Annual General Meeting Notice of the one hundred and tenth Annual General Meeting of the Company, to be held at the registered office of Grainger plc, Citygate, St. James' Boulevard, Newcastle upon Tyne NE1 4JE on 8 February 2023 at 2.00 pm, is set out in this document. Registered in England and Wales with registered number 125575 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to the action to be taken, you should consult your stockbroker, bank manager, solicitor, accountant or other independent professional adviser authorised pursuant to the Financial Services and Markets Act 2000 immediately. If you have sold or transferred all your ordinary shares in Grainger plc, please forward this document, together with the accompanying documents, 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 transmission to the purchaser or transferee. CONTENTS Page 2 Definitions and Directors Page 3 Letter from the Chairman Page 6 Notice of Annual General Meeting Page 9 General notes DEFINITIONS The following definitions apply throughout this document, unless the context requires otherwise: 'Act' the Companies Act 2006 as amended; 'Annual General Meeting' the Annual General Meeting of the Company to be held on 8 February 2023 at 2:00pm at the registered office of the Company; 'Annual Report and Accounts' the 2022 Annual Report and Accounts of the Company prepared in accordance the Act; 'Board' or 'Directors' the Board of Directors of the Company (or a duly appointed committee thereof); 'Company' Grainger plc; 'Directors' the Directors' Remuneration report for the Remuneration report' year ended 30 September 2022 circulated to shareholders with this circular; 'FCA' the Financial Conduct Authority; 'FSMA' the Financial Services and Markets Act 2000; 'London Stock Exchange' London Stock Exchange Group plc; 'Notice' the notice of the Annual General Meeting included in this circular; 'Official List' the list maintained by the FCA pursuant to Part VI of FSMA; 'PEG Principles' the 2022 Pre-Emption Group's revised Statement of Principles; 'Shares' ordinary shares in the capital of the Company; and 'UK Corporate the UK Corporate Governance Code (July Governance Code' 2018 edition) published by the Financial Reporting Council. DIRECTORS Mark Clare* (Chairman) Helen Gordon (Chief Executive) Robert Hudson (Chief Financial Officer) Rob Wilkinson* Justin Read* Janette Bell* Carol Hui* Michael Brodtman* * Non-Executive Registered and Head Office Citygate St James' Boulevard Newcastle upon Tyne NE1 4JE Letter from the Chairman 19 December 2022 DEAR SHAREHOLDER The next Annual General Meeting of the Company is to be held at the registered office of Grainger plc, Citygate, St. James' Boulevard, Newcastle upon Tyne NE1 4JE, on 8 February 2023. You will see from the Notice of Annual General Meeting, which is set out on page 6 of this document, that there are 19 resolutions which are proposed for approval, 13 of which relate to the ordinary business of the Annual General Meeting and 6 of which relate to special business. Details of these resolutions are set out below and in the Notice. Resolutions 1 to 14 and 19 will be proposed as ordinary resolutions. Resolutions 15 to 18 will be proposed as special resolutions. At the time of publication of this document, the Company expects that physical attendance at the Annual General Meeting will be possible and shareholders will be able to attend in person. In addition, as was the case for last year's annual general meeting, the Company will provide facilities so that shareholders can ask questions of the board remotely which will be answered and published on the Company's website in advance of the Annual General Meeting. ORDINARY BUSINESS Resolution 1 seeks approval of the Directors' report and the audited financial statements for the year ended 30 September 2022 which have been circulated to shareholders at the same time as this letter. Resolution 2 seeks approval (on an advisory basis) of the Remuneration Committee Chairman's introductory letter (set out on pages 83 to 85 of the Annual Report and Accounts) and the Directors' Remuneration report (set out on pages 83 to 102 of the Annual Report and Accounts). Resolution 3 seeks approval of the Directors' Remuneration Policy (the "Policy"). Following a review of the Directors' Remuneration Policy approved at the 2020 annual general meeting, a new Policy is being proposed to be applied for the current financial year onwards and is being put to a binding shareholder vote. The Policy is described on pages 86 to 91 of the Annual Report and Accounts and has been developed taking into account the principles of the UK Corporate Governance Code and the views of our major shareholders. If approved, the Policy will take formal effect from the date of the Annual General Meeting and shall be in place for the next three-year period unless a new policy is presented to shareholders before then. Resolution 4 relates to the proposed payment of a dividend of 3.89p per share to be paid on 14 February 2023 to all holders of 5p Shares on the register of members of the Company at the close of business on 30 December 2022 in respect of all Shares then registered in their names. Resolutions 5 to 11 relate to the re-election and election of the Directors of the Company. In accordance with the UK Corporate Governance Code, all of the Directors other than Rob Wilkinson are offering themselves for re-election or election at this Annual General Meeting. Rob Wilkinson will be retiring as a Director at the Annual General Meeting and I would very much like to thank Rob for his valuable contribution as a member of the Board. It is considered by the Board that all of the Directors bring valuable skills and experience to the Board. Biographies of all of the Directors standing for re-election or election can be found on pages 62 to 63 of the Annual Report and Accounts and the Company's website together with reasons why their contributions are, and continue to be, important to the Company's long-term sustainable success. Michael Brodtman is standing for election as Director for the first time at the Annual General Meeting, as he will be appointed to the Board following last year's annual general meeting. Resolutions 12 and 13 relate to the auditors of the Company. Ordinary resolutions are being proposed at this Annual General Meeting for their re-appointment as auditors and to authorise the Directors to approve their remuneration. An assessment of the effectiveness, independence and objectivity of the auditors has been undertaken by the audit committee which has recommended to the Board that the auditors of the Company be re-appointed as such. SPECIAL BUSINESS Resolution 14 This resolution, which will be proposed as an ordinary resolution, seeks shareholder approval for the Directors to be authorised to allot Shares. Under the provisions of section 551 of the Act, the Directors are not permitted to allot shares unless authorised to do so by the shareholders. The Act provides for such authority to be granted either by the Company in general meeting or by the Articles of Association and, in both cases, such authority can only last for five years. Notwithstanding the statutory provisions, institutional best practice indicates that this authority should be renewed annually. Accordingly, all unexercised previous authorities (including that obtained at the Company's previous annual general meeting) are revoked by this new authority and this authority will expire at the conclusion of the next annual general meeting of the Company or, if earlier, 15 months after the passing of the resolution except insofar as commitments to allot Shares have been entered into before that date. In accordance with institutional guidelines, the Board considers it appropriate that the Directors be granted authority to allot Shares in the capital of the Company up to a maximum nominal amount of £24,715,949 representing the guideline limit of approximately two-thirds (ie 66.6%) of the Company's issued ordinary share capital (excluding treasury shares) as at 5 December 2022 (being the latest practicable date prior to publication of this circular). Of this amount, £12,357,974 (representing approximately one-third (ie 33.3%) of the Company's issued ordinary share capital (excluding treasury shares) can only be allotted pursuant to a fully pre-emptive Letter from the Chairman continued rights issue. The Board has no present intention of exercising this authority. As at the date of this circular, the Company holds 1,506,300 treasury shares, being approximately 0.20% of the issued share capital of the Company (excluding treasury shares) as at 5 December 2022 (being the latest practicable date prior to publication of this circular). Resolutions 15 and 16 These resolutions, which will be proposed as special resolutions, supplement the Directors' authority to allot Shares in the Company proposed by resolution 14, and will disapply statutory pre-emption rights in relation to allotment of a limited number of Shares in the Company. Section 561 of the Act requires a company proposing to allot equity securities to offer them first to existing shareholders in proportion to their existing shareholdings. The allotment of equity securities includes Shares (the only class of share capital the Company has at present) and selling Shares held in treasury, but the requirement does not apply to Shares issued under employee share schemes. If these resolutions are passed, the requirement imposed by section 561 will not apply to allotments by the Directors in two cases: in connection with a rights (or similar) issue, where application of the principle in section 561 could (for example) either result in fractional entitlements to Shares arising or require the issue of Shares where this would be impractical because of legal or regulatory requirements in any given overseas jurisdiction; allotments of Shares for cash up to a total nominal value of £7,414,784 (representing approximately 20% of the Company's issued share capital (excluding treasury shares) as at 5 December 2022 (being the latest practicable date prior to publication of this circular)). This gives the Directors flexibility to take advantage of business opportunities as they arise, whilst the 20% limit ensures that existing shareholders' interests are protected in accordance with guidelines issued by institutional investors' bodies; and allotment of Shares for up to a nominal amount equal to 20% of any allotment of Shares from time to time under paragraph 2 above, such authority to be used only for the purposes of making a follow-on offer which the Board or the Company determines to be of a kind contemplated by paragraph 3 of section 2B of the PEG Principles. The authority to issue up to 20% of the Company's issued share capital (excluding treasury shares) and the further authority to be used for the purposes of making a follow-on offer are in accordance with the PEG Principles as revised in 2022. These provide greater flexibility to undertake non-pre-emptive issuances in connection with acquisitions and specified capital investments. The Board confirms that it will only allot Shares with a nominal value of over £3,707,392 (representing 10% of its issued share capital (excluding treasury shares)) for cash if such allotment is in connection with either an acquisition or specified capital investment, in line with the PEG Principles, which will be announced at the same time as the allotment or will have taken place in the preceding 12 month period and will be disclosed in the announcement of the allotment. The Company may use this authority for the purposes of funding one or more specified capital investments in its development pipeline, meaning that the specific project funded by the allotment may be one (or more) of a number of projects that have been identified and disclosed by the Company at the time of the relevant capital raising. This authority will expire at the conclusion of the next annual general meeting or, if earlier, 15 months after the passing of the resolutions except in so far as commitments to allot Shares have been entered into before that date and resolutions to renew the authority will be produced at each future annual general meeting. Resolution 17 This resolution, which will be proposed as a special resolution, seeks to renew the authority for the Company to purchase its own Shares in the market up to a maximum of 74,147,847 Shares (being approximately 10% of the Company's issued ordinary share capital as at 5 December 2022 (excluding treasury shares), being the last practicable date prior to the publication of this circular). The proposed resolution sets out the maximum and minimum prices which the Company may pay for its Shares. This authority will expire at the conclusion of next year's annual general meeting or, if earlier, 15 months after the passing of the resolution. The Directors continually assess the Company's capital management position in accordance with its capital management framework. This authority gives the Company greater flexibility in managing its capital resources. The Board does not currently intend to exercise this authority during the year ahead. However, should it do so, it will only be following careful consideration, taking into account market conditions prevailing at the time, other investment opportunities, appropriate gearing levels, the overall position of the Company, the effects on earnings per share and the benefits for shareholders. Any purchase of Shares would be by means of market purchases. Any Shares purchased under the authority may be cancelled (and the number of the Shares in issue will be reduced accordingly) or may be held in treasury so as to be available to be sold at a later date, subject to the restrictions set out in resolution 14 or its equivalent in force at the time. The extent of the authority sought is calculated in accordance with current governance practice. In the 12 months prior to 5 December 2022, being the last practicable date prior to the publication of this circular, the Company had not exercised its right under its existing authority. The total number of options or warrants to subscribe for Shares that were outstanding as at 5 December 2022, being the latest practicable date prior to publication of this circular, was 673,371, representing 0.09% of the issued ordinary share capital of the Company excluding treasury shares (0.10% of the issued share capital of the Company if the Company's full authority to purchase Shares, both existing and being sought, is used). Resolution 18 The Companies (Shareholders' Rights) Regulations 2009 increased the notice period for all general meetings (including Annual General Meetings) of the Company, subject to any restrictions in its Articles of Association, to 21 days' notice. For general meetings other than Annual General Meetings, a company quoted on the Official List is allowed to hold such general meetings (but not Annual General Meetings) on 14 days' notice provided that two conditions are met. The first condition is that the company offers facilities for shareholders to vote by electronic means. This condition is met if there is a facility offered by the company and accessible to all members to appoint a proxy by means of a website. The second condition is that there is an annual resolution of shareholders approving the reduction in the minimum notice period from 21 days to 14 days. The Board is therefore proposing this resolution as a special resolution to approve 14 days as the minimum notice period for all general meetings of the Company other than annual general meetings. The approval will be effective until the Company's next annual general meeting, when it is intended that permission for the approval to be renewed will be sought. It is intended that the shorter notice period would not be used as a matter of routine for general meetings, but only where the flexibility is merited by the business of the meeting and is thought to be in the interests of shareholders as a whole. Resolution 19 The Company has a policy that it does not make donations or incur expenditure on behalf of political parties. However, the Act contains restrictions on companies making political donations or incurring political expenditure and it defines these terms very widely, such that activities that form part of the normal relationship between the Company and bodies concerned with policy review may be included. Such activities are not designed to support a particular political party. The Company believes that the authority proposed under this resolution, which will be proposed as an ordinary resolution, is necessary to ensure that it does not commit any technical or inadvertent breach of the Act when carrying out activities in furtherance of its legitimate business interests. The authority will lapse on the conclusion of the Company's next annual general meeting and will be limited to an aggregate amount of £50,000. The Company neither made political donations nor incurred political expenditure in the financial year ended 30 September 2022. WHETHER OR NOT YOU DECIDE TO ATTEND THE ANNUAL GENERAL MEETING, WE STRONGLY ENCOURAGE YOU TO CAST YOUR VOTE BY PROXY IN ADVANCE OF THE GENERAL MEETING. ALL VOTES WILL BE HELD BY POLL SO THAT ALL PROXY VOTES ARE INCLUDED. RECOMMENDATION The Directors believe that all the proposals referred to above are in the best interests of the Company and its shareholders as a whole and are most likely to promote the success of the Company for the benefit of its shareholders as a whole. The Directors unanimously recommend that you vote in favour of all the proposed resolutions, as they intend to do in respect of their own beneficial shareholdings. Yours sincerely Mark Clare Chairman This is an excerpt of the original content. To continue reading it, access the original document here. Attachments Original Link Original Document Permalink
Disclaimer Grainger plc published the content on December 19, 2022. It is solely responsible. Published by Public at 15:14:07 UTC on December 19, 2022.
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