AGM Information • Oct 26, 2020
AGM Information
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If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000, as amended, if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial advisor.
If you have sold or otherwise transferred all of your shares in ScS Group plc (the Company), please send this document, together with the accompanying Notice of Annual General Meeting and Form of Proxy, as soon as possible, to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee. If you have sold or otherwise transferred any part of your holding, you should retain these documents.
ScS GROUP PLC
(incorporated in England and Wales with registered no. 03263435)
This document, together with the accompanying Notice of Annual General Meeting, should be read as a whole. Your attention is drawn to the letter from the Non-Executive Chairman which is set out on pages 2 to 5 of this document and the recommendation in respect of the resolutions numbered 1 to 14 to be proposed at the Annual General Meeting referred to below.
Notice of the Annual General Meeting of ScS Group plc to be held at 2.00 p.m. on 25 November 2020 at ScS, 45-49 Villiers Street, Sunderland, SR1 1HA accompanies this document. Details of the action you are recommended to take in respect of the resolutions numbered 1 to 14 to be proposed at the Annual General Meeting are set out on page 5 of this document. Please complete the enclosed Form of Proxy and return it in accordance with the instructions printed on it as soon as possible, but in any event so as to be received by the Company's registrars, Equiniti, at Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, by no later than 2.00 p.m. on 23 November 2020 (or, in the case of any adjournment, not later than 48 hours before the time fixed for the holding of the adjourned meeting).
In light of the prevailing government guidance in relation to COVID-19, it is proposed that the AGM be convened with the minimum quorum of Shareholders present in order to conduct the business of the meeting. This will be facilitated by ScS Group plc.
In the interests of protecting the health and safety of our Shareholders, colleagues and the wider public, Shareholders will not be admitted to the AGM. Our advisers and other guests have also been asked not to attend. Instead, we ask all Shareholders to appoint the Chair as their proxy to vote on the resolutions set out in the Notice as early as possible. Proxy voting instructions can be found on page 5.
Alternatively, if you hold your ordinary shares in the Company in uncertificated form, you may also appoint a proxy by completing and transmitting a CREST proxy instruction in accordance with the procedures set out in the CREST Manual ensuring that it is received by Equiniti by no later than 2:00 p.m. on 23 November 2020 (or in the case of any adjournment, not later than 48 hours before the time fixed for the holding of the adjourned meeting).
Directors: ScS Group plc Alan Smith Registered office: David Knight 45-49 Villiers Street Chris Muir Sunderland Ron McMillan SR1 1HA
Angela Luger 7 October 2020
Dear Shareholder
I am pleased to send you details of our annual general meeting (the AGM).The formal notice of the AGM, which accompanies this document (the Notice), sets out the business to be considered at the AGM. The purpose of this letter is to provide you with further details of resolutions 1 to 14 to be considered at the AGM.
In light of the prevailing government guidance in relation to COVID-19, the Board has determined that the AGM will be convened with the minimum quorum of Shareholders present in order to conduct the business of the meeting. This will be facilitated by ScS Group plc.
In the interests of protecting the health and safety of our Shareholders, colleagues and the wider public, Shareholders will not be admitted to the AGM. Our advisers and other guests have also been asked not to attend. Instead, we ask all Shareholders to appoint the Chair as their proxy to vote on the resolutions set out in the Notice as early as possible. If a Shareholder appoints someone else as their proxy, that proxy will not be able to attend the meeting in person or cast the Shareholder's vote. Proxy voting instructions can be found on page 5.
Despite these exceptional circumstances, the Board is keen to maintain engagement with Shareholders. In order to facilitate this, if you are a Shareholder and would like to ask the Board a question on the formal business of the AGM, please email your question to [email protected] by 2.00 p.m. on Monday 23 November 2020. Answers to questions will be published on our website at www.scsplc.co.uk as soon as is practicable after the close of the AGM.
We will continue to closely monitor the rapidly developing impact of COVID-19, including the latest government guidance, and how this may affect the arrangements for the AGM. Consequently, the AGM is subject to change, possibly at short notice. If it becomes necessary or appropriate to revise the current arrangements for the AGM, further information will be made available on our website at www.scsplc.co.uk.
This year, shareholders will be asked to approve 14 resolutions. Resolutions 1 to 12 are proposed as ordinary resolutions. This means that, for each of those resolutions to be passed, a simple majority of votes cast on a show of hands must be in favour of the resolution or, on a poll, shareholders representing a simple majority of the total voting rights of the shareholders voting (in person or by proxy) must vote in favour of the resolution.
Resolutions 13 and 14 are proposed as special resolutions. This means that, for each of those resolutions to be passed, not less than 75% of the votes cast on a show of hands must be in favour of the resolution, or, on a poll, shareholders representing not less than 75% of the total voting rights of the shareholders voting (in person or by proxy) must vote in favour of the resolution.
The directors must present the Company's Annual Report and financial statements, strategic report and directors' and auditors' reports at a general meeting. Those to be presented at the AGM are in respect of the financial year ended 25 July 2020, and together comprise the Annual Report 2020.
The Annual Report 2020 is also available on the Company's website at http://www.scsplc.co.uk/investors/reports-and-presentations/year-2020.aspx.
The Company must seek shareholder approval on an annual basis for the part of its directors' remuneration report which describes how the Company's directors' remuneration policy has been implemented during the previous financial year.
The relevant part of the directors' remuneration report is set out in full on pages 62 to 68 of the Annual Report 2020. This vote is advisory only, therefore it does not affect the historical remuneration paid to any individual director.
The Company is required to appoint auditors at each general meeting at which its annual accounts and reports are presented to shareholders. Therefore, resolution 3 proposes the reappointment of PricewaterhouseCoopers LLP as auditors (to hold office until the next such meeting at which the Company's annual accounts and reports are presented to shareholders), and, in accordance with normal practice, resolution 4 authorises the Audit Committee to determine the auditors' remuneration.
Resolutions 5 to 10 (inclusive) propose the re-election of Alan Smith, David Knight, Chris Muir, Ronald McMillan, George Adams and Angela Luger respectively as directors. Biographies of each of the directors are set out on pages 50 and 51 of the Annual Report 2020.
The selection process for new directors, the review process for existing directors and the company's assessment of independence are described on pages 52 to 56 of the Annual Report 2020.
Generally, the directors may only allot shares in the Company (or grant rights to subscribe for, or to convert any security into, shares in the Company) if they have been authorised to do so by shareholders.
In line with guidance issued by the Investment Association if passed, the first part of resolution 11 will authorise the directors to allot ordinary shares in the Company (and to grant rights to subscribe for, or to convert any security into, shares in the Company) up to an aggregate nominal amount of £12,670.89. This amount represents approximately one third of the issued ordinary share capital of the Company (excluding treasury shares) as at 7 October 2020, being the last practicable date before the publication of this document.
In addition, if passed, the second part of resolution 11 will authorise the directors to allot ordinary shares in the Company (and to grant rights to subscribe for, or to convert any security into, ordinary shares in the Company) in connection with a rights issue only up to a further aggregate nominal amount of £12,670.89. This amount represents approximately one third of the issued ordinary share capital of the Company (excluding treasury shares) as at 7 October 2020, being the last practicable date before the publication of this document.
If given, these authorities will expire at the conclusion of the Company's next AGM or at the close of business on the date which is fifteen months after the date of this general meeting (whichever is the earlier). It is the directors' intention to renew the allotment authority each year.
As at the date of this document, 77,275 ordinary shares are held by the Company in treasury.
The directors have no current intention to exercise either of the authorities sought under resolution 11. However, the directors consider that it is in the best interests of the Company to have the authorities available so that they have the maximum flexibility permitted by institutional shareholder guidelines to allot shares or grant rights without the need for a general meeting should they determine that it is appropriate to do so to respond to market developments or to take advantage of business opportunities as they arise.
It is not the Company's policy to make donations to political parties, or to make other political donations within the normal meaning of that expression, and the directors have no intention of changing that policy.
However, as a result of the wide definitions of political expenditure, political donations and political organisations in the Companies Act 2006 ('Act'), normal business activities and expenditure which might not be thought to be political expenditure or a political donation to a political organisation in the usual sense may fall within the restrictions of the Act. For example, sponsorship of industry forums, funding of seminars and other functions to which politicians are invited, matching employees' donations to certain charities, expenditure on organisations concerned with matters of public policy, law reform and representation of the business community, and communicating with the Government and political parties at local, national and European level might be construed as political expenditure or as a political donation to a political organisation.
Resolution 12 does not purport to authorise any particular donation or expenditure, but is expressed in general terms, as required by the Act, and is intended to authorise normal donations and expenditure while avoiding inadvertent infringement of the Act. If passed, resolution 12 would allow the Company and its subsidiaries to make political donations to political parties, other political organisations and independent election candidates and to incur political expenditure up to an aggregate limit of £50,000 in the period beginning with the date on which resolution 12 is passed and ending at the conclusion of the next AGM of the Company. The authority will not be used to make political donations within the normal meaning of that expression. It is the directors' intention to renew this authority each year.
Generally, if the directors wish to allot new shares or other equity securities (within the meaning of section 560 of the Act) for cash, then under the Act they must first offer such shares or securities to shareholders in proportion to their existing holdings. These statutory pre-emption rights may be disapplied by shareholders.
Resolution 13, which will be proposed as a special resolution, will enable the directors to allot equity securities for cash up to a maximum aggregate nominal amount of £25,341.78 without having to comply with statutory pre-emption rights, but this power will be limited to allotments:
This disapplication authority is in line with the Statement of Principles issued by The Pre Emption Group in 2015 ('2015 Principles').
The directors also intend to follow the provisions in the 2015 Principles regarding cumulative usage of authorities within a rolling three year period. The 2015 Principles provide that a company should not issue shares representing more than 7.5 per cent of its issued ordinary share capital for cash in any rolling three year period without prior consultation with shareholders, other than on a pre emptive basis or in connection with an acquisition or specified capital investment.
If given, this power will expire at the conclusion of the Company's next AGM or at the close of business on the date which is fifteen months after the date of this general meeting (whichever is the earlier). It is the directors' intention to renew this power each year.
Resolution 14 will be proposed as a special resolution. If passed, it will allow the Company to purchase up to 3,801,265 ordinary shares in the market (which represents approximately 10 per cent of the issued ordinary share capital of the Company as at 7 October 2020, being the last practicable date before the publication of this document). The minimum and maximum prices for such a purchase are set out in the resolution. If given, this authority will expire at the conclusion of the Company's next AGM or at the close of business on the date which is fifteen months after the date of this general meeting (whichever is the earlier). It is the directors' intention to renew this authority each year.
The directors have no current intention to exercise the authority sought under resolution 14 to make market purchases, but consider the authority desirable to provide maximum flexibility in the management of the Company's capital base. If passed, the directors will only exercise this authority if they believe that to do so would result in an increase in earnings per share and would be in the best interests of the Company and of its shareholders generally.
The Act allows the Company to hold shares which have been repurchased as treasury shares and either re-sell them for cash, cancel them (either immediately or in the future) or use them for the purposes of its employee share schemes. The directors will have regard to institutional shareholder guidelines which may be in force at the time of any such purchase, holding or re-sale of shares held in treasury. This provides the Company with additional flexibility in the management of its share capital. No dividends will be paid on, and no voting rights will be exercised in respect of, treasury shares.
As at 7 October 2020 (being the last practicable date before the publication of this document), there were options outstanding over 1,044,674 ordinary shares in the Company (which represent approximately 2.75 per cent of the issued ordinary share capital of the Company at that date). If the authority to purchase the Company's ordinary shares was exercised in full and those shares were subsequently cancelled, these options would represent approximately 2.75 per cent of the issued ordinary share capital of the Company.
The directors consider that all of the resolutions set out in the Notice would be most likely to promote the success of the Company for the benefit of its members as a whole. The directors will be voting in favour of all of the resolutions in respect of their own beneficial holdings amounting to approximately 4.21 per cent of the issued share capital of the Company; and unanimously recommend that you do so as well.
If you would like to vote on the resolutions set out in the Notice, please appoint the Chairman of the meeting as a proxy, either:
For proxy appointments to be valid, they must be received by 2.00 p.m. on 23 November 2020. Further details relating to voting by proxy are set out in the notes to the Notice.
Yours sincerely
Alan Smith Non-Executive Chairman
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