Directors’ Report
for the year ended 31 December 2007The Directors present their report and the audited financial statements for the year ended 31 December 2007.
Principal activities and business review
The principal activity of the Group is the supply of rental vehicle services. A full review of the Group's activities and a report on its business, strategy and likely future developments are included in the Chairman's Statement and the Business Review, incorporated in this report by reference.
Share capital
Details of the share capital of the Company and changes during the year covered by this Report are set out in Note 29 to the Consolidated Financial Statements. The rights and obligations attaching to the Company's ordinary shares are set out in the Company's Articles of Association. There are no restrictions on the voting rights attaching to the Company's ordinary shares or on the transfer of securities in the Company.
Results and dividends
The results for the year are set out in the Consolidated Financial Statements. The Directors do not recommend the payment of an interim or final dividend for the year (2006: nil).
Directors and their interests
The names of the Directors of the Company as at 31 December 2007 and those subsequently appointed appear in the Corporate Governance report. The Directors' interests in shares and options to purchase shares are detailed in the Remuneration Report .
Employee involvement and share schemes
Details of employee involvement are included in the Corporate Social Responsibility Report. Details of the Company's employee share schemes, including any provisions relating to a change of control, are set out in the Remuneration Report.
Donations
Charitable donations are detailed in the Corporate Governance report and in the Corporate Social Responsibility Report.
Post balance sheet events
There are no significant events affecting the Group since year end.
Payments to creditors
The Group's policy with regard to payment of suppliers is set out in the Corporate Governance report.
Financial instruments
The Group's financial risk management objective is set out in Note 26 to the Consolidated Financial Statements.
Purchase of own shares
The details of own shares held are included in Note 30 to the Consolidated Financial Statements and details of the authority given to the Company for the purchase of its shares are set out in the Corporate Governance report.
Substantial shareholdings
The details of substantial shareholdings are included in the Corporate Governance report. As noted in the Corporate Governance report, the Company has entered into a Relationship Agreement with s.a. D'Ieteren n.v. which holds 59.6% of the Company's share capital, details of which are summarised in the Corporate Governance report.
Appointment of Directors and Articles of Association
The Company's Articles of Association provide that the Company may appoint directors by ordinary resolution. The Company's Articles of Association themselves may be amended by special resolution of the shareholders. As explained in the Corporate Governance report one-third of the directors resign by rotation at least every three years. Details of the Relationship Agreement with s.a. D'Ieteren n.v., which includes rights for s.a. D'Ieteren n.v. to appoint and remove up to three Directors, are set out in the Corporate Governance report.
Significant agreements
The Group has entered into the following significant agreements which are subject to change of control provisions: (1) Trademark and System Licences dated 4 April 1997 for use of the Avis trademarks and operating system in Europe, Africa, the Middle East and Asia which can be terminated in the event that a major competitor obtains control of 35% or more of voting capital, whereupon associated agreements, including the Computer Services Agreement dated 1 January 1991 for use of the Wizard system, would also terminate. (2) Trademark Licence dated 11 March 2003 for use of the Budget trademarks in Europe, Africa and the Middle East which can be terminated in the event that a major competitor obtains control of 35% or more of voting capital. (3) A €580,000,000 Facilities Agreement dated 20 February 2006 which can be terminated in the event of a change of control. (4) €250,000,000 Senior Floating Rate Notes due 2013 dated 21 July 2006 which can be accelerated in the event of a change of control.
Disclosure of information to auditors
So far as each Director is aware, there is no relevant audit information of which the Group's auditors, PricewaterhouseCoopers LLP, are unaware and each Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Group's auditors are aware of this information.
Auditors
PricewaterhouseCoopers LLP have expressed their willingness to continue in office and a resolution to reappoint them as the Group's auditors will be proposed at the Annual General Meeting.
By order of the Board
Judith Nicholson
Company Secretary
27 February 2008
