Section 172 statement and details of stakeholder engagement, including COVID – 19 response

Trifast plc – Annual report – 31 March 2021

Industry: manufacturing, distribution

Stakeholder engagement

The Board acknowledges that there is a legal requirement for the Company to report on how the Board and its Committees have considered the requirements of Section 172 of the Companies Act 2006 in their decision-making

Section 172 statement

Businesses do not operate in isolation. Without a good understanding of who their key stakeholders are and how they impact upon and are impacted by the organisation, a business will fail to deliver sustainable value to shareholders and other stakeholders.

The Board considers its key stakeholders to be its employees, investors, customers, suppliers, the communities in which we operate, as well as regulators and governments. We actively engage with our key stakeholders to understand their views and build effective relationships, and our engagement approach for each stakeholder group is set out on the following pages.

In addition to having regard to stakeholder considerations, the Board acknowledges its responsibility to consider long-term impacts and the Company’s impact both upon and from wider society and the environment.

The Board delegates day-to-day management, risk and decision making to its Operational Executive Board, but it maintains oversight of the Company’s performance, and reserves to itself specific matters for approval, including the strategic direction of the Group, acquisitions and disposals, and entering into material contracts and purchase of fixed assets above set limits.

The Board monitors performance against strategy, and that decision-making is appropriate, by receiving regular updates, both in Board and Committee meetings and through monthly Board reports from the CEO, CFO and other OEB members, all of which enable it to make well‑informed decisions for the long-term success of the Company and its various stakeholders.

To aid effective decision-making, the Directors and the Senior Management team take into account the Group’s policies, including the Group Code of Conduct and supporting corporate policies set out on page 75.

Section 172(1) Companies Act 2006

‘Duty to promote the success of the company’

1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

a) the likely consequences of any decision in the long term,

b) the interests of the company’s employees,

c) the need to foster the company’s business relationships with suppliers, customers and others,

d) the impact of the company’s operations on the community and the environment,

e) the desirability of the company maintaining a reputation for high standards of business conduct, and

f) the need to act fairly as between members of the company.

Supported by the Company Secretary and General Counsel, the Board, management, and anyone tasked with preparation of Board materials give consideration to stakeholders in all matters requiring decision-making, including strategic decisions

Principal decisions

We define principal decisions as both those that are material to the Group, but also those that are significant to any of our key stakeholder groups.

In making the following principal decisions, the Board considered the outcome from its stakeholder engagement as well as the need to maintain a reputation for high standards of business conduct and the need to act fairly between the members of the Company:

Capital allocation to deliver strategy

During the year the Board joined the OEB and other senior managers to discuss and approve a medium-term strategic roadmap. As set out on page 26, the Group’s core strategy includes both delivering organic and acquisition growth. A key consideration for the long-term success of the business was the appropriate allocation of capital to deliver the strategy.

Further to the approval of the annual budgets, the Board discussed and updated the Group’s acquisition criteria to ensure they are still relevant and approve next steps when key stage gates have been achieved.

The Board also agreed and oversaw a £16m Placing to preserve the Company’s strategic investment capability, and approved investment to move two of our fast‑growing sites to new, larger premises to facilitate future growth. Employees were engaged during the process and the impact on them was considered by the Board. With the new premises only being a short distance from the existing sites it was felt that any negative impact would be low, and the better facilities would be welcomed.

COVID-19 response

The COVID-19 pandemic has had a dramatic impact over the course of the year and has been a dominant consideration for the Board. The safety and wellbeing of the workforce and the continuation of the Group’s operations and supply chain were the main concerns.

The Board enacted the business continuity plan, and introduced new working practices to limit the risk to our team. This entailed the transition to home working and the implementation of COVID-19 secure workplace practices for all sites, including staff PPE and amended working practices. Further details can be found on page 10.

COVID-19 brought with it uncertainty and anxiety for many of our staff, and the Board responded by increasing employee engagement through videos and regular updates from Directors, an information hub on the Company intranet, and the use of noticeboards and employee surveys. A greater focus was also placed on employee mental health. Full details can be found on page 56.

As part of the equity raise, the Board performed stress testing to ensure the sustainability of the Company through various scenarios. These included various cash‑saving initiatives such as deferment of capital expenses, the use of various global furlough schemes, as well as a 20% reduction in remuneration for the Board during Q1.

Enhanced focus was placed on cash flow management within the business, which had the potential to impact on our supply chain partners. The Directors sought to ensure that payments continued in line with agreed terms and, where appropriate, worked closely with strategic suppliers to support ongoing provision of products and services in the short term and preserve their financial viability in the long term.

The senior management team engaged constantly with customers and suppliers during the period to ensure continuity of supply and responsiveness to the constant changing market dynamics.

The Board also gave wider consideration to how we were able to support our communities during this time. We worked closely with the NHS surgery near our HQ to provide additional car parking for the COVID-19 vaccination centre, and our staff supported a number of good causes that aimed to help those affected by the pandemic, including food banks and free meal delivery.