Other statutory information

Principal activities

The principal activities of the Group are the marketing and development of computer software and services for engineering and related solutions. The Company is a holding company.

Results and dividends

The Group made a profit for the year after taxation of £33.4 million (2009 – £42.2 million). Revenue was £148.3 million (2009 – £164.0 million) and comprised software licences, software maintenance and services.

The Directors recommend the payment of a final dividend of 13.9 pence per ordinary share (2009 – 6.5 pence). If approved at the forthcoming Annual General Meeting, the final dividend will be paid on 30 July 2010 to shareholders on the register at close of business on 25 June 2010.

Business review and future developments

A review of the Group’s operations during the year and its plans for the future is given in the Chairman’s statement, the Chief Executive’s review and the Finance Director’s review.

The Key Performance Indicators (KPIs) used by AVEVA to measure its own performance at the Group level are total revenue, adjusted profit before tax, adjusted earnings per share and headcount. The figures for the year ended 31 March 2010 are set out in the Finance Director's review page, together with figures for the previous year and a discussion of the principal risks and uncertainties facing the Group.

Suppliers’ payment practice

It is the Group’s policy that payments to suppliers are made in accordance with those terms and conditions agreed between the Company and its suppliers, provided that all trading terms and conditions have been complied with by the other party.

The Company has £nil trade creditors (2009 – £nil). At 31 March 2010, the Group had an average of 18 days’ purchases owed to trade creditors (2009 – 18 days’).

Research and Development

The Group continues an active programme of Research and Development which covers updating of and extension to the Group’s range of products.

Intellectual property

The Group owns intellectual property both in its software tools and the products derived from them. The Directors consider such properties to be of significant value to the business.

Financial instruments

The Group’s financial risk management objectives and policies are discussed in note 24 to the Consolidated financial statements.

Going concern

The Group has significant financial resources, is profitable and has a strong position in the markets it serves. At 31 March 2010 the Group had bank and cash and treasury deposit balances of £149.7 million (2009 – £126.2 million) and no debt. As a result, the Directors believe that the Group is well placed to manage business risks successfully despite the uncertain economic outlook.

Therefore after making enquiries and considering the cash flow forecasts for the Group, the Directors have a reasonable expectation that the Group has adequate resources to continue its operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements.

Directors and their interests

The Directors who served during the year under review are shown below:

Nick Prest (Chairman)

David Mann (Non-Executive Director and Senior Independent Director)

Jonathan Brooks (Non-Executive Director)

Philip Dayer (Non-Executive Director)

Richard Longdon (Chief Executive)

Paul Taylor (Finance Director and Company Secretary)

On 1 April 2010, Hervé Couturier was appointed a Non-Executive Director. On the same date it was also announced that David Mann will retire as Non-Executive Director and Senior Independent Director from the Board at the next Annual General Meeting.

The interests (all of which are beneficial) in the shares of the Company of Directors who held office at 31 March 2010 in respect of transactions notifiable under Disclosure and Transparency Rule 3.1.2 that have been disclosed to the Company are as follows:

	2010 3.33 pence ordinary shares	2009 3.33 pence ordinary shares
Nick Prest	16,690	16,690
David Mann	26,700	26,700
Jonathan Brooks	—	—
Philip Dayer	7,000	7,000
Richard Longdon	364,970	350,000
Paul Taylor	59,984	50,000

No changes took place in the interests of Directors in the shares of the Company between 31 March 2010 and 26 May 2010.

Hervé Couturier had no interests in the Company on the date of his appointment (1 April 2010).

Directors’ share options are disclosed in the Directors’ remuneration report page.

No Director had a material interest in any significant contract, other than a service contract or contract for services, with the Company or any of its subsidiaries at any time during the year.

Resolutions will be submitted to the Annual General Meeting for the election of Hervé Couturier and the re-election of all other current Directors (other than David Mann). Brief biographical details of all Directors, including those who are proposed for re-election, appear on Board of Directors page.

Conflict of interest

Throughout the year the Company has had the procedures in place to deal with conflict situations and these have been operated effectively. During the year no conflicts arose which would require the Board to exercise authority or discretion in relation to such conflicts. Changes to the Articles are proposed to be made at the Annual General Meeting and these are described in the appendix to the Notice of Annual General Meeting.

Takeover Directive Disclosures

The additional information required to be disclosed under the Takeover Directive Disclosures is set out below. The disclosures below are in some cases a summary of the relevant provisions of the Company’s Articles of Association and the relevant full provisions can be found in the Articles, which are available for inspection at the Company’s registered office.

Share capital

The rights attaching to the Company’s shares are set out in its Articles of Association. At 31 March 2010, the Company’s issued share capital consisted of a single class of ordinary shares with a nominal value of 3.33 pence.

Subject to any restrictions referred to in the next section, members may attend any general meeting of the Company. Voting rights attaching to the ordinary shares are described in the next section.

Members can declare final dividends by passing an ordinary resolution but the amount of the dividends cannot exceed the amount recommended by the Board. The Board can pay interim dividends provided the distributable profits of the Company justify such payment. The Board may, if authorised by an ordinary resolution of the members, offer any member the right to elect to receive new shares, which will be credited as fully paid, instead of their cash dividend. Any dividend which has not been claimed for twelve years after it became due for payment will be forfeited and will then revert to the Company.

If the Company is wound up, the liquidator can, with the sanction of the members by special resolution and any other sanction required by law, divide among the members all or any part of the assets of the Company and he/she can value any assets and determine how the divisions shall be carried out as between the members or different classes of members. The liquidator can also transfer the whole or any part of the assets to trustees upon any trusts for the benefit of the members. No members can be compelled to accept any asset which would give them any liability.

There are no special control rights in relation to the Company’s shares.

Subject to any restrictions below, on a show of hands every member who is present at a general meeting has one vote on each resolution and, on a poll, every member who is present has one vote on each resolution for every share of which he/she is the registered member.

A resolution put to the vote of a general meeting is decided on a show of hands, unless before or on the declaration of the result of the show of hands, a poll is demanded by the Chairman of the meeting, or by at least two members present in person (or by proxy) and having the right to vote, or by any member or members present in person (or by proxy) having at least one tenth of the total voting rights of all members, or by any members present in person (or by proxy) holding shares on which an aggregate sum has been paid up of at least one tenth of the total sum paid up on all shares conferring that right. Under the terms of the AVEVA Group Employee Benefit Trust 2008, the trustees will abstain from voting shares in the Company held by the Trust.

A member may vote personally or by proxy at a general meeting. Any form of proxy sent by the Company to members in relation to any general meeting must be delivered to the Company not less than 48 hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the appointment proposes to vote. A corporation which is a member of the Company may authorise such persons as it thinks fit to act as its representatives at any general meeting of the Company.

In the case of joint holders, the vote of the senior who tenders the vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. For this purpose seniority shall be determined by the order in which the names stand in the register of members. No member shall be entitled to attend or vote, either personally or by proxy, at a general meeting in respect of any share if any call or other sum presently payable by him to the Company in respect of such share remains unpaid.

The Board may direct that a member shall not be entitled to attend or vote, either personally or by proxy, at a general meeting in respect of some or all of the shares held by him/her (the Default Shares) if he/she or any person with an interest in shares has been sent a notice under Section 793 of the Companies Act 2006 (which confers upon public companies the power to require information with respect to interests in their voting shares) (a “Section 793 Notice”) and he/she or any interested person fails to supply the Company with the information requested within 14 days after delivery of that notice. These restrictions end seven days after receipt by the Company of all the information required by the relevant Section 793 Notice.

The Board may refuse to register a transfer unless:

it is in respect of a share which is fully paid up;
it is in respect of only one class of share;
it is in favour of a single transferee or not more than four joint transferees;
it is duly stamped (if so required); and
it is delivered for registration to the office or such other place as the Board may from time to time determine, accompanied (except in the case of a transfer by a recognised person where a certificate has not been issued or in the case of a renunciation) by the certificate for the shares to which it relates and such other evidence as the Board may reasonably require to prove the title of the transferor or person renouncing and the due execution of the transfer or renunciation by him/her or, if the transfer or renunciation is executed by some other person on his/her behalf, the authority of that person to do so; provided that the Board shall not refuse to register any transfer or renunciation of partly paid shares which are listed on the London Stock Exchange on the grounds that they are partly paid shares in circumstances where such refusal would prevent dealings in such shares from taking place on an open and proper basis.

The Board may decide to suspend the registration of transfers, for up to 30 days a year, by closing the register of members. The Board cannot suspend the registration of transfers of any uncertificated shares without gaining consent from CREST.

There are no restrictions on transfer of the ordinary shares in the Company other than: certain restrictions which may from time to time be imposed by laws and regulations (for example, insider trading laws); and pursuant to the Listing Rules of the Financial Services Authority whereby certain employees of the Company require the approval of the Company to deal in the ordinary shares.

There are no agreements between holders of securities that are known to the Company which may result in restrictions on the transfer of securities or on voting rights.

Change of control

All of the Company’s share-based plans contain provisions relating to change of control. Outstanding awards and options normally vest and become exercisable on a change of control, subject to the satisfaction of any performance conditions at that time.

There are no significant agreements to which the Company is a party that take effect, alter or terminate upon a change of control of the Company following a takeover bid.

There are no agreements between the Company and its Directors or employees providing for compensation for loss of office or employment that occurs because of a takeover bid.

Other substantial shareholdings

On 26 May 2010, the Company had been notified, in accordance with Disclosure and Transparency Rule 5, of the following interests in the ordinary share capital of the Company:

Name of holder	Number	Percentage held %
Black Rock Investment Management	11,568,521	17.03
Capital Group	5,020,350	7.39
HSBC Holdings plc	4,222,648	6.22
Legal and General Investment Management	2,520,510	3.71
Standard Life Investments	2,282,793	3.36
Janus Capital Management LLC	2,038,895	3.00

Articles of Association

The Articles of Association of the Company may be amended by special resolution. There are no conditions contained in the Memorandum in relation to the alteration of the Articles of Association of the Company.

Powers of the Directors

Subject to its Articles of Association and relevant statutory law and to any direction that may be given by the Company in general meeting by special resolution, the business of the Company shall be managed by the Directors, who may exercise all powers of the Company which are not required to be exercised by the Company in general meeting. At the Annual General Meeting in 2009 the Directors were granted authority to allot (a) relevant securities up to an aggregate nominal amount of £753,542.97 and (b) equity securities up to an aggregate nominal amount (when added to allotments under (a) above of £1,507,085.94 where the allotment is in connection with a rights issue). A renewal of this authority is being sought at the 2010 Annual General Meeting.

Appointment of Directors

The Company’s Articles of Association provide that at each Annual General Meeting of the Company one third of the Directors (or if their number is not three or a multiple of three, the number nearest to but not exceeding one third) shall retire from office. Those Directors who are required to retire at each Annual General Meeting shall be, first, any Director who wishes to retire (and not offer himself for reappointment) and second, those Directors who have been longest in office since their last appointment or reappointment. Any Director who retires at an Annual General Meeting may, if willing to act, be reappointed.

Additionally, new Directors may be appointed by the Board but are subject to election by members at the first opportunity after their appointment. The Articles of Association limit the number of Directors to not less than two and not more than ten save where members decide otherwise. Members may remove any Director (subject to the giving of special notice) and, if desired, replace such removed Director by ordinary resolution.

In accordance with Corporate Governance best practice, all Directors who served during the year (with the exception of David Mann) will stand for re-election together with Hervé Couturier, being the first Annual General Meeting since his appointment.

Charitable and political donations

During the year the Group made charitable donations totalling £35,590 (2009 – £49,145) of which £10,000 was paid to MacMillan Cancer Support and £10,000 to The Prince’s Trust. The remainder was donated to local and national charities.

During the year the Group did not make any political donations (2009 – £nil).

Annual General Meeting

The Annual General Meeting will be held on 7 July 2010 at The Trinity Centre, 24 Cambridge Science Park, Milton Road, Cambridge CB4 0FN. The Notice of the Annual General Meeting is being sent to shareholders along with this Annual Report which contains details of the resolutions proposed. Further details of particular resolutions are set out below.

Authority to repurchase ordinary shares

Resolution 12 set out in the Notice convening the Annual General Meeting gives authority to the Company to purchase its own ordinary shares up to a maximum of 6,792,820 ordinary shares until the earlier of 6 October 2011 and the date of the next Annual General Meeting. This represents 10% of the ordinary shares in issue at 26 May 2010 and the Company’s exercise of this authority is subject to the stated upper and lower limits on the price payable which reflects the requirements of the UK Listing Authority. Your Directors believe that it is advantageous for the Company to have this flexibility to make market purchases of its own shares. Shares will only be repurchased if earnings per share are expected to be enhanced as a result and the Directors believe it is in the best interests of shareholders generally. To the extent that any shares so purchased are held in treasury, earnings per share will be enhanced until such time, if any, as such shares are resold or transferred out of treasury.

The Company has the choice of cancelling shares which have been repurchased or holding them as treasury shares (or a combination of both). Treasury shares are essentially shares which have been repurchased by the Company and which it is allowed to hold pending either reselling them for cash, cancelling them or, if authorised, using them for the purposes of its employee share plans.

The Directors believe that it is desirable for the Company to have this choice. Holding the repurchased shares as treasury shares would give the Company the ability to reissue them quickly and cost effectively and would provide the Company with additional flexibility in the management of its capital base. No dividends will be paid on, and no voting rights will be exercised, in respect of treasury shares.

As at 26 May 2010 (being the latest practicable date prior to the publication of the notice of the Annual General Meeting), there were 378,220 outstanding options granted under all share option plans operated by the Company which, if exercised, would represent 0.22% of the issued ordinary share capital of the Company at that date. If this authority and any existing authority were exercised in full and the shares repurchased were to be cancelled, such options, if exercised, would represent 0.25% of the issued ordinary share capital of the Company.

Authorities to allot shares and disapply pre-emption rights

Resolution 13

The Directors may allot shares and grant rights to subscribe for, or convert any security into, shares only if authorised to do so by shareholders. The authority granted at the last Annual General Meeting is due to expire at this year’s Annual General Meeting. Accordingly, resolution 13 will be proposed as an ordinary resolution to grant new authorities to allot shares and grant rights to subscribe for, or convert that security into, shares (a) up to an aggregate nominal amount of £754,757.86 and (b) in connection with a rights issue, up to an aggregate nominal amount (reduced by allotments under part (a) of the resolution) of £1,509,515.72.

These amounts represent approximately 33.3% and approximately 66.7% respectively of the total issued ordinary share capital of the Company as at 26 May 2010 (the latest practicable date prior to the publication of this notice). If given, these authorities will expire at the Annual General Meeting in 2011 or on 6 October 2011, whichever is the earlier. Where usage of these authorities exceeds the thresholds suggested by the Association of British Insurers (“the ABI”), all of the Directors will stand for re-election at the following Annual General Meeting to the extent required by the ABI.

The Directors have no present intention of issuing shares pursuant to this authority.

As at 26 May 2010 (the latest practicable date prior to the publication of this notice) the Company holds no treasury shares.

Resolution 14

The Directors also require a power from shareholders to allot equity securities or sell treasury shares for cash otherwise than to existing shareholders pro rata to their holdings. The power granted at the last Annual General Meeting is due to expire at this year’s Annual General Meeting. Accordingly, resolution 14 will be proposed as a special resolution to grant such a power. Apart from offers or invitations in proportion to the respective number of shares held, the power will be limited to the allotment of equity securities and sales of treasury shares for cash up to an aggregate nominal value of £113,213.68 (being 5% of the Company’s issued ordinary share capital at 26 May 2010 (the latest practicable date prior to the publication of the Notice)). If given, this power will expire on 6 October 2011 or at the conclusion of the Annual General Meeting in 2011, whichever is the earlier. The Directors will have due regard to institutional guidelines in relation to any exercise of this power, in particular the requirement for advance consultation and explanation before making any non pre-emptive cash issue pursuant to this resolution which exceeds 7.5% of the Company’s issued share capital in any rolling three year period.

New Articles of Association

It is proposed in resolution 15 to adopt new Articles of Association (the “New Articles”) in order to update the Company’s current Articles of Association (the “Current Articles”), primarily to take account of the Companies (Shareholders’ Rights) Regulations 2009 and the implementation of the Companies Act 2006.

The principal changes introduced in the New Articles are summarised in the appendix to the Notice of Annual General Meeting. Other changes, which are of a minor, technical or clarifying nature and also some more changes which merely reflect changes made by the Companies Act 2006 and the Companies (Shareholders’ Rights) Regulations 2009 have not been noted in the appendix to the Notice of Annual General Meeting. The New Articles and the Current Articles are available for inspection, as noted in the Notice of Annual General Meeting.

Notice required for shareholder meetings

The Shareholders Rights Directive was implemented in the UK in August 2009. The regulation implementing this Directive increases the notice period for general meetings of the Company to 21 days unless shareholders agree to a shorter notice period. On the basis of a resolution passed at the 2009 Annual General Meeting, the Company is currently able to call general meetings (other than an Annual General Meeting) on 14 clear days’ notice and would like to preserve this ability. Resolution 16 seeks such approval. The approval will be effective until the Company’s next Annual General Meeting, when it is intended that a similar resolution will be proposed. The Company will also need to meet the requirements for electronic voting under this Directive before it can call a general meeting on 14 days’ notice. The shorter notice period would not be used as a matter of routine for general meetings. However, the flexibility offered by this resolution will be used where, taking into account the circumstances, including whether the business of the meeting is time-sensitive, the Directors consider this appropriate in relation to the business to be considered at the general meeting in question.

Employee benefit trust

The AVEVA Group Employee Benefit Trust 2008 was established in 2008 to facilitate satisfying the transfer of shares to employees within the Group on exercise of vested options under the various share option and deferred bonus share plans of the Company. On 28 May 2009, the Trust acquired in the open market an aggregate of 89,016 ordinary shares in AVEVA Group plc at a price of £7.29 for total consideration of £653,000. The Trust holds a total of 122,770 ordinary shares in AVEVA Group plc representing 0.18% of the issued share capital at the date of this report. Under the terms of the Trust deed governing the Trust, the trustees of the Trust are required (unless the Company directs otherwise) to waive all dividends in respect of ordinary shares in AVEVA Group plc held by the Trust except where beneficial ownership of any such ordinary shares was passed to a beneficiary of the Trust. In the same way as other employees, the Executive Directors of the Company are potential beneficiaries under the Trust.

Disabled employees

The Group gives full consideration to applications for employment from disabled persons where the candidate’s particular aptitudes and abilities are consistent with adequately meeting the requirements of the job. Opportunities are available to disabled employees for training, career development and promotion.

Where existing employees become disabled, it is the Group’s policy to provide continuing employment wherever practicable in the same or an alternative position and to provide appropriate training to achieve this aim as well as reasonable adjustments to the workplace and other support mechanisms.

Employee involvement

The Group places considerable value on the involvement of its employees and has continued to keep them informed of matters affecting them as employees and on the various factors affecting the performance of the Group. This is achieved through formal and informal meetings, the Group intranet and presentations from senior management. There is an employee representative committee which meets on a regular basis to discuss a wide range of matters affecting their current and future interests. All employees are entitled to receive an annual discretionary award related to the overall profitability of the Group subject to the performance of the individual and the Group. The Group conducts employee wide surveys from time to time to gauge the success or otherwise of its policies and uses this information to improve matters as appropriate.

Directors’ qualifying third party indemnity provisions

The Company has granted an indemnity to its Directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act. Such qualifying third party indemnity provision remains in force as at the date of approving the Directors’ report.

Auditors

A resolution to reappoint Ernst & Young LLP as auditors for the ensuing year will be put to the members at the Annual General Meeting.

Directors’ statement as to disclosure of information to auditors

The Directors who were members of the Board at the time of approving the Directors’ report are listed on Other statutory information page. Having made enquiries of fellow Directors and of the Company’s auditors, each of these Directors confirms that:

so far as he is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the Company’s auditors are unaware; and
he has taken all the steps he ought to have taken as a Director in order to make himself aware of any such relevant audit information and to establish that the Company’s auditors are aware of that information.

Responsibility statement pursuant to FSA’s Disclosure and Transparency Rule 4 (DTR 4)

Each Director of the Company (whose names and functions appear on Other statutory information page) confirms that (solely for the purpose of DTR 4) to the best of his knowledge:

the financial statements in this document, prepared in accordance with the applicable UK law and applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company and of the Group taken as a whole; and
the Chairman’s statement, Chief Executive’s review and Finance Director’s review include a fair review of the development and performance of the business and the position of the Company and Group taken as a whole, together with a description of the principal risks and uncertainties that they face.

By order of the Board

Signature: Paul Taylor, Finance Director and Company Secretary

Signature: Richard Longdon, Chief Executive

Paul Taylor

Finance Director
and Company Secretary
26 May 2010

Richard Longdon

Chief Executive

High Cross
Madingley Road
Cambridge CB3 0HB

^ back to top