|Business model||A description of the company's business model can be found within the strategic report.|
|Dividends||Our directors are recommending a final dividend of 27.52 pence per ordinary share for the year ended 31 March 2019, which, together with the interim dividend of 13.76 pence, gives a total dividend for the year of 41.28 pence per ordinary share (the interim and final dividends paid in respect of the 2017/18 financial year were 13.24 pence and 39.73 pence per ordinary share respectively). Subject to approval by our shareholders at our AGM, the final dividend will be paid on 1 August 2019 to shareholders on the register at the close of business on 21 June 2019.|
|Directors||The names of our directors who served during the financial year ended 31 March 2019 can be found in the Board of directors. Sir David Higgins was appointed on 13 May 2019.|
|Reappointment||Our articles of association provide that our directors must retire at every annual general meeting following their last election or reappointment by our shareholders which is consistent with the recommendation contained within the 2016 UK Corporate Governance Code ('the Code') that all directors should be subject to annual election by shareholders. This has been the case at all the AGMs since 2011. Information regarding the appointment of our directors is included in our corporate governance report in the Nomination committee.|
|Interests||Details of the interests in the company's shares held by our directors and persons connected with them are set out in our directors' remuneration report which is hereby incorporated by reference into this directors' report.|
|Corporate governance statement||The corporate governance report is hereby incorporated by reference into this directors' report and includes details of our compliance with the Code. Our statement includes a description of the main features of our internal control and risk management systems in relation to the financial reporting process and forms part of this directors' report. A copy of the 2016 version of the Code, as applicable to the company for the year ended 31 March 2019, can be found at the Financial Reporting Council's website frc.org.uk. Copies of the matters reserved for the board and the terms of reference for each of the main board committees can be found on our website.|
|Share capital||At 31 March 2019, the issued share capital of the company was £499,819,926 divided into 681,888,418 ordinary shares of 5 pence each and 273,956,180 deferred shares of 170 pence each. Details of our share capital and movements in our issued share capital are shown in note 23 to the financial statements. The ordinary shares represented 71.3 per cent and the deferred shares represented 28.7 per cent respectively of the shares in issue as at 31 March 2019.|
All our ordinary shares have the same rights, including the rights to one vote at any of our general meetings, to an equal proportion of any dividends we declare and pay, and to an equal amount of any surplus assets which are distributed in the event of a winding-up.
Our deferred shares convey no right to income, no right to vote and no appreciable right to participate in any surplus capital in the event of a winding-up. The rights attaching to our shares in the company are provided by our articles of association, which may be amended or replaced by means of a special resolution of the company in general meeting. The company renews annually its power to issue and buy back shares at our AGM and such resolutions will be proposed at our 2019 AGM. Our directors' powers are conferred on them by UK legislation and by the company's articles. At the AGM of the company on 27 July 2018, the directors were authorised to issue relevant securities up to an aggregate nominal amount of £11,364,806 and were empowered to allot equity securities for cash on a non-pre-emptive basis to an aggregate nominal amount of £1,704,721.
|Voting||Electronic and paper proxy appointment and voting instructions must be received by our registrars (Equiniti) not less than 48 hours before a general meeting and when calculating this period, the directors can decide not to take account of any part of a day that is not a working day.|
|Transfers||There are no restrictions on the transfer of our ordinary shares in the company, nor any limitations on the holding of our shares in the company, save: (i) where the company has exercised its right to suspend their voting rights or to prohibit their transfer following the omission of their holder or any person interested in them to provide the company with information requested by it in accordance with Part 22 of the Companies Act 2006; or (ii) where their holder is precluded from exercising voting rights by the Financial Conduct Authority's Listing Rules or the City Code on Takeovers and Mergers.|
There are no agreements known to us between holders of securities that may result in restrictions on the transfer of securities or on voting rights. All our issued shares are fully paid.
|Major shareholdings||At 22 May 2019, our directors had been notified of the following interests in the company's issued ordinary share capital in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority:
|Per cent of issued share capital||Direct or indirect nature of holding|
|Lazard Asset Management LLC||8.03||Indirect|
|Purchase of own shares||At our last AGM held on 27 July 2018, our shareholders authorised the company to purchase, in the market, up to 68,188,841 of our ordinary shares of 5 pence each. We did not purchase any shares under this authority during the year. We normally seek such an authority from our shareholders annually. At our 2019 AGM, we will again seek authority from our shareholders to purchase up to 68,188,841 of our ordinary shares of 5 pence each with such authority expiring at the end of our AGM held in 2020.|
|Change of control||As at 31 March 2019, Equiniti Trust (Jersey) Limited was the trustee that administered our executive share plans and had the ability to exercise voting rights at its discretion which related to shares that it held under the trust deed constituting the trust. In the event of a takeover offer which could lead to a change of control of the company, the trustee must consult with the company before accepting the offer or voting in favour of the offer. Subject to that requirement, the trustee may take into account a prescribed list of interests and considerations prior to making a decision in relation to the offer, including the interests of the beneficiaries under the trust.|
In the event of a change of control, the participants in our all-employee share incentive plan (ShareBuy) would be able to direct the trustee of ShareBuy, Equiniti Share Plan Trustees Limited, how to act on their behalf.
|Information required by UK Listing Rule 9.8.4||Details of the amount of interest capitalised by the group during the financial year can be found in note 6 to the financial statements. In line with current UK tax legislation, the amount is fully deductible against the group's corporation tax liability, resulting in tax relief of £7.1 million.|
There are no other disclosures to be made under Listing Rule 9.8.4.
|Directors' indemnities and insurance||We have in place contractual entitlements for the directors of the company and of its subsidiaries to claim indemnification by the company in respect of certain liabilities which might be incurred by them in the course of their duties as directors. These arrangements, which constitute qualifying third-party indemnity provision and qualifying pension scheme indemnity provision, have been established in compliance with the relevant provisions of the Companies Act 2006 and have been in force throughout the financial year. They include provision for the company to fund the costs incurred by directors in defending certain claims against them in relation to their duties as directors of the company or its subsidiaries. The company also maintains an appropriate level of directors' and officers' liability insurance.|
|Political donations||We do not support any political party and do not make what are commonly regarded as donations to any political party or other political organisations. However, the wide definition of donations in the Political Parties, Elections and Referendums Act 2000 covers activities which form part of the necessary relationship between the group and our political stakeholders. This includes promoting United Utilities' activities at the main political parties' annual conferences, and occasional stakeholder engagement in Westminster. The group incurred expenditure of £9,338 (2018: £21,662) as part of this process. At the 2018 AGM, an authority was taken to cover such expenditure.|
A similar resolution will be put to our shareholders at the 2019 AGM to authorise the company and its subsidiaries to make such expenditure.
|Trade associations||We are members of a small number of trade associations. Some of these have a national focus, such as Water UK, the representative body of the UK water industry, which considers industry-wide priorities such as development of markets, customer trust, resilience, and legislation and regulation, and the Confederation of British Industry, which provides a policy-making voice for firms at a regional, national and international level. Others focus on specific professions such as the 100 Group representing the views of the finance directors of FTSE 100 and large UK private companies and the GC 100, the voice of general counsel and company secretaries in FTSE 100 companies. The company is also a member of regional bodies, such as the North West Business Leadership Team which encourages engagement across the public and private sectors to promote the sustainable economic development and long-term well-being of the North West. Our total contribution to these associations in 2018/19 was £399,658 (2017/18: £389,743).|
|Employees||Our policies on employee consultation and on equal opportunities for our disabled employees can be found in the 'People' section in Our business model. The company's business principles make clear how the company and all our employees must seek to act with integrity and fairness and observe legal requirements. Anyone with serious concerns that the company may not be adhering to these principles is encouraged to speak up via their line manager or through a confidential telephone line.|
Importance is placed on strengthening employees' engagement (see How we create value for stakeholders), measuring their views annually, then taking action to improve how they feel about the company and understand its direction. Employees are provided with information, through briefings and access to other online materials, to enable them to understand the financial and economic factors affecting the company's performance. Furthermore, Alison Goligher has been designated as the non-executive director for leading the board's engagement with the workforce. Amongst other initiatives, an Employee Voice Panel has been established, chaired by Alison; meetings will be held quarterly with the venue rotating around our region. The Panel will consist of circa 30 employees elected from across all employee segment groups and geographical areas. Panel members will be re-elected approximately every two years. The objectives of the Panel are to: provide the opportunity for a two-way channel of communication between the board and the workforce; provide insight to the board on how people think and feel about working for the company; and contribute to the monitoring and assessment of the culture of the business. During the year, we have had regard to employee interests, consulting with employees and their representatives and trade union representatives in relation to new pension arrangements introduced on 1 April 2019 and consulting with employee representatives in relation to organisational changes for support and managerial roles. The effect of our regard towards employees in relation to the decisions taken during the financial year is included in our s172(1) Statement in the Statutory and other information.
Employees are encouraged to own shares in the company through the operation of an all employee share incentive plan (ShareBuy).
Information on our average number of employees during the year, can be found in note 3.
and community matters
|Details of our approach, as a responsible business, is set out in our business principles, which can be found on our website at unitedutilities.com/corporate/about-us/governance/business-principles/. Our approach to engagement with our environmental stakeholders and those in the communities we serve can be found in the How we create value for stakeholders. |
The effect of our regard towards the environment, social and community matters in relation to the decisions taken during the financial year is included in our s172(1) Statement in the Statutory and other information.
|Customers and suppliers and key stakeholders||Our approach to engagement with customers, suppliers, regulators and other key stakeholders can be found in the How we create value for stakeholders. The effect of our regard towards customers, suppliers, regulators and other key stakeholders in relation to the decisions taken during the financial year is included in our s172(1) Statement in the Statutory and other information.|
Our sustainable supply chain charter sets out how we work with our suppliers, which can be found on our website at: unitedutilities.com/corporate/about-us/governance/suppliers/how-we-buy/sustainable-supply-chain/, we are also a signatory to the Prompt Payment Code. We publish key statistics and other information on our payment practices in line with the Duty to Report on Payment Practices and Performance on the Department for Business, Energy & Industrial Strategy's website. Information is published on a six-monthly basis. For the six months to 31 March 2019, our average time taken to pay invoices was 24 days; in the previous six months it was 25 days.
|Approach to technology development||We are committed to using innovative, cost-effective and practical solutions for providing high-quality services and we recognise the importance of ensuring that we focus our investment on the development of technology and that we have the right skills to apply technology to achieve sustainable competitive advantage and also that we continue to be alert to emerging technological opportunities.|
|Financial instruments||Our risk management objectives and policies in relation to the use of financial instruments can be found in note A4.|
|Events occurring after the reporting period||Details of events after the reporting period are included in note 26.|
|Slavery and human trafficking statement||Our statement can be found on our website at: unitedutilities.com/human-rights|