Company Information - AIM Rule 26 Compliance

1. Establish a strategy and business model which promote long-term value for shareholders

The principal activity of Andrews Sykes Group PLC (the “Company”) and its subsidiaries (the “Group”) is the hire, sale and installation of a range of equipment including pumping, portable heating and air conditioning. The Group operates from depots in the UK, France, Italy, The Netherlands, Belgium, Luxembourg, Switzerland and the UAE.

Shareholder value in the medium term to long term is intended to be delivered by driving operational excellence across the Group and growing within selected markets and geographies. The Board believes that the presence and requirements of a longstanding controlling shareholder helps focus the Company’s strategy on long-term shareholder value creation.

The Group’s strategy and business model is discussed, agreed and reviewed on a regular basis by the Board and is set out each year in the Company’s Annual Report with updates (as appropriate) provided in the full year and half year financial results announcements. The Group’s financial statements can be found in the “Corporate Publications” section of the Company’s website. The presence and requirements of a longstanding majority shareholder has resulted in a strategy with the key aim of creating long–term shareholder value.

2. Seek to understand and meet shareholder needs and expectations

The Company has a controlling 86.33% shareholder which has a number of representatives on the Board.

The Company monitors its share register and ensures that dialogue is entered into with other shareholders as appropriate. The Vice Chairman and the Managing Director respond to all enquiries made of them by shareholders and Andrew Kitchingman, the Senior Independent Non-Executive Director, not only provides an independent view of the Group but is also a point of shareholder access which is independent of the executive team or the majority shareholder.

The Board recognises the importance of communication with the Company’s shareholders. The Annual Report and the Half Year Accounts and related announcements are made available promptly on the Company’s web site in accordance with the AIM Rules.

All shareholders are invited to attend the Company’s Annual General Meeting (“AGM”). The AGM includes a question and answer session and Directors make themselves available to meet with shareholders following the meeting.

3. Take into account wider stakeholder and social responsibilities and their implications for long-term success

The Company recognises that long term success is driven by good relations with both internal and external stakeholders. Internally the senior management team communicates with staff at all levels by both formal and informal communication channels, feedback from these channels are often used to drive improvements and provide new initiative for product and service developments.

Externally the Group has strong relationships with a number of key suppliers, many of these relationships have been in place for 10 years or more. Regular meetings are held with these suppliers to ensure that relationships are optimised, with new innovation high on the agenda. We communicate with our customers in many ways and channel feedback via a line management structure which is much flatter than many companies within our sector. Customer communication ranges from social media through to high level contract reviews. Customer feedback is monitored by senior management on a regular basis. Executive and Non-Executive Directors communicate with shareholders directly and make themselves available for such meetings.

4. Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Group’s principal risks, and plans to mitigate these risks, are identified and set out in the Company’s Annual Report.

The Board considers carefully the key risks impacting upon the Group based on the information presented to it and makes key decisions taking into account a range of risks, both internal and external to the Company, including its supply chain.

Key elements of the Group’s system of internal controls are:

• Control environment – the Board has put in place an organisational structure with clearly defined lines of responsibility and delegation of authority. This under the direct supervision of the Managing Director, supported by appropriate policy statements.
• Risk management – the Managing Director is responsible for identifying risks facing the business and for putting in place procedures to mitigate and monitor risks. Risks are assessed and monitored at Board level on an ongoing basis, as well as during the annual business planning process.
• Information systems – the Group has a comprehensive system of financial reporting. The annual budget is approved by the Board. Actual results and variances compared with the budget are reported to the Board monthly, supported by detailed management commentaries. Revised forecasts are regularly prepared and reported to the Board.
• Control procedures – policies and procedures manuals are maintained at all significant business locations. In particular, there are clearly defined policies for capital expenditure including appropriate authorisation levels. Larger capital projects and major investments and divestment decisions require Board approval.
• Monitoring systems – internal controls are monitored by executive management.

The Board routinely consider the effectiveness of the Company’s system of internal controls. The Board has established an Audit Committee, further details of which are set out below. The Audit Committee considers risk and internal control as a fundamental part of its responsibilities.

The Board reports upon internal financial controls in accordance with the ICAEW's guidance "Internal Control and Financial Reporting".

5. Maintain the Board as a well-functioning, balanced team led by a chair

The Board consists of 8 members, led by Jean-Jacques Murray, the Non-Executive Chairman, manages and provides leadership to the Board to ensure that it is effective in its task of setting and implementing the Company’s direction and strategy.

There is one executive member of the Board – Carl Webb, the Group Managing Director, who develops and implements the Group’s strategy, manages performance and ensures the Board is informed about business matters. Carl was appointed to the Board on 5 March 2021 to assume the day to day responsibilities, supported by the Andrews Sykes senior management team, and ensure the continuity of the Company's established strategy. Whilst not a full Board member, Ian Poole the Group Finance Director, provides financial reporting advice to the Board and is responsible for maintaining the group’s financial records. The Group Finance Director works closely with the Group Managing Director supporting him in all financial aspects of the group’s business operations.

There are 6 Non-Executive Directors of which one, Andrew Kitchingman, is independent. The other non-executive directors – Jean-Jacques Murray, Jean-Pierre Murray, Marie-Claire Leon, Emmanuel Sebag and Xavier Mignolet – are all associated with EOI (the Company’s 86.33% shareholder) and are not considered independent.

The Non-Executive Directors provide oversight and scrutiny of the performance of the executive team to ensure that the Company’s key strategic objectives are met, as well as representing the shareholders of the Company. None of the Non-Executives Directors participate in any performance related remuneration / share option schemes.

The Company has only one independent Non-Executive Director whereas the Code recommends that boards have at least two independent non-executive directors. The Board considers that there is sufficient independence on the Board taking into account the shareholder base of the Company. For this reason the Board has no current plans to appoint an additional independent Non-Executive Director, but will keep the matter under review.

Andrews Sykes and EOI have entered into a relationship agreement (originally dated 10 December 1999 and updated on 21st September 2018) in which EOI has provided certain assurances to Andrews Sykes with regard to its relationship with Andrews Sykes. The agreement confirms that the business and affairs of Andrews Sykes shall be managed by the Board in accordance with Andrews Sykes’ Memorandum and Articles of Association and with applicable laws and all relevant statutory provisions for the benefit of shareholders as a whole. Any transactions or other relationships between EOI and Andrews Sykes will be at arm's length and on a normal commercial basis. Where appropriate, Board members associated with EOI must declare their interest and take no part in decisions.

The Managing Director works full time in the business and is contracted to make such contribution and time commitment as is required for the fulfilment of his duties. The Non-Executive Directors are required to prepare for and to attend Board meetings and meetings of such Board committees of which they are members. They are expected to commit sufficient time to enable them to fulfil their duties. Each Director has access to the Company Secretary who is responsible to the Board for ensuring that all applicable procedures and regulations are complied with. Each Director also has the right to take independent professional advice in connection with his or her duties at the Company’s expense.

Further details of the 8 Board members are provided in the Annual Report and on the Directors section of the Company’s website.

6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

The Board is considered to comprise individuals with a good blend of relevant experience in the Company’s sector, the financial and the public markets and with the necessary experience and strategic and operational skills required to drive the Group forward.

The Directors’ biographies and skill sets are detailed in Annual Report and on the Directors section of the Company’s website.

Each Director keeps up to date with their specialist experience and knowledge by following relevant information and publications. From time to time this is supported by the Company’s advisors and specialist consultants.

7. Evaluate Board Performance based on clear and relevant objectives, seeking continuous improvement

The Board’s performance is primarily measured by the financial performance of the Group and its ability to meet key business objectives. In recent years the financial performance of the Group has been strong which has encouraged the Board to believe that its membership is appropriate. The Board also consider that the stability of its membership over recent years has been a major contributor to the Company’s success. We do however recognise that from time to time new Board members will add value and bring fresh ideas. In addition to financial results the Board is also measured on its ability to meet key business objectives, such as the Group’s geographic growth within mainland Europe.

The Vice Chairman evaluates the Board performance informally on a regular basis and formally at least twice per year. The Group reviews succession and contingency plans frequently and takes great care and consideration when selecting new Board members.

8. Promote a corporate culture that is based on ethical values and behaviours

The Group has a long-established heritage and reputation based on sound ethical values and the Board considers this to be of great ongoing value. Many companies within our market sector envy our reputation and we frequently optimise this commercially and by attracting new staff.

The Group’s corporate policies are based on our ethical values and can be found on the Our Policies page on our website. In recent years many of our product innovations have been focussed on environmental improvements covering initiatives such as reduced emissions and fuel efficiency. We have a long list of accreditations, including ISO9001, ISO14001, OHSAS18001 and ISO45001:2018, details of which can be found on the Accreditations page of the Company’s website.

We pride ourselves in providing our staff with a good working environment within a strong ethical culture. The Group’s HR policies are regularly reviewed by the senior operations team, are provided to all staff both on commencement of employment and are available at all times via a Company Intranet site. The Group has a large number of long serving staff members, many with 30 years plus service, which is a testament to our working culture. We engage with a number of Community Trust’s and Charities to offer opportunities to those that have had difficulties finding employment.

9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

The Board is responsible for creating value for shareholders, determining strategy, investment and acquisition policy, approving significant items of expenditure and for the consideration of significant financing and legal matters. Matters specifically reserved for decision by the full Board, include matters of business strategy, material corporate actions, approval of budgets and approval of financial statements.

The Board meets on at least three occasions each year. Due to the consistent nature and strategy of the Group, this is considered sufficient. Interim meetings or appropriate sub-committees are established when urgent decisions are required on matters specifically reserved for the Board between scheduled Board meetings. In addition, all Directors receive appropriate monthly management information and have the opportunity to discuss this with the Managing Director or any member of the executive team.

All Directors receive a pre-Board meeting briefing pack and post Board meeting minutes and appropriate attachments from the Company Secretary. A number of the Board are based overseas and cannot always attend all meetings in person. Where a Director cannot attend a meeting in person (or by telephone) he / she can give their contributions in advance to an attending Director or the Company Secretary and relay any comments concerning the Board minutes before they are adopted. Should there be any matter that requires further discussion, a supplementary telephone Board meeting is convened.

The roles of Chairman and Managing Director are held by separate directors and there is a clear division of responsibilities between them. The Chairman leads the Board and ensures its effectiveness and approach to corporate governance. He sets the Board agenda and ensures that all Directors make an effective contribution. The Chairman is also responsible for ensuring the Board and broader management framework is established, operates effectively and is compliant with relevant statutory codes and Company policies and for the regular assessment of the effectiveness of the Board and its committees. The Managing Director has responsibility for all operational matters and implementation of the Company’s strategy as approved by the Board. The Non-Executive Directors have particular responsibility in ensuring that the strategies proposed by executive management are fully challenged.

All Directors must offer themselves for re-election at least once every three years and at least one third of the Directors must offer themselves for re-election each year.

The Board maintains two standing committees - the Audit Committee, which is chaired by Andrew Kitchingman, the Independent Non-Executive Director, and the Remuneration Committee which is chaired by Jean-Jacques Murray, the Non-Executive Chairman.

The Audit Committee is responsible for ensuring that the financial performance of the Group is properly monitored, controlled and reported upon. It meets at least three times a year, to review the half year and full year financial results, to meet the Company’s auditors to discuss the audit and to review the internal controls framework of the Group. The audit committee comprises Andrew Kitchingman (Independent Non-Executive Director) and Xavier Mignolet (Non-Executive Director).

The Remunerations Committee meets at least once a year to review the performance of Executive management and set the scale and structure of their remuneration and the basis of their service agreements with due regard to the interests of the shareholders. The Remuneration Committee comprises Jean-Jacques Murray (Non-Executive Chairman), Emmanuel Sebag (Non-Executive Director) and Andrew Kitchingman (Independent Non-Executive. Director). Details of the Directors' remuneration are set out in the Directors' Remuneration Report in the Annual Report.

All Board appointments are considered by the Board as a whole and, as such, it has not been considered necessary to establish a Nomination Committee. The removal of any Board member is also a matter for the Board as a whole.

The Board and its Committees are considered to comprise individuals with the necessary experience and strategic and operational skills required to drive the Group forward and to deliver its strategy for the benefit of shareholders over the medium to long term.

The terms of reference for the Audit committee can be found here and the terms of reference for the Remuneration committee can be found here.

10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Company reports on its financial performance and updates on its corporate governance at least two times each year, at the half year and full year financial results. The financial results are also communicated to the stock market via RNS announcements.

These reports and announcements are available on the Corporate Publications and Announcements section of the Company’s website. Copies of previous years reports since 2010 are also on the Company’s web site.

The Board pays particular attention to the votes cast by the shareholders at the AGM. In the event that a significant proportion (>20% including proxies) of independent votes are cast against a resolution at a General Meeting of the Company, the Board intends, on a timely basis, to explain any action it has taken or will take as a result of that vote.