Good afternoon, ladies and gentlemen. Good to see you. As you've been able to see in this agenda, this afternoon, we will be discussing amongst other items the Annual Report 2014, the auditors report, our external auditor is present here today to that effect and the final dividend. Given that Mrs. Berzelius' current term of office expires this month and as this will be Mr.
Buff's final meeting as a member of Supervisory Board before he steps down. At the end of the month, we'll be addressing a number of Supervisory Board appointments. First, some announcements as usual. We would like to kindly request you to switch off your mobile phones. Don't switch off your hearing aids.
No need for that. The official language of today's meeting is Dutch and you can follow the meeting in the English language. We have headphones available is Dutch and you may raise your questions either in English or in Dutch. As you know, early shareholders and their proxy holders, ADR holders, use of factories, holders of pledges on shares, members of the Board of Management and members of the Supervisory Board have a right to address the general meeting today. Please address your questions to me and use microphones here in the aisles and clearly state your name and place of residence.
Should you be unable to reach the microphone placed in the aisle, you can ask the hostesses to bring you a microphone. Please be concise in your questions and to raise all your questions on the same item of the agenda in one go. Please be concise and raise all your questions in one go. Why am I saying this twice? You probably wonder.
So please be concise in your questions will be answered by one of the board members, Board of Management, Supervisory Board questions on the audit report and the external audit process. To that effect, we have our external auditor of KPMG present here today, Ms. Zerfon Leyva and Niemeyer will be present here today and they will be able to address such questions. The gentlemen may be able to stand so we can see them. Thank you very much.
Before we start, I'd like to ask Ms. Van Meeer, our Corporate Secretary to address some procedural matters. Good afternoon. For the voting process, you will have received a handset chip card and voting card. The voting card also gives you concise instructions on the electronic voting system.
Should you have any questions about the voting procedure, one of the hostels will come and help you should you raise your hand. Shareholders have been given the opportunity to vote by remote voting through ABN AMRO and Mr. Kirk's civil law notary of R and M will cast the votes as a proxy holder. This meeting Wednesday, March 25, 2015 is the record date. And this entails that for this meeting, the following people are entitled to Carlsberg shareholders were registered on that date.
An explanation of how to register prior to the record date has been explained in the notice of the meeting. It is acknowledged that the shareholders have been convened in accordance with the relevant provisions in the articles association. The notice and the agenda were published on the Axo, Nobel and Securities info websites. A copy of the advertisement, a complete agenda and notes of the agenda have been placed on the information desk here today. So the meeting has been properly convened and is entitled to adopt legally valid resolutions.
The Chairman will be informing you how much capital is represented here today and the number of votes that can be cast. Thank you, Ms. Van der Meer. Proceeding to item 2, the report of the management board on the financial year 2014. Those of you present here today have been able to read and review the annual report for financial year 2014.
I would like to ask Mr. Buchner to take the floor and to inform us of the proceedings of this past year. Thank you, Anthony, and thank you and welcome, ladies and gentlemen, shareholders. Welcome. It is a great pleasure to stand before you to present the year 2014 for AkzoNobel.
A lot has transpired in this year. It's been a very busy year, eventful year. And I can highlight a number of items and issues here today. And that in the market in which that hasn't really grown and despite the fact that we have done a lot, we and it's been a tough market, we have been able to show good performance, something our staff members have worked very hard at. Looking at the first slide, actually what you see is something you'll recognize about €14,500,000,000 in revenues last year 2014.
The currency effects were to our disadvantage. 47,000 just over 47,000 employees 44% of our revenue is generated in our high growth markets. These high growth markets aren't growing as quickly as before, but it is outside the developed markets that we do generate a great deal of our revenues. We're an enormous producer of paints coatings and specialty chemicals And we are a leading producer producer in all these respects. And we have incredible leadership positions in many of our markets products and services.
You see the breakdown here in terms of revenue and also in terms of profit, which here is reflected in as operating income and also the areas in the businesses that we invest in. And this gives you a good picture of what AkzoNobel has achieved by year end 2014. What is it that we have achieved in 2014? Clearly, we have shown that the strategy of organic growth and operational excellence as we call it is actually very successful. We're working very hard and improving many, many things, but it has become clear that AkzoNobel quarter after quarter has been able to show better performance.
And by year end 2014, it was the 7th consecutive quarter that we were able to show a better performance than a year before. And yesterday, we added yet another quarter to this excellent performance. We are implementing major changes in AkzoNobel. We have introduced new processes both in the three business areas the coatings, specialty chemicals and decorative paints, but also group level. Corporate level, we're working on entirely new processes.
The first results were already visible in 2014. We're absolutely sure that in 2015, we will constantly be showing these results. Something that we're very pleased about is that in 2014, once again, we ranked number 1 in the Dow Jones Sustainability Index, which is one of the most respective indexes. In our category alone, about 40 companies are compared with each other. People don't look at the brochures.
They don't look and take into account what it is that you say, but they look at how you behave, what your conduct is. And over the past 9 years, we see that we've been in the top 3, which is fantastic and just goes to show that sustainability is extremely important in our company. And this, of course, thanks to a great deal of dedication of our staff. We have an initiative human cities we'll be talking about that later on. And we're on track to deliver the results and the targets that we've defined for 2015.
So we are getting closer and closer, but we're still very confident and trust that we are absolutely on track in this respect. Looking at the markets of AkzoNobel, you'll see 4 marvelous pictures. Top left hand side, the buildings infrastructure. This is what we call buildings and infrastructure, but it's building, it's renovation as well as new buildings and new construction. These are buildings where people work in or live in also infrastructure bridges or other forms of infrastructure.
This is our largest segment 42% of our revenue. And obviously, it is a segment that has determined great deal of the dynamics in the market. It's been tough in the U. S. And in Europe.
And in China, we see that this same market is picking up. There are issues and this is a market that will require a bit of time to recover entirely from the deep crisis 2,008, 2009. Anything that flies, drives or sales can be served by AkzoNobel Coatings in some way or other. That is a sector that accounts for 16% of our revenues quite visible for most people. And the same applied to consumer goods whether it's salt, table salt or coatings, the table people enjoy their foods at the table.
So consumer goods, including mobile phones and undoubtedly, you'll all have a mobile phone. And most people in this world touch an AkzoNobel product without even knowing. And that would be particularly in these 2 segments, consumer goods and building, obviously. Industrial segment is the number 2 segment, 25% of our revenues and many of our specialty chemical products go into this segment. And this segment behaves slightly differently as compared to the other segments, but is doing very, very well for AkzoNobel.
Here you'll see the 42% revenue transport, 16 percent consumer goods, 17% and industry, 25%. So if we travel the world, you'll see that 2014 Europe hasn't really been able to recover in a substantial way. And the problems that we've seen occurring in Russia in August with all the implications have made things tougher for the second half of the year. Everybody had hoped that Europe in the second half of twenty fourteen would start growing again so that everybody would be able to benefit from that. This is something that never happened.
But now what we see is that there is hope again. We hope that this will happen in 2015. We're not seeing it yet. And we still see concerns in Eastern Europe and some issues in Western Europe, particularly in the segment that you see at the top right hand side. But I think that things feel slightly better than 1 or 2 years ago.
But really, we're waiting for the growth that people are hoping for. If we now go to Asia, we see that China is slowing down quite clearly, especially as compared to previous years. China has experienced an excellent growth process over the past few years. So it's not surprising to see a slowdown. But obviously, good thing that we have a strategy in which we're trying to improve ourselves.
We're not going to wait for the market that is going to help us. And you've seen this in the performance of 20 14. This is a strategy that is bearing fruit. You see this in the numbers. You see it on the sales side that we have negative figures here, but this was particularly driven by currency.
2014 is contrary to 2015, we see that the currencies were a headwind, not a tailwind. In the Q1, euro became weaker as compared to all major currencies in the world, the dollar, the pound, the Chinese currency. 2014, it was still a negative effect on our revenues. Despite the fact that the effect was negative, we were able to improve our profits. And particularly, if you look at the profit that we generate inherently, we improved by 20% as compared to the previous year.
And if you then take into account what the additional effects were that we saw in 2014, you see that in 20 13, we had positive non recurrent effects. In 2014, we had negative incidentals or non recurring effects. But the performance of the company, we should really zoom in on the second graph on the left hand side. That is where you see the 20% increase of operating income. Cash flow also improved by 3% very, very healthy signs I would say that we are well on track.
Here you see you don't really see it in the numbers, but you see that in profitability, the profitability 2014 was 6.9%. And here you see it, if you adjust for incidentals at 7.5%. And then if you adjust for restructuring costs that we took charge of in 2014, we're in excess of 9%. Of course, we will always have incidentals and restructuring effects. But you see that the underlying revenues of AkzoNobel has improved quite consistently.
And last year in volume side, there's been a growth that was offset by headwind in currency effects. And we see the opposite in the 1st few months in this year. This is what we have accomplished and the actual goals that we have for return on sales and return on investment, which is actually profit on capital invested and also our targets are goals regarding the balance sheet of AkzoNobel the way we want to be healthy. The net debt to EBITDA ratio net debt under 2, we're doing better than that better than our goals our targets. And we're absolutely convinced as a management team present here today.
We're absolutely convinced that we're on track to hit these targets. Here you see the AkzoNobel cash flow profile. This is something that was quite worrying at the beginning. And just to compare things in a simple way, the left hand side should be higher. The dark blue are our operational cash flows.
And from that, we actually want to create a situation in which any liabilities we have, any obligations we have can be paid with our operational cash flow not by divesting, not by doing anything else know that we can foot the bill ourselves from our own operational strength. And the dark blue section in 2012 was less good. We saw that in 2013 as well. 2014, we came close. We came close, but not entirely slightly cash negative in 2014.
We're convinced that in 2015, we will be able to hit a cash positive level. And that way, we'll be able to fund any liabilities we have from our own operational cash flow. We have been able to reduce our costs, costs of borrowing money in the market. In the past, we had bonds in which we had very high interest percentages that we needed to pay. And prior to that 2013, twenty 13, we paid in excess of 8% in terms of interest.
Now these interest percentages have gone down for everyone. For us in 2,000 and seven, 2008. They were extremely high and the 7% bonds were replaced by replacing them or paying them off and not issuing them again, but also by introducing new bonds with lower interest our average funding costs are clearly being reduced. And you see this in these low graphs, low buzz. We're constantly capable of reducing our financing charges and costs.
But on the other hand, we're trying to improve our operational performance and this is an excellent balance. And we're doing this with a strategy which we introduced in 20 13 the beginning of 2013, very important strategy the first results of which became visible in 2014. So actually this is a very straightforward way of depicting the strategy. It's a strategy of organic growth and operational excellence and it's a nice sleek way of carrying out your processes, but also managing organic growth, growth that we generate ourselves along with sustainability, which is part and parcel of everything we do within this strategy. The strategy has been set out in this block.
The behavior principles which is the foundation core principles and values very important. And then we look at what we do the strategic focus areas, the processes, capabilities, the real strategic areas that we want to focus on. Now this is a strategy that we are delivering right now. We're in the 3rd year and we have set our objectives for 2015. That doesn't mean that this is going to change.
I think that we're going to continue on the path of this strategy for a while now. But these are the goals for 2015. And as I said, the entire executive committee is absolutely convinced that we are on track and that these goals will be achieved. We have done a great deal in the different areas and this presentation is not going to do justice to the work our employees, our staff has done in this change process of the individual operations, paints, specialty chemicals and coatings and what it is that we're doing at a group level at AkzoNobel. In decorative paints, we have developed an entirely new way of working.
There are certain elements that have been pushed by the market, but other things have been centralized procurement planning of the plants, supply, logistics and we've also managed brands, brands of our decorative paints and the centralization linked with increased freedom in the market itself to serve the market. This is a new model that we moved towards in 2014. And of course, the old model was managed differently according to the different countries. And this is really generating synergies. And we have a different way of organizing things, clearly different way of organizing things.
We have also been able to take out layers as we've done in Performance Coatings. We clearly see this reflected in the Performance 2014. Performance Coatings, the Coatings department of AkzoNobel has also experienced an extraordinary change by removing a number of layers from the organization of a flatter organization being closer to management being able to respond much more with much more agility. And of course, we're still going through this process. We believe that it will take until the Q2 2015 until we finalize everything.
But all these three divisions or business areas have gone through fundamental business changes. And the same applies to the group head office. We call it Global Business Services here. And here we have introduced a fundamentally different way of managing and supporting the different functions and businesses. And the combination of this large and substantial transformation process is reflected every quarter in our performance.
But it's not only about transformation plans and processes, it is also about people, people at AXA Nobel, people who do everything in their power who have an incredible degree of commitment and dedication and have shown this throughout the reorganizations. The transformation we've lost many, many people. We've had to take leave of many employees. That always hurts. And the team at AkzoNobel has continued to fight to focus on core principles and delivering on the commitments and focusing on clients.
This is what we require from our people, living up to our commitments, the passion for excellence and the fact that we have to do everything together and we absolutely want to win together not as individuals. Living these values has been so incredibly important to on the one hand introduce and carry through the transformation process and on the other hand hold on to the heart and spirit of AXA Nobel. And I was already talking about human cities. In 2014, we introduced it. And I'm going to say very little about it.
I think it's much better for me to show you some footage that will explain itself.
Estimates suggest that by 2,050 around 70% of the world's population will live in cities. Coping with the demands that this will create is one of the biggest challenges of our age. At AkzoNobel, around 60% of our business goes into buildings, infrastructure and transportation. So we have a big role to play in helping cities to meet the challenge they face. That's why we've introduced our Human Cities initiative, which was officially launched at the 2014 Venice Architectural Biennale.
It's designed to help the world cities become more inspiring, more livable and more enjoyable places for people to live and work. We're focusing on 6 main areas where our products and expertise can make the biggest difference: bringing color to cities, embracing urban heritage, connecting people and places, encouraging education, promoting healthier lifestyles, inspiring more sustainable living. We've already made great progress with human cities, building on work we've done in Bergamo, Italy, at Gardens by the Bay in Singapore, and Malacca in Malaysia, to name just 3. As a progressive company, we're also working closely with a number of influential partner organizations and NGOs and have already made a commitment to the Clinton Global Initiative, which established a partnership with a 100 resilient cities pioneered by the Rockefeller Foundation. It's just one of many steps we're taking to help cities across the world become more human.
If you want to know more, you can have a look at the year report and a wonderful, beautiful introduction cities initiative. And I do believe it has a very positive effect on the image of AkzoNobel as a whole. It determines the image as a whole. And I do believe we can set this forward. And this is something we do not just alone but with our staff and with external companies, with NGOs.
They help us to make human cities a reality. And they help us to make those real and essential. Sustainability is something that AXA Noble has kept in highest team for a long time, including all my predecessors. A lot of energy has been devoted to that. Sustainability is an integral part of everything we do.
We become number 1 in the Dow Jones Sustainability Index. This is a wonderful performance. And in this presentation, I cannot cover everything that HEXA Noble staff do that to encourage sustainability. This is just the way we work. It is quite clear that people outside AXA Noble recognize this, the praises, the orders and they put us on number 1.
And this is something we want to keep doing in the coming years and maybe even decennium. Having a brief glance at different parts of our business, decorative paints in 2012 was really having hard time because the building market both in Europe and America and other countries was going through a hard time. So it was not an easygoing. As a consequence, all the principles, all the changes were introduced step by step in decorative paints brought closer the better revenues and profitability. Our renovation and the way we approach our clients, we keep improving that.
The pain business depends on the renovation market. And you see that on the pie chart that it looks so good. So the part of the business is renovation, so not building new premises, but renovating the existing one. In Europe, it is a bigger market, while in China, we concentrate more on building new buildings. So that's why we have 50% of in Europe and the rest in the emerging markets.
So this reflects the growth in the last years. The emerging markets, the growth markets are slowing down. Later, they're plateauing off. And in Europe in 2015, it will be keeping up speed. It will be tight going in those markets, so we cannot expect any presence on the decorative paints market.
Therefore, we can only hope that the results, in spite of everything, can become better. A brief video film here as well to illustrate what I've been saying.
As the world becomes increasingly urbanized, how can we make sure that the cities we live in have meaning and provide people with a sense of place and space? At AkzoNobel, we believe that balancing old and new is key to creating more human cities and protecting our heritage. To fully appreciate the positive impact that safeguarding the past can have, you only need to look at Malacca in Malaysia. Declared a UNESCO World Heritage Site in 2,008, the town's unique architecture is being preserved through a partnership with Axonobel's Dulux paint brand. The project which will run until 2019 involves Dulux providing technical and design support as well as supplying suitable paints and coatings to help preserve the uniqueness and originality of the colors on 26 heritage buildings and monuments.
Once a thriving center for trade and cultural exchange between east and west, Malacca is a remarkable example of an historic colonial town. It's easy to understand why local residents are so fiercely proud of its history and remain keen to preserve its architecture and culture.
My name is Serge Jardin. I'm French. I am living in Malaysia since the last 25 years. Malacca have attracted the merchants from all over the world. Each of this community, these traders bring with them a little bit to an influence architecture, cuisine, costume, the language and is what we can still see today.
I think is what UNESCO wanted to preserve this unique encounter of so many different culture in the Port of Malacca. The story is a living process. Each stone will tell you a story if you take time to listen. That's the reason it's important for the Malaysian to preserve that heritage for the younger generation to come to
learn.
If we have a look at the Performance Coatings department that you see that the revenue exceeds €5,500,000,000 and the profitability is almost 10%. And as you see, the restructuring costs were quite sizable, and they're already included into those figures. The whole segment was quite broad, and it covers a lot of different activities. And we're talking about buildings and transportation. However, we do cover consumer goods and some industrial parts.
So Performance Coatings is the business area that covers all different kind of segments. Geographically, it has been an even spread all over the world. A lot of activities were reported and it reflects a lot of the way we work, fewer layers and straight reporting lines. People have worked hard to achieve that. And we'll talk about performance curtying more and performance curtying are reflected in such a way that the costs are reduced and the flexibility has been increased.
And another video from here and just show what kind of different accents we have. And this is the wonderful part of Accent Noble and of our geographic presence and the clients, the variety of people we come across every day.
Every day, more and more people and goods need to travel around the world. Which means that global demand for safe and reliable transport has never been higher. We rely on modern transportation hubs like airports, bus terminals and train stations to connect our cities and keep modern life moving. They help cities to function properly and ensure that people and cargo can get around quickly and efficiently. This places big demands on all areas of transport, ranging from daily wear and tear to the environmental challenges such as weathering and corrosion.
AkzoNobel's high performance coatings products are designed to protect and enhance vehicles, buildings and transport systems all over the world. We keep airports in Hong Kong, London and Brazil safer and more comfortable for longer. And we protect trains and metro systems in Dubai and Shanghai. As our cities keep growing, we're helping to make transport more sustainable, better looking, and more affordable for everyone. At AkzoNobel, we're committed to meeting the growing demands of a fast changing world and making our cities better, more human places to live.
Together with our partners, we developed a concept to make cities more human. And it's very nice that work not only with the local actors, but also mayors of those cities come to us and they want to share those concepts. And they would like us to make some parts of their cities more human, nicer where people feel at ease. So we have a different partner in dialogues, different from before and before we launched this initiative, Human Cities. Let's have a look at the Specialty Chemicals, and we see the profitability has improved and in 2014.
So we have very good results. So return on sales, 10.4%, and this is a big step forward compared to the previous year. And the return on investment is 14.8% and used to be 8.2% in the past. So you see the leap forward has been considerable. So this is the continuous improvements of both our supply chain and customer service.
And you can see as a shareholder the results of that and the figures, again, a brief visual illustration.
Over the next few decades, the world's population is projected to reach 9,000,000,000 people. This will lead to more and more of us living in energy and resource hungry cities. If we're to meet this growing demand, we have to learn to do more with less. AkzoNobel is committed to developing sustainable solutions that promote efficient and sustainable living. That's why we put a strong focus on driving resource efficiency and lowering energy use.
How does this benefit cities? Well, a great example is our fast increasing production of HPMOs, which are used in the manufacture of
LEDs.
They also open up exciting new They also open up exciting new possibilities for smart urban lighting projects, making cities safer, more colorful and more enjoyable places to live and work.
Human cities is a very important initiative. Therefore, Ford has emerged 4 times here in the EBITDA footage and each business area has an individual dedicated program in support of that. And Specialty Chemicals focuses on that, including the product we deliver and our own energy consumption at ExxonMobil facilities. Summing up, I would say that in 2014, it has become clear that a lot of things were achieved until now are reflected in the figures, in the year figures and in our reports. We have improved profitability and improved profitability if we look at the difference at different capital areas.
In spite of the fact that the market is very complicated, we are undergoing a transformation. A considerable part has already been achieved. But in the coating department, we need to see the results because delays we've taken out have improved our overall structure. The launch of the human cities initiative has delivered a lot of positive reactions from the outside world. And the absolute focus on sustainability has been the greatest team.
And in 2014, we kept developing that. So in fact, we found the possibility to set forward this initiative bringing to the wonderful results. So we're on track to deliver 2015 targets. I've already mentioned that. So before I continue with the conclusions of the presentation, I would to thank all of our staff who made all these results possible.
I would like to thank the clients who have been extremely loyal to us, and they do assist us in innovating and finding new product. I would like to thank you as shareholders. And of course, I would like to thank our colleagues and Uwe. Thank you. Yes.
Thank you very much, Tal. Thank you for your presentation. And the registration of shareholders closed at 14:15 and the attendance list has been verified. And the share capital is 349,000,000,300 and a 243.856,000,000 and it gives the total number of the boats as 174.6 to 1928, and the level of attendance is 4 70.73%. A copy of Mr.
Buchner's presentation will be available from the information desk free of charge. I would like to invite you now to ask your questions relating to financial year 2014 and about the report of the Board of Management. As I said earlier, please set your questions relating to the gendered item in one go. And also, the corporate governance and the strategy item can be covered now. If you have questions about the remuneration policy, please keep them till agenda item 3A.
And also questions related to the audit report will come after that. So who would like to start the ball rolling? So the lady yes, yes, it's over there. Could you please state your name? Thank you very much.
I'm Carola von Ramuh. I work at Raveco and I'm representing also N. M. Menzies and Gautzen. First of all, I would like to thank you and to express my compliments of the year results of 2014.
We see that the efficiency in your management also gives results. You see the profitability growing and the results we can only complement that. So I'd like to congratulate it with the Dow Joint Sustainability Index and your performance there, which is incredible. So the results have a good quality. We understand that ExxonMobil has shown the value creation per different segment.
And they show the reports also. The pulp and Performance Chemicals business units in Brazil has been and Brazil has been covered from 4 different aspects. My question is as follows. We see that 2 out of 3 sustainability targets were performing less. So the carbon footprint and the high performance chemicals performed worse.
So can we imagine that the results in the coming year would be improved? And Oxenorba also was confronted by external fraud case in the U. S. Amounting totally to the 53,000,000. So we understand that the steps have been taken by AXA Nobel to prevent similar frauds happening in the future.
Until now, we haven't seen a lot of transparency in that area. So are you planning to be more transparent as a result of the investigation into the fraud? And if possible, also would to have the improvements covered concerning the management system and the so called lessons learned from this case. Okay. So you've got 2 questions.
The first one covers the sustainability index, where we've seen certain issues. So Mr. Buffier, so 2 out of 3 targets were reported in the sustainability area at this peak. I forgot So there are 3 targets talking about sustainability. 1 is going quite fine, and we've reached the target of 2020.
And we put all our effort into reaching those targets. And 2 others in 2014 have plateaued off or haven't even taken a step backwards. As a company, of course, you off take your electricity, take the power from the local parties. And you're trying to save all the time on the one hand, But if a certain country switched over to coal or to another energy mix, you cannot compensate straight away. So this is what you've seen.
This is the so called CO2 footprint reduction. So this target has been doing worse than we had expected. And internally, we've done our homework and we've achieved some savings. But for example, in Germany, Germany leads certain power areas, and the Netherlands have been more coal oriented in energy production. So we couldn't influence that.
So we had to work hard on our own efficiency to reduce the carbon footprint for us and for our partners. So we see that the whole chain is much broader than just the CO2 emissions. And the CO2 is also part of the Resource Efficiency Index, which is quite a normative index, which we've set for ourselves. And because it's happened a certain step back, We see that in 2014, we haven't improved. And our committee have analyzed this in quite a detail, and we need to have a closer look at what we can do to get this target anyway.
And we're doing our best to improve this particular area. But the targets remain the way they are. Oh, yes, yes, they remain out there the way they were set. And then the fraud in Chicago, this particular case, so maybe I can add that the Financial Director, Nelis, can you maybe add something, the CFO?
Yes. So on this fraud end of 2014, the company has been subject to an external fraud in one location in the United States. As soon as we detected this fraud, we took immediately action to contact the appropriate law enforcement authorities and also to name independent legal and auditors adviser to look at the case. We also very quickly informed the market. So we've been transparent announcing with the press release that we had this external fraud.
We have looked intensively at the case. We have been able to confirm that it was an isolated case in this subsidiary in Chicago. And then we have also been able to know that the amount was limited. And we took the all amount loss in 2014, which at the end amounted to €51,000,000 So I think we've been transparent in that. We are now focusing very much on recovering the money to try to find who has done that and to recover the funds.
And this is really the concentration. You need to understand that this is what we think is best for the company and for the shareholder is to be able to recover the money. And that's why we have not disclosed more detail about the food, but we have been very transparent about what happened. We've also been able to confirm with our extensive analyze that we had a customary and proper control in place, but they were breached. Of course, now what we're doing on top of trying to recover the money is to increase the awareness with the company.
So we have done extensive training in all our subsidiary to ensure that people reinforce their carefulness.
Maybe something about lessons learned?
I think in term of lessons as we know right now more and more company are facing those type of risk of being targeted. And that's why we have, as I mentioned, reinforced the awareness of people around the world about the fact they need to be very vigilant. They need to follow our procedure, our control. As I said, we are look at it and we have a proper control in place. But of course, we're also looking at reinforcing controls in certain area.
But our framework control, which is disclosed in our annual report, has been assessed very strong. Thank you.
Right. Who would like to take the floor next? The gentleman there in the back. My name is Koos Henning. I'm from the ZEB, the Dutch Association of Investors for Sustainable Development.
And I have several questions. I would like to bundle them all together, represent 45,000 shares. So my first question is about the volumes and the price mix. We've seen that the profitability has improved and we've seen that with ExxonMobil and we only support that. But in 2014, the sales have reached a small plus and the price mix is 0.
And in Q1, the volumes have decreased and they couldn't compensate that for the price mix effect. Could you please highlight why is it so complex, so difficult to compensate for the sales volumes either by the higher prices or the pricemix? Next, the lower oil prices. So first, what is your vision on the whole issue? And here, we namely think that it's important to highlight if Oxenovil now gets in a more difficult situation if the price goes up or down.
So what kind of impact do you expect? Moreover, you were talking about the growth markets and the growth markets are experiencing a difficult time. So we see the spread per reach in the geographical spread. Could you maybe go into more detail on the geographical spread in growing markets? So my next question is, so we see the explanation of return on sales is on the operational loss from corporate and other.
And those losses have grown in the last years from minus 170,000,000 in 20.11 to minus 314,000,000 in 20.14. Could you please explain these figures as well? Okay, right. Thank you very much for your question. As you know, we're not talking about our being us being lucky about you being lucky and about everybody's happiness.
So sales volumes and prices, could you maybe explain that? So in 2014, the volumes have grown and the markets have already pointed out have given us very little tailwind. So in 2015 in the Q1 we'll see thing. But we're not talking about 2015 here. And all geographic areas, we see just like in North America, which is a growing area compared to the year before.
All the other regions have remained the same growth wise or they're growing less than in other areas, South America, Russia, because the prices have grown less, as well as China. So this is the result applying to the volume growth and the markets have remained challenging. Once again, the reason for us having such a good time is because we did not rely on those markets helping us out. We did not expect that. Well, talking about oil, if I may, so it has two effects on ExxonMobil.
So we have clients from the oil industry. Those clients have invested heavily or they have frozen the investments or they restructured and delayed. We don't know if it is a permanent delay or a temporary delay, but some of our clients, companies see the market becoming weaker because of the oil prices and they purchase less from us. This is a slow going reaction. On the other side, we buy a lot of products which are oil based.
And in that area, we expect partial effects. But we need to be quite clear that the clients know that the oil prices go lower. And the clients would say, you know, we need to have an arkon effect. This has not been really thought through because the oil prices have been on this level for just 3 months and a lot of people are discussing and analyzing the situation and who would feel the greatest impact. We at HEXO Nobel observe things.
We follow the discussion. We take quite an active part with our suppliers about that. And we do realize it can have a great effect on. But it is a very complex structure from the point of view of clients and suppliers. And this is these are parts of the puzzle, which are connected to each other.
And we do see certain movements in the pricemix, what you talked about because the oil price are part of that? And the last part, maybe corporate cost, Melissa, maybe you could take that such as EUR72 million to minus EUR314 million. Could you maybe take this question?
As I just mentioned before, in 2014, we have been subject to this fraud case, amounted to €50 1,000,000 and this was recorded in the corporate costs. So that's explained the variation. Globally, as Tom has mentioned, we're working really on transforming the function and therefore our costs are going down. So the increase is unfortunately due to the loss linked to the food. Thank you.
Okay. Wimarg Nomier, Edward Vlaehner of Greater Handepunst.
I would like to take the floor about this agenda item. I hand over there. Yes, Mirai Eirama. I'm from the Dutch Association of Investors for Sustainable Development. So we have 70 institutional investors, 600 private and 16,000,000,000 investments.
I would like to congratulate AXA Noble with the results. It is inspirational. It is the source of hope that the planet possible has been drawn as a plan to create more value. And what we see is that your targets and go premium solutions in 2020 has almost been reached. So it brings about the question, do you think that this ambition needs to be fine tuned?
In your report, you say that the eco efficiency in 2015 needs to be 4 times better. It may be high time right now to increase your ambition in eco premium. And can you commit? Can you improve the targets? What are the barriers?
Next, we see beautiful ambitions and we see beautiful targets, which we're trying to reach. However, it's not quite clear how, what is the way ExxonMobil has chosen to achieve this. Would really appreciate more information and more specific targets about garbage and the World Business Council for Sustainable Development has also appealed to everyone to achieve a 0 waste level by 2015. Having said that, I would like to express my appreciation of the Renewable and Sustainability Index, but we do need some targets on the renewable data sources. Do you have plans in that area as well?
All right. It's a number of questions actually. Can we become more ambitious in thereof eco targets looking at the way we're going right now? Well, eco premium targets, it's a very good English translation for projects that have certain competitive edge based on the sustainability for our clients. We can do a lot with our energy sources, but we can make products which bring about positive effect for our clients and can also become a competitive edge for us.
We are a leader in a lot of innovations. But if you're standing still for a year, a lot of people want to catch you up. And it's very easy to copy other people, much easier than to renew. And the Eco premium solution is not standing still. And if we need some more time to bring about innovation, if we want to take a breather in innovation, then those percentages we're losing.
The 3% or 4% are just taller for us because this is a very dynamic process. And as we've just explained, the targets are still very strong because we analyze a great number of criteria also concerning our competitors. And if we say, well, there are targets that need to stay at the same level, we cannot keep changing them. And the eco premium solution is the target, and we don't have plans on short term to change that or to replace them. And what about 0 waste target?
Are we planning to adopt new targets? We are participating in the World Council of Sustainable Development and 0 waste is a part of that overall program if our operational efficiency is implemented. So we have different targets in that area and different paints and the coatings and special chemicals have done a lot to diminish the waste. And not very much has been brought to landfills. And of course, the production, the manufacturing process has a lot to do with that.
We have internal targets. And those internal targets have not been announced to the outside world because we have our financial targets and we have a great number of sustainability targets. And we have presented them and we have committed ourselves to that. So it is intrinsic to our work. But those are not short term targets, I must say.
Right, right. Any other questions about the report? But you had a question, didn't you? Yes. I was just curious.
Are you going to publish those waste targets in the coming future? And I have also the complaints procedure question. The point is that our organization, the Dutch Association of Investment Sustainable Development appreciates this P cup method, but it is aimed at the internal process, but if there are complaints from the society or from the NGOs, they're extremely important. So I was wondering what kind of mechanisms are implied in your organization to deal with those complaints. Do you have any kind of procedure to handle the complaints from the outside complainers?
And my last question is about taxes. Why can't you report country by country about the taxes? Because taxes are our own common responsibility in any society we're present at. Let's start with the taxes. And Elyse, it's up to you.
Could you maybe say a few words about tax?
Yes. So our tax rate is currently 29% in 2014. And for 2015, 31% for the Q1. We are a good citizen paying our tax, and we disclosed in our annual report our effective tax rate and the amount of tax we pay. Nevertheless, for the country by country, we're thinking that providing this amount of detail will provide to our competitors a lot of information about the actual results we're making in the different country.
And therefore, it's more for the competitive disadvantage that you could create that we're only disclosing it. But for the rest, I think we're very transparent overall on the information we're providing here in Oilport. Thank you.
Then the Klacht approach, Jure?
And the complaints procedure next. Yes, we have quite a transparent complaint handling procedure, which is quite a low threshold, both for our staff and outsiders. So they can come to us and put forward a complaint and this is a functioning procedure and we always take them seriously. It is an institutionalized process in ExxonMobil running quite smoothly. It shows quite clearly that people make use of it.
And at this moment, we don't think we need to improve that considerably because the transparency is quite high and people make use of this procedure both internally and from the outside. Everything depends on the issue at hand and we can start discussing certain issue both at a meeting or personally. AkzoNobel is quite open and transparent for both its own staff and outside world like NGOs. I mean those NGOs and members of the public who want to tell us if something goes wrong. Who wants to take the floor?
No one? I'd like to close this agenda item. And thank you very much for the compliments we've received here. It does not happen very often. But if you have any compliments, they're always welcome.
We're moving on, discussing the implementation of the remuneration policy. And it's my pleasure to give the floor to Ms. Baldov, who is the Head of the Remuneration Committee. She will present a report on the implementation of the remuneration policy in 2014 as laid down in the annual report. Sari, the floor is yours.
Good afternoon to all of you. But I will very briefly go through first how our remuneration package is built, if I could get that slide on there. Here we go. So the remuneration package of the members of the Board of Management consists of base salary, as you can see there, performance related short term incentive with share matching opportunity, performance related long term incentive in the form of shares, post contract benefits and then the other benefits. I'm not going to go deeper into details with this because there's not been changes with regards to this policy from last year.
The only point I sort of the only thing I will point out here has to do with the long term incentive. And there, you see the 3 performance measures, total shareholder return, return on investment and then sustainability index. And these are valid for the programs since 2013. But for the series 2012, 2014, we had 2 criteria and those were total shareholder return and sustainability with fifty-fifty split. The reason I mentioned this is that when I come to implementation of the policy that was the criteria used there.
So if we then turn to the implementation of the remuneration policy in 2014, First, I'd just like to mention that to ensure that remuneration is linked to performance, a significant proportion of the remuneration package is variable and dependent on short and long term performance of the individual board member and the company. The implementation of the policies described in the annual report on the pages 130 and 134. And if I just briefly summarize some of the aspects here, as I already said, objectives for 2014 for the short term incentives remained unchanged and payout for that program is well aligned with the company performance. And when the Supervisory Board reviewed company 2014 performance, there were no facts or circumstances that would have required adjustment of the STI payout. I'd like to point out though the fraud case in the U.
S. Has already been discussed here. So I would like to point out that that impacted in a significant way the financial outcome the outcome of the financial metrics in a negative way. Then for the long term incentive, as I already said in the 2012, 2014 series, the criteria were total shareholder return and sustainability index. And even though the company's ranking in the relative total shareholder return index moved up by one place.
This did not result in payout. So the payout for that was 0. And then for the 3rd consecutive year, the company ended up, as has been mentioned here already, in the 1st place in the sustainability ranking. And this resulted in an award of 82% of shares granted. And then finally, just one final comment.
So the same criteria that were used 2014 are also being used in 2015. But during this year, the remuneration committee will proactively review the remuneration structure and incentive criteria in view of what is needed and relevant beyond 2015 when we go further into the future. And this both in terms of alignment with the company's strategy from the point of view and then also from the point view of implementing remuneration at the media levels of external market as is defined in our remuneration policy. That's what I wanted to say at this point and I'll be happy to take questions. Thanks.
So Danquiel, Sari. Seidenfra.
Thank you, Sari. Are there any questions? I can confirm that there is one question from the lady in the front. We actually have 2 questions. Well, first of all, unfortunately, we see that AkzoNobel still gives variable pay in performance below the median.
But we would like to call on you when you review the remuneration policy to implement a different policy in this respect. I'd like to hear from you. And you also said that the fraud case had a negative impact on the financial targets. Could you be more explicit? Did it also have an impact on the personal targets of the members of the Board discretionary or not because the fraud took place under the ultimate responsibility of the board obviously.
Chairman, the latter is clear. It has had an impact on all forms of remuneration or quantitative remunerations because it's a very quantitatively focused remuneration package as you've been able to see in the explanatory note. So indeed the answer is yes.
Paying below the medium, sorry, maybe you would like to give an answer to that. This is TSR?
TSR, yes. But as I mentioned, sort of the outcome was 0. And so it was below median and it was the outcome was 0. But actually this policy was approved I believe in the AGM, this sort of use of the ranking system in 2013, if I recollect correctly. And so that's why it is in use it was in use 2014 and is in use now.
But as I said, we proactively look at the future requirements. Thank you, Bill. Thank you.
Are there any other questions? If not, we can now proceed to the next item on the agenda, which is adoption of the financial accounts for the financial year 2014. Mr. Birchenough in his presentation has highlighted the most important financial elements in 2014. And this is the point in time in which you could if you wish, ask any questions to the auditor, the external auditor.
Who has any questions for the auditor? Yes. Yes. Once again, Kooswendering, VEB, Association of Security Holders. First of all, I have a question on CapEx and then two questions to the external auditor.
Questions about CapEx. One of the targets of AkzoNobel is to reduce CapEx towards depreciation. Now, it was remarkable that the plant equipment machinery CapEx is much lower than write offs. And the question is, why is that? How come?
Why is it that car manufacturing plants, are they being closed? Or are you investing less in technology? And then my question is to the auditor. Perhaps you can hold on to this and we can first deal with the CapEx question. So prior to 2012, we invested inordinate amounts in CapEx.
CapEx amounts were far and far in excess not only of write offs, but also write off and amortization combined. So now we are trying to move towards this combined ratio 4% of revenues if you look at revenue today, which means that we are still conducting excellent investments in excess of write offs. We're investing in growth. So it's not that we're investing. We're just reducing it to a normalized and normal amount and that is mainly directed to property, plant and equipment in the future.
And now you have questions for the external auditor. Yes, the mandate of KPMG will expire in 2015. Question therefore is, how are they going to prepare PricewaterhouseCoopers to this new period of time? So and the annual report furthermore says that misstatements in excess of €3,000,000 are to be submitted to the Supervisory Board ordinarily or minor misstatements that may be relevant. Question is, were there any such misstatements?
If so, could you put them into perspective? And what or how did the supervisory board deal with these misstatements? Chairman, the last question is more of a question for the Chairman of the Audit Committee, I would say. And the first question can be answered by the external auditor. How do you deal with the changeover from 1 auditor to the next?
Perhaps I can take the opportunity to say a few words about the audit because you've called on the auditor to tell you a bit more about the role of the auditor in carrying out the audit. By the way, my name is Erik Van Leuven. I'm one of the external auditors of AXA Nobel. The financial statements is drafted by the Board of Management, is signed by the Supervisory Board and is put to you for approval as shareholders. It is up to me to audit the financial statements.
The outcome of the audit has been reflected in the opinion. The opinion included on page 184 through 186 of the financial statements. Now the audit focuses on making sure that the financial statements reflect the actual reality. In other words, our audit is also focused on determining any incorrectness, any material errors that would be relevant in this respect. And in our audit, we focus on the important elements of the financial statements, but also processes and systems that are being used when drawing up the financial statements.
Now this would be the equity position cash flows and so forth. So we reviewed the management report to see whether there are any there's any information that conflicts with the financial statements any errors. And we've also determined that the financial statements complies with the generally accepted accounting principles and that all legal requirements have been met. We have also met our legal requirement in order to by reporting our findings to the Supervisory Board and Board of Management. And in our opinion, in accordance with the law, we have indicated what our main findings have been, our main audit goals and you've been able to read that we've been able to issue an unqualified statement.
Now the audit was carried out in conformity with the professionally accepted standards for auditors. We've taken into account the risk factors and the internal audit and internal control was evaluated and reviewed. And we determined what it is that we consider to be critical in the audit of the financial statements, the most important items and we reported on that in our statement. During the interim audit, we focus on internal control and year end, we mainly control on the work being done at year end. AkzoNobel is an internationally operating corporation with many subsidiaries, both in the Netherlands and abroad.
And we have involved many of these subsidiaries in our audit. KPMG is the external auditor for the subsidiaries. We send them instructions. We to these auditors, we do internal reviews and we talk to local management. And this year, we visited the U.
S, the U. K, France, Germany and China. We audit the financial statements in terms of a certain materiality limit. Of course, it's not responsible to audit everything. So it all depends on materiality and you'll be able to find that in the statement.
It is €64,000,000 in total for AkzoNobel. Now that doesn't mean to say that we review everything with a materiality limit of €64,000,000 €64,000,000 is what we apply to certain items on the balance sheet on or to subsidiary companies. And anything that may have gone wrong in the course of the year, if it exceeds €3,000,000 it will be reported back to us. And we then discuss it with the Board of Management and the Audit Committee in detail and we will then report to the Supervisory Board on that matter. Approach findings of the audit conclusions will be discussed in detail with the audit committee.
We meet with the audit committee 6 times a year. At year end, we attend the meeting of the supervisory board in which the financial statements are discussed and we will report on our work and the outcome and the content of the management letter and the management letter and our opinion is discussed. I would like I wanted to use this opportunity to share more information on our work, our findings and our interactions audit committee and the Executive Board sorry Board of Management in order to point out what it is that we do. I'll be happy to answer any other questions you may have regarding the transition. The following, we have agreed with the audit committee that in the meeting in June, we will discuss with them in consultation with the new auditor PwC and in consultation with the internal per 1st October 2015.
They have to be independent. As from that point in time, we can start working on the transition and we know from experience and I have my own experience in other assignments that a smooth transition, if you will, is indeed possible and that we're going to do everything possible to ensure that it is a smooth transition. Now auditing differences, correct, you're quite right that audit differences in excess of €3,000,000 are reported back to myself and are discussed with the Supervisory Board and the Audit Committee. AkzoNobel has such a quality of internal reporting and has such a clear ambition to report as best as possible and be as transparent as possible that any auditing differences that we may have identified this year have been fully incorporated in the financial statements so that as per year end there were no other auditing differences to be reckoned with. That answers all the questions.
Are there any other questions for the auditor? No. So I can confirm that there are no further questions. And now allow me to explain how the voting procedure works. I will be announcing when it is that I'm opening the vote and I will also inform you when it is that we're closing the vote.
After the vote, you'll find the outcome on the screen with the number of votes and percentages. Outcome on the screen with the number of votes and percentages. This information by the way will also be posted on the website. I will be informing you whether a proposal has been carried or rejected. For voting instructions, they can be stated explicitly.
Any votes against can indicate that they will be voting against. The vote is open.
Right. Okay. So back. The voting is now closed. What you see here are the results.
They are posted on the screen right behind me. So the results are here. Please ask the secretary to make a note of it and the proposal has been voted in favor. So we're moving on to Agenda Item 3C, the dividend policy. Ms.
Myles Castello will comment briefly on the dividend policy. I would like to highlight that the dividend policy itself is not a voting point. Mailez, the floor
is yours. Yes. So it is like Sonobel policy to pay a dividend stable to rising each year. The dividend, the interim one, the final, shareholder elect to receive a share dividend. Through a strategy that I liked a turn in his presentation, the management has been committed to really improve both profitability and cash generation.
As you have can see, during the past 2 years, you we have really made strong progress into improving our ratio of profitability and we also improved significantly our cash generation. Nevertheless, last year 2014, we're still slightly cash negative. Therefore, we are proposing to maintain stable the dividend for this year at €1.45 per share.
Okay.
I'm sorry, yes. Thank you very much. So agenda item 3d, this is the profit allocation and the adoption of the dividend proposal. It was proposed at the financial year 2014 a dividend of 1.45 per normal share and of the normal value of €2. In 2014, €0.33 have already been paid out as interim dividend.
And the remaining final dividend €1.12 per share will be paid in cash under the terms published by ExxonMobil. On May 19 will the payment take place until the shareholder opts for payment of the dividend in shares. The Supervisory Board recommends adoption of those resolutions. Are there any questions in relation to the dividend proposal?
None.
So we'll vote on the dividend proposal. The voting is now open. Voting has now been closed. The results of the vote are on the screen. So, Secretary, please make a note of the numbers and the proposal has been adopted.
Agenda item 4, discharge. The discharge of von Lieberich of the members of the Board of Management held office in 2014 in relation to the performance of their duties during the financial year 2014. Are there any questions in relation to this proposal? None. I suggest we vote.
The voting is now open. The voting has been closed. The results are up on the screen. I'd like to request the secretary to make a note of that and we see that the proposal has been adopted. Item 4b, discharge from liability of the members of the supervisory board held office in 2014 in relation to the performance of their duties in the financial year 2014.
Are there any questions in relation to this proposal? None. I suggest we vote on this agenda item. The voting is now open.
The voting
has now been closed. The results are on the screen. I would like to request the secretary again to make a note of the other result and the proposal has been adopted. Thank you very much. Agenda item 4.
The following agenda item concerns the appointment of 1 new member of the supervisory board, namely Ms. Slomars and the reappointment of Ms. Brazelius as member of the supervisory board. Brief resumes of each, including relevant data such as the occupation, the value of the shares, which they hold in the company's capital and an overview of other present positions can be found on our website. For Mr.
Braselios, this information is also summarized in the report for 2014. I can confirm that the priority shareholders have resolved to waive their option to make a binding recommendation for these positions. Therefore, the nominations are non binding and are subject to the approval at today's meeting. First, the nomination under Agenda Item 5A, the appointment of Mr. Slomars as a member of the supervisory board.
Mr. Slomars is the CEO of APG Group and a supervisory board member of Atragios, where he chairs the Supervisory Board of Atragios Credit Insurance. He has financial and commercial expertise of 35 years. He served at the Ministry of Finance, where his most recent position was General of the Budget. Mr.
Slurmer's financial credentials are recognized internationally as demonstrated in his function as trustee of the IFRS Foundation and he's also Board of Governors at the State Academy of Finance and Economics. His deep learning knowledge will contribute to the financial expertise. And if he's appointed today, the supervisory board intends to include Mr. Slemers in the audit committee. Mr.
Slemers, could I ask you please to stand up? Thank you very much. Thanks. You can sit down. Are there any questions in relation to this proposed appointment?
Thank you. Let us vote on this agenda item. The voting is now open.
The
voting has now been closed. The results of the voting are shown on the screen. I would like to request the secretary to record the result and establish that the resolution has been passed. Congratulations. We're moving on to our 2nd nomination 5.
The reappointment of Mrs. Briseis as a member of the supervisory board. Mrs. Briseis' current term of office ends this year, and she has confirmed that she is available to be reappointed for a 3rd term of 4 years. Mr.
Frussellus has been a member of the Supervisory Board since May 2007, and since March 2008, she's been a member of the orders committee. Mrs. Orders Committee of a number of international companies and Chairing Board of Lancelot Asset Management, AAB. In these capacities and with her experience, she makes a major contribution to our Supervisory Board in the Audit Committee. It is proposed by the Supervisory Board to reappoint Mr.
Braselius. Are there any questions in relation to the proposed appointment? The floor is yours. Yes. My question is about the number of members of the Supervisory Board.
They were from 9, mid to 6, and there would be 8. Is the intention of ExxonMobil to keep decreasing the number of members of the Board? We don't have an established policy concerning the numbers of the members. But in the coming years, we're planning to attract another member. And of course, there are you do need a certain number of people because there are a number of committees and we need to have them all filled in.
And this could be just one committee. And one person can be a member of 2 or 3 committees, but you know around 10 is the most optimal and given number. Right. Let us vote and the voting is now open. The voting has now been closed.
The results of the voting are presented on the screen. I request the secretary to make a note of the result and establish that the resolution has been carried. Thank you. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Proposal to extend the authorization of the Board of Management to issue shares and to restrict or exclude the preemptive rights of shareholders. As you know, this agenda item is presented to you.
The ship shares and the restriction of exclusion of preemptive rights of shareholders by the Board of Management requires the authorization of the meeting of shareholders. This Agenda Item 2 resolution have to be adopted. As for the issuing shares, the simple majority of those costs is required, whereas the restriction or exclusion preemptive rights of shareholders, a 2 thirds majority is required. And if less than half of the share capital is represented. So first, the law stipulates that the management board has a certain authority to prolong it for 18 months.
So in April 22, in 20 15, and if the term is shorter than on the day when the general meeting of shareholders is held, So this authorization and grant subscription rise to shares up to a max of 10% in case of mergers or acquisitions to be increased up to a maximum of 10% of the total number of shares outstanding on April 22, 2015, at the Board of Management discretion to be issued as common shares and or preferred shares. Are there any questions on this agenda item? I suggest we vote on this proposal. The voting is now open.
The standing is new for Sloter.
The voting is now closed and the results are shown on the screen. The resolution has been passed. Moving on to Item 6B. It is in the interest of the company, it may be in the interest of the company as that when shares are issued, pre emptive rights are restricted or excluded. In this respect, we also require you to extend the authorization of the Board of Management for a period of 18 months starting on April 22, 20 15 or in case of a shorter period until the day the authorization is extended by the AGM to restrict or exclude the preemptive rights of shareholders when share is issued or subscription rights granted, which the Board of Management is authorized to do in accordance with the Russian just passed.
And situation of which it may occur are the issue of shares in relation to acquisitions. However, we should note that the preemptive rights do not apply to shares are fully paid in kind, for example, in case of acquisition as stipulated by law. However, the exclusion of preemptive rights may be required for those acquisitions, the shares are fully paid up or if those acquired cash money is used to pay the purchase price of the company acquired wholly or on part. Are there any questions in relation to this proposal? There are none.
We start the voting. The voting is now open. The voting has now been closed and the results are showing on the screen. I can establish that the resolution has been passed. Proposal to authorize the Board of Management to acquire common shares in the share capital of the company on behalf of the company.
This proposal concerns the authorization of the Board of Management for a period of 18 months starting on April 22, 2015, or in case in shorter period until the daily authorization is extended by the AGM of shareholders to acquire common shares in the company's shareholder at any time during the 18th period. The number of common shares to be acquired is limited to the maximum number of shares in the company's share capital as permitted within the limits of the law and the articles of association that the company may hold in its own share capital at any given moment. Common shares may be acquired through the stock market or otherwise at a price between the par value and the Euronext Amsterdam and the price on the day of purchase on condition that the share price is no higher than the opening price on the day of purchase. The proposal to allow the company to acquire shares also to price up to 10% in excess of the opening price has been inspired by the desire to have more flexibility in case price fluctuation may occur during the day. The low limit of the power value has been included in the proposal as the law stipulates that beside an upper limit, also a lower limit is required.
Are there any questions? There are none. So the voting is now open. We're going to vote. The voting has now been closed.
The results of the voting are presented on the screen behind me. I request the secretary to make a note of the result and establish the resolution has been passed. We're coming to any other business in closing. Does anybody wish to ask any questions or make further comments? The floor is
yours.
I am Mireya Raimo, and I present the BDO, the Association of Investors for Sustainable Development. Please receive my compliments for the sustainable profit and loss analysis, which you've drawn up. We, as the BDO, had some questions about that. And if we have some questions, well, we've been quite brief and concise. And my request is to find some time after the meeting to answer our written questions presented by.
Could you answer them also in written form? Moreover, I do hope that you can try and bring in more transparency in setting the targets also for the outside world because that helps to achieve those sustainability targets, which are important for all of us. Allow me to assure you that we're doing our best to be as transparent as possible. And as far as the targeting is concerned, it's more efficient and effective to have just a couple targets, say 2 or 3. And then you can be quite sure that all the attention will be given to those 2 targets and there is more probability to achieve those targets.
So we are encouraged to set targets for everything and to publish them. But if you have 25 targets, that means that you have none. And certain discipline in setting the targets is a very good thing. I do understand your ambition to try and spread it out as broadly as possible. But on the other hand, we need to see how feasible it is.
We have just 24 hours in a day. And we also must remember the efficiency aspect in setting the targets. So I would like to ask the secretary, have we received your written questions? So are we going to answer them in written form as well? Right.
Okay. And I guess we can put it up on the website and we'll keep in touch. And just one brief remark on my side. I'm not talking about 2025 targets really, but we've seen that the renewable sources are a great part of the carbon footprint. So we believe that the Resource Efficiency Index can be quite an attractive indicator for future clearness and transparency.
I do realize that you're not trying to ask us to set 25 targets, but you're not the only one who talks about targets and you're not the only one who encourages to set targets. So we are being approached from left, right and center. So I appreciate the value of targets, but we must think about efficiency in target setting. Right. So before we close the meeting Oh, there is another question.
It's just 3:30, you know? Wes, I have an essential question about pensions. In your report, I read that in 2015, euros 313,000,000 will be dedicated to top ups. And in Q1, has such a payment been done? And we don't have any insight in the arrangements.
And there is a deficit of about €800,000,000 So I have 2 questions. How should investors interpret these figures? Are there any cash payments coming up? And the second issue I would like to touch upon, the ROI and ROS targets, are they going to be reached in 2015? What are the expectations?
So let me guess what is coming after that? Well, not just demands of the targets are not going to present that, but we're just talking about, so what is, what's next? This is what I meant. So these two questions. Tom, will you take this?
So pensions. Pensions are an incredibly complex issue and we need to go into details and depth. We pay around €330,000,000 on top ups per year. And this is due to the British pension funds, which were acquired in our portfolio. And they will be placed in the Q1 most entirely maybe to considerable extent.
That's why we saw them. And these top ups are negotiated every 3 year. So this is some shifts are possible, but the major part of top ups have been paid in the Q1 for the whole year. And the possible fluctuations will be in the smaller part. As far as our 15.
Let's first get these targets and achieve these targets and then sit down and discuss those tasks, because it will keep us focused on these targets and we can start discussing new ones after that. Right. Any other questions? None. Before we close today's meeting, I would like to take a moment to consider a very sad thing.
We lost Dolf van der Brink, who passed away in December last year. He has been a supervisory board member for 10 years and is Head of the Orders Committee. And Dov was an extremely professional person and the integrity of his performance is incredible. It's been a great loss for Raulus and we still miss him on a daily basis. I would like to wish his family all the courage they can master.
And then another point, it is not that said, but it's not a happy thing. Doctor. Uwe Ernst Buffet, who is stepping down as a member of Supervisory Board after 12 years. And after 12 years, it cannot be reelected. Uwe has a great understanding of the chemical sector, and he's also a great businessman, and he's had a wonderful career.
AkzoNobel is very grateful for his performance and we'll miss him as well. I wish you all the best.