Page 11 - Suncorp_Review

Suncorp Group Limited Annual Report 2010/11 9

6.5 Signifcant changes in the state of affairs

The Suncorp Group has moved to the next stage in its strategic journey. The business has been stabilised and there is a solid foundation for growth. The focus is now on executing strategic plans, simplifying operations and demonstrating progress against commitments. In January 2011, the Suncorp Group implemented a non‑operating holding company structure following shareholder, regulatory and court approval. This established Suncorp Group Limited as the listed holding company of the Suncorp Group of companies and enabled the Suncorp Group’s legal and operating structures to align. Suncorp‑Metway Ltd (SML) no longer operates as the Suncorp Group’s holding company, but continues as the Suncorp Group’s Authorised Deposit Taking Institution (ADI).  A single enterprise agreement was agreed and commenced at the end of February 2011. This provides a consistent set of terms and conditions for the Suncorp Group’s Australian employees.

The Suncorp Group sold its interests in Tyndall Investment Management Limited, Tyndall Investment Management New Zealand Limited and The New Zealand Guardian Trust Company Limited, thus supporting the Suncorp Group’s strategic focus of driving growth in its core businesses.

6.6 Environmental regulation

The Building Energy Effciency Disclosure Act was passed in 2010, and requires the Suncorp Group to obtain a Building Energy Effciency Certifcate (BEEC) for any building where the Suncorp Group plans to sell or sub-lease commercial offce space above 2,000 square metres.

The National Greenhouse and Energy Reporting Act 2007

came into effect in July 2008. The Suncorp Group will report emissions under this Act for the 2010/11 period. This is the frst year the Suncorp Group will reach the threshold for reporting.

The operations of the Suncorp Group are not currently subject to any other particular and signifcant environmental regulation under any law of the Commonwealth of Australia or any of its states or territories. The Suncorp Group may, however, become subject to state environmental regulation when enforcing securities over land for the recovery of loans. The Suncorp Group has not incurred any liability (including for rectifcation costs) under any environmental legislation.

7. Dividends

A fully franked 2011 interim dividend of $192 million (15 cents per share) was paid on 1 April 2011. A fully franked 2011 fnal dividend of $257 million (20 cents per share) has been declared by directors.

Further details of dividends provided for or paid are set out in note 4 to the consolidated fnancial statements.

8. Events subsequent to reporting date

On 22 July 2011, the Suncorp Group entered into a put and call option agreement with a potential purchaser in relation to the sale of the Suncorp Centre for $63 million.

The agreement provides the potential purchaser the right to exercise its call option to purchase the Suncorp Centre from the Suncorp Group; and the Suncorp Group the right to exercise its put option to sell the Suncorp Centre to the potential purchaser should the call option not be exercised within the agreed timeframe. When either the call or put option is exercised, a sales contract will be entered into, with settlement expected late 2011. The Suncorp Centre is classifed as held for sale as at 30 June 2011. Further details are set out in note 16 to the consolidated fnancial statements.

Other than as noted above, there has not arisen in the interval between the end of the fnancial year and the date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect signifcantly the operations of the Suncorp Group, the results of those operations, or the state of affairs of the Suncorp Group in future fnancial years.

9. Likely developments

Over the coming fnancial year, the Suncorp Group will continue with the run‑off of the non‑core banking portfolio, while focusing on the growth of its core banking, general insurance and life insurance operations. Over the next three years, growth is expected to be realised in three waves: –– from the signifcant changes made to claims and pricing in the general insurance business –– from investment in the bank franchise; and

–– by building scale in the direct life insurance business. Other than as disclosed elsewhere in this report, at the date of signing, the directors can make no comment on any likely developments in the Suncorp Group’s operations in future fnancial years or the expected results of those operations.

10. Directors’ interests

The relevant interest of each director in the shares, debentures, interests in registered schemes and rights or options over such instruments issued by the Company, as notifed by the directors to the Australian Securities Exchange in accordance with section 205G(1) of the

Corporations Act 2001 , at the date of this report is as follows:

2011   Fully Paid Ordinary Shares

J Story 138,803 I Atlas – W Bartlett 26,968 P Dwyer 20,000 S Grimshaw 24,314 E Kulk 20,173 G Ricketts 23,654 P Snowball 1 966,123 Dr Z Switkowski 201,599

1 Includes 900,000 shares held by the trustee of the Executive Performance Share Plan. Benefcial entitlement to those 900,000 shares remains subject to satisfaction of specifed performance hurdles.