The directors have pleasure in presenting their report and the audited financial statements of the group for the year ended 31 December 2010.
Beazley plc is the ultimate holding company for the Beazley group, a global specialist risk insurance and reinsurance business operating through its managed syndicates 2623, 6107, 3623, 3622 and 623 at Lloyds’ in the UK and Beazley Insurance Company, Inc., a US admitted carrier in the US.
Review of business
A more detailed review of the business for the year and a summary of future developments are included in the annual statement and the financial review sections of this report.
Results and dividends
The consolidated profit before taxation for the year ended 31 December 2010 amounted to $250.8m (2009: $158.1m).
The directors announce a second interim dividend of 5.1 pence per ordinary share (2009 second interim dividend: 4.7 pence), plus a special dividend of 2.5 pence. These dividends, together with the first interim dividend of 2.4 pence per ordinary share, give a total of 10.0 pence.
The second interim dividend will be paid on 30 March 2011 to shareholders on the register on 4 March 2011 (save to the extent that shareholders on the register of members on 4 March 2011 are to be paid a dividend by a subsidiary of the Company (being Beazley DAS Limited) resident for tax purposes in the United Kingdom pursuant to elections made or deemed to have been made and such shareholders shall have no right to this second interim dividend).
The directors of the company at 31 December 2010, who served during the year and to the date of this report, were as follows:
Jonathan Geoffrey William Agnew (non-executive chairman)
David Andrew Horton (chief executive)
George Patrick Blunden (non-executive director)
Andrew Frederick Beazley (deputy chairman) – died 13 October 2010
Martin Lindsay Bride (group finance director)
Adrian Peter Cox (director) – appointed 6 December 2010
Nicholas Hill Furlonge (director)
Jonathan George Gray (director)
Alexander Gordon Kelso Hamilton (non-executive director)
Daniel Lawrence Jones (non-executive director) – resigned 2 June 2010
Neil Patrick Maidment (director)
Padraic Joseph O’Connor (non-executive director)
Andrew David Pomfret (non-executive director)
Vincent Joseph Sheridan (non-executive director)
Kenneth Paul Sroka (non-executive director) - appointed 12 November 2010
Rolf Albert Wilhelm Tolle (non-executive director) – appointed 6 December 2010
Clive Andrew Washbourn (director)
The board has noted the provision on annual re-election of all directors introduced by the UK corporate governance code (the new code) which applies to financial years beginning on or after 29 June 2010. In view of the very recent introduction of this requirement, the company has concluded it will not submit all of the directors for re-election at the annual general meeting to be held on 23 March 2011. However, the company intends to comply fully with this provision of the new code at its annual general meeting in 2012.
Accordingly, Neil Maidment and Nick Furlonge retire by rotation and, being eligible, offer themselves for re-election at the forthcoming annual general meeting.
Adrian Cox, Ken Sroka and Rolf Tolle, who were appointed by the board since the last annual general meeting, retire in accordance with the articles of association and, being eligible, offer themselves for re-election at the forthcoming annual general meeting.
Details of directors’ service contracts and beneficial interests in the company’s share capital are given in the directors’ remuneration report in the corporate governance section of this report. Biographies of directors seeking re-election are set out in the board of directors section of this report.
The company’s compliance with corporate governance is disclosed in the corporate governance statement in the corporate governance section of this report.
The directors have prepared these accounts on a going concern basis, as they are of the opinion that the company and group will be able to pay its debts as and when they fall due.
After reviewing the group’s budgets and medium-term plans, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future.
Supplier payment policy
The company and group’s policy for the year ending 31 December 2010, for all suppliers, is to fix terms of payment when agreeing the terms of each business transaction, to ensure the supplier is aware of those terms and to abide by the agreed terms of payment. The group had an average 47 days, purchases included in trade creditors at 31 December 2010 (2009: 50 days).
Corporate, social and environmental responsibility
The company’s corporate, social and environmental policy is disclosed in the corporate governance section of this report.
No political donations were made by the group in either of the current or prior reporting period.
The group’s approach to risk management is set out in the corporate governance section of this report and further detail is contained in note 2 to the financial statements.
As at 1 February 2011, the board had been notified of, or was otherwise aware of, the following shareholdings of 3% or more of the company’s issued ordinary share capital:
|Number of ordinary shares||%|
|Jupiter Asset Management||50,836,989||9.8|
|Legal & General Investment Management||20,950,194||4.0|
|MFS Invesment Management||20,903,922||4.0|
|Dimensional Fund Advisors||20,559,953||4.0|
Annual general meeting
The notice of the annual general meeting to be held at 12.00 noon on Wednesday, 23 March 2011 at 2 Northwood Park, Santry, Dublin is set out in the circular to the shareholders.
At 8 February 2011 there are outstanding options to subscribe for 12.5m ordinary shares pursuant to employee share schemes, representing 2.3% of the issued share capital. If the authority to purchase shares were exercised in full, these options would represent 2.3% of the enlarged issued share capital.
The company's auditors historically been KPMG Audit Plc, based in the United Kingdom. As the company has recently domiciled to Ireland, the company felt that it was more appropriate that the company's auditors be based in Ireland. Accordingly KPMG Audit Plc resigned on 21 December 2010 and KPMG was appointed on 7 January 2011. KPMG have indicated there willingness to continue in office. Accordingly, a resolution to appoint KPMG as audtors of the company will be proposed in the annual general meeting.
Disclosure of information to auditors
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 auditors are 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 auditors are aware of that information.
By order of the board
S A Coope
2 Northwood Park
8 February 2011