of an AGM or to table a draft resolution for an item on the agenda of a general meeting.

The 2014 AGM will be held at 11.00 a.m. on 18 July 2014 at The Four Seasons Hotel, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland.

Memorandum and Articles of Association +-

The Company’s Memorandum and Articles of Association sets out the objects and powers of the Company. The Articles of Association detail the rights attaching to shares, the method by which the Company’s shares can be purchased or re-issued, the provisions which apply to the holding of and voting at general meetings and the rules relating to the Directors, including their appointment, retirement, re-election, duties and powers.

The Company’s Articles of Association may be amended by a special resolution passed by the shareholders at an AGM or EGM of the Company.

A copy of the Memorandum and Articles of Association can be obtained from the Company’s website www.dcc.ie.

Transparency Rules+-

As required by the Transparency Rules published by the Central Bank of Ireland under Section 22 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006, the following sections of the Annual Report shall be treated as forming part of this report: the Chairman’s Message on this page, the Chief Executive’s Review on this page, the Operating Reviews on this page, the Financial Review on this page, the Principal Risks and Uncertainties on this page, the earnings per ordinary share in note 18, the Key Performance Indicators on this page and the derivative financial instruments in note 1.

Substantial Shareholdings+-

The Company has been notified of the following shareholdings of 3% or more in the issued share capital (excluding treasury shares) of the Company as at 31 March 2014 and 20 May 2014:

 

As at 31 March 2014

As at 20 May 2014

 

No. of €0.25 Ordinary Shares

% of Issued Share Capital (excluding treasury shares)

No. of €0.25 Ordinary Shares

% of Issued Share Capital (excluding treasury shares)

 

FMR LLC and FIL Limited on behalf of its direct and indirect subsidiaries*

11,017,646

13.14%

10,765,602

12.84%

Invesco*

5,598,545

6.67%

5,584,021

6.65%

Blackrock*

3,075,475

3.67%

3,391,967

4.04%

Setanta Asset Management *

3,371,897

4.02%

3,102,851

3.70%

Jim Flavin

2,633,000

3.14%

2,633,000

3.14%

* notified as non-beneficial interests

 

 

 

 

 

 

Principal Subsidiaries and Joint Ventures +-

Details of the Company’s principal operating subsidiaries and joint ventures are set out on this page.

Research and Development +-

Certain Group companies are involved in ongoing development work aimed at improving the quality, competitiveness, technology and range of their products.

Political Contributions +-

There were no political contributions which require to be disclosed under the Electoral Act, 1997.

Accounting Records +-

The Directors are responsible for ensuring that proper books and accounting records, as outlined in Section 202 of the Companies Act, 1990, are kept by the Company. The Directors believe that they have complied with this requirement by providing adequate resources to maintain proper books and accounting records throughout the Group including the appointment of personnel with appropriate qualifications, experience and expertise. The books and accounting records of the Company are maintained at the Company’s registered office, DCC House, Brewery Road, Stillorgan, Blackrock, Co. Dublin, Ireland.

Takeover Regulations +-

The Company has certain banking facilities which may require repayment in the event that a change in control occurs with respect to the Company. In addition, the Company’s long term incentive plans contain change of control provisions which can allow for the acceleration of the exercise of share options or awards in the event that a change of control occurs with respect to the Company.

Auditors +-

The auditors, PricewaterhouseCoopers, will continue in office in accordance with the provisions of Section 160(2) of the Companies Act, 1963. A resolution authorising the Directors to determine their remuneration will be proposed at the Annual General Meeting.

Michael Buckley, Tommy Breen

Directors
20 May 2014