Other disclosures


Principal activities

The principal activities of the Group and its subsidiary companies are described on the Our business at a glance and Our strategy pages and in the Business review.

Disclosure of all relevant information to auditors

The Directors who approved this report are satisfied that, as far as they are aware, there is no relevant audit information (as defined in the Companies Act 2006) of which the Company’s auditors are unaware. Each of the Directors has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.

Directors

The names and biographical details of our Directors as at 31 March 2012 are on the Our Board page. Further information regarding the Directors who served during the year can be found on the Corporate governance page and in the Remuneration report.

Creditor payment policies

The Group seeks to agree payment terms with each supplier when we start doing business with them. We always aim to pay our suppliers within a reasonable period of the invoice being received and in accordance with the Prompt Payment Code, which can be found at www.promptpaymentcode.org.uk. At 31 March 2012, the Company had no trade creditors (2011: £Nil). Group creditor days represented 87 days (2011: 72 days).

Charitable and political donations

The Group made a number of charitable donations throughout the year to support community organisations and initiatives, totalling £11,640 (2011: £9,015). No political donations were made. Further information relating to our community activities can be found on the Corporate responsibility page.

Employees

We consider our people to be our greatest asset and consequently have designed employment strategies that are both linked to business needs and are designed to develop our people to fulfil their full potential. Our employment policies are designed to provide equal opportunities irrespective of age, disability, ethnicity, gender, gender reassignment, marital status and civil partnership, nationality, pregnancy and maternity, race, religion and belief and sexual orientation.

All employees, whether part-time or full-time, temporary or permanent, are treated fairly and equally. We select employees for employment, promotion, training or other matters affecting their employment on the basis of aptitude and ability.

We take every opportunity to involve and consult with our employees and we believe that employee involvement is an essential contributor to the development of our business. Our Executive Directors regularly visit our different office locations to meet with our employees, provide updates on the performance of the Group and to receive suggestions and feedback, through both roadshow presentations and informal meetings.

During the year we have launched a quarterly video update which can be found on our intranet, The Hub, which helps to raise awareness of activities and performance across the Group. This is also supported by a monthly managers briefing document and a weekly round-up bulletin which is distributed to all employees by email.

In March 2011 we undertook a group-wide employee survey to obtain feedback from our employees on a range of topics. The results of this were fed back to employees during the year and workshops have been held to investigate the findings further and to enable employees to feed in to the decisions being taken to address the key concerns raised.

We encourage our employees to become shareholders by offering a Share Incentive Plan as we believe this encourages greater employee engagement. More information about this can be found in the Remuneration report.

Share capital

The Company has a single class of share capital which is divided into ordinary shares of 10 pence.

Rights and obligations attaching to shares

In a general meeting of the Company voting is as follows:

A member is not entitled to vote in respect of any share in the capital of the Company held by him or her, if there are sums payable to the Company in respect of such share which remain unpaid.

Full details of the deadline for exercising voting rights in respect of the resolutions to be considered at the AGM to be held on Thursday 19 July 2012 are set out in the Notice of Meeting.

All dividends are paid proportionately to the amounts paid up on the shares and are paid to those members whose names are on the share register at the date at which the dividend is declared, or at such other date as determined by the Directors or by an ordinary resolution of the Company.

If the Company is wound-up, the liquidator, with the sanction of a special resolution of the Company or any other sanction required by law, may divide the whole or any part of the assets of the Company amongst the shareholders and may determine how the division of the assets will be carried out.

Transfer of shares

All transfers of uncertificated shares must be made in accordance with, and be subject to, the Uncertificated Securities Regulations 2001 and in accordance with any arrangements made by the Board.

All transfers of certificated shares must be in writing in a form which has been approved by the Directors; this is known as ‘the Instrument of Transfer’. The Instrument of Transfer must be signed by, or on behalf of, the transferor and the transferor will remain as the holder of the share until the name of the transferee is entered into the share register.

The Directors may refuse to register the transfer of any share which is not fully paid or which is in favour of more than four persons jointly. The Directors may also refuse to recognise an Instrument of Transfer if it is not lodged at the Company’s registered office or at any other place which the Directors have determined.

If the Directors refuse to register a transfer they will send to the transferee a notice of the refusal and the Instrument of Transfer within two months of the date on which the transfer was lodged with the Company.

Shares held by Employee Share Trusts (EST)

The trustees of the Kingston Communications 2000 EST vote any shares held in the EST as they wish, having due regard to the interests of the employees as potential beneficiaries.

The trustees of the KCOM Group PLC EST consult with participants regarding the voting of any transferred-in or purchased shares but may vote any matching shares held in the EST as they wish, having due regard to the interests of the participants.

Allotment of shares

At the AGM in 2011, the Company was authorised by the members to allot shares up to an aggregate nominal amount of £17,220,130. Authority was also given at the same time for the partial disapplication of pre-emption rights, up to a maximum aggregate value of £2,583,019. As at the date of this report no shares had been allotted under this authority.

Repurchase of shares

At the AGM in 2011, the Company was authorised by members to purchase its own shares, up to a maximum of 51,660,391. During the year, the Company did not purchase any of its own shares. The Company funds Employee Share Trusts to meet its obligations under the Company’s share schemes. During the year the Trusts purchased 600,000 (2011: 181,370) shares on the London Stock Exchange at a cost of £425,773 (2011: £88,871) with a nominal value of £60,000 (2011: £18,137). These shares represent 0.12 per cent of the called up share capital and are held in trust until they vest; therefore the purchase of these shares does not reduce the share capital in issue. The total number of shares held in trust to meet obligations under the Company’s share schemes is:

Number
As at 1 April 2011 7,060,230
As at 31 March 2012 7,810,902

Further details around the purchase of shares in the year are set out in note 26 to the financial statements.

Significant agreements – change of control

The following significant agreements contain provisions entitling the counterparties to exercise termination or other rights in the event of a change of control of the Company:

The Company does not have any agreements with any Director or employee that would provide compensation for loss of office or employment resulting from a takeover.

Annual General Meeting

Our AGM will be held at the KC Stadium, Kingston upon Hull on Thursday 19 July 2012 at 11am. The Notice of Meeting accompanies this Annual Report and is also available on our Group website at www.kcomplc.com. Five resolutions will be proposed as special business. Explanatory notes on these resolutions are set out in the Notice of Meeting.

The Directors consider that all the resolutions proposed are in the best interests of the Company and it is their recommendation that shareholders support these proposals as they intend to do so in respect of their own holdings.

This report has been reviewed and approved by the Board of KCOM Group PLC.

Signed on behalf of the Board

Kathy Smith

Company Secretary

31 May 2012

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