![]() #### ANNUAL REPORT AND ACCOUNTS 2024 For the year ended 31 March 2024 rsgroup.com ## FOCUS. ## ALIGN. ## PRIORITISE. EXECUTE. ![]() #### Welcome to our Annual Report Strategic report Performance highlights 1 RS Group at a glance 2 Value creation 3 Chair’s introduction 4 Our stakeholders 6 Our marketplace 8 &KLHI([HFXWLYH2ࢇFHUȆV&(2 introduction 10 Business model and strategy 13 Strategy in action 14 Our growth ambitions 17 Our values 18 Key performance indicators 20 Financial review 24 Regional review 29 Risks, viability and going concern 32 Environmental, social DQGJRYHUQDQFH(6\*  Regulatory statements 70 Governance report Chair’s letter 73 Our Board of Directors 74 Governance at a glance 76 Board leadership and governance framework 77 Board activities during the year 80 Board evaluation 84 Governance code compliance 86 Nomination Committee report 88 Audit Committee report 92 Directors’ Remuneration report 99 Directors’ report 116 Statement of Directors’ responsibilities 119 Financial statements Independent Auditors’ report 120 Group accounts 127 Company accounts 173 Five year record 178 Other information Shareholder information 179 Glossary of terms 181 In this report < Front cover: The Technical Solutions Centre at our regional distribution centre at Fort Worth, US For information about your shareholding visit: rsgroup.com/investors/shareholder-information We have included a glossary of terms at the end of this document to help explain our acronyms Navigating this interactive document Return to contents Return to previously viewed page Page back Page forward ![]() #### FINANCIAL ESG GLOBAL GOALS #### Performance highlights Advancing sustainability 61% Reduction in Scope 1 and 2 emissions since 2019/20 excluding recent acquisitions 2,3 2022/23: 57% 2,3 90% of Group electricity is from renewable sources 2022/23: 91% 4 Championing education and innovation 796k Young engineers and students reached through educational programmes, products and DesignSpark platform since 2020/21 2022/23: 471k 31k lives improved since 2019/20 through our support of The Washing Machine Project (TWMP) 2022/23: 28k Empowering our people 75 employee engagement score 2022/23: 78 34% of our senior leaders are women and 11% are ethnically diverse 2022/23: 30% women and 11% ethnically diverse Doing business responsibly 45% of employees with carbon reduction metric in annual bonus incentive 2022/23: 50% 52% of suppliers by spend have an EcoVadis rating to drive ESG performance 2022/23: 49% 4 Revenue £2,942m Change: (1)% 3URࢉWEHIRUHWD[ £249m Change: (33)% Adjusted 1 RSHUDWLQJSURࢉWPDUJLQ 10.6% Change: (2.9) pts Earnings per share 38.8p Change: (36)% Dividend per share 22.0p Change: +5% Like-for-like 1 revenue change (8)% Change: (18) pts Adjusted 1 SURࢉWEHIRUHWD[ £281m Like-for-like 1 change: (30)% Return on capital employed 1 17.4% Change: (13.4) pts Adjusted 1 earnings per share 43.8p Like-for-like 1 change: (34)% Adjusted 1 IUHHFDVKࢊRZ £151m Change: (43)% #### ESG RATINGS AND #### STANDARDS S&P: included in Sustainability Yearbook Medal rating: Platinum Climate leadership score: A- Global top 50 ESG companies 2024 rating: AA Index score 2023: 3.6/5  6HH 1RWH  RQ SDJHV  WR  IRU GHࢉQLWLRQV DQG UHFRQFLOLDWLRQV 2. Performance excludes acquisitions completed in 2022/23 and 2023/24. 6FRSHDQGHPLVVLRQVXSGDWHGWRUHࢊHFWUHSRUWLQJDQGHPLVVLRQVIDFWRUFKDQJHV 4. 2022/23 performance restated to include post-acquisition data from acquisitions completed in 2022/23 and 2023/24. + Read more on page 24 + Read more on pages 40 to 69 RS Group plc Annual Report and Accounts for the year ended 31 March 2024 1 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### A TRUSTED PARTNER We are a digitally enabled global distributor of product and service solutions, providing small volumes of our suppliers’ products to satisfy our industrial customers’ maintenance, repair and operations (MRO) demands. Revenue £2,942m Change: (1)% Like-for-like change: (8)% 1 2022/23: £2,982m #### RS Group at a glance #### OUR PURPOSE #### Making amazing happen for a better world 2XUSXUSRVHUHࢊHFWVRXUIRFXVRQGHOLYHULQJUHVXOWVIRUSHRSOH SODQHWDQGSURࢉW2XU(6\*DFWLRQSODQȁ)RUD%HWWHU:RUOG ȁGHOLYHUVORQJWHUPYDOXHIRUDOORXUVWDNHKROGHUV + Read more on pages 40 – 69 #### OUR VISION #### First choice for all our stakeholders We strive to be the best place to work for our people, the go-to partner for customers and suppliers, contributing to the communities around us and delivering long-term, sustainable value for our shareholders. + Read more on pages 6 – 7 #### OUR VALUES #### How we work Our values support us to deliver our strategy by guiding daily decisions. They are how we work across our organisation in a consistent way. The values unite us in how we should behave and help us build a culture we are proud of. + Read more on pages 18 – 19 Revenue split by products and service solutions Automation and control (A&C) 42% Mechanical and fluid power 5% Electronics 18% Maintenance 26% Safety and protection 4% Single-board computing 1% Other 4% Revenue split by range of industries Original equipment manufacturing 18% Commerical and finanical services 11% Electronics manufacturing 11% Process manufacturing 17% Public sector 4% Transport and defence 7% Utilities and energy 5% Other 27% + Read more on pages 24 to 31 # WE ARE # RS GROUP EMEA 61% Americas 32% Asia Pacific 7% Region split EMEA Revenue £1,795m Change: +1% Like-for-like change: (5)% 1 2022/23: £1,769m + Read more on page 29 Americas Revenue £934m Change: (1)% Like-for-like change: (13)% 1 2022/23: £946m + Read more on page 30 $VLD3DFLࢉF Revenue £214m Change: (20)% Like-for-like change (15)% 1 2022/23: £268m + Read more on page 31 35 countries with RS operations 1.1m customers c.9,000 employees >2,500 suppliers  6HH 1RWH  RQ SDJHV  WR  IRU GHࢉQLWLRQV DQG UHFRQFLOLDWLRQV RS Group plc Annual Report and Accounts for the year ended 31 March 2024 2 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() ### CREATING VALUE FOR ### ALL OUR STAKEHOLDERS #### THROUGH-CYCLE VALUE #### CREATION TARGETS #### REVENUE GROWTH #### TWICE MARKET #### (OF GDP+) #### MID-TEEN #### ADJUSTED OPERATING PROFIT MARGIN >70% cash conversion rate >20% return on capital employed 30% #### ADJUSTED OPERATING PROFIT #### CONVERSION 1. #### Well positioned in growth markets #### Global leader in a large, industrial MRO market, growing at GDP+ #### through cycle 2. 'LࢆHUHQWLDWHGSURSRVLWLRQGULYLQJPDUNHWVKDUHJDLQ Digitally enabled, high service distributor of a broad range of technical product and service solutions for industrial customers that demand low volumes of critical products across many categories 3. #### 6LJQLࢉFDQWRSHUDWLQJOHYHUDJH #### &UHDWLQJXWLOLVLQJDQGRSWLPLVLQJPRUHHࢇFLHQWDQGࢊH[LEOHSK\VLFDO #### digital and process infrastructure 4. #### $WWUDFWLYHࢉQDQFLDOFKDUDFWHULVWLFV #### Strong cash generation supporting ongoing investment and high returns #### on invested capital 5. Disciplined acquisitions accelerating consolidation Rigorous investment discipline and clear capital allocation policy driving accelerated value creation #### Value creation RS Group plc Annual Report and Accounts for the year ended 31 March 2024 3 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Last year was a challenging one for RS and the industry in general. The industrial market is cyclical but, by prioritising and pursuing the tremendous RSSRUWXQLWLHV WKDW OLH DKHDG ZH DUH FRQࢉGHQW LQ GHOLYHULQJ WKURXJKF\FOH JURZWK DQG VLJQLࢉFDQWO\ LPSURYHGࢉQDQFLDOSHUIRUPDQFHRYHUWKHPHGLXP term. The people of RS are fundamental to our success and, again this year, they have been outstanding in terms of their dedication, professionalism and enthusiasm. My sincere thanks go out to each and every one of them. Strategy Our strategy remains the same but we have UHࢉQHG LW GXULQJ WKH \HDU WR SURYLGH JUHDWHU IRFXV more alignment, better prioritisation and improved execution. We remain focused on organic growth, supplemented by value-accretive mergers and acquisitions (M&A). 7KH%RDUGLVIXOO\VXSSRUWLYHRIWKHZRUNWKDWWKH Executive Committee (ExCo) team has undertaken to clarify the strategic actions and KPIs required to help us achieve our strategic goals and create sustainable value. With our leadership in digital and our vast range of product and service solutions, we are well SRVLWLRQHG WR FDSLWDOLVH RQ WKH VLJQLࢉFDQW PDUNHW RSSRUWXQLW\ )RU PRUH RQ RXU PDUNHW RSSRUWXQLW\ and strategy please see pages 8 and 13. )ROORZLQJLWVDFTXLVLWLRQLQ-DQXDU\5LVRXOKDV outperformed our expectations. In Latin America, we see tremendous opportunities ahead as our team in Americas increases its collaboration with Risoul. We were also pleased to welcome the Distrelec team into RS Group following completion of its DFTXLVLWLRQLQ-XQH'LVWUHOHFLVDVWURQJࢉW with RS in EMEA. Its rapid integration, in terms of combined sales, marketing and product management, will accelerate our business across the region. Our M&A pipeline is strong and we will FRQWLQXH WR H[HUFLVH VWUDWHJLF DQG ࢉQDQFLDO GLVFLSOLQH 2XUFXOWXUHDQGYDOXHV 7KH %RDUG LV FOHDU WKDW FXOWXUH LV IXQGDPHQWDO WR the success of our business. We have continued to admire and value the special culture that exists across our global operations. Towards the end of the year, RS created a new set of values to unite the business behind how we should behave and work. Launched at our 2024 Leadership Event, the values help guide our decision making to deliver great outcomes, improve our corporate governance and reinforce RXUDPD]LQJFXOWXUHȁDFXOWXUHRIZKLFKZHFDQ all be proud. 7KH %RDUG EHOLHYHV WKDW WKHVH YDOXHV RXWOLQH what the business needs to do to be successful: ȁ We are one team ȁ We deliver brilliantly ȁ We do the right thing ȁ We make every day better A strong Environmental, Social and Governance (ESG) approach is embedded in our culture and strategy and we remain focused on our commitment to raise ESG standards across our business and wider value chain. At RS, we are clear that strong ESG performance is a key part of our success and provides opportunities for business growth. To read about our progress against our 2030 ESG action plan goals please see pages 40 to 61. During the year, the Group has been included in the S&P Global Sustainability Yearbook 2024, positioned in the top 15% of companies in its LQGXVWU\ UHࢊHFWLQJ OHDGHUVKLS DQG SURJUHVV LQ sustainability. In addition, RS Group was awarded a platinum medal by EcoVadis for the second consecutive year, placing our business in the top 1% of the 100,000+ companies assessed. 7KH %RDUG KDV VHHQ UHDO EHQHࢉWV IURP KDUQHVVLQJ the full potential of diverse talents, perspectives and experiences to drive innovation, sound decision making and sustainable success. We were SOHDVHG WR EH UHFRJQLVHG E\ WKH )76(  :RPHQ ### OUR PEOPLE ARE ### FUNDAMENTAL ### TOOUR SUCCESS #### Chair’s introduction Rona Fairhead Chair #### A challenging year but we #### UHPDLQ FRQࢉGHQWDERXWWKH #### opportunities ahead. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 4 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Leaders Review where RS was ranked fourth due WRKDYLQJPRUHWKDQRIZRPHQRQRXU%RDUG + See pages 18 and 19 for more on our values and culture Our stakeholders 2XUYLVLRQLVWREHFRPHࢉUVWFKRLFHIRUDOORXU stakeholders: our people, customers, suppliers, FRPPXQLWLHVDQGVKDUHKROGHUV7KH%RDUGDQG Company seek to engage actively with them all to understand their needs. We have outlined on pages 6 and 7 our stakeholder engagement and outcomes for the Group during 2023/24. We fully understand our obligations to our owners ȁRXUVKDUHKROGHUV,QDGGLWLRQWRRWKHU%RDUG members, I have spent a lot of time engaging with shareholders and we truly value that dialogue. In this regard, as well as building a strong, sustainable company for our owners, we also recognise the importance of our dividend WRWKHPDQGWKH%RDUGLVSOHDVHGWRFRQWLQXHZLWK our progressive dividend policy. More details on RXU%RDUGHQJDJHPHQWZLWKRXUVWDNHKROGHUVFDQ be found on pages 80 to 83. Our Board $WWKHHQGRIKLVࢉUVW\HDUDW56\*URXSDV&KLHI ([HFXWLYH2ࢇFHU&(2WKH%RDUGLVGHOLJKWHG with how Simon Pryce has directed the business. +HKDVUHFRJQLVHGWKHFKDOOHQJHVUHࢉQHGWKH strategy and is positioning the business for improved execution and the growth opportunities DKHDG:HDUHFRQࢉGHQWWKDWWKHJUHDWHUFODULW\ and focus will resonate strongly with our stakeholders and drive further value. We were also thrilled to welcome Kate Ringrose DVRXU&KLHI)LQDQFLDO2ࢇFHU&)26KHMRLQHG 56\*URXSIURP&HQWULFDD)76(FRPSDQ\ where she spent 18 years, culminating in the role RI&)2.DWHKDVDVWURQJWUDFNUHFRUGRIGULYLQJ exceptional business transformation, operational excellence and strategic growth, and brings a wealth of experience that has already been of VLJQLࢉFDQWEHQHࢉWWRWKH\*URXS :HDUHFRQࢉGHQWWKDWXQGHU6LPRQȆVOHDGHUVKLS supported by Kate and our global leaders, RS will be able to accelerate the execution of our strategy and capitalise on the opportunities ahead. %HIRUH,FRQFOXGH,ZRXOGOLNHWRWXUQWRWKH%RDUG 2XU%RDUGUHYLHZKDVFRQࢉUPHGWKDWZHKDYH a diverse range of relevant experience and H[SHUWLVHHYHQDVZHFRQWLQXHWRVKDSHRXU%RDUG for the future. I would like to thank each member RIWKH%RDUGIRUWKHLUH[FHOOHQWFRXQVHOLQVLJKWV and wisdom throughout the year. Once again, they have been tremendous. Looking ahead As we continue to navigate the challenging external environment, it is critical that we remain focused on executing our strategy with zeal and passion. We are excited and positive about the RSSRUWXQLWLHVWKDWOLHDKHDGDQGIHHOFRQࢉGHQW that, with the right leadership and people in place, we will generate notable value and strong growth in the medium term. #### Culture is a critical driver which energises and #### motivates our people.” #### Chair’s introduction continued #### DRIVING VALUE FOR ALL OUR STAKEHOLDERS Driving value for all our stakeholders underpins our purpose of making amazing happen for a better world and ensures that we do so sustainably and responsibly. For our people ȁ Clear people plan (page 53) ȁ Created new set of values (pages 18 and 19) For our customers ȁ %HWWHU:RUOGSURGXFWUDQJHRIFVXVWDLQDEOHSURGXFWVSDJH ȁ Sustainable MRO solutions to help customers meet their ESG goals (page 49) ȁ Enhanced Scope 3 emissions reporting (page 47) For our suppliers ȁ Regular engagement on supplier ESG action priorities (page 49) ȁ Support and guidance via our ESG supplier handbook (page 43) For our communities ȁ Supporting education and innovation through RS Grass Roots, DesignSpark and OKdo (page 51) ȁ Improving lives through support of social impact partners and volunteering (pages 51 and 56 respectively) For our shareholders ȁ RS sustainable products and solutions are generating long-term revenue (pages 48 and 49) ȁ Expansion into low-carbon industry segments, such as renewable energy, opening up new market opportunities (page 49) RS Group plc Annual Report and Accounts for the year ended 31 March 2024 5 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() What matters to our people ȁ High-performance, purpose-led culture ȁ Diversity and inclusion ȁ Wellbeing and mental health ȁ Training and career development ȁ 3HUVRQDOࢉQDQFLDOSODQQLQJDQGHGXFDWLRQ How we engage ȁ Encourage employee-led networks and communities ȁ Regular employee engagement surveys ȁ Diversity and inclusion training ȁ Non-Executive Director initiatives and interactions ȁ Training programmes and development opportunities for all employees ȁ Health and wellbeing resources ȁ $FFHVVWRSHUVRQDOࢉQDQFLDOZHOOEHLQJWRROVDQG regular pension seminars What we have achieved ȁ 2024 Leadership Event in March with 193 leaders ȁ )LQDOLVWDQGOLVWHGLQWKH7RS,QVSLULQJ3ODFHV to Work in North America ȁ Received a 95/100 on the annual Corporate (TXDOLW\,QGH[UHYLHZIRU/\*%74,$ Inclusive Workplaces ȁ Won Outstanding Employer award in the 2024 Top Human Resource Management Awards in China ȁ 3URJUDPPHSDUWQHULQࢉUVWHYHU([HFXWLYH Accelerator programme by Moving Ahead ȁ 253 people in UK apprenticeship programme ȁ A Gold member of the Apprentice 5% club for three consecutive years in the UK Why they matter The value we bring +RZZHZLOOPHDVXUHࢉUVWFKRLFH OUR PEOPLE Our people are fundamental to the success of our business and we continue to invest in our ability to recruit, retain and develop the best talent. Creating an inclusive and engaging environment where everyone is proud and excited to come to work as themselves and can perform at their best, develop and thrive. ȁ My Voice engagement score CUSTOMERS ,WLVFUXFLDOWRXQGHUVWDQGRXUFXVWRPHUVȆ needs in order to create value, solve problems and unlock opportunities. %HLQJDWUXVWHGSUREOHPVROYHUGHOLYHULQJ excellence through a connected experience and a suite of valued product and service solutions for industrial MRO customers. ȁ Net promoter score SUPPLIERS We work in partnership with our suppliers to deliver an unrivalled product choice and innovative solutions for our customers. %HLQJDWHFKQLFDOO\OHGVHUYLFHRULHQWHG supplier partner of choice, bringing an unrivalled product range and innovative solutions to industrial MRO customers. ȁ Number of stocked products COMMUNITIES Across our communities worldwide, we are implementing educational initiatives to improve lives and inspire the next generation of engineers. Supporting our communities to improve SHRSOHȆVOLYHVLQVSLULQJIXWXUHJHQHUDWLRQV while creating a more sustainable world. ȁ Reduction in carbon emissions SHAREHOLDERS Our shareholders include institutional investors and individuals who provide the capital for our business to grow. Creating superior economic value through delivering reliably for our stakeholders, generating consistent and sustainable cash returns on invested capital well in excess of our cost of capital. ȁ Earnings per share #### Our stakeholders ### UNDERSTANDING ### THE NEEDS OF ALL ### OUR STAKEHOLDERS It is important for us to engage with all our stakeholders to understand what matters to them, ensuring we are responsive to their needs and adding value. The views of our VWDNHKROGHUVDUHIXQGDPHQWDOWRXVEHFRPLQJࢉUVWFKRLFHDQGGULYLQJDORQJWHUP VXVWDLQDEOHEXVLQHVV:HKDYHWKHUHIRUHGHࢉQHG.3,VIRUHDFKRIRXUVWDNHKROGHUV DQGZLOOVHWWDUJHWVWRGHWHUPLQHRXUSURJUHVVLQEHFRPLQJࢉUVWFKRLFH #### OUR PEOPLE Linked to our ESG goals: RS Group plc Annual Report and Accounts for the year ended 31 March 2024 6 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() What matters to our suppliers ȁ Data-driven product management ȁ Knowledge of customer needs and trends ȁ Ease of doing business ȁ 2ࢆHULQJIXOOUDQJHRISURGXFWDQGVHUYLFH solutions to our customers ȁ Positive environmental and social impact, operating to high ethical standards How we engage ȁ Dedicated account managers ȁ Regional and global supplier events ȁ 6XSSOLHUVFRUHFDUGVZLWKGHࢉQHGWDUJHWV ȁ Voice of Supplier survey every two years ȁ 56&RQQHFWȁSDUWQHULQJZLWKVXSSOLHUVWR connect with customers ȁ Seamless new product introductions ȁ Regular engagement with suppliers on ESG action plan What we have achieved ȁ Stronger partnerships with our suppliers ȁ :RUNHGZLWKVXSSOLHUVWRH[WHQG%HWWHU:RUOG product range ȁ Developing a programme to source, store and deliver products closer to the customer ȁ Attendance at Smart Production Solutions (SPS) conference in Munich, Germany What matters to our customers ȁ Innovative and sustainable solutions to solve problems and unlock opportunities ȁ A seamless experience so customers can focus on what they do best ȁ A partner to build a more sustainable and socially responsible future ȁ An unrivalled choice of products and services and availability How we engage ȁ Dedicated customer service ȁ Seamless communication ȁ Trade fairs, forums and presence at customer sites ȁ Voice of the Customer surveys ȁ Customer performance reviews What we have achieved ȁ ([SDQGHG%HWWHU:RUOGSURGXFWUDQJHWRF ȁ Risoul transactional website launched in Mexico ȁ Expanded technical solution services in Americas ȁ Enhanced search capabilities on 27 websites WKURXJKXVLQJ\*RRJOHWHFKQRORJ\DQGDUWLࢉFLDO intelligence (AI) ȁ Enabled greater localisation of digital experiences to connect better with customers ȁ Improved translation quality with 94% of customers responding that product translations are good ȁ 'URYHDFXWWLQJHGJHGDWDGULYHQȅWHVWDQGOHDUQȆ DSSURDFKWKDWVLJQLࢉFDQWO\ERRVWHGFXVWRPHU engagement and satisfaction What matters to our communities ȁ Providing support to our local communities ȁ Providing educational initiatives to young people ȁ Limiting environmental impact in operations How we engage ȁ Competitions to encourage innovation ȁ Delivering SuperSkills Employability Training ȁ 2XUH[FOXVLYH\*OREDO2,500 suppliers of industrial MRO products >750K stocked products 1.1m customers £257 Average order value #### HOW WE WIN RS is a digitally enabled global distributor of product and service solutions, providing small #### volumes of our suppliers’ products to satisfy our industrial customers’ MRO demands + Read more on about our strategy in action on pages 14 to 16 #### Customers Target high lifetime value customers who buy a broad mix of industrial MRO products in small volumes #### Products Focus on technically led and specialist ranges within a broad product RࢆHUZLWKDVWURQJIRFXV on A&C and HOHFWULࢉFDWLRQ #### Operational #### excellence /HYHUDJHHࢇFLHQW physical, digital and process infrastructure sustainably with great people #### Solutions Scale solutions that pull through product and drive customer loyalty #### Experience Strengthen and tailor our digitally enabled, seamless customer experience across all interactions with us RS Group plc Annual Report and Accounts for the year ended 31 March 2024 13 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() £257 average order value 7REHRXUFXVWRPHUVȆࢉUVWFKRLFHZHPXVWSURYLGHWKH relevant product and services that solve their procurement needs. We deliver excellence through a connected experience and a suite of valued product and service solutions for industrial MRO customers. While continuing our unique service proposition for other relevant sectors, we are targeting customers with a high lifetime value and a consolidating behaviour in key vertical markets. Our target customers are those industrial customers purchasing small volumes of multi-category MRO products ranging from global multi-site operators to small single-site customers. #### TARGET INDUSTRIAL #### MRO CUSTOMERS >750k stocked products :H RࢆHU D EURDG DQG GHHS UDQJH RI LQGXVWULDO 052 products to meet our customers’ needs. We will maintain our broad range of technically led and specialist products, with a strong focus on A&C. We will also increase and curate DUDQJHLQDGMDFHQWFDWHJRULHVDQGDEURDGHURࢆHULQJ WDLORUHGWR VSHFLࢉF FXVWRPHU QHHGV ZKLOVW OHYHUDJLQJ RXU unique regional strengths. Our strong and extensive supplier relationships ensure wide product choice, availability and substitute options. 2XURZQEUDQG56352LVDNH\GLࢆHUHQWLDWRUIRUXVRࢆHULQJ customers high-quality, competitively priced products. #### INCREASE AND CURATE #### OUR PRODUCTS ENABLING OFFSHORE WIND In 2023, RS won a landmark contract to provide MRO solutions to support WKHZRUOGȆVODUJHVWRࢆVKRUHZLQGIDUP Working with Equinor, RS will provide products and vital operational supplies to support several wind projects across the UK for the next three years. As demand for renewable energy increases, the development of the RࢆVKRUHZLQGLQGXVWU\LVFUXFLDO for long-term energy security and sustainability. Read more on page 49 SUPPORTING SOLAR POWER ADVANCEMENT Adoption of renewable energy is an HVVHQWLDO HOHPHQW LQ WKH ࢉJKW DJDLQVW FOLPDWHFKDQJHDQGWKHࢊH[LELOLW\DQG HࢇFLHQF\ RI VRODU JHQHUDWLRQ KDV VHHQ it emerge as one of the most popular DQGDSSHDOLQJ RSWLRQV 56 352 RࢆHUV D comprehensive approach to solar power, providing everything needed from a single source. The portfolio is also modular and scalable, allowing end users to future proof systems so they can be quickly expanded and adapted when required. Read more on page 49 #### Strategy in action Annual Report and Accounts for the year ended 31 March 2024 14 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION RS Group plc ![]() #### Strategy in action continued 24% of revenue from service solutions :H RࢆHU VHUYLFH VROXWLRQV PDLQO\ GLJLWDO WKDW FUHDWH customer loyalty and address customers’ problems that drive product pull through. We also have a number of revenue-generating services such as our maintenance solutions, see case study below, and our safety solutions which include personal protective equipment (PPE) and hygiene control solutions. We make our customers’ lives easier across the design and maintain lifecycle which drives stronger relationships, recurring revenue and greater customer lifetime value. #### SCALE OUR SERVICE #### SOLUTIONS 61% of revenue through digital channels We provide a digitally enabled experience powered by a human touch and specialist knowledge. We aim to provide a seamless customer experience, tailored to customer type and potential lifetime value. We are focusing on providing a more personalised and bespoke customer service for higher-value customers as we optimise our costs to serve. This will deliver sustainable cash UHWXUQVDQGIXUWKHUGLࢆHUHQWLDWLRQIURPPDUNHWSODFHVDQG pure digital players. #### STRENGTHEN OUR #### CUSTOMER EXPERIENCE DELIVERING SUSTAINABLE SOLUTIONS In 2023/24, compressed air leak surveys conducted by RS Maintenance Solutions helped to identify energy losses of over £2.3 million among 14 customers, with the average return on investment to repair faults taking less than six weeks. Our sustainability solutions help customers run their businesses more HࢇFLHQWO\ FRVW HࢆHFWLYHO\ VDIHO\ and sustainably at all stages of the industrial lifecycle. Read more on page 49 MAKING SUSTAINABLE CHOICES EASY We have implemented several digital IHDWXUHV WR KHOS FXVWRPHUV ࢉQG DQG purchase products from our range of c. 30,000 Better World products. Our customer-facing website now includes the BWP product stamp on all eligible products, detailed sustainable product factsheets and a guidelines document outlining our inclusion criteria and methodology. Read more on page 48 RS Group plc Annual Report and Accounts for the year ended 31 March 2024 15 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() c. 9,000 employees :H DUH LPSURYLQJ RXU RSHUDWLRQDO HࢆHFWLYHQHVV WR GULYH HࢇFLHQFLHV LQ RXU WHFKQRORJ\ DQG GLJLWDO SURFHVVHV DQG physical infrastructure. We are focusing on developing SURFHVVHࢇFLHQF\ZKHUHWKLQJVFDQEHGRQHEHWWHU consistently. We are evolving our enabling functions to share expertise and provide support across the Group. Our continuous improvement approach through our great people and our increased use of automation and data DQDO\WLFV HQDEOHV XV WR SURYLGH HࢇFLHQW DQG EHVWLQFODVV service to our customers. #### DELIVER OPERATIONAL #### EXCELLENCE INCREASING SUSTAINABLE PACKAGING In 2023/24, our European operations switched to brown packaging boxes for product distribution which are made from 100% recycled material. We also replaced all plastic tape in the UK, France, Italy and Germany with paper tape sealing which allows for easier recyclability while reducing customer waste. Read more on page 46 #### 2024 LEADERSHIP #### EVENT OUR PEOPLE IN ACTION #### An opportunity for clarity and alignment In March 2024, 193 of our senior leaders from across the world attended our leadership event in (XURSH 7KH HYHQW JDYH WKHP WKH RSSRUWXQLW\ WR OHDUQ DERXW WKH UHࢉQHG \*URXS VWUDWHJ\ DQG WKH aligned regional strategies, presented by each of the regional presidents, as well as the updated operating model. 7KHQHZYDOXHVZHUHXQYHLOHGDORQJZLWKKRZWKH\ࢉWZLWKRXUSXUSRVHYLVLRQ VWUDWHJ\ DQG operating model. Our senior leaders left the event understanding how the values will help deliver RXU VWUDWHJ\ PRUH HࢆHFWLYHO\ DQG WKH QHHG WR FOHDUO\ FRPPXQLFDWH WKHLU VLJQLࢉFDQFH WR WKHLU WHDPV #### Strategy in action continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 16 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Operating leverage Geographic opportunities Product extensions and adjacencies Product and service solutions May 2018 Jan 2019 Dec 2020 Jan 2021 Feb 2021 Jun 2022 Jan 2023 Jun 2023 Apr 2024 Operating leverage Geographic opportunities Product extensions and adjacencies Product and service solutions #### Our growth ambitions We see opportunities to continue to take market share across all our operating areas. Market outperformance results from selling more product and service solutions to existing and new customers, growing our branded and own-brand product range and leveraging our digital and data capabilities to improve our customer service and experience. All of this should increase our share of customer wallet and attract new customers. With our disciplined investment criteria, we are accelerating organic growth by adding high-quality, strategic acquisitions that will develop our: ACQUISITIONS IN ACTION #### Risoul We acquired Mexico-based Risoul in January 2023. Since then, the business in Latin America KDVRXWSHUIRUPHG RXUH[SHFWDWLRQV UHࢊHFWLQJ D VWURQJPDUNHW DQG VSHFLDOLVW WHFKQLFDO VHUYLFH RࢆHU :HVHHVLJQLࢉFDQWV\QHUJ\RSSRUWXQLWLHVDVZH introduce RS Group’s digital capabilities and RS PRO, our own-brand product range, into Risoul, as well as the service learnings we can develop within RS in Americas. The launch of Risoul’s transactional website in February 2024 has continued to solidify our foundations in Latin America and will support the future expansion of the business. #### Distrelec In June 2023, we completed the acquisition of 'LVWUHOHFZKLFKLVDVWURQJࢉWZLWK56LQ(0($,WZLOO GHOLYHUVLJQLࢉFDQWFRVWVDYLQJVDQGGULYHLQFUHDVHG revenue through our existing distribution capability across Europe and has brought the addition of a PXFKQHHGHG ORFDO IXOࢉOPHQW FHQWUH LQ 6ZLW]HUODQG We are accelerating our initial integration plans with our expected cost savings already exceeding those anticipated when we made the initial acquisition. 2XU FXVWRPHUV ZLOO EHQHࢉW IURP FRPELQHG SURGXFW and value-added solutions and our own-brand product range, RS PRO, which is starting to prove SRSXODU ZLWK 'LVWUHOHF FXVWRPHUV 6XSSOLHUV EHQHࢉW from an unrivalled joint distribution network. #### ACCELERATING #### VALUE CREATION ### OUR GROWTH ### AMBITIONS RS Group plc Annual Report and Accounts for the year ended 31 March 2024 17 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() We listen, respect and trust each other. We seek diverse perspectives. We collaborate with purpose as one connected team. We are empowered, take ownership and deliver what customers need with energy and passion. We care about our impact on colleagues, customers, suppliers and communities, today and tomorrow. We are adaptable, agile and inspired to innovate and make positive changes, DOZD\VࢉQGLQJZD\V to improve, challenge and simplify. #### Our values # OUR VALUES # WILL HELP US # SUCCEED #### We are one team who deliver brilliantly by doing the right #### thing to make every day better. Our values are four guiding principles that outline what our people need to do together to succeed. They are how we work across our organisation in a FRQVLVWHQWZD\7KH\XQLWHXVLQKRZZHVKRXOGEHKDYHDQGGLࢆHUHQWLDWHXVIURP our competition. Our values help us to build trust with our customers, suppliers and investors. We have a clear plan of action and an ambition to improve the way we operate and to build a purpose-led culture that we are all proud of. 7KH YDOXHVZLOOKHOSXVGHOLYHURXUVWUDWHJ\PRUHHࢆHFWLYHO\DQGZLWKEHWWHU long-term outcomes for everyone. 2,500 survey responses 350 people joined our focus groups RS Group plc STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION 18Annual Report and Accounts for the year ended 31 March 2024 ![]() #### Our values continued ### CONSISTENT ### VALUES FOR ALL Our values were created with the input of our people around the world. To develop them, we evaluated 2,500 survey responses and gained feedback from 350 of our people, customers and suppliers through focus groups, in addition to garnering the perspectives of our senior leaders. 2024 We are rolling out and embedding our new values with our people. We are encouraging them to embrace the values in their teams, UHࢊHFWLQJKRZWKH\OLYH WKHPDOUHDG\DQGZKHUH WKH\FDQLPSURYH 3. We engaged with VHQLRUOHDGHUVWRFOHDUO\ connect the values with RXUVWUDWHJ\ 7. We designed how the new values would look 4. We mapped where our new values would appear across the HPSOR\HHH[SHULHQFH 8. We briefed leaders and line managers on the rollout plans for our new values 1. We issued a questionnaire to over a third of our people to understand the values that mattered to them most 5. We developed local versions of the new values in our global languages and then tested them 9 languages 2,500 responses 2. We held face-to-face workshops with 350 of our people, customers and suppliers to learn more about their views on values 6. We developed a rollout plan to reach all our people through 2024 40 hours 350 people #### OUTCOME #### One consistent set of values; embraced and demonstrated by all RS people RS Group plc Annual Report and Accounts for the year ended 31 March 2024 19 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Key performance indicators 2XUVL[ࢉQDQFLDONH\SHUIRUPDQFHLQGLFDWRUV .3,VKHOSXVWRPHDVXUHWKHVXFFHVVIXO LPSOHPHQWDWLRQRIRXUVWUDWHJ\DQG monitor and drive our performance. 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UHSRUWLQJPHWKRGRORJ\GDWDLQFOXGHVEXVLQHVVHVDFTXLUHGLQDQG GDWDDOVRXSGDWHGWRLQFOXGHEXVLQHVVHVDFTXLUHGLQWKDW\HDU #### Key performance indicators FRQWLQXHG RS Group plc Annual Report and Accounts for the year ended 31 March 2024 23 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() ### PERFORMANCE IN ### A CHALLENGING ### ENVIRONMENT #### Financial review Our financial performance reflects the challenging market and unwinding of our unusualpost-pandemic trading benefit.” Overall results 2024 2023 Change Like-for-like 1 change Revenue £2,942m £2,982m (1)% (8)% \*URVVSURࢉW £1,264m £1,352m (7)% (11)% Gross margin 43.0% 45.3% SWV SWV 2SHUDWLQJSURࢉW £280m £383m (27)% (25)% $GMXVWHG 2 RSHUDWLQJSURࢉW £312m £402m (22)% (25)% $GMXVWHG 2 RSHUDWLQJSURࢉWPDUJLQ 10.6% 13.5% SWV SWV $GMXVWHG 2 RSHUDWLQJSURࢉWFRQYHUVLRQ 24.7% 29.7% SWV SWV 3URࢉWEHIRUHWD[ £249m £372m (33)% (31)% $GMXVWHG 2 SURࢉWEHIRUHWD[ £281m £391m (28)% (30)% Earnings per share 38.8p 60.4p (36)% (34)% $GMXVWHG 2 earnings per share 43.8p 63.6p (31)% (34)% &DVKJHQHUDWHGIURPRSHUDWLRQV £301m £413m (27)% $GMXVWHG 2 IUHHFDVKࢊRZ £151m £264m (43)% $GMXVWHG 2 RSHUDWLQJFDVKIORZFRQYHUVLRQ 81.9% 92.0% SWV 1HWGHEW £418m £113m 1HWGHEWWRDGMXVWHG 2 EBITDA 1.1x [ 5HWXUQRQFDSLWDOHPSOR\HG 17.4% 30.8% Dividend per share 22.0p 20.9p 5%  /LNHIRUOLNHFKDQJHH[FOXGHVWKHLPSDFWRIDFTXLVLWLRQVDQGWKHHࢆHFWVRIFKDQJHVLQH[FKDQJH UDWHVRQWUDQVODWLRQRIRYHUVHDVRSHUDWLQJUHVXOWVZLWKFRQYHUWHGDWDYHUDJH H[FKDQJHUDWHV5HYHQXHLVDOVRDGMXVWHGWRHOLPLQDWHWKHLPSDFWRIWUDGLQJGD\V\HDURQ\HDU $FTXLVLWLRQVDUHRQO\LQFOXGHGRQFHWKH\KDYHEHHQRZQHGIRUD\HDUDWZKLFKSRLQWWKH\VWDUWWR EHLQFOXGHGLQERWKWKHFXUUHQWDQGFRPSDUDWLYHSHULRGVIRUWKHVDPHQXPEHURIPRQWKVVHH 1RWHRQSDJHVWRIRUUHFRQFLOLDWLRQV  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The Board and ExCo are committed to setting and embedding a sound risk culture which is aligned with the principles and values of the Group and recognise that the right risk culture is vital in assisting management and employees in the avoidance of many potential organisational GLࢇFXOWLHV7KH\DLPWRVHWWKHFRUUHFWWRQHIURP the top and ensure that risk is an intrinsic element of the governance structure. Risk appetite :HGHࢉQHRXUULVNDSSHWLWHDVWKHDPRXQWRI risk that the Group is willing to take to meet its strategic objectives and deliver projected returns. The Board has the responsibility of assigning a risk appetite against each of the risk themes and agreeing behaviours that align to each of the appetite categories. The appetite is underpinned by key factors such as our ways of working, treating customers fairly, our strategic actions, along with national and international laws and regulations within the areas in which we operate. There is a low tolerance for health and safety risks, regulatory risks or risks to the reputation of the business. RS will not tolerate fraud or other ࢉQDQFLDOFULPHVLQDQ\DVSHFWRILWVRSHUDWLRQVDQG any suspected acts will be fully investigated and prosecuted if appropriate. See pages 59 and 70 for more information regarding our Code of Conduct and policies. Risk framework Risk management is an essential part of business activities, to assist identifying the problems the Group may face and to help avoid or manage WKHPZKHUHQHFHVVDU\(ࢆHFWLYHULVNPDQDJHPHQW empowers management and the organisation to act with autonomy and accountability and supports the Group to use risk information as a guide to good decisions and help prioritise resources. The risk framework is designed to identify and mitigate potential risks proactively, ensure regulatory compliance, enhance operational HࢇFLHQF\DQGIRVWHUVWDNHKROGHUFRQࢉGHQFH It is a strategic asset for safeguarding the Group’s ࢉQDQFLDOKHDOWKPDQDJLQJRXUUHSXWDWLRQDQG ensuring targets are achieved. The members of the ExCo are responsible for the operational day-to-day understanding and adherence to the risk framework and are also tasked with creating a positive risk culture. Senior managers are responsible for producing risk registers for their areas of the business and being transparent in providing information to the risk team. This process involves market, business and function risk leaders to provide bottom-up visibility of possible risks. Assessment of risks 7KHULVNRZQHULGHQWLࢉHVWKHFRQWUROVIRUHDFK ULVNDQGDVVHVVHVWKHLPSDFWXVLQJERWKࢉQDQFLDO DQGQRQࢉQDQFLDOFULWHULDDQGOLNHOLKRRGRIWKH ULVNRFFXUULQJXVLQJFRQVLVWHQWPHDVXUHV7KHVH DVVHVVPHQWVFRQVLGHUWKHHࢆHFWVRIWKHH[LVWLQJ controls leading to the resulting net or residual risk. This assessment process is supplemented by an annual risk and controls questionnaire which is completed by all relevant operating locations and Group-wide functions. This provides more detailed risk information across the Group and is reviewed by the Group’s risk team. Emerging risks 6RPHULVNVFDQQRWEHHDVLO\TXDQWLࢉHGRIWHQ due to a lack of information to facilitate a clear understanding of the consequences. These risks are categorised as emerging and they are closely monitored until more information is available. #### The Group has risk management and internal control processes to identify, #### DVVHVVPDQDJHDQGPRQLWRUWKHULVNVZKLFKKDYHWKHSRWHQWLDOWRDࢆHFWWKH #### achievement of its strategy. #### OUR RISK MANAGEMENT PROCESS 1. Identify potential risks 2. Assess the risk 3. Determine and treat the risk 4. Monitor and review RS Group plc Annual Report and Accounts for the year ended 31 March 2024 32 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### BEING #### CYBER SECURE Cyber security continues to be a key concern for all businesses. However, it is short-sighted to only consider technological cyber security risks. RS Group’s approach to cyber security has a strong focus on human behaviour and culture and our information security team is passionate about helping our people to stay safe online, whether at work or at home. :HWDNHDSHRSOHࢉUVWDSSURDFKWRRXU education and awareness, recognising that cyber security can be perceived as complicated and overly technical. Our information security team and our education partners create engaging and friendly content that ensures that employees feel safe to reach out and ask questions, and that they get answers in plain language, not specialist jargon. This LQFOXGHVGHOLYHULQJIDFHWRIDFHEULHࢉQJ sessions as well as formal and informal videos, how-to guides and blog posts. MANAGING RISKS IN ACTION: Recently, we performed a survey across all employees to help understand their cyber security awareness and tailor our approach WRGLࢆHUHQWW\SHVRIOHDUQHUVDQGGLࢆHUHQW SURࢉOHVRIULVN7KLVKDGDVWURQJUHVSRQVH rate and we will be using the data gathered to make further improvements in the coming year. We have also recently launched a new training platform in conjunction with a third-party specialist that continues our people-focused approach to cyber security awareness. This includes tools, tricks and informative blog posts to keep our employees up to date, as well as quizzes to show them where they could improve their online safety knowledge. This platform is informed by research in human psychology and corporate anthropology and adopts a continual learning approach, delivering smaller courses on a regular basis rather than a single annual training package. As well as improving engagement, crucially this enables both greater measurement and greater remediation of human cyber risk. #### Risks, viability and going concern continued #### ACCOUNTABLE AND RESPONSIBLE TEAMS #### Overall #### accountability #### Board Overall accountability for the Group’s approach to risk management. Supported by the Audit &RPPLWWHHWRHQVXUHHࢆHFWLYHLQWHUQDOFRQWUROVDQGULVNPDQDJHPHQWV\VWHPVWKH%RDUGDOVR approves the Group’s risk appetite and the principal risks. #### Executive Committee Responsible for owning and reviewing the Group’s risk management process, risks and mitigating internal controls and making recommendations to the Board. #### Markets, businesses, regions #### and Group functions Identifying, reviewing and communicating local risks using risk registers where applicable. #### Risk owners #### Group Risk Supports the business to identify, assess, manage and report risks. This includes providing a consistent measurement process for risks and helping identify risks that should be reported at a Group level. #### Other specialist functions Other functions complementing the Group risk team that oversee areas including information security, technology, legal, compliance and environmental and health and safety teams. #### Supporting #### teamsOperational Audit 2SHUDWLRQDO$XGLWDVSDUWRILWVVFKHGXOHGDXGLWVUHYLHZVWKHHࢆHFWLYHQHVVRIWKH\*URXSȆV mitigating controls for its risks. #### Assurance We take a people-first approach to our education and awareness, recognising that cyber security can be perceived as complicated and overly technical.” RS Group plc Annual Report and Accounts for the year ended 31 March 2024 33 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Cyber security Risk theme: Operational Change initiatives Risk theme: Operational  M&A activity Risk theme: Operational :KDWLVWKHULVNDQGKRZFRXOGLWDࢆHFWXV" A successful attack on our systems, sites, data or DWKLUGSDUW\PHDQVWKDWFRQࢉGHQWLDOLQIRUPDWLRQLV lost or business critical systems become unavailable that may lead to negative customer or supplier impacts, regulatory action, reputational damage and / or loss of business and revenue. :KDWLVWKHULVNDQGKRZFRXOGLWDࢆHFWXV" We are not able to implement successfully a business and technology change programme to deliver the strategic agenda which could lead to a lack of engagement and prioritisation for deployment and embedding the required change initiatives into the business. :KDWLVWKHULVNDQGKRZFRXOGLWDࢆHFWXV" We do not realise the appropriate value from our acquisitions. :KDWDUHZHGRLQJWRPDQDJHWKHULVN" – Controls in place include technical and organisational protection measures including: ੳ Firewalls ੳ Anti-malware software ੳ 6WDࢆWUDLQLQJDQGDZDUHQHVV ੳ Procedures to update security patches ੳ Regular security testing ੳ Incident response processes – Regular assessment and continuous development of security controls, including investing in employee education and awareness and further security testing capabilities. This includes running simulations of security incidents with both senior and operational leaders. :KDWDUHZHGRLQJWRPDQDJHWKHULVN" – The design and implementation of a robust strategic delivery and execution framework, with sponsorship and leadership by the members of the ExCo, supported E\DGHࢉQHGJRYHUQDQFHSURFHVV :KDWDUHZHGRLQJWRPDQDJHWKHULVN" – Process to build and maintain a pipeline of RSSRUWXQLWLHVLQFOXGLQJWKRURXJKVFUHHQLQJIRUࢉW with our agreed strategy and with our culture. – Rigorous due diligence and contract negotiation processes, including full involvement of expertise across our businesses, functions and (where DSSURSULDWHH[WHUQDODGYLVRUV – Clear value-focused returns criteria for investments, expertise in comprehensive suite of valuation techniques and a commercial approach to negotiation. – Robust integration planning process closely linked with the due diligence process; ownership of the business plan and synergy targets by the acquiring business; detailed synergy capture plan and strong governance of post-acquisition delivery process. :KDWDUHRXUIXWXUHDUHDVRIIRFXV" – Continue to stay abreast of developments relating to cyber security, including regulatory changes such as 7KH1HWZRUNDQG,QIRUPDWLRQ6HFXULW\1,6'LUHFWLYH – As security threats continue to evolve, we also work collaboratively with the National Cyber Security Centre and other third-party security intelligence organisations. :KDWDUHRXUIXWXUHDUHDVRIIRFXV" – Deployment of a change management methodology and creation of a community of practice. – Provide regular reporting through the quarterly business review process. :KDWDUHRXUIXWXUHDUHDVRIIRFXV" – &RQWLQXHWRDXGLWDQGUHࢉQHLQWHUQDOSURFHVVHV – Continue to train and develop latest industry-standard techniques for valuation, acquisition and integration. 5LVNVGLUHFWLRQGHࢉQLWLRQ The risk is likely to increase within the next 12 months The risk is likely to remain stable within the next 12 months The risk is likely to reduce within the next 12 months  New risk #### Risks, viability and going concern continued Principal risks 7KH%RDUGDQG([&RFRQࢉUPWKDWWKH\KDYH undertaken a robust assessment of the Group’s principal and emerging risks, including those that could threaten its business model, future performance, solvency or liquidity, and assessed them against the Group’s risk appetite. For several principal risks, ExCo members will, as part of their ongoing activities, update the Board on these risks and their mitigation. This allows the Board to determine whether the actions being WDNHQE\PDQDJHPHQWDUHVXࢇFLHQW ### OUR PRINCIPAL ### RISKS AND ### UNCERTAINTIES RS Group plc Annual Report and Accounts for the year ended 31 March 2024 34 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Talent and capability Risk theme: Operational Geopolitical environment Risk theme: Operational Market disruption Risk theme: Strategy and change :KDWLVWKHULVNDQGKRZFRXOGLWDࢆHFWXV" If we are not able to attract, develop and retain the necessary high-performing employees and capabilities, we may not be able to meet our ambitious strategic goals and maintain customer service levels and relationships. :KDWLVWKHULVNDQGKRZFRXOGLWDࢆHFWXV" Future global destabilisation impacts our international business activities, increasing operating costs, additional trade sanctions, supply chain delays, and / or hinders passage of products between our distribution sites with delays and higher costs. :KDWLVWKHULVNDQGKRZFRXOGLWDࢆHFWXV" Unexpected changes in market buying behaviours UHVXOWLQORZHUWKDQIRUHFDVWࢉQDQFLDOUHVXOWV :KDWDUHZHGRLQJWRPDQDJHWKHULVN" – Holistic people plan to create the right culture that delivers on our employee vision. – Upweighting succession planning with greater focus on action follow up. – Investing in leader and manager capability development. – Improved cascade of objectives and improved performance management. :KDWDUHZHGRLQJWRPDQDJHWKHULVN" – Continually monitoring the existing markets in which the Group operates to identify potential uncertainties that may impact our service to customers within countries, regions or globally. – 7KURXJKRXUVXSSOLHUGLUHFWDQGLQGLUHFWUHODWLRQVKLSV identifying potential supply vulnerabilities and ensuring appropriate resilience is in place. – Considered as part of the due diligence process when looking at potential acquisition targets. – Continued investments in trade compliance intelligence and capabilities. :KDWDUHZHGRLQJWRPDQDJHWKHULVN" – Continually assess what is ‘value’ to our customers and the optimal ways to deliver this at an appropriate return for the Group. – Continue to improve our online user experience WKURXJKULFKDQGGLࢆHUHQWLDWHGSURGXFWFRQWHQWWR make it easier for customers to compare and select the right product across an unrivalled product range. – 0LWLJDWHF\FOLFDOLW\E\EXLOGLQJLQFUHDVHGࢊH[LELOLW\LQWR our cost base and targeting less cyclical customer verticals and product categories. :KDWDUHRXUIXWXUHDUHDVRIIRFXV" – Introducing strategic workforce planning to ensure we have the capabilities required to deliver the strategy. – Launching employee value proposition for external attraction and internal retention. :KDWDUHRXUIXWXUHDUHDVRIIRFXV" – Increase share of local and nearshore sourcing reduces singular risk from one sourcing market. – Continued expansion of our product range in both depth and breadth reduces dependency on any VSHFLࢉFVXSSOLHURUVRXUFLQJPDUNHW :KDWDUHRXUIXWXUHDUHDVRIIRFXV" – Continued targeted expansion of our product range in both depth and breadth to ensure we cover our customers’ existing and future needs, including horizon-scanning on future technologies and driving consolidation of customers’ purchases with us. – )XUWKHUGHYHORSPHQWRIVROXWLRQVRࢆHULQJWR provide more value to customers and enhance customer loyalty. #### Risks, viability and going concern continued 5LVNVGLUHFWLRQGHࢉQLWLRQ The risk is likely to increase within the next 12 months The risk is likely to remain stable within the next 12 months The risk is likely to reduce within the next 12 months  New risk RS Group plc Annual Report and Accounts for the year ended 31 March 2024 35 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Business resilience Risk theme: Operational Climate change Risk theme: Operational Access to debt and capital markets Risk theme: Financial resilience  :KDWLVWKHULVNDQGKRZFRXOGLWDࢆHFWXV" We are not adequately prepared for a major business disruption, caused by an unplanned event disrupting FULWLFDOLQIUDVWUXFWXUHSK\VLFDODQGRUGLJLWDODVVHWV and cannot carry out key processes and functions. :KDWLVWKHULVNDQGKRZFRXOGLWDࢆHFWXV" We do not adequately manage the potential impacts RQWKHEXVLQHVVGXHWRFOLPDWHFKDQJHHࢆHFWV7KLV could be either: – The physical risks of more extreme weather conditions LQFOXGLQJKHDWZDYHVVWRUPVRUࢊRRGVFRXOGLPSDFW employee health and wellbeing, our supply chain channels and customer service, reducing revenue and increasing operating and capital costs in order to mitigate the risks. – The transition risks associated with the migration to a low-carbon industrial sector, including declining demand from heavy and energy intensive industries or single-use RS products and increased costs of logistics (due to carbon taxes on fuels and investment in clean WHFKQRORJLHVFRXOGOHDGWRUHGXFHGUHYHQXHRU reduced customer NPS. :KDWLVWKHULVNDQGKRZFRXOGLWDࢆHFWXV" We are not able to access adequate capital to support ongoing operations and future growth. This may impact us in that we cannot generate adequate cash ࢊRZWRVXSSRUWGD\WRGD\RSHUDWLRQVFDQQRWDFFHVV ࢉQDQFLQJWRVXSSRUWRUJDQLFDQGLQRUJDQLF investments and / or do not have adequate debt facilities to operate as a going concern. :KDWDUHZHGRLQJWRPDQDJHWKHULVN" – \*OREDOVXSSO\FKDLQQHWZRUNZLWKWKHDELOLW\WRIXOࢉO customer orders by another distribution site and maintain service. – Ongoing assessments of critical third-party inventory suppliers and appropriate inventory levels to mitigate ULVNZKHUHLGHQWLࢉHG – Resilient IT systems infrastructure featuring operating redundancies and disaster recovery. – Annual disaster recovery testing of core IT systems, both digital and supply chain. – Strict control over upgrades to core transaction systems and other applications. :KDWDUHZHGRLQJWRPDQDJHWKHULVN" – Refreshed our climate scenario analysis, to overlay FOLPDWHVFHQDULRVRQWRRXUࢉYH\HDUVWUDWHJLFSODQ – Continued to expand our sustainable products, including our Better World product range, to support our customers’ climate goals. – Improved our supply chain and operational capabilities, to reduce emissions from our distribution sites and product shipments. – Continued to invest in measures to improve operational resilience at our distribution sites. – Supporting new RS businesses to develop and execute WKHLUࢉUVWSKDVHGHFDUERQLVDWLRQSODQV :KDWDUHZHGRLQJWRPDQDJHWKHULVN" – Cash forecasting and working capital management. – Proactive investor relations programme for equity. – 'LYHUVLࢉFDWLRQRIIXQGLQJVRXUFHV – 'LYHUVLࢉFDWLRQRIGHEWIXQGLQJPDWXULWLHV – ([LVWLQJIDFLOLWLHVUHࢉQDQFHGLQH[FHVVRIPRQWKV prior to maturity. – Robust bank relationship management with appropriate distribution of ancillary business. :KDWDUHRXUIXWXUHDUHDVRIIRFXV" – Continued expansion of product ranges stocked closer to customers to reduce dependency on individual distribution sites within the network. – Continue to update legacy systems and test disaster recovery of existing systems. :KDWDUHRXUIXWXUHDUHDVRIIRFXV" – &RQWLQXHWRJURZRXUFXVWRPHURࢆHULQJVDQGUHYHQXH from sustainable products, service solutions and low-carbon industries, optimise our supply chain and focus on business continuity planning and building upgrades at our distribution sites most exposed to physical climate impacts. – Recent acquisitions have impacted the Group’s carbon reduction progress. Investment will be required to decarbonise these businesses (and future DFTXLVLWLRQVWRFRQWLQXHWRPHHWWKH\*URXSȆVWDUJHW to be net zero in its direct operations by 2030 and avoid reputational risk. :KDWDUHRXUIXWXUHDUHDVRIIRFXV" – Ongoing evaluation of alternative lenders and funding sources. – Alignment with strategic forecasts and awareness of M&A pipeline to ensure preparedness for future funding needs. – Continuous assessment of the debt markets and bank economic advice to make opportunistic funding decisions and avoid future economic adverse conditions. #### Risks, viability and going concern continued 5LVNVGLUHFWLRQGHࢉQLWLRQ The risk is likely to increase within the next 12 months The risk is likely to remain stable within the next 12 months The risk is likely to reduce within the next 12 months  New risk RS Group plc Annual Report and Accounts for the year ended 31 March 2024 36 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Legal and regulatory compliance Risk theme: Regulatory compliance :KDWLVWKHULVNDQGKRZFRXOGLWDࢆHFWXV" We fail to manage legal and regulatory compliance risks which could lead to: – Serious health and safety incidents / breaches – Non-compliance with trade, transport or product UHJXODWLRQVDFURVVGLࢆHUHQWPDUNHWV – Breaches of any other regulatory or legislative requirements (such as the UK Bribery Act 2010 and &ULPLQDO)LQDQFHV$FW – Non-conformance with operational compliance, AI policies and NIS2 directive. :KDWDUHZHGRLQJWRPDQDJHWKHULVN" – Accident and near miss reporting, reduction strategies and actions provided by specialist support. – Ongoing reviews of relevant national and international compliance requirements. – Training and awareness programmes focusing on legal regulations and requirements. – Code of conduct for all employees and whistleblowing facilities to raise concerns. – Ethical sourcing policy for suppliers. – Our trade compliance systems scanning customer orders to ensure trade compliance requirements are being followed. :KDWDUHRXUIXWXUHDUHDVRIIRFXV" – Implementing a monitoring programme focused on key ethics and compliance risks. – Continued awareness campaign and promotion of the Speak Up process. – Focused training on fraud for key roles within the business. – Global review process to be introduced to review and challenge submissions. – Review and monitoring of AI use across RS. #### Risks, viability and going concern continued Our AI governance strategy aims to balance the benefit and business opportunity with the risks that it entails. #### OUR APPROACH #### TO AI GOVERNANCE MANAGING RISKS IN ACTION: Similar to our approach to other technological developments in recent history, such as cloud computing, 3D printing or video conferencing, our AI governance strategy aims to balance WKHEHQHࢉWDQGEXVLQHVVRSSRUWXQLW\RI using this new technology with the risks that it entails (notably on quality, bias, accuracy of output, reputational, legal or VHFXULW\LVVXHV:KLOHZHGRQRWZDQWWR VWLࢊHLQQRYDWLRQDQ\GHSOR\PHQWRI$, within the Group must be done safely and in line with risk appetite. We have put in place a series of controls DGDSWHGWRWKHULVNSURࢉOHRIWKH\*URXS as a user of AI tools: – A new Group AI Policy was launched in April 2024 with guidance for our people on how to use AI tools – Key principles of the policy have been showcased as part of the Code of Conduct and Privacy training – An AI community was formed in December 2023 with representatives from Technology, Information Security, Group Legal and Compliance as well as Indirect Procurement. This community is being expanded to cover regional representation as well. Colleagues who wish to use an AI tool at work can seek advice from the AI community through the Innovation Forum – Technology colleagues are reviewing the IT systems catalogue to assess current AI usage – Questions targeting AI usage have been EXLOWLQWRWKHVXSSOLHUSUHTXDOLࢉFDWLRQ questionnaire as part of the procurement process. This will prevent our suppliers adding AI capabilities as part of their VHUYLFHRࢆHULQJIRUWKH\*URXSZLWKRXW express permission – Suppliers are also asked to sign bespoke clauses to cover the Group on AI risk Looking ahead, the Group will need to navigate an evolving global legal framework around the world. The EU is currently leading the charge with an AI Regulation, expected to apply fully by 2026 across all EU member states. We will be closely monitoring legal developments with a particular focus on the EU AI Regulation in order to assess further implications for the Group and adapt our internal control framework accordingly. The AI community will continue to advise our colleagues on implementing AI safely but will also seek to develop an AI toolkit to enable self-service DQGLQFUHDVHHࢇFLHQFLHV 5LVNVGLUHFWLRQGHࢉQLWLRQ The risk is likely to increase within the next 12 months The risk is likely to remain stable within the next 12 months The risk is likely to reduce within the next 12 months  New risk RS Group plc Annual Report and Accounts for the year ended 31 March 2024 37 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Viability statement Assessment of prospects Our business model and strategy, as described on page 13, is structured so that the Group is a digitally-enabled global distributor of product and service solutions, providing small volumes of our suppliers’ products to satisfy our industrial customers’ MRO demands. We supply a very broad spread of customers both in terms of industry sector and geography. The Group is not reliant on one particular group of customers or suppliers, with its largest customer accounting for under one percent of revenue and its largest supplier OHVVWKDQࢉYHSHUFHQWRIUHYHQXH2XUEXVLQHVV PRGHOLVGLࢆHUHQWLDWHGE\RXUJOREDOQHWZRUNRI distribution sites; our customer-centric team; our strong supplier relationships; our broad and deep SURGXFWRࢆHULQJDQGVHUYLFHVROXWLRQVFDSDELOLWLHV and our strong digital presence. The Group has high inventory availability with products sourced from a large number of suppliers and provides customers with a reliable and fast service. 7KH\*URXSȆVUHVXOWVDQGࢉQDQFLDOSRVLWLRQDUH reviewed monthly by both our ExCo and the Board. Every day the ExCo receives an analysis of the previous day’s revenue and gross margin. The Board receives and reviews regularly the monthly PDQDJHPHQWDFFRXQWVLQFOXGLQJFDVKࢊRZVDQG also receives regular performance and forecast updates from the CFO and CEO. We update our detailed rolling 18-month forecast of the Group’s income statement, balance sheet DQGFDVKࢊRZVIUHTXHQWO\ZKLFKDUHUHJXODUO\ reviewed, and the assumptions approved, by the Board. The Group’s long-term prospects are assessed SULPDULO\WKURXJKRXUVWUDWHJLFDQGࢉQDQFLDO planning process. This includes the preparation RIDࢉYH\HDUVWUDWHJLFSODQDQGDQDQQXDOEXGJHW setting process involving both Group and regional management which are updated annually and reviewed and approved by the Board. The ExCo receives and reviews progress against the strategic plan objectives regularly. The Board also receives updates and, if appropriate, the strategic plan is updated depending on progress and performance. The Board also considers the long-term prospects of the Group as part of its regular monitoring and review of risk management and internal control system, as described on pages 32 and 80 to 83. 2XUUHJXODUFDVKࢊRZIRUHFDVWVHQDEOHXVWR track our net debt position and to take any necessary actions on a timely basis. Our capital position is supported by regular reviews of the Group’s funding facilities and banking covenants’ headroom, through the Group’s Treasury Committee. In April 2023 we took out a new €150 million three-year term loan to partly fund our acquisition of Distrelec and in October 2023 our request to take up one of the one-year term extensions to the £400 million SLL facility was approved by lenders and so now matures in October 2028. Only £155 million of this facility was drawn down at 31 March 2024. As described throughout this Annual Report and Accounts, the Group’s performance was impacted by the challenging macroeconomic environment over the past year and the unwinding of our SRVWSDQGHPLFWUDGLQJEHQHࢉW$VDUHVXOW like-for-like revenue declined by 8% and adjusted IUHHFDVKࢊRZIHOOE\WRePLOOLRQOHDGLQJ to net debt of £418 million (including lease OLDELOLWLHVRIePLOOLRQDW0DUFK:H also paid dividends during the year of £104 million ePLOOLRQDQGWKHDFTXLVLWLRQZH completed during the year increased net debt by £333 million. We have ended the year with a strong balance sheet. 'HWDLOVRIRXUVRXUFHVRIࢉQDQFHDUHRXWOLQHGLQ Note 23 on page 163, with the earliest facilities maturing being the three-year term loan and two tranches of our private placement loan notes in 2026/27. The Group’s debt covenants are EBITA to interest to be greater than 3:1 and net debt to adjusted EBITDA to be less than 3.25:1. At 31 March 2024 (%,7$WRLQWHUHVWZDV[[DQG net debt to adjusted EBITDA was 1.1x (2022/23: [VHH1RWHRQSDJHVDQGIRU UHFRQFLOLDWLRQVDQGXQGHURXUVWUDWHJLFSODQ these are also comfortably met. Viability assessment period In its assessment of the Group’s viability, the Board has reviewed the assessment period and has determined that a three-year period to 31 March 2027 continues to be most appropriate. 7KHUREXVWQHVVRIWKHVWUDWHJLFSODQLVVLJQLࢉFDQWO\ KLJKHULQWKHࢉUVWWKUHH\HDUVZLWKWKHࢉQDOWZR years being a high-level extrapolation. The Group has few contracts with either customers or suppliers extending beyond three years and, in the main, contracts are for one year or less. The business operates with a minimal forward order book, generally taking orders and shipping them on the same day. In addition, as more business becomes digital and we become more agile, speed of change increases and so visibility is relatively short term. Of the Group’s long-term obligations, the UK pension scheme is the largest and its triennial funding valuation forms the basis of our agreeing its funding with its trustee. Our share-based payment schemes are also mainly for three years. Assessment of viability Each of the Group’s principal risks and uncertainties on pages 34 to 37 has a potential impact on the Group’s viability and so the Board considered various scenarios and examined a number of factors that could impact each in the future. It decided which scenarios would have the most impact on the viability of the Group and determined an appropriately severe but plausible stress test for each of these scenarios. The strategic plan approved at the January 2024 Board meeting, adjusted to include the estimated HࢆHFWRIRXUDFTXLVLWLRQRI7ULGHQWLQ$SULOLV FRQVLGHUHGWRUHࢊHFWWKH%RDUGȆVFXUUHQWO\EHVW estimate of the future prospects of the Group. Therefore, in order to assess the viability of the Group, the scenarios and stress tests were modelled by overlaying them onto the adjusted strategic plan to quantify the potential impact of one or more of them crystallising over the assessment period. #### Risks, viability and going concern continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 38 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() In performing the above tests it was assumed WKDWQRPDMRUUHRUJDQLVDWLRQVRUVLJQLࢉFDQW working capital initiatives occur in mitigation, capital expenditure is not lower than that in the strategic plan, dividends continue to be paid and there are no changes in or extensions to debt ࢉQDQFLQJ$VDUHVXOWDOOWKHDERYHWHVWVPRGHOWKH new principal risk and uncertainty ‘Access to debt and capital markets’. In none of the stress tests were the Group’s covenants breached nor were the Group’s debt facilities used up. The results of the stress tests to the left showed the Group would be able to withstand the impact of these scenarios occurring. Reverse stress tests were also undertaken to assess the circumstances that would threaten the \*URXSȆVFXUUHQWࢉQDQFLQJDUUDQJHPHQWV7KHVH LQFOXGHGVLJQLࢉFDQWGHFOLQHVLQUHYHQXHVLJQLࢉFDQW declines in revenue and gross margin and a major deterioration in cash collection and would have to UHVXOWLQDGMXVWHGRSHUDWLQJSURࢉWPDUJLQIDOOLQJ to under 5% in at least one of the following three years. Also, a reverse stress test of an acquisition RIDVLJQLࢉFDQWO\ORVVPDNLQJEXVLQHVVZDV undertaken and would have to cost over £300 million to use up our debt facilities. All these reverse stress tests assumed that no major UHRUJDQLVDWLRQVRUVLJQLࢉFDQWZRUNLQJFDSLWDO initiatives occur in mitigation, capital expenditure is unchanged from that in the strategic plan, dividends continue to be paid and there are no FKDQJHVLQRUH[WHQVLRQVWRGHEWࢉQDQFLQJ7KH Board considers the risk of these circumstances occurring to be remote. The above scenarios are hypothetical and extremely severe for the purpose of creating outcomes that have the ability to threaten the viability of the Group; however, multiple control measures are in place to prevent and mitigate any such occurrences from taking place. If any of these scenarios actually happened, various options are available to the Group to maintain liquidity so as to continue in operation. Confirmation of viability Based on the assessment outlined above, the Board has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three years to 31 March 2027. Going concern 7KHJRLQJFRQFHUQSHULRGLVGHࢉQHGDVDSHULRG of at least 12 months from 22 May 2024. Based on the assessment outline above and the output of our detailed rolling 18-month forecasts, the Board believes that it is appropriate to continue to adopt the going concern basis in preparing the Group’s accounts. The scenarios and related stress tests modelled and how they link to the principal risks and uncertainties were: Scenario and related stress tests modelled Link to principal risk and uncertainties Revenue and gross margin down with no cost mitigations Revenue falls in 2024/25 by more than the like-for-like decline in 2023/24, with a further decline in 2025/26. Gross margin declines in 2024/25 to 40% and operating costs stay static as no mitigation is taken. Costs move in line with revenue in future years. –Change initiatives –M&A activity – Talent and capability – Geopolitical environment – Market disruption – Climate change – Legal and regulatory compliance Cash collection down Cash collection from trade receivables deteriorates leading to trade receivables impaired by 2% of revenue in 2024/25. – Geopolitical environment 6LJQLࢉFDQWLQIUDVWUXFWXUHIDLOXUH Major incident at the distribution site with the largest impact, destroying the building and its contents. –Business resilience – Climate change Major cyber breach / information loss Major system failure (possibly caused by a cyber DWWDFNOHDGLQJWRDVHULRXVORVVRIVHUYLFHࢉQHV for data breach and loss of reputation leading to halving of revenue growth. – Cyber security –Business resilience #### Risks, viability and going concern continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 39 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Environmental, social and governance (ESG) Advancing sustainability 42 Championing education and innovation 50 Empowering our people 52 Doing business responsibly 58 # CREATING # VALUE # FORA BETTER # WORLD + Read more about our ESG approach at: rsgroup.com/sustainability RS Group plc Annual Report and Accounts for the year ended 31 March 2024 40 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() ### FOR A ### BETTER WORLD #### 2XUSXUSRVHPDNLQJDPD]LQJKDSSHQIRUDEHWWHUZRUOGUHࢊHFWV #### RXUFRPPLWPHQWWRGHOLYHULQJUHVXOWVIRUSHRSOHSODQHWDQGSURࢉW #### To create value for all our stakeholders, our 2030 ESG action plan #### targets four global goals and 15 actions where we are driving #### SRVLWLYHFKDQJH Our 2030 ESG action plan We continue to take ESG action to support our 1.1 million customers, c. 9,000 people and over 2,500 global suppliers. By targeting the \*URXSȆVPRVWPDWHULDO(6\*DFWLRQVDVLGHQWLࢉHG through our Corporate Sustainability Reporting Directive (CSRD) aligned double materiality assessment, we are enabling our strategy, strengthening relationships and generating value for all our stakeholders. Our ESG action plan supports six UN SDGs. A summary of progress against each of our global goals and key action areas can be found in the table below, with detailed progress updates against all 15 actions outlined on pages 42 to 61. All 2023/24 and 2022/23 ESG data now includes post-acquisition data for businesses acquired by the Group in 2022/23 and 2023/24, unless stated otherwise. To read more about our ESG approach, including our methodology for collecting and calculating ESG data, accounting for acquisitions and historical performance, head to: rsgroup.com/sustainability Supporting six United Nations Sustainable Development Goals (UN SDGs): #### OUR 2030 ESG ACTION PLAN #### GLOBAL GOALS KEY ACTION AREAS PERFORMANCE HIGHLIGHTS Advancing sustainability Developing sustainable operations and product and service solutions for our customers and suppliers Net zero emissions in direct operations by 2030, value chain before 2050; Science Based Targets initiative (SBTi), UN Global Compact’s Business Ambition for 1.5°C and UN Race to Zero commitments 61% reduction in Scope 1 and 2 emissions since 2019/20 excluding acquisitions 1 53% of our packaging has >50% recycled content, an increase of 6% pts since 2022/23 26% reduction in Scope 3 transport emissions intensity 2 since 2019/20 Championing education and innovation Partnering with education providers, building skills and fostering innovative solutions that improve lives Building skills and fostering innovation with PLOOLRQ engineers and innovators c. 5,200 educational institutions use our products in their teaching £628k raised for The Washing Machine Project (TWMP) to improve lives since 2019/20 1.4m DesignSpark members, including professional design engineers and students Empowering our people Creating a safe, inclusive and dynamic culture where everyone can thrive and grow Working towards a diverse leadership team of 37% to 42% women and 17% to 22% ethnically diverse leaders 3 75 employee engagement score – down from 78 in 2022/23 34% of our senior leaders are women and 11% are ethnically diverse 4 46% reduction in our all accident frequency rate 4 since 2019/20 5 Doing business responsibly Ensuring the highest ethical standards throughout our business and global supply chain Increasing screening and (6\*REMHFWLYHVIRUVXSSOLHUV ESG metrics in employee rewards and sustainability- linked loan (SLL) 45% of employees have their annual incentives aligned to carbon reduction targets 32% of suppliers by spend set science-based targets (SBTs) 66% of RS PRO suppliers are Sedex members 1. Excludes acquisitions completed in 2022/23 and 2023/24. Scope 1 and 2 emissions have been updated to UHࢊHFWUHSRUWLQJDQGHPLVVLRQVIDFWRUFKDQJHV 2. Tonnes of CO 2 e due to Scope 3 transportation emissions per tonne of product sold. 3. We have updated our 2030 D&I actions in 2023/24. See pages 54 and 55 for more.  RIVHQLRUPDQDJHUVVHOIUHSRUWHGHWKQLFLW\YLDWKHHPSOR\HHGDWDEDVHLQFOXGLQJQRWVSHFLࢉHG SUHIHUQRWWRVD\DQGLGHQWLࢉHGDVQRQZKLWH 5. Per 200,000 hours worked. #### ESG continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 41 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() ### ADVANCING ### SUSTAINABILITY As a critical partner to the global industrial sector, we play an important role in advancing VXVWDLQDELOLW\DQGWDFNOLQJFOLPDWHFKDQJH By developing a cleaner and greener distribution service and providing sustainable product and service solutions, we can make D UHDODQGODVWLQJLPSDFWDQGGLࢆHUHQWLDWHRXU brand as a strategic partner to our customers DQGVXSSOLHUV Status key Each of our actions are broken down into annual targets that need to be met to remain on WUDFNWRDFKLHYHRXUDQGJRDOV7KHNH\EHORZUHࢊHFWVRXUFXUUHQWSRVLWLRQ On track or ahead Slightly behind target – monitor closely Not on track – further action required More information is available in our full ESG scorecard: rsgroup.com/sustainability 1. By 2029/30 from 2019/20. 2. Performance excludes acquisitions completed in 2022/23 and 2023/24.  6FRSHDQGHPLVVLRQVXSGDWHGWRUHࢊHFWUHSRUWLQJDQGHPLVVLRQVIDFWRU FKDQJHV 4. Tonnes per £m revenue. 5. Tonnes of CO 2 e due to Scope 3 transport emissions per tonne of product sold. #### ESG continued 2030 ACTIONS PERFORMANCE STATUS COMMENTARY READ MORE By 2030 in our direct operations: – Carbon emissions: Be net zero with a SBT to reduce absolute emissions from our own operations by 75% 1 61% reduction in Scope 1 and 2 emissions since 2019/20 excluding recent acquisitions 2,3 Positive progress made from site energy savings, switching to renewable electricity and creating D QHW]HURࢊHHW,QFOXGLQJDFTXLVLWLRQVGLUHFW emissions increased by 19% from 5,700 tCO 2 e in 2022/23 to 6,800 tCO 2 e in 2023/24 Pages 43 to 46 rsgroup.com/ sustainability – Packaging: Make our packaging more sustainable: reduce intensity by 30% 1 , with 100% of packaging widely reusable or recyclable and made with at least 50% recycled content 35% reduction in packaging intensity since 2019/20 4 Packaging intensity decreased by 8% from 2022/23 and by 35% since 2019/20 with recent acquisitions included. Positive progress due to reducing customer packaging and using reusable eco-totes in internal systems – Recycling and waste: Reduce, reuse and recycle our waste: reduce intensity by 50% 1 , recycle > 95% and DFKLHYH]HURZDVWHWRODQGࢉOOLQRXU direct operations 82% of total waste recycled Overall percentage of waste recycled improved as we continued to prioritise better waste segregation, recycling and reuse. For example, our global distribution centre (DC) in Nuneaton, UK increased its recycling rate from 74% to 87% Working towards a net zero global value chain by 2050: – Product transportation: Reduce Scope 3 transport emissions by 25% per tonne of product sold 1 26% reduction in intensity of Scope 3 transport emissions since 2019/20 5 Ongoing progress by prioritising modal shifts and optimising our supply chain to source, store and ship more products locally to customers through our distribution sites. However, our intensity KPI was impacted by a change in global emissions factors and supply chain challenges Pages 47 to 49 – Products and solutions: Develop innovative and sustainable product and service solutions for all our FXVWRPHUVLQFOXGLQJRࢆHULQJ 100,000 Better World products 1 c. 30k products in the Better World product range Increased Better World product range to c. 30,000 products from over 90 suppliers, available in 30 countries worldwide. We also launched new solutions to help our customers run their businesses more sustainably – Supplier engagement: Commit to engaging 67% of suppliers by spend to set SBTs by 2025 32% of suppliers by spend have set SBTs Positive seven percentage point increase in VXSSOLHUVVHWWLQJ6%7VGXULQJWKH\HDUEXWRࢆ track to meet our 2025 target. We will continue to engage suppliers in ESG action in 2024/25 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION RS Group plc Annual Report and Accounts for the year ended 31 March 2024 42 ![]() Access to technologies Government policies and incentives Energy grid decarbonisation Gold Standard FHUWLࢉHGRࢆVHWV #### Our net zero plan #### ESG continued 1. Performance excludes acquisitions completed in 2022/23 and 2023/24. 2. Tonnes of CO 2 e due to Scope 3 transport emissions per tonne of product sold. Our ambition is to be net zero in our direct operations by 2030 and across our wider value chain by 2050. For RS, this means implementing our science-based emissions reduction targets across Scope 1, 2 and 3 HPLVVLRQVDQGXVLQJFHUWLࢉHG\*ROG6WDQGDUGRࢆVHWVIRUDQ\DGGLWLRQDOUHVLGXDOKDUGWRDEDWHHPLVVLRQV7RDFKLHYHWKLVZHKDYHVHWIRXU6%7VZKLFKZHUHYDOLGDWHGE\WKH6%7LLQDQGFRYHUWKH\*URXSȆV most material operational activities, including our direct operations, logistics, suppliers and products. These targets and their supporting initiatives drive our decarbonisation approach in line with the 2015 Paris Agreement to limit global warming to 1.5°C above pre-industrial levels. Our detailed climate performance covering our direct and indirect activities can be found on pages 44 to 47, our Task Force on Climate- related Financial Disclosures (TCFD) response on pages 62 to 67 and our independent assurance statement from ERM CVS on pages 68 and 69. #### Net zero across our direct operations by 2030 pages 44 and 45 Net zero across our value chain by 2050 pages 47 to 49 Upgrading our distribution sites to be more automated, energy HࢇFLHQWDQGVXVWDLQDEOHWR provide a better service to our customers and reduce our environmental impacts. Key actions in 2023/24: – Implemented environmental management dashboards at our 10 largest sites which include monthly emissions reduction targets and monitoring – 0RYHGWRDQHZHQHUJ\HࢇFLHQW ORFDOIXOࢉOPHQWFHQWUH)&LQ Madrid, Spain and progressed multi-year project to improve WKHHࢇFLHQF\RIRXUUHJLRQDO DC in Beauvais, France – Worked with a third-party decarbonisation partner at our regional DC in Bad Hersfeld, Germany to create a net zero plan Impact: 4% reduction in premises energy use in 2023/24 excluding acquisitions 1 We are committed to taking action to decarbonise our direct operations. Our three priority areas are: Over 99% of our emissions sit within our global value chain, which is where we have the greatest opportunity to drive change and create value for our stakeholders. Our three priority areas are: Generating and procuring renewable electricity by installing solar photovoltaic panels on our buildings and procuring green electricity. Key actions in 2023/24: – Installed solar panels at our FC in Midrand, South Africa which have provided over 45% of the site’s electricity use since October 2023 – Solar panels on the roof of our FC in Madrid, Spain – Group Energy Management Policy promoted to all owned and leased sites to procure green electricity where available. Where purchasing DUHQHZDEOHHQHUJ\WDULࢆLVQRW possible, we purchase Energy $WWULEXWH&HUWLࢉFDWHVIRUVHOHFWVLWHV Impact: 90% renewable electricity use in 2023/24 Transitioning our company car ࢊHHWWRHOHFWULFDQGK\EULGYHKLFOHV and encouraging adoption with our people. Key actions in 2023/24: – Installed over 40 additional electric charging points in locations across the UK – $FFHOHUDWHG8.ࢊHHWSROLF\WR mandate the switch to hybrid or electric vehicles (EVs) to reach our 2030 target – Established cross-functional working groups to roll out EV and hybrid company car policy to EMEA markets Impact: 30% Group company cars and 82% of 8.ࢊHHWDUHHOHFWULFRUK\EULG Expanding our range of sustainable product and service solutions to help customers reduce costs, save resources and achieve their environmental goals. Key actions in 2023/24: – Increased the number of Better World products in our range and broadened our framework to target multiple sustainability improvements across the product lifecycle (see page 48) – Continued to expand our sustainability-focused maintenance, repair and operation (MRO) services, such as energy monitoring and compressed air surveys (see page 49) Impact: c. 30k %HWWHU:RUOGSURGXFWVRࢆHUHG to customers in 2023/24 Cutting the distance our products travel by sourcing, storing and shipping closer to customers and suppliers and switching to less carbon intensive modalities. Key actions in 2023/24: – Product replenishments from the UK to our regional DC in Fort Worth, US moved to sea and road deliveries, rather than air, to reduce emissions – Optimised our regional DC in Bad Hersfeld, Germany to enable more European customers to be served locally by road – Increased carrier engagement and selection based on sustainability principles Impact: 26% reduction in product transport intensity since 2019/20 2 Collaborating with our suppliers to prioritise carbon reduction activities that drive reductions across the value chain, including sourcing, designing, manufacturing and shipping products more sustainably. Key actions in 2023/24: – Engaged with our top 67% of suppliers by spend to act on four sustainability priorities detailed in our ESG supplier handbook, including setting SBTs and becoming members of EcoVadis or Sedex (see page 61) – Conducted c. 300 meetings with suppliers to target development of more sustainable products, for inclusion in the Better World product range Impact: 32% suppliers by spend set carbon targets with SBTi Enabled by: 'HFDUERQLVLQJ our buildings 6XVWDLQDEOHSURGXFW and service solutions 6ZLWFKLQJWR renewable electricity &UHDWLQJD QHW]HURࢊHHW 3URGXFW transportation 6XSSOLHU engagement RS Group plc Annual Report and Accounts for the year ended 31 March 2024 43 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() 5 10 15 20 29/3026/2723/2419/20 ’000 tonnes CO 2 e Min 75% SBT reduction 19/20–29/30 Trajectory for 1.5°C Offsets to net zero Net zero trajectory Actual performance 19/20 to 23/24 Our performance & trajectory to 2029/30 4 Scope 1 and 2 emissions (tonnes CO 2 e) 1 Excluding recent acquisitions 2 4,600 10% reduction from 2022/23 Including recent acquisitions 3 6,800 19% increase from 2022/23 Carbon intensity (tonnes CO 2 e/£m) 1 Excluding recent acquisitions 2 1.8 Unchanged from 2022/23 Including recent acquisitions 3 2.3 21% increase from 2022/23 In 2023/24, we integrated post-acquisition data from our acquisitions completed in 2022/23 and 2023/24 3 into our Scope 1 and 2 emissions reporting. This has increased our direct carbon footprint from 5,100 to 5,700 tonnes CO 2 e in 2022/23 and from 4,600 to 6,800 tonnes CO 2 e in 2023/24. Risoul, our industrial product and service solutions business in Mexico, has had DVLJQLࢉFDQWLPSDFWRQRXUGLUHFWRSHUDWLRQDO IRRWSULQWDVLWRZQVLWVࢊHHWRIORJLVWLFVYHKLFOHV to deliver products directly to customers. We have restated our historic emissions to include emissions from businesses acquired in 2022/23 and 2023/24. This is summarised in the Scope 1 and 2 emissions table (bottom right), along with our pathway to net zero in our direct operations (top right) which shows our updated trajectory towards meeting our ambitions. Pathway to net zero We remain committed to achieving our Group net zero ambition and to working with our acquired businesses to decarbonise their operations and inspire action with customers and suppliers. Our ESG team is proactively supporting operational teams at our acquired businesses RI'+5LVRXODQG'LVWUHOHFWRGHYHORSࢉUVWSKDVH decarbonisation plans aligned to the Group’s net zero ambition and SBTs. Initial plans will focus on VLWHHQHUJ\HࢇFLHQF\RSWLRQVIRUUHQHZDEOH electricity, hybrid and electric vehicles and logistics optimisation. We will share more information on our plans and progress in our climate transition plan which will be published in line with compliance timelines. #### Advancing sustainability within our business #### ESG continued Scope 1 and 2 emissions 1 (tonnes CO 2 e) Change from 2020 2024 2023 2022 Excluding recent acquisitions 2 (61)% 4,600 5,100 6,300 Including emissions from acquired businesses, from the point of RS ownership 3 (43)% 6,800 5,700 6,300 Including emissions from acquired businesses, in 2019/20 baseline year (SBTi target) 4 (57)% 6,800 7,300 8,500 #### Carbon emissions (Scope 1 and 2) in our direct operations By 2029/30, our ambition is to be net zero in our direct operations. We have set a SBT validated by SBTi to reduce absolute emissions IURPRXURZQRSHUDWLRQVE\DQGZLOOXVH\*ROG6WDQGDUGFHUWLࢉHGRࢆVHWVFORVHUWRIRUDQ\UHVLGXDOKDUGWRDEDWHHPLVVLRQV  .3,VDUHRQDFRQVWDQWH[FKDQJHUDWHEDVLVDQGXSGDWHGWRUHࢊHFWFKDQJHVLQUHSRUWLQJPHWKRGRORJ\HPLVVLRQVIDFWRUVDQG DGGLWLRQDOGDWD&RYHUDJHLQFOXGHVRSHUDWLRQVXQGHURXUGLUHFWࢉQDQFLDOFRQWUROJOREDOO\ 2. Performance excludes acquisitions completed in 2022/23 and 2023/24. 3. Includes post-acquisition data from acquired businesses domnick hunter-RL (Thailand) Co., Ltd. (DH) and Risoul y Cia, S.A. de C.V. (Risoul) (completed in 2022/23) and Distrelec B.V (Distrelec) (completed in 2023/24). 4. Performance and plan re-based to 2019/20 to include emissions from acquired businesses. Our pathway to net zero in our direct operations RS Group plc Annual Report and Accounts for the year ended 31 March 2024 44 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() 6,800 5,700 6,300 7,500 23/24 22/2321/2220/2119/20 11,900 6.2 3.8 2.4 1.8 1.8 1.9 2.3 #### Carbon emissions (Scope 1 and 2) in our direct operations continued #### ESG continued Greenhouse gas (GHG) emissions (Scope 1 and 2) and SECR disclosure Metric 2024 2023 Group Scope 1 emissions Combustion of fossil fuels 5 tonnes CO 2 e6,0225,067 Operation of facilities, including fugitive emissions 3 tonnes CO 2 e119113 Group Scope 2 emissions 6 Purchased electricity (market-based) tonnes CO 2 788 594 Electricity use from renewable sources % Group electricity 90% 91% Electricity use from own renewable generation % Group electricity 2% 2% Intensity metric CO 2 e due to premises energy and vehicles use per £m revenue tonnes CO 2 e / £m 2.3 1.9 Total GHGs per £m revenue 3 tonnes CO 2 e / £m 2.4 2.0 SECR disclosures 7 UK total Scope 1 and 2 emissions (market-based) tonnes CO 2 e2,6143,114 UK energy consumption GWh 26.3 29.2 1. Performance excludes acquisitions completed in 2022/23 and 2023/24. 2. 2022/23 Scope 1 and 2 CO 2 e emissions restated as 5,700 tonnes to include businesses acquired in 2022/23. 3. Figure includes 119 tonnes of CO 2 e due to fugitive emissions from air-conditioning systems (2022/23: 113 tonnes), which are not included in our reported Scope 1 and 2 emissions of 6,800 tonnes CO 2 e.  .3,VDUHRQDFRQVWDQWH[FKDQJHUDWHEDVLVDQGXSGDWHGWRUHࢊHFWFKDQJHVLQUHSRUWLQJPHWKRGRORJ\HPLVVLRQVIDFWRUVDQG DGGLWLRQDOGDWD&RYHUDJHLQFOXGHVRSHUDWLRQVXQGHURXUGLUHFWࢉQDQFLDOFRQWUROJOREDOO\ 5. Includes emissions of 3,656 tonnes relating to fuel use in company vehicles (2022/23: 2,534 tonnes). 6. Scope 2 emissions calculated using CO 2 factors as CO 2 e factors are not consistently available for all countries. Market-based emissions from electricity purchased from renewable sources were nil tonnes CO 2 (2022/23: nil). Market-based emissions from electricity purchased from non-renewable sources calculated using grid average emission factors. Location-based Scope 2 emissions calculated using grid average factors were 7,630 tonnes CO 2 (2022/23: 7,609 tonnes). 7. SECR: UK emissions were 38% of global market-based emissions. UK energy use, including vehicle energy use, was 46% of global energy use. \*+\*VDUHFDOFXODWHGLQOLQHZLWKWKH\*+\*3URWRFRO&RUSRUDWH6WDQGDUGXVLQJ8.'HSDUWPHQWIRU(QYLURQPHQW)RRG5XUDO$ࢆDLUV DQGFRXQWU\VSHFLࢉFJULGDYHUDJH,QWHUQDWLRQDO(QHUJ\$JHQF\HPLVVLRQVIDFWRUV)XUWKHUGHWDLOVFDQEHIRXQGLQRXUEDVLVRI reporting document and ESG data centre on our website: rsgroup.com/sustainability We continued to make strong progress in reducing our Scope 1 and 2 emissions in our existing business in 2023/24, achieving a 10% reduction from 2022/23 excluding recent acquisitions 1 . This was driven by continued activities to reduce energy consumption across our distribution sites, switching to renewable electricity and progressing WRZDUGVDQHOHFWULFDQGK\EULGFRPSDQ\FDUࢊHHW in the UK. 7KURXJKFRQWLQXHGHQHUJ\HࢇFLHQF\ improvements at our sites, we achieved a 4% reduction in energy consumption in 2023/24 and a 9% reduction from 2019/20 1 . The Group’s energy intensity has reduced by 33% since our baseline year of 2019/20 1,4 . We also increased the proportion of our UK company cars that are electric or hybrid to 82% (2022/23: 54%). Carbon reduction will remain a key focus in 2024/25. This is a core KPI for the Group and 45% of our people and leaders are incentivised to drive progress through the Scope 1 and 2 emissions reduction metric in the annual incentive (page 60). Streamlined Energy and Carbon Reporting (SECR) disclosure In accordance with UK SECR requirements, our 2023/24 Group Scope 1 and 2 emissions are summarised in the table to the right and restated to include post-acquisition data from acquisitions completed in 2022/23 and 2023/24. Our Scope 3 emissions performance breakdown by material category can be found on page 47. Environmental Management Systems (EMS) All of our distribution sites have a robust EMS in place to manage risk, track ongoing performance and identify opportunities to target further emissions reductions. Additionally, 37 distribution sites covering 49% of our operations by revenue DQGE\ࢊRRUDUHDDUHFRYHUHGE\,62 HQYLURQPHQWDOPDQDJHPHQWFHUWLࢉFDWLRQV CO 2 e (tonnes) due to 2022/23 and 2023/24 acquisitions CO 2 e (tonnes) excluding recent acquisitions CO 2 e intensity (tonnes CO 2 e / £m revenue) excluding recent acquisitions CO 2 e intensity (tonnes CO 2 e / £m revenue) including recent acquisitions Scope 1 & 2 emissions 2,4 tonnes CO 2 e 6,800 In 2023/24, the Group commissioned independent external assurance from ERM CVS of its absolute CO 2 e emissions from Scope 1 and 2 and Scope 3 categories 1, 4 and 11; emissions intensity from Scope 1 and 2, product transportation and RS PRO products in-use; and packaging intensity. Their independent assurance report is set out on pages 68 and 69. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 45 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Packaging By 2029/30, we want to make our packaging more sustainable: reduce intensity by 30% and 100% of packaging to be widely reusable or recyclable and made with at least 50% recycled content. 3DFNDJLQJ intensity 1,2 % packaging made with at least 50% recycled content 1.57 8% reduction from 2022/23 53% 6 pts increase from 2022/23 Packaging sustainability is a critical issue for our customers. They want to know that we are taking proactive measures to reduce the amount of packaging used, while increasing the amount of recycled content and recyclable materials to minimise waste. Packaging intensity is one of RXUQRQࢉQDQFLDO.3,VDQGLVLQFOXGHGLQRXU SLL targets (see page 60). In 2023/24, our packaging intensity reduced by 8% from 2022/23 and by 35% from 2019/20. We continued to reduce overall packaging tonnage by using more reusable eco-totes and pallets in our internal replenishment systems and automated packaging machines to produce PDGHWRࢉWWUDQVLWFDUWRQVWKDWVDYHVSDFHDQG reduce waste. Reusable plastic collars were introduced and plastic pallets were increased for inventory replenishments between RS locations in (0($7KLVKDVVLJQLࢉFDQWO\UHGXFHGZDVWH across the organisation. :HPDGHVLJQLࢉFDQWSURJUHVVLQVZLWFKLQJWR more sustainable packaging materials across our regions this year to support our customers: – RS in EMEA: we moved to brown packaging boxes which are made from 100% recycled material – RS in Americas: we increased the proportion of packaging made with over 50% recycled content from 15% by weight in 2022/23 to 46% in 2023/24 – RS in the UK, France, Italy and Germany: we replaced plastic tape with paper tape sealing to reduce plastic consumption by four tonnes and make it easier for customers to recycle &RPELQHGWKHVHHࢆRUWVPHDQWKDWRYHURI total packaging by weight is made from materials that contain at least 50% recycled content. This represents a 6 percentage points increase in recycled content from 2022/23. At the end of 2023/24, 94% of our packaging was reusable or recyclable, unchanged from 2022/23. In 2024/25, we will develop the next phase of our packaging strategy, including our initiatives, investment plans and a review of our 2030 packaging targets to identify further opportunities for action. 1. Tonnes / £ million revenue. .3,VDUHRQDFRQVWDQWH[FKDQJHUDWHVEDVLVDQGDUHXSGDWHGWRUHࢊHFWFKDQJHVLQUHSRUWLQJPHWKRGRORJ\ #### ESG continued #### Recycling and waste By 2029/30, we want to reduce, reuse and recycle our waste: reduce intensity by 50%, recycle over 95% DQGDFKLHYH]HURZDVWHWRODQGࢉOOLQRXUGLUHFWRSHUDWLRQV Waste intensity 1,2 Waste recycled 1.37 increased by 1% from 2022/23 82% increased by 6 pts from 2022/23 We are committed to reducing, reusing and recycling our waste to create a cleaner and greener world. By reducing our use of natural resources, we can also reduce costs and support customer and supplier sustainability preferences. Waste has been a key area of focus for our distribution site management teams in 2023/24 as we prioritised better waste segregation, recycling and reuse across our global operations. Our global DC in Nuneaton, UK implemented a major continuous improvement project to reduce supplier and customer packaging and increase recycling. This led to a 13 percentage point increase in the site’s recycling rate. In 2023/24, our waste intensity increased by 1% from 2022/23 but was 10% lower than in the 2019/20 baseline year. The proportion of total waste recycled increased by 6 percentage points to 82%. Waste that is not recycled is typically sent for incineration, energy recovery and only to ODQGࢉOODVDODVWUHVRUW,QRIRXU total waste was incinerated, 5% was sent to ODQGࢉOODQGZDVWUHDWHGYLDRWKHUPHDQV of disposal. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 46 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Advancing sustainability within our value chain #### Product transportation By 2029/30, we aim to reduce Scope 3 transport emissions by 25% per tonne of product sold. Scope 3 transport emissions intensity 2,3 1.23 unchanged from 2022/23 With thousands of product shipments every day, including inbound supplier deliveries and outbound customer deliveries, it is critical that we continue to optimise our supply chain to reduce our transport emissions. In 2023/24, our transport emissions intensity 2 was unchanged from 2022/23, with an overall decrease of 26% from 2019/20. Our progress in 2023/24 was impacted by several factors outside our control, including an increase in global emissions factors used to calculate our transport emissions and global supply chain challenges. This was further compounded by DVKRUWWHUPLQFUHDVHLQ$VLD3DFLࢉFFXVWRPHU deliveries by air. Despite these challenges, we have continued to make positive strides in our global product transportation strategy to set us on a positive path for the future. We continued to prioritise modal shifts from air to sea and road in 2023/24. We also implemented several key logistical improvements across our locations. This included the following activities: – RS in EMEA: we have expanded the inventory capacity of our regional DC in Bad Hersfeld, Germany by 14% in 2023/24 and introduced new routes into France, Italy and Spain, resulting in less products being shipped from the UK into mainland Europe, reducing emissions and saving transportation costs – RS in Spain: our expanded FC in Madrid holds more products locally, reducing delivery distances and emissions – 56LQ$VLD3DFLࢉF we expanded our supply chain network with FCs in Malaysia, Thailand, the Philippines and New Zealand to reduce the distance of customer deliveries in these markets by 9% – RS in Americas: UK to US product replenishments moved from air to sea, reducing transport emissions on these lanes by 22% In 2024/25, we will develop the next phase of our transportation strategy, including our initiatives, investment plans and a review of 2030 targets. A key priority will be working with our acquired businesses to support supply chain optimisation and seek opportunities to further reduce air travel, cost and emissions. #### ESG continued Key Scope 3 emissions categories % Change from 2020 2024 2023 2022 3URGXFWWUDQVSRUWDWLRQ Product transportation (Scope 3, Category 4) 1,3,5 (18)% 48,400 49,400 54,500 Product transportation carbon intensity 2,3,5 (SBTi target) (26)% 1.23 1.23 1.29 3XUFKDVHGJRRGVDQGVHUYLFHV Purchased goods and services (Scope 3, Category 1) 3,5 (12)% 2.9m 2.9m 3.0m % of suppliers by spend with SBTs (SBTi target) +17% pts 32% 25% 19% ,QXVHHPLVVLRQVIURP56352SURGXFWV Use of sold products: RS PRO (Scope 3, Category 11) 3,4,5 +4% 2.2m 2.5m 2.3m RS PRO products in-use carbon intensity 3,4,5 (SBTi target) (18)% 184 222 203 1. Tonnes of CO 2 e (from inbound, outbound and inter-site deliveries controlled by RS Group). 2. Transport emissions intensity (tonnes of CO 2 e from inbound, outbound and inter-site deliveries controlled by RS Group, per tonne of product sold).  .3,VXSGDWHGWRUHࢊHFWFKDQJHVLQUHSRUWLQJPHWKRGRORJ\DQGHPLVVLRQVIDFWRUV 4. Tonnes of CO 2 e from RS PRO products in-use per tonne of product sold. 5. Subject to independent external assurance by ERM CVS. See independent assurance report on pages 68 and 69. #### Scope 3 emissions As a global distributor of industrial product and service solutions, Scope 3 emissions represent over 99% of our total carbon footprint. It is therefore vital that we collaborate with suppliers DQGFXVWRPHUVWRLQࢊXHQFHUHGXFWLRQVLQERWK upstream and downstream emissions. In doing so, we are driving collective climate action and creating greater value for all our stakeholders. In 2023/24, emissions from the Group’s three material Scope 3 emissions categories totalled some 5.2 million tonnes CO 2 e. We have set SBTs for each of these categories which were validated by the SBTi in 2023/24. In 2023/24, we worked with third-party experts WRUHࢉQHRXU6FRSHSURGXFWHPLVVLRQV methodologies from a spend-based approach WRDSURGXFWVSHFLࢉFPHWKRGRORJ\WKDWSURYLGHV greater accuracy. This has resulted in an increase in our two most material emissions categories from 2022/23: purchased goods and services and in-use emissions from RS PRO products (see table below). Our reporting methodologies are detailed in our basis of reporting document, which can be found at: rsgroup.com/sustainability. Performance data has been externally assured by ERM CVS (see pages 68 and 69). Moving forward, we will continue to mature our Scope 3 data collection, methodologies and reporting. In 2024/25, we will focus on in-use emissions from our wider product portfolio, beyond RS PRO. RS Group plc STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION 47Annual Report and Accounts for the year ended 31 March 2023 ![]() #### Sustainable products By 2029/30, we want to develop innovative and sustainable product and service solutions for all our FXVWRPHUVLQFOXGLQJDQDPELWLRQWRRࢆHURYHU%HWWHU:RUOGSURGXFWVWRFXVWRPHUV Sustainable products c. 30,000 products in our Better World product range in 2023/24 Better World products Better World products enable our customers to make more sustainable and responsible purchasing decisions they can trust. Initially launched in 2022/23 as a range of c. 20,000 products in the UK and Republic of Ireland, we expanded the range in 2023/24 to include 10,000 new products from 50 additional suppliers, across 30 countries. :LWKFXVWRPHUVRIWHQࢉQGLQJVXVWDLQDEOH purchasing confusing and limited, we launched DFODLPVEDVHGIUDPHZRUNLQ0DUFKWRRࢆHU better choices that are backed by clear, credible DQGYHULࢉHGVXVWDLQDELOLW\FODLPV Partnering with external consultants to ensure its robustness, the framework is structured by product attributes that are aligned to evolving legislation such as the Green Claims Directive. The framework also covers key areas of the product lifecycle, with claims grouped into three categories based on customer need: – Made more sustainably: features products that are produced using more sustainable materials or manufacturing processes – Sustainable solution: features products that help customers run their business more sustainably; from reducing energy and emissions to protecting health and safety – Supports circularity: features products with an increased lifespan, or that can be reused, repaired or recycled to reduce waste Our Better World product range now features c. 30,000 products from over 90 suppliers and includes over 1,300 products that support energy and carbon reduction or renewable energy generation across customer facilities. Our ambition is to grow the range to over 100,000 products in the coming years and create a clear and robust sustainability standard for our industry that supports both customers and suppliers. To achieve this ambition, we need our suppliers to accelerate the development DQGYHULࢉFDWLRQRIVXVWDLQDEOHSURGXFWVDWD VLJQLࢉFDQWO\IDVWHUSDFH7KLVLVVRPHWKLQJZH are strongly advocating for with our supplier partners, but recognise it will take more time for the industry to make this fundamental shift and we have therefore updated our target year to 2029/30. The Better World product range also forms the foundation of our alignment towards the EU taxonomy for sustainable activities. As we continue to develop the framework, we will begin to report key metrics that are taxonomy-aligned. Our aim is to complete a taxonomy benchmarking analysis over the next year in preparation for reporting in 2025/26. #### ESG continued #### Better World products answer the clear market need for #### moresustainable options. #### Theframework helps customers make the right decisions for #### theirown environmental goals.” Markus Schlink Corporate Account Manager, Siemens AG + Download the Better World product guidelines here: rsgroup.com/sustainability/ advancing-sustainability/ sustainable-products RS Group plc Annual Report and Accounts for the year ended 31 March 2024 48 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Sustainable service solutions Sustainability solutions We want to help our customers run their EXVLQHVVHVPRUHHࢇFLHQWO\FRVWHࢆHFWLYHO\ safely and sustainably at all stages of the LQGXVWULDOOLIHF\FOH%\RࢆHULQJYDOXHDGGHGDQG sustainability-focused industrial MRO services, we are strengthening customer relationships and increasing revenue through service fees and product pull through: – Maintenance, repair and operations: :HRࢆHULQGXVWULDO052VROXWLRQVLQFOXGLQJ energy, water and compressed air leakage VXUYH\VWKDWSURPRWHRSHUDWLRQDOHࢇFLHQF\ cut costs and reduce emissions Highlights: In 2023/24, we successfully launched customer energy and air leak surveys focused on operational compressed air, heat loss / steam loss, panel thermography, LED lighting and pumps. These surveys have been rolled out to a number of UK and Ireland customers as part of an initial trial – Recycling and circular economy solutions: We are working with established third-party recycling providers in the UK to provide product recycling schemes for customers and circular economy trials Highlights: In 2023/24, we continued to develop two new recycling solutions focused on personal protective equipment (PPE) and cable recycling. We are actively seeking pilot customers to develop this further and broaden RXURࢆHUWRFRYHUERWKUHIXUELVKDQGUHSDLU – Health and safety (H&S) solutions: We have partnered with training providers to create a comprehensive suite of H&S training courses and customer site surveys including air TXDOLW\WHVWLQJࢉUHULVNDVVHVVPHQWV+6 DXGLWVDQGKHDOWK\EXLOGLQJFHUWLࢉFDWLRQ Highlights: In 2023/24, in the UK, we launched H&S training courses in collaboration with supplier partners Supporting low carbon industries Our product and service solutions support the growth of low-carbon industries by providing their product procurement, industrial MRO and logistics needs. In doing so, RS plays an important role in enabling the transition to a low-carbon economy, while creating new green revenue streams from high value growth industries: – Renewables: We are partnering with the UK renewables sector to enable fast access to critical MRO products and solutions which will minimise their downtime and support growth Highlights: In 2023/24, we formed a strategic partnership with energy company Equinor to SURYLGH052VROXWLRQVWRWKHRࢆVKRUHZLQG sector in the UK. This collaboration will support YLWDORࢆVKRUHZLQGSURMHFWVLQFOXGLQJWKH ZRUOGȆVODUJHVWRࢆVKRUHZLQGSURMHFW'RJJHU %DQN8.:HDOVRMRLQHG2ࢆVKRUH5HQHZDEOH Energy (ORE) Catapult and other partners LQDSURMHFWGHVLJQHGWRSURYLGHRࢆVKRUH wind operators with vital insight into wind turbine health, logistical planning and MRO product solutions – Electric vehicles and solar: We provide a range of products for customers that manufacture, install, operate and maintain EV charging equipment. We are also increasing our range of solar power equipment to support customer sustainability Highlights: In 2023/24, we enhanced our EV FKDUJLQJRࢆHULQFUHDVLQJWKHDYDLODELOLW\RI charging points, cables, connectors and electronic components. Our aim is to develop charging kits and bundles to become a one-stop shop for installers and maintainers of EV equipment #### Supplier engagement By 2025, we commit to engaging 67% of suppliers by spend to set SBTs. Suppliers by spend setting SBTs 32% 7% pts increase from 2022/23 With over 750,000 stocked products from over VXSSOLHUVDQGDVLJQLࢉFDQWSURSRUWLRQRI our Scope 3 emissions from purchased goods and services, it is vital that we engage, inspire and collaborate with our supplier partners to decarbonise our value chain. In doing so, we can create long-term value while helping our suppliers reach higher levels of sustainability and making their products and services more attractive to customers. We continued to engage with our key suppliers in 2023/24 to encourage them to develop and RࢆHUPRUHVXVWDLQDEOHSURGXFWVSULRULWLVH carbon reduction and set SBTs. Through regular interactions, supplier events, quarterly business reviews (QBRs) and supplier ESG communications, we have made good progress in encouraging our suppliers to take sustainability action. Read page 61 for more. In 2023/24, 32% of suppliers by spend have set SBTs with the SBTi, an increase of 7 percentage points from 2022/23. Despite steady progress, this means that we are not on track to meet our 2025 ambition of 67%. In 2024/25, we will continue with our programme of supplier ESG HQJDJHPHQWWRLQࢊXHQFHIXUWKHUSURJUHVV #### ESG continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 49 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() ### CHAMPIONING ### EDUCATION AND ### INNOVATION It is essential that we inspire the next generation of industrial innovators to ensure we have the right skills to thrive in the future. By providing educational products, inspirational learning content and immersive skills development opportunities, we help young engineers and technologists embark on exciting future careers. We also collaborate with social impact partners on projects that improve lives. #### ESG continued 2030 ACTIONS PERFORMANCE STATUS COMMENTARY READ MORE Inspiring future engineers and innovators: Reach one million young people with educational technologies, learning content and skills development 796,000 young engineers and students reached through educational programmes, products and DesignSpark platform since 2020/21 Continued to reach young people through our global education programme which serves c. 5,200 educational institutions. OKdo’s participation in the BBC micro:bit – the next gen campaign also distributed micro:bits to c. 200,000 primary school students in the UK See page 51 rsgroup.com/ sustainability Purpose-driven innovation: Engage with 1.5 million engineers and innovators in creating socially responsible and sustainable solutions 357,000 engineers and innovators engaged in purpose-driven innovation initiatives since 2020/21 Increased engagement with innovators and engineers by 10% in 2023/24. Our subscription- based DesignSpark service is set to help businesses innovate faster, however more work is needed to reach our 1.5 million target by 2030 See page 51 Social impact partnerships: Support our social impact partners to develop solutions that improve lives – including supporting TWMP to help 100,000 people in need 31,000 lives improved through TWMP since 2019/20 Raised c. £298,000 for TWMP in 2023/24 through external fundraising from customers and suppliers. This will enable TWMP to increase production and distribution in 2024/25 See page 51 £628,000 raised for TWMP since 2019/20 Status key Each of our actions are broken down into annual targets that need to be met to remain on WUDFNWRDFKLHYHRXUDQGJRDOV7KHNH\EHORZUHࢊHFWVRXUFXUUHQWSRVLWLRQ On track or ahead Slightly behind target – monitor closely Not on track – further action required More information is available in our full ESG scorecard: rsgroup.com/sustainability STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION RS Group plc Annual Report and Accounts for the year ended 31 March 2024 50 ![]() #### Our key actions Inspiring future engineers and innovators Purpose-driven innovation Social impact partnerships By 2029/30 we want to reach one million young people with educational technologies, learning content and skills development opportunities to support future engineers and innovators. By 2029/30 we want to engage with 1.5 million engineers and innovators in creating socially responsible and sustainable solutions. By 2029/30 we want to support our social impact partners to develop solutions that improve lives, including supporting TWMP to help 100,000 people in need. We are passionate about inspiring young people, not only by encouraging them to pursue tech-based careers but by directing their development towards purpose-led engineering. As well as providing educational products to c. 5,200 institutions, we are shaping the next generation of innovators through two key programmes: – OKdo education provides coding and electronics products, tools and games to help young students (aged 6-18) learn to code – RS Grass Roots education gives young engineers and technologists (aged 18-30) vital skills to inspire and shape their early career As a purpose-led business at the heart of the global industrial sector, we are passionate about fostering ingenuity by bringing the engineering FRPPXQLW\WRJHWKHUWRGHYHORSQHZWHFKWKDWEHQHࢉWVSHRSOHDQGSODQHW In 2023/24, through our DesignSpark platform, we engaged with a global community of 1.4 million design engineers, students and innovators from around the world, to accelerate the design and development of projects that improve lives. By promoting our #ActivistEngineering ethos, we HQFRXUDJHHQJLQHHUVWRDGRSWDUHVSRQVLEOHPLQGVHWWRLQࢊXHQFHFKDQJH To act as a force for good, we support global social impact projects that develop innovative solutions to solve challenges and save lives. 6LQFHZHKDYHSURYLGHGࢉQDQFLDODQGYROXQWHHULQJVXSSRUWWRWZR primary partnerships: – TWMP provides displaced and low-income communities with an DFFHVVLEOHRࢆJULGZDVKLQJPDFKLQHVROXWLRQWKDWKDVLPSURYHGWKHOLYHV of 31,000 people to date – Engineers Without Borders-International (EWB-I) works across the globe to put sustainability at the heart of engineering Key actions in 2023/24 OKdo education highlights: – Participated in the BBC micro:bit – the next gen campaign, an ambitious project from the BBC, Micro:bit Foundation and Nominet to provide every primary school in the UK with tools, resources and training to support skills development in the classroom. As a key partner, OKdo distributed 675,000 micro:bits to reach 90% of UK primary schools (c. 20,000) – Continued to support the BBC’s annual do your :bit challenge: by donating eDQGPLFURELWERDUGVWRWKH&RPSWRQ8QLࢉHG6FKRROV'LVWULFW86 RS Grass Roots education highlights: – RS student project fund provided students with up to £300-worth of RS products to bring their university projects to life. We also ran Student Project Competition, EPIC and separate projects in South Africa and Spain – Provided online learning content to accelerate SuperSkills development and help engineering students gain important employability skills Key actions in 2023/24 DesignSpark highlights: – Promoted the second phase of our Air Quality Project – an initiative that HQFRXUDJHV'HVLJQ6SDUNPHPEHUVWRXVHDFHUWLࢉHGRSHQVRXUFH cloud-connected sensor platform (ESDK) to tackle global pollution – Continued to work with the Maltese government to support air quality education by implementing our Breathe Better Bear project across ten schools, with additional schools set to take part over the next year. The project features a toy bear linked to an ESDK sensor to educate primary school children on air pollution and climate change – Launched a new podcast series called Mission Responsible to coincide with National Engineering Week. The podcast explores how responsible engineering can build a better planet by exploring topics focused on building a sustainable future Key actions in 2023/24 TWMP highlights: – In 2023/24, we raised c. £298,000 for TWMP Foundation through fundraising activities, employee donations and matched-giving. Since 2019/20, we have raised a total of £628,000 for the charity – 56HPSOR\HHVYROXQWHHUHGWREXLOGࢊDWSDFNZDVKLQJPDFKLQHVZKLFK were sent to communities in need across India, Kenya and Uganda – Participated in community wash days near to our regional DC in Fort Worth, US, where employees volunteered to support the homeless community EWB-I highlights: – We sponsored EWB-I’s Engineering for People Design Challenge in the UK and US, which gives c. 20,000 students the opportunity to design sustainable solutions that tackle community development challenges + More information rsgroup.com/sustainability uk.rs-online.com/web/content/discovery/education www.okdo.com + More information rsgroup.com/sustainability rs-online.com/designspark/home + More information rsgroup.com/sustainability www.thewashingmachineproject.org www.ewb-international.org #### ESG continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 51 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() ### EMPOWERING ### OUR PEOPLE Our unique team of c. 9,000 individuals is the lifeblood of our business. Every day, their passion and expertise enable us to provide product and service solutions that delight our customers and make amazing happen forabetter world. 2XUFRPPLWPHQWLVWREHࢉUVWFKRLFHIRURXU people, creating an inclusive and engaging environment where all our people can grow, learn and thrive. #### ESG continued 2030 ACTIONS PERFORMANCE STATUS COMMENTARY READ MORE Engaged employees: Achieve and maintain an employee engagement score in the top 10% of high-performing companies 75 employee engagement score (out of 100) 3 point decrease in 2023/24, from 78 to 75. We KDYHWDNHQDFWLRQWRUHࢉQHRXUVWUDWHJ\YDOXHV and operating model and enhance our people plan to support engagement See page 54 rsgroup.com/ sustainability Diversity and inclusion (D&I): (QVXUHRXUWHDPLVUHࢊHFWLYHRI the customers, suppliers and communities we serve by working towards 37% to 42% of our senior leaders being women and 17% to 22% being ethnically diverse 1 34% women in senior leadership roles We have made some progress towards our D&I actions to create a more diverse leadership team in 2023/24. Gender diversity among our leaders increased by 4 percentage points to 34%, while ethnic diversity remained unchanged at 11%. Following a benchmark in 2023/24, we have VXEVHTXHQWO\UHࢉQHGRXUJOREDO',VWUDWHJ\ and 2030 actions See pages 54 and 55 11% ethnically diverse senior leaders 2 Health, safety and wellbeing: Aim for zero accidents involving our people 0.37 8% decrease in our all accident frequency rate 3 since 2022/23 Our health and safety performance continued to improve, with a further all accident frequency rate reduction in 2023/24. We will continue to take action to reach zero accidents by 2030 See page 56 Volunteering: Inspire 50% of colleagues to volunteer to support their communities and build new skills 23% of employees have volunteered in the last two years The number of employees using their two days of paid volunteering leave increased by 5% points this year. With 23% of our employees volunteering in the last two years, there is still work to be done to reach our 2030 ambition See page 56 Status key Each of our actions are broken down into annual targets that need to be met to remain on WUDFNWRDFKLHYHRXUDQGJRDOV7KHNH\EHORZUHࢊHFWVRXUFXUUHQWSRVLWLRQ On track or ahead Slightly behind target – monitor closely Not on track – further action required More information is available in our full ESG scorecard: rsgroup.com/sustainability 1. We have updated our 2030 D&I actions in 2023/24. See pages 54 and 55 for more. 2. 102 of 128 senior managers self-reported ethnicity via the employee database (including QRWVSHFLࢉHGSUHIHUQRWWRVD\DQGLGHQWLࢉHGDVQRQZKLWH 3. Per 200,000 hours worked. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 52 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### D&I, Technology, data and insight Long-term objective Focus areas Creating an inclusive and engaging culture Building a diverse talent pipeline Developing leader, manager and functional capability and excellence Compelling reward and recognition that drives performance – Employee engagement – Values and behaviours – Health and safety –Volunteering – Talent acquisition – Employee value proposition and onboarding –Early careers –Leadership framework and development – People manager development – Strategic workforce planning – 5HZDUGDQGEHQHࢉWV – Incentive review – Recognition – Wellbeing #### Culture Talent Capability Reward Actions Underpinned by #### …to support our strategy, operating model and vision 2XUYLVLRQIRURXUSHRSOHLVWREHࢉUVW choice by creating an inclusive and engaging environment where everyone is proud and excited to come to work and can perform at their best, develop and thrive. In 2023/24, we strengthened our commitment to people and culture through the development of our refreshed operating model, people plan and values launched in March 2024 (see pages 13, 18 and 19). /HGE\RXU&KLHI3HRSOH2ࢇFHURXUSHRSOH plan focuses on four core pillars of culture, talent, capability and reward. It is guided by our values and behaviours and underpinned by two core foundational priorities: D&I to ensure we are promoting diverse thought and representation in everything we do and technology, data and insight to ensure we have robust tools and data to consistently meet the needs of all our stakeholders. 7KURXJKRXUSHRSOHSODQZHDUHFRQࢉGHQW we will continue to build and support an outstanding RS team who will embody our values, execute our strategy brilliantly and deliver high performance to create long-term value for all our stakeholders. Read about how we are putting our people ࢉUVWRQSDJHVWR #### OUR PEOPLE PLAN Creating an inclusive and engaging environment where everyone is proud and excited to come to work and can perform at their best, develop and thrive. #### ESG continued #### 3XWWLQJSHRSOHࢉUVW #### The RS people plan details our approach to attracting, developing, #### engaging and retaining an #### outstanding team to meet our long-term strategic and #### operational aims. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 53 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() 11,000+ comments received in our latest My Voice engagement survey #### Culture #### ESG continued #### Diversity and inclusion %\ZHZDQWWRHQVXUHRXUWHDPUHࢊHFWVWKHFXVWRPHUVVXSSOLHUVDQGFRPPXQLWLHVZHVHUYHE\ working towards 37% to 42% senior leaders being women and 17% to 22% being ethnically diverse. % female leaders % ethnically diverse leaders 3 34% Increase of 4 pts from 2022/23 11% Unchanged from 2022/23 As a global business, it is vital that we create an inclusive and dynamic environment where all our people can grow and thrive. By promoting a culture of openness and respect, we continue to attract and retain the best talent in our industry and beyond, while harnessing a diverse range of strengths relating to gender, ethnicity, age, neurodiversity, disability and sexuality. We continued to implement measures to increase the broad diversity of our senior leadership team in 2023/24. During the year, the number of senior leaders that are women increased to 34% (2022/23: 30%), while the percentage of our leaders who are ethnically diverse 3 was unchanged. 'HVSLWHRXUFRQWLQXHGHࢆRUWVZHKDYHQRW made progress at the pace we would wish. To understand why and to help us make a bigger shift, we conducted an external review of our ',VWUDWHJ\GXULQJWKH\HDU7KLVLGHQWLࢉHG opportunities to embed D&I more robustly in our governance, systems and processes and data. :HKDYHVXEVHTXHQWO\XVHGWKHVHࢉQGLQJVWR UHࢉQHRXUJOREDO',VWUDWHJ\VWUHQJWKHQRXU action plan and review our 2030 actions to ensure they remain ambitious and achievable. As an outcome, in April 2024, our ExCo agreed revised 2030 D&I actions to ensure our team LVUHࢊHFWLYHRIWKHFXVWRPHUVVXSSOLHUVDQG communities we serve, by working towards 37% to 42% of our senior leaders being women and 17% to 22% being ethnically diverse. By introducing a minimum target range to our actions, we continue to be ambitious DQGDVSLUDWLRQDOZKLOHFUHDWLQJࢊH[LELOLW\WR DFFRPPRGDWHVLJQLࢉFDQWUHJLRQDOYDULDWLRQV and changes in representation across our global communities and talent pipelines. Gender We are committed to promoting gender diversity across the Group and wider industry to drive our business and sector forward. Globally, our Group-wide gender split remains balanced, with near equal numbers of men and women across the organisation (2023/24: 49% female; 51% male). At a senior leadership level, our female manager population increased by four percentage points in 2023/24 to 34% (2022/23: 30%) 4 . At Board level, composition increased to 56% female Board members (2022/23: 44%), including our Chair and CFO, following the appointment of Kate Ringrose. This was recognised in the FTSE Women Leaders Review for ‘Women on Boards’ in 2024, where we ranked joint fourth for FTSE 100 Board diversity. 3. 102 of 128 senior managers self-reported ethnicity via the HPSOR\HHGDWDEDVHLQFOXGLQJQRWVSHFLࢉHGSUHIHUQRWWR VD\DQGLGHQWLࢉHGDVQRQZKLWH 4. The percentage of our manager population which is female has been subject to independent external assurance by ERM CVS. See independent assurance report on pages 68 and 69. #### Employee engagement By 2029/30, we want to achieve and maintain an employee engagement score in the top 10% of high-performing companies. Engagement score 75 Down by 3 from 78 in 2022/23 Creating a high-performance, engaged and motivated team is critical for our long-term success. To ensure we are meeting the needs of our people consistently, we regularly check in with them to assess ongoing levels of satisfaction and engagement. In 2023/24, our My Voice survey included 21 questions and was run in 11 languages to gain valuable insights from our global team. We received an 88% response rate this year (2022/23: 86%), our highest to date. We also received more than 11,000 comments (an increase of 11%), which is testament to the trust our colleagues have in sharing their views. Overall, our engagement score declined by three points in 2023/24, from 78 to 75 1 . Feedback highlighted uncertainty surrounding recent leadership changes, as well as concerns about global economic conditions. This sentiment was echoed by external engagement benchmarks, which saw a general trend in declining engagement scores globally in 2023 2 . Our current score places us four percentage points below our ambition to be in the top 25% of high-performing companies by 2024/25. In response, we continue to invest in our people plan and identify ways to evolve our listening approach. From 2024/25, we will conduct quarterly pulse surveys to encourage managers to check in with their people more regularly. This will be further supported by My Voice, which will provide a global view on Group sentiment every 18 months. We hope that these actions will strengthen our two-way listening approach and ensure we continue to meet the needs of our SHRSOHTXLFNO\DQGHࢆHFWLYHO\ 1. As at 31 March 2024, we were four points away from the global benchmark for the top 25% of high-performing companies. 2. Glint’s June 2023 Global Benchmark saw a 1% decline in overall engagement scores since our last survey. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 54 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Diversity and inclusion continued We continued to implement measures to support, develop and promote gender diversity across the Group in 2023/24. Highlights include: – Elevate: Our women and allies’ network brings together and supports global members who are working to bring gender diversity to the forefront of the agenda – Accelerating leaders: Continued to support talented women through accelerator programmes like Remarkable Women and Mission Include’s 30% Club which promote personal and professional development – Women in Tech: Partnered with Women in Electronics in the US to invite 32 women into our workplace and expand employment opportunities for women in industry – STEM Returners: Worked with STEM Returners to recruit, develop, retain and promote women and other under-represented groups Ethnicity We are committed to promoting a diverse culture UHࢊHFWLYHRIWKHFRPPXQLWLHVDQGFRXQWULHVZH serve. In support, we are working towards building a more ethnically diverse leadership team. In 2023/24, 11% of our senior leaders LGHQWLࢉHGDVHWKQLFDOO\GLYHUVH 1 (2022/23: 11%). To accelerate, we conducted a review of our D&I strategy, 2030 actions and initiatives in 2023/24. We will be taking action on this in 2024/25 to continue to create a more ethnically diverse and gender balanced team. While we are behind on our 2030 action, we continue to raise awareness of ethnic and cultural diversity across our existing employee base. We have taken important measures to attract, recruit and promote talented people of all races and ethnicities in 2023/24. Highlights include: – EmbRACE: Our ethnically diverse employee resource group (ERG) and allies’ network brings together global members who are working to recognise and celebrate diversity – Accelerating diverse leaders: 20 RS employees joined Mission Include’s 30% Club to help #### ESG continued under-represented groups develop leadership skills. A further 20 employees participated by joining the programme as mentors – Cultural awareness training: Delivered global training with a focus on cognitive bias and promoting cultural intelligence – Celebrating diversity: Continued to celebrate events including Black History Month in the UK and US, Windrush (UK) and Juneteenth (US) Moving forward, ethnicity will remain a key priority in our refreshed D&I strategy as we look to identify ways to improve our performance and attract diverse talent into our industry and organisation. Broader inclusion We are committed to operating as an equal opportunity employer and supporting D&I in its broadest sense so that everyone is proud and excited to come to work and can perform at their best, develop and thrive. We support under- represented and vulnerable employees by giving them the tools they need to succeed. Our employee-led ERGs support colleagues in the areas of gender (Elevate), ethnicity (EmbRACE), sexual orientation and LGBTQIA+ (Spectrum) and, youth (Bloomers). Our ERGs actively run events throughout the year to raise awareness across the entire organisation. We recognise we still have a long way to go, but we are passionate about investing in our people and becoming an inclusive employer of choice. 1. 102 of 128 senior managers self-reported ethnicity via the HPSOR\HHGDWDEDVHLQFOXGLQJQRWVSHFLࢉHGSUHIHUQRWWRVD\ DQGLGHQWLࢉHGDVQRQZKLWH Our external disclosures relating to Board and senior management are aligned to the Financial Conduct Authority’s Diversity and Reporting requirements (see pages 90 and 91). Read more about our diversity and inclusion programmes, policies and progress on our website: rsgroup.com/sustainability RS Group plc STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION 55Annual Report and Accounts for the year ended 31 March 2024 ![]() #### ESG continued #### Volunteering By 2029/30 we want to inspire 50% of our employees to use their volunteer time to have a positive impact on global communities. % of employees who have volunteered in the last two years 23% Increase of 5% pts from 2022/23 We continued to support local communities in 2023/24 by encouraging our people to use their two days of paid volunteering leave to participate in community-based initiatives and volunteer for good causes. As well as supporting local communities, volunteering is a great way to develop skills, improve engagement and boost health and wellbeing. We were pleased to see an increase in YROXQWHHULQJE\ࢉYHSHUFHQWDJHSRLQWVWKLV\HDU with employees donating a total of 1,700 days to support a local cause or one of our key social impact partners. Key highlights included volunteering for TWMP, where 110 employees volunteered their time to build 39 of the latest Divya 1.65 washing machines and a further 50 volunteers participated in community wash days to give homeless people the dignity of clean clothes. While volunteering participation continues to increase steadily, we still have work to do to ensure that 50% of our people are using their time to support community causes. Volunteering will be promoted alongside the roll out of our new values and behaviours in 2024/25 as an example of how we do the right thing. For more on our volunteering initiatives and activities, go to: rsgroup.com/sustainability #### Our performance Change from 2023 2024 2023 2022 All accidents (3)% 32 33 40 All accident frequency rate (per 200,000 hours) (8)% 0.37 0.40 0.53 Lost time accidents (23)% 17 22 23 Lost time accident frequency rate (per 200,000 hours) (30)% 0.19 0.27 0.31 Total calendar days lost (9)% 302 333 252 Near misses reported +20% 20,124 16,740 13,770 Near misses per head +13% 2.21 1.96 1.76 For additional health and safety data, including how we are supporting mental health and wellbeing, please visit our ESG data centre: rsgroup.com/sustainability #### Health, safety and wellbeing By 2029/30, we aim for zero accidents involving our people. All accident frequency rate (per 200,000 hours) 0.37 Decrease of 8% from 2022/23 In 2019/20, we set the ambition to reach zero accidents involving our people by 2029/30. To achieve this, our Target Zero programme aims to implement measures that continuously improve performance, prevent avoidable incidents and support physical health and mental wellbeing. Following the acquisition of DH, Risoul and Distrelec, we conducted health and safety audits, assessments, induction and awareness training to align the new sites and our colleagues to Group standards. We continued to make progress in reducing the number of total accidents and incidents across the Group in 2023/24. Our all-accident frequency rate per 200,000 hours was down 8% to 0.37 – a reduction of 46% since 2019/20. During the year, the total number of accidents across the Group decreased to 32. No accidents resulted in life-changing injuries or fatalities. 7RSURPRWHDVDIHW\ࢉUVWFXOWXUHZHHQFRXUDJH our people to have greater awareness and individual ownership of their actions to protect themselves, their colleagues and families. We do this through comprehensive awareness training, EHVWSUDFWLFHDOLJQPHQWDQGUHJXODUUHࢊHFWLRQ through our learning from experience process. In 2023/24, we continued our Behaviour Based Safety initiative to help employees and leaders identify and eliminate any behaviours that may result in future incidents. We also aligned our GLVWULEXWLRQVLWHVRQࢉYH'&VDIHW\SULRULWLHV to ensure that key safety requirements are embedded consistently across our locations. Near miss reporting continued to underpin our health and safety focus and we conducted regular campaigns to encourage our people to identify and report unsafe acts, hazards and near misses. The total number of near misses reported in 2023/24 increased to 20,124. Once reported, all near misses are investigated immediately, with most corrected at the time of reporting and others requiring more stringent control procedures to be addressed as soon as viable. To ensure consistency across our operations, all our sites have health and safety management V\VWHPVLQSODFHZLWKVLWHVFHUWLࢉHGWR ISO 45001 or an equivalent standard, covering RIࢊRRUDUHDDQGRIRXUVLWHV:H continue to identify and target sites with higher accident rates and work with them to develop action plans which we monitor closely. 13% increase in reported near misses per head in 2023/24 29 VLWHVFHUWLࢉHGWR,62RUDQHTXLYDOHQWVWDQGDUG RS Group plc Annual Report and Accounts for the year ended 31 March 2024 56 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Talent, capability, reward #### Talent and leadership We operate in a competitive industry, which is why we place strong emphasis on accelerating the long-term growth and career advancement of our people and leaders to retain talent and drive our commercial success. In 2023/24, we continued to increase our insight and rigour into the selection and development of our leadership population. To achieve this, we introduced a Global Executive Talent Policy which GHࢉQHVRXUFRPPRQDSSURDFKWRDVVHVVLQJ internal and external leadership hires while balancing leadership behaviours with technical capabilities. In 2024/25, we will include leadership succession tracking into our QBRs to embed further talent planning, visibility and accountability. As part of our talent review process, we regularly identify and nominate future leaders to participate in development activities that are best aligned to their needs. In 2023/24, we enrolled select candidates in strategic learning opportunities such as Ezra Coaching and #### Capability development Our people are integral to creating a high- performance culture that unlocks the innovation and ingenuity we need to deliver our VWUDWHJ\DQGWRUHPDLQࢉUVWFKRLFHIRUDOORXU stakeholders. By setting a consistent global framework for learning and development, we are shaping the talent we need to thrive. We invest in our people through a broad mix of on-the-job activities, learning opportunities and formal training. In 2023/24, our employees completed a total of over 51,000 hours of learning through our global learning platform, My Academy, on both mandatory and non- mandatory content. This is supplemented by live training which provides over 30,000 additional training hours. Our approach to ensuring we have the right capabilities in place is driven by two key global processes: talking performance and talent & succession reviews. By promoting a regular rhythm of career conversations between managers and employees, we can identify GHYHORSPHQWDOQHHGVTXLFNO\DQGHࢆHFWLYHO\ to accelerate their progression. In 2023/24, we introduced a new people managers’ guidebook to support our managers with everything they need to positively engage, develop and manage their people. The guidebook includes guidance in facilitating excellent career and development conversations to support skills development and career progression. We also relaunched our monthly Management Matters sessions in 2023/24 to bring people managers from all roles and regions together to share experiences and learning. #### Reward and recognition We want to provide competitive rewards and EHQHࢉWVWRLQFHQWLYLVHRXUSHRSOHWRSHUIRUP at their best and to attract and retain top talent. In 2023/24, we enhanced our rewards and EHQHࢉWVWRSURYLGHDSDFNDJHRISK\VLFDOVRFLDO DQGࢉQDQFLDOLQFHQWLYHVIRURXUSHRSOHDQGWKHLU families (see pages 103 and 104). Our approach is guided by our global commitment to ensuring base pay levels DUHVHWWRSD\DOLYLQJZDJHDQGWKDWZHRࢆHU competitive bonuses to our people, as well as long term incentive plans (LTIPs) to reward our senior leaders. This is supported by a market-based approach that aligns our EHQHࢉWVDQGUHZDUGVSDFNDJHVWRORFDO market norms and supports our commitment to diversity and inclusion. ,QࢊXHQFHZLWK,PSDFW:HDOVRFRQWLQXHGWR encourage peer-to-peer interaction via monthly Management Matters facilitated sessions and our 2024 Leadership Event, which was attended by 193 people managers in March 2024. We are also passionate about identifying and investing in emerging talent to accelerate their progression into leadership roles. Through Future Shapers, we are helping ambitious cohorts of employees to develop their leadership skills. Led by Ivy House, 14 employees participated in Future Shapers this year, with a total cohort of 71 employees since the programme began in 2019/20. We continue to provide apprenticeships and supported 253 colleagues in the UK in 2023/24. We have been recognised as a Gold member of the 5% Club and our employees have spent over 11,000 hours developing their knowledge, skills and behaviours through ‘earn and learn’ training. #### ESG continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 57 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() ### DOING BUSINESS ### RESPONSIBLY Our commitment to doing the right thing underpins everything we do and ensures we remain a trusted and transparent partner. We adopt a strong approach to governance, ethics and compliance both within our business and across our value chain. By actively collaborating with our 2,500+ product suppliers, we ensure that the more than 750,000 products we stock come from responsible businesses that share our high ethical and environmental standards. #### ESG continued 2030 ACTIONS PERFORMANCE STATUS COMMENTARY READ MORE Responsible business: ESG-related targets included in our employee rewards programme across all levels, geographies and in our SLL 45% of employees had their annual incentive aligned to Group carbon reduction in 2023/24 45% were incentivised to deliver Scope 1 and 2 emissions reduction goals in 2023/24, with a carbon metric accounting for between 10% to 15% in the Group’s annual incentive. Three ESG metrics are in our £400 million SLL See page 60 rsgroup.com/ sustainability Responsible supply chain: Evaluate our suppliers against our high ethical and environmental standards and set ESG objectives for strategic suppliers 59% of suppliers by spend with signed Ethical Trading Declaration We continue to drive ESG action with our strategic product and service suppliers across (0($DQG56,QWHJUDWHG6XSSO\6SHFLࢉFDOO\ZH target our key suppliers (top 67% by spend) by encouraging them to work on four ESG priorities set out in our Supplier ESG Handbook. By including supplier spend from recent acquisitions, the number of suppliers in the top 67% by spend has increased from c. 350 businesses to 390. This has impacted the percentage of suppliers with a signed Ethical Trading Declaration and an EcoVadis assessment in 2023/24. We will continue to work with the acquisitions in 2024/25 to align to our supply chain ambitions See page 61 52% of suppliers by spend have an EcoVadis rating 66% of RS PRO suppliers by spend are Sedex members Status key Each of our actions are broken down into annual targets that need to be met to remain on WUDFNWRDFKLHYHRXUDQGJRDOV7KHNH\EHORZUHࢊHFWVRXUFXUUHQWSRVLWLRQ On track or ahead Slightly behind target – monitor closely Not on track – further action required More information is available in our full ESG scorecard: rsgroup.com/sustainability RS Group plc Annual Report and Accounts for the year ended 31 March 2024 58 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### ESG governance ESG compliance steering group Ensures compliance to existing and emerging ESG regulation Initiative steering groups Comprised of four steering groups that drive action on key ESG action plan areas: Net zero, packaging, transport and Better World products #### ESG continued The ExCo, led by our CEO, has ultimate responsibility for the development, delivery and progress of our 2030 ESG action plan. They oversee the development, implementation and performance management of all ESG-related policies, goals, initiatives, investments and disclosures. The ExCo receives quarterly ESG performance updates and annual training on our net zero strategy and climate transition plans to ensure they are taking action on the Group’s key climate-related risks and opportunities, the latest regulations and embedding best practice. The Board has close oversight of our ESG action plan. They ratify key ESG policies, targets, initiatives and investments, while monitoring progress via regular ESG updates. In respect of ESG, the Board is supported by two of its committees: the Audit Committee (see pages 92 to 98), who ensure alignment to existing and emerging ESG compliance and the Remuneration strategic plans, oversee initiatives and manage ongoing performance. The ESG team are also supported by the ESG compliance steering group who oversees the development and delivery of the Group’s approach to existing and emerging ESG legislation, including the TCFD and CSRD. Reporting and disclosure To ensure our ESG disclosures meet the evolving needs of our stakeholders, we continued to align our reporting to key frameworks, ratings and standards. Our 2023/24 ESG Report and data FHQWUHLQFOXGHVXSWRࢉYH\HDUVRIHQYLURQPHQWDO data and our climate-related KPIs. We also provide a separate basis of reporting document which outlines the reporting methodology for key ESG KPIs. Assurance of our ESG data from ERM CVS can be found on pages 68 and 69. For more, please go to: rsgroup.com/sustainability. Our ESG disclosures are aligned to the following frameworks and standards: – TCFD: In 2023/24, we enhanced our TCFD GLVFORVXUHZLWKࢉQDQFLDOPRGHOOLQJDQGUHࢉQHG our Scope 3 emissions methodology, disclosure and assurance process (see pages 62 to 67) – GRI & SASB: Our ESG reporting aligns to the Global Reporting Initiative (GRI) and sector- VSHFLࢉFUHFRPPHQGDWLRQVRI6XVWDLQDELOLW\ Accounting Standards Board (SASB) – UNGC: We are members of the United Nation’s Global Compact (UNGC), and our latest Communication on Progress (COP) can be found on our website – UN SDGs: Our ESG action plan is aligned to six of the UN SDGs where we can make the biggest impact (see page 41) The ESG regulatory landscape continues to evolve rapidly and we are working hard to stay aligned ZLWKWKHODWHVWVWDQGDUGVDQGVHFWRUVSHFLࢉF recommendations. This includes taking measures to align our approach to emerging UK and EU regulation, including CSRD, the International Sustainability Standards Board (ISSB), UK Transition Plan Taskforce (TPT) and the EU and UK Green Taxonomies. Committee (see pages 99 to 115), who make decisions on ESG metrics and targets to be included in executive remuneration and employee rewards. In 2023/24, the Audit Committee reviewed the Group’s climate-scenario modelling and wider TCFD disclosure, as well as our updated Scope 3 emissions modelling and recommended these to the Board for disclosure (see page 80). We also selected a new Non-Executive Director ESG lead, Bessie Lee, to provide a deeper governance link between the Board, ExCo and ESG team. The Group ESG team is responsible for the day-to-day delivery of our ESG action plan. Operating within our Corporate Services function, the team is led by our VP of Social Responsibility & Sustainability and is supported by four cross organisational steering groups focused on net zero, packaging, transport and Better World products. These teams meet monthly to develop We continued to align to leading global ESG ratings in 2023/24, including: – EcoVadis: Platinum medal – CDP: A- Climate score – MSCI: AA rating – Sustainalytics: 6.4 score (Global top 50 ESG companies) – S&P: Sustainability Yearbook inclusion Ethics and compliance We are committed to upholding the highest standards of ethics and compliance across the Group and ask our suppliers and partners to do the same. To ensure consistent action, our key policies and processes align to regional legislative requirements and best practice standards. These include the policies and processes described below and on page 60. Code of Conduct In 2023/24, we launched a new Code of Conduct to reinforce our commitment to achieving the highest ethical and legal standards across the Group. The Code of Conduct sets out our policy to maintain the highest standards of ethical conduct and behaviour, legal and compliance requirements we must adhere to and ways of raising concerns via our Speak Up helpline (see page 60). To familiarise people with the Code of Conduct, we launched mandatory training in early 2024 which 100% of our top 500 leaders and 91% of employees have completed to date, with ongoing training to cover remaining employees. Awards and recognition In 2023/24, RS Group was awarded Best Company for Sustainability Reporting in the industrial sector at the Corporate ESG Awards 2023, held by ESG Investing. We were also listed in the S&P Global Sustainability Yearbook for WKHࢉUVWWLPHSODFLQJXVLQWKHWRSRI companies in our industry for ESG action. #### ESG GOVERNANCE STRUCTURE The Board Oversees the Group’s ESG approach and receives regular updates on ESG action plan progress Executive Committee Develops and implements the Group’s ESG strategy, policies and delivery initiatives ESG team Ensures operational delivery of the Group’s ESG action plan ESG Non-Executive Director Risk Committee Audit Committee Remuneration Committee RS Group plc Annual Report and Accounts for the year ended 31 March 2024 59 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### ESG governance continued #### ESG continued #### Incentivising ESG progress By 2029/30, we want to include ESG-related targets in our employee rewards programme across all levels and geographies. ESG metrics in Group performance scorecard % of employees with carbon reduction metric in annual incentive 8 unchanged from 2022/23 45% a 5% pts decrease from 2022/23 We have taken steps to integrate ESG targets into our employee rewards programme to drive progress towards our 2030 ESG action plan. As of 2023/24, 45% of Group employees have their annual incentive aligned to the Group’s Scope 1 and 2 emissions reduction target, with this metric accounting for between 10% to 15% of the Group annual incentive. In 2023/24, we exceeded the maximum performance level for this metric. Furthermore, 75 of our senior leaders continue to participate in the Journey to Greatness LTIP, which has employee engagement as a measure. In addition to these incentives, ESG forms a core part of our performance management at both a Group and individual level. The ExCo and Board receive ESG performance updates quarterly. We DOVRKDYHHLJKWQRQࢉQDQFLDO.3,VLQRXUXSGDWHG Group performance scorecard which the ExCo will use to manage ESG performance via QBRs ZLWKWKHUHJLRQVDQGIXQFWLRQV6SHFLࢉF individuals and teams have ESG targets in their annual objectives and annual incentive structures to drive further progress. Sustainability-linked loan The Group continues to have access to funding via a £400 million SLL facility which is directly linked to the achievement of three of the Group’s most material 2030 ESG actions – direct carbon emissions (Scope 1 and 2 CO 2 e emissions), packaging intensity and the percentage of management that are women. In 2023/24, we met the annual performance targets IRUDOOWKUHH.3,VDVVSHFLࢉHGLQWKH6// framework agreement. Ethical trading We continue to promote ethical standards for our people through the Code of Conduct and for our suppliers through our Procurement Policy and Ethical Trading Policy. We are committed to partnering with suppliers with strong ESG standards. We ask all our products and service suppliers to sign our Ethical Trading Declaration, or provide their own equivalent ethical policy that aligns to our standards. As of 2023/24, 59% of suppliers by spend had signed our Ethical Trading Declaration or provided their own. Anti-bribery and corruption We are committed to conducting our business DࢆDLUVHWKLFDOO\DQGWUDQVSDUHQWO\HQVXULQJZH do not engage in or facilitate any forms of bribery or corruption as outlined in UNGC Principle 10. Our Anti-Bribery & Corruption Policy covers our stance on bribes, gifts and hospitality, facilitation payments and political and charitable contributions. This policy and expected procedures are detailed in our Code of Conduct training which all employees are required to complete. We delivered anti-bribery training to 100% of our top 500 leaders in 2023/24. Whistleblowing Speak Up, our dedicated whistleblowing process LVDFRQࢉGHQWLDOPHWKRGIRUHPSOR\HHV customers and suppliers to raise concerns regarding ethical or legal concerns without fear of victimisation. Available globally, we provide both an internal channel and an external independent reporting service that is operated by a third party supplier. In 2023/24, we received 23 Speak Up reports, all of which were investigated and where necessary acted upon. The operation of our Speak Up process is monitored regularly by our Audit Committee (see page 98). We refreshed our Speak Up Policy during the year and continued to deliver dedicated training, awareness and Speak Up refresher campaigns. Modern slavery Our 2024 Modern Slavery Transparency Statement outlines our zero-tolerance stance WRZDUGVDQ\IRUPVRIVODYHU\KXPDQWUDࢇFNLQJ child or forced labour within any part of our business or supply chain. This position is reinforced in our Anti-Slavery and Human 7UDࢇFNLQJ3ROLF\DQG(WKLFDO7UDGLQJ3ROLF\ We comply fully with the International Labour Organization (ILO) Forced Labour Convention and Abolition of Forced Labour Convention and the ILO’s Minimum Age Convention. In 2023/24, 91% of our employees undertook modern slavery training as part of our Code of Conduct training, including employees across all DCs. Data, information security and privacy We continue to operate a robust information security programme, central to which is our Information Security Policy that is aligned to the principles of the NIST Cybersecurity Framework and ISO 27001. We recognise and respect the high level of trust our customers, suppliers and employees place in us. This is why we continue to maintain a high level of focus on data, privacy and information security, as key mitigations to cyber security as a principal risk for the Group. We also published a Data Incidents Policy and an AI Policy which is being translated for global distribution. In 2023/24, we brought all our mandatory information security and privacy training requirements into a single course that forms part of our Code of Conduct training. In addition, we provided tailored training to over 600 colleagues across the Group (100% of high risk teams) that deal with personal data from the UK and EU. For a full list of Group codes, policies and standards, go to: rsgroup.com/sustainability/ codes-policies-and-standards RS Group plc Annual Report and Accounts for the year ended 31 March 2024 60 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### ESG continued Supplier ESG action plan We are committed to leveraging our position at the centre of the global industrial value chain to drive responsible action among our suppliers, on behalf of our customers. We recognise that sustainability is a new part of the journey for some of our suppliers, which is why we are committed to educating, upskilling and encouraging them to set responsible business standards that align with our own. In doing so, we are forging stronger relationships and accelerating value chain decarbonisation. We continued to strengthen our approach towards screening and collaborating with suppliers in 2023/24, which helps to reduce risk and increase trust among customers. We target to engage our top 67% of suppliers by spend (c. 390 suppliers) and all RS PRO suppliers on four ESG priorities outlined in our Supplier ESG Handbook: – Sign and return the Ethical Trading Declaration: 59% of suppliers by spend with a signed Ethical Trading Declaration in place in 2023/24 (2022/23: 50% 1 ) Finally, we continued to conduct detailed ethics and compliance monitoring with our key suppliers to ensure ongoing alignment to Group standards and expectations. This included: – Risk screening: As of 2023/24, we have risk screened all existing suppliers on the RS database against global government lists – 6XSSOLHUSUHTXDOLࢉFDWLRQTXHVWLRQQDLUHV Since May 2023, all new suppliers are required WRFRPSOHWHDPDQGDWRU\SUHTXDOLࢉFDWLRQ questionnaire as part of our supplier onboarding process. In 2023/24, we updated WKHTXHVWLRQQDLUHDQGWULDOOHGDUHTXDOLࢉFDWLRQ supplier ESG questionnaire for our top suppliers, covering 67% of supplier spend. We will aim to re-qualify our suppliers every three years to ensure they are all aligned to evolving and emerging standards – RS PRO site inspections: 39 audits of higher- risk RS PRO suppliers from Asia took place in 2023/24 More information on our supplier ESG action plan can be found online at: rsgroup.com/ sustainability – 'HYHORSDQGRࢆHUPRUHVXVWDLQDEOHSURGXFWV (QJDJHGVXSSOLHUVWRGHYHORSDQGRࢆHUPRUH sustainable products via ongoing webinars and individual meetings. 50 new suppliers and 10,000 new products were added to the Better World product range in 2023/24, which now totals c. 30,000 products from over 90 suppliers (see page 48) – Set science-based carbon reduction targets by 2025: As of 2023/24, 32% of suppliers have set science-based climate goals through the SBTi (see page 49) – Become EcoVadis-rated or Sedex members: Continued to encourage strategic suppliers to become EcoVadis rated, with 52% by spend now rated (2022/23: 49% 2 ). Not only has participation increased, but overall scores have also improved from an average bronze medal in 2022/23 to silver in 2023/24. Additionally, we encourage RS PRO suppliers to become Sedex members, with 66% of our key suppliers now signed up (2022/23: 49%) Beyond this, we continued to engage suppliers on key ESG topics throughout the year via webinars and events covering topics such as EcoVadis alignment, sustainable PPE, health and safety and Better World product development. 1. Restatement of 2022/23 from 52% to 50% due to updates in reporting methodology and data cleansing. 2. Restatement of 2022/23 from 50% to 49% due to updates in reporting methodology and data cleansing. #### Responsible supply chain By 2029/30, we want to evaluate all our suppliers against our high ethical and environmental standards and set ESG objectives for strategic suppliers. Suppliers with signed ethical trading declaration Suppliers with EcoVadis rating Suppliers committed to SBTi RS PRO suppliers that are Sedex members 59% 9 pts 1 increase from 2022/23 52% 3% pts increase 2 from 2022/23 32% 7 pts increase from 2022/23 66% 17 pts increase from 2022/23 RS Group plc Annual Report and Accounts for the year ended 31 March 2024 61 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### ESG continued ### TASK FORCE ON ### CLIMATE-RELATED ### FINANCIAL DISCLOSURES At the time of publication, we have aligned with the requirements of Listing Rule 9.8.6R and the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 E\LQFOXGLQJFOLPDWHUHODWHGࢉQDQFLDOGLVFORVXUHVWKDWDUHFRQVLVWHQWZLWKWKH7&)' recommendations. :KHUHSRVVLEOHZHKDYHPDGHXVHRIWKH7&)')LQDO5HFRPPHQGDWLRQV5HSRUWDQG$QQH[HV DQGWHFKQLFDOVXSSOHPHQWVIRURXUTXDQWLWDWLYHFOLPDWHVFHQDULRDQDO\VLV:HZLOO continue to use these resources to strengthen our disclosures in the future, including GHYHORSPHQWRIRXUࢉUVWFOLPDWHWUDQVLWLRQSODQ The table below sets out the 11 TCFD recommendations and where the related information can be found within this report: Recommendation Disclosure Reference Governance A) Describe the Board’s oversight of climate-related risks and opportunities Doing business responsibly (page 59) B) Management’s role in assessing and managing climate-related risks and opportunities Doing business responsibly (page 59) Strategy $'HVFULEHWKHFOLPDWHUHODWHGULVNVDQGRSSRUWXQLWLHVWKHRUJDQLVDWLRQKDVLGHQWLࢉHGRYHU the short, medium and long term TCFD strategy (pages 63 to 67) B) Describe the impact of climate-related risks and opportunities on the organisation’s EXVLQHVVHVVWUDWHJ\DQGࢉQDQFLDOSODQQLQJ TCFD strategy (pages 63 to 67) &'HVFULEHWKHUHVLOLHQFHRIWKHRUJDQLVDWLRQȆVVWUDWHJ\WDNLQJLQWRFRQVLGHUDWLRQGLࢆHUHQW climate-related scenarios, including a 2°C or lower scenario TCFD strategy (pages 63 to 67) Risk management A) Describe the organisation’s processes for identifying and assessing climate-related risks TCFD risk management (page 67) / Risks, viability and going concern (page 36) B) Describe the organisation’s processes for managing climate-related risks TCFD risk management (page 67) / Risks, viability and going concern (page 36) C) Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management TCFD risk management (page 67) / Risks, viability and going concern (page 36) Metrics and targets A) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process Advancing sustainability / TCFD metrics and targets (page 67) B) Disclose Scope 1, Scope 2 and if appropriate Scope 3 greenhouse gas (GHG) emissions and the related risks Advancing sustainability (pages 44, 45 and 47) C) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets Advancing sustainability (pages 42 and 43) Climate change is one of the greatest challenges facing our world today. As a Group, we are committed to climate action and supporting the critical priorities of the Paris Agreement to limit global warming to 1.5°C above pre-industrial levels. This is not only the right thing to do for people and planet, but core to our purpose of making amazing happen for a better world and our strategy, which is focused on delivering sustainable value for all our stakeholders. We remain committed to communicating our progress on climate action transparently. This is the third year we have published a TCFD report and we have made good progress in this time, moving from qualitative to quantitative scenario DQDO\VLVIRURXUࢉYHFOLPDWHUHODWHGULVNVDQG opportunities (CRROs), embedding strong governance and risk management controls and integrating climate and ESG priorities into our products, solutions, target customer industries and operational capabilities. Our progress to date enables us to mitigate our risks, while leveraging the opportunities to deliver long-term value for our stakeholders by supporting the transition to a low-carbon global industrial sector. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 62 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### ESG continued 2XUࢉYH&552VDUHVXPPDULVHGLQWKHWDEOHRQ this page and further detail can be found on pages 64 and 65. These remain consistent with our assessment and disclosure in prior TCFD reports (available at: rsgroup.com/sustainability/ reporting-centre), which set out further complementary detail and context on our climate governance and risk management approach and our climate-related scenario analysis. Governance Our climate governance activities are fully integrated within our wider corporate governance. For an overview of our ESG governance arrangements and key activities for 2023/24, inclusive of climate risks and opportunities, refer to page 59. For an update on key ExCo and Board climate-related engagement and activities in 2023/24, please refer to pages 80 to 83. Strategy Driving climate action through our core business strategy Climate action is core to our purpose, strategy, YDOXHVDQG(6\*DFWLRQSODQ:HUHࢉQHGRXU strategy in 2023/24 and this has provided an opportunity to deepen this integration further. Some key examples of how we are mitigating climate risks and maximising opportunities, aligned to our strategy include: – Customers: developing and retaining customers in industry sectors that are critical to the low-carbon transition, including renewables, utilities and automotive sectors (see page 14) – Products: RࢆHULQJRXUFXVWRPHUVPRUH sustainable products that help them to reduce their energy consumption and transition to lower-carbon operations (see pages 15 and 48) – Solutions: helping our customers run their businesses more sustainably, via solutions such as energy monitoring and product recycling (see pages 15 and 49) – 2SHUDWLRQDOH[FHOOHQFH reducing emissions from our DC operations and product shipments (see pages 16 and 42 to 47) We are engaging with our suppliers, customers and wider value chain partners to drive collaborative action for a low-carbon global industrial sector, for example, through our Better World product range and supplier ESG action plan (see pages 48 and 49). We are already seeing our commitment and progress on ESG be a key GLࢆHUHQWLDWRULQDWWUDFWLQJDQGUHWDLQLQJKLJKYDOXH customers. Alongside this, we are making good progress in developing our climate transition plan, utilising the TPT Framework released in 2023 and will publish this in line with developing compliance timelines. Refining our approach to climate scenario analysis In 2023/24, we refreshed our quantitative climate VFHQDULRDQDO\VLV2XU(6\*DQG\*URXSࢉQDQFLDO control teams worked together to overlay climate VFHQDULRVRQWRRXUUHIUHVKHGࢉYH\HDUVWUDWHJLF plan and projected out to 2050. This has helped to bring tighter ownership and control over our CRROs and demonstrates our commitment to embedding climate action across our business. We have modelled the impact on Group adjusted RSHUDWLQJSURࢉWDIWHUPLWLJDWLRQRIWKH&552V XQGHUWKUHHGLࢆHUHQWFOLPDWHVFHQDULRVIURPWKH International Energy Agency (IEA) for transition risk and under three Intergovernmental Panel on Climate Change (IPCC) Representative Concentration Pathways (RCPs) for physical risk, which is consistent with our previous analyses (see reference table on page 66). :HLGHQWLࢉHGWKHOLNHO\WLPHIUDPHIRUHDFK&552 to emerge: – Short term: 0 to 5 yearsDOLJQHGWRRXUࢉYH\HDU strategic plan) – 0HGLXPWHUPWR\HDUV (aligned to the risk management process, modelled as 2030 in our quantitative climate scenario analysis) – /RQJWHUPWR\HDUV (aligned to the risk management process, modelled as 2050 in our quantitative climate scenario analysis) :KLOVWZHKDYHLGHQWLࢉHGVKRUWWHUPFOLPDWH RSSRUWXQLWLHVZHKDYHQRWLGHQWLࢉHGDQ\PDWHULDO short-term risks. We have modelled our medium and long-term CRROs in the table on page 66. 2XUࢉYH&552V Products, solutions and customers &KDQJHVLQFXVWRPHU #### segments and product #### demand (transition #### opportunity) Logistics 7HFKQRORJ\WUDQVLWLRQ #### and rising fuel costs #### (transition risk) Distribution sites 5HGXFHGHPLVVLRQVDQG #### energy costs through solar #### generation (transition #### opportunity) ,PSDFWRIH[WUHPHKHDW #### (physical risk) ,PSDFWRIH[WUHPHZHDWKHU #### (physical risk) We are already seeing our commitment and progress onESG be a key differentiator in attracting and retaining high-value customers RS Group plc Annual Report and Accounts for the year ended 31 March 2024 63 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() DFWLRQVRQRXU&552V &552 Description Business owners Metrics monitored 2023/24 initiatives, progress and investment activities 7UDQVLWLRQ Opportunity 3URGXFWVVROXWLRQVDQG customers: Changes in customer segments and product demand 6WUDWHJLFDFWLRQDOLJQPHQW &RQQHFWHGVWDNHKROGHUV Growth in customer segments linked to the low-carbon economy and product categories that enable the net zero transition, alongside a smaller downside of decline in traditional customer segments (fossil fuel) and products that are not required in the low-carbon economy (although modelling indicates this is RIORZVLJQLࢉFDQFH Products: Chief of Product and Supply Chain (P&SC) Solutions: Chief of Solutions and Services – Number of products in the Better World product range (ambition for 100,000) – Investment in and incremental revenue from sustainable products and services e.g. Better World products, industrial MRO services that reduce energy and carbon and low-carbon industry sectors – Overall green revenues metric to be developed, aligned to UK Green Taxonomy guidance – Better World products – c. 30,000 products launched in 30 countries (see page 48) – Low-carbon industry sectors – business development WHDPDQGVWUDWHJ\HVWDEOLVKHGIRU8.RࢆVKRUHZLQG industry. Key strategic MRO partnership established ZLWK(TXLQRUWRVHUYHWKHZRUOGȆVODUJHVWRࢆVKRUHZLQG farm – Dogger Bank, UK (see page 49) – New sustainability solutions to help customers monitor and reduce energy in their operations (see page 49) 2024/25 focus: Continue to grow our customer propositions and revenue from sustainable product and service solutions and low-carbon industries Risk 2. Logistics: Technology transition and rising fuel costs 6WUDWHJLFDFWLRQDOLJQPHQW &RQQHFWHGVWDNHKROGHUV Increased costs from third-party logistics providers associated with carbon freight taxes and investment in low-carbon technologies (expected to continue to be embedded in pricing margin) Chief of P&SC and Regional Presidents (RPs) –Total CO 2 emissions and emissions intensity for product transportation – 25% reduction per tonne of product sold by 2029/30 from 2019/20 (SBTi target) – Logistics costs as a % of revenue – 26% reduction in absolute carbon emissions from product transportation since 2019/2020 1 , delivered via ongoing initiatives to regionalise and optimise our supply chain and switch transport modes to sea or ground to limit distance, air miles, costs and carbon emissions (see page 47) 2024/25 focus: Continued supply chain optimisation through regional sourcing, storing and shipping and modal shift to reduce distances travelled, carbon footprint and cost Opportunity 'LVWULEXWLRQVLWHV Reduced emissions and energy costs through solar generation 6WUDWHJLFDFWLRQDOLJQPHQW &RQQHFWHGVWDNHKROGHUV Installation of solar panels on available distribution site roof space to reduce energy costs and increase resilience Chief of P&SC and RPs – Capital expenditure on distribution site solar generation and storage solutions has been embedded in goodwill impairment on page 95 – Reduction in energy costs – Percentage of 2023/24 electricity use from on-site solar generation: 2% – Investing in solar panels at our distribution sites or leasing new distribution sites with solar installed – 52kW solar panels array added to our FC at Midrand, South Africa – New leased FC in Madrid, Spain, with solar panels installed – Proposals in development for other key distribution sites (see page 43) 2024/25 focus: Review and progress proposals for installation of solar generation at further sites 1. Scope 3 emissions from product transportation (Category 4) per tonne of product sold. #### ESG continued Stakeholder key Our people Customers Suppliers Communities Shareholders Strategic action Customers Products Solutions Experience Operational excellence RS Group plc Annual Report and Accounts for the year ended 31 March 2024 64 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() DFWLRQVRQRXU&552V &552 Description Business owners Metrics monitored 2023/24 initiatives, progress and investment activities Physical Risk 4. Distribution sites: Impact of extreme heat 6WUDWHJLFDFWLRQDOLJQPHQW &RQQHFWHGVWDNHKROGHUV Increased costs associated with installation RIKLJKHࢇFLHQF\FRROLQJV\VWHPVDQGRU potential impacts on the health, safety and wellbeing of people working at our distribution sites which could reduce SURGXFWLYLW\.H\PDWHULDOVLWHLGHQWLࢉHG to be exposed to extreme heat is our regional distribution site in Fort Worth, US Chief of P&SC and RPs – Distribution site operating temperatures – Worker productivity and absence during high-heat periods (>35°C and >40°C) – Capital expenditure in heating, ventilation and air conditioning (HVAC) systems has been embedded in goodwill impairment on page 95 – Employee productivity monitored in distribution sites during high-heat periods with regular breaks and refreshments – Building upgrades and new building management system installed at our regional DC in Fort Worth, US, supporting HVAC optimisation (c. £0.5 million capital investment) – 1HZPRGHUQDQGHQHUJ\HࢇFLHQW)&LQ0DGULG6SDLQ and improvement in roof insulation and windows at our regional Beauvais DC, France, to reduce solar gain (c. £1 million capital investment) 2024/25 focus: Ongoing mitigation through business continuity planning, review additional sites for HVAC and fabric improvement options Risk 5. Distribution sites: Impact of extreme weather 6WUDWHJLFDFWLRQDOLJQPHQW &RQQHFWHGVWDNHKROGHUV ([WUHPHZHDWKHUHYHQWVLQFOXGLQJࢊRRGLQJ storms and tornadoes, have the potential to disrupt our operations and logistics and cause physical damage to our infrastructure. Our regional distribution sites in Fort Worth, US ZDVLGHQWLࢉHGWREHWKHNH\VLWHDWULVNGXHWR physical exposure and strategic importance for our Americas distribution network Chief of P&SC and RPs – Distribution site insurance costs – Frequency and cost impact of severe weather events on distribution sites – Investment in distribution site facility improvements – Proactive business continuity planning by our regional DC team in Fort Worth, US, includes mitigations such as drop shipments, alternative warehousing, updated contingency plan and enhanced revenue recovery procedures 2024/25 focus: Ongoing mitigation through business continuity planning #### ESG continued Stakeholder key Our people Customers Suppliers Communities Shareholders Strategic action Customers Products Solutions Experience Operational excellence RS Group plc Annual Report and Accounts for the year ended 31 March 2024 65 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### ESG continued Updated climate scenario analysis ,QRXU(6\*DQG\*URXSࢉQDQFLDOFRQWURO teams conducted quantitative climate scenario analysis, overlaying the CRROs onto our refreshed ࢉYH\HDUVWUDWHJLFSODQ+LJKOHYHOUHVXOWVRIWKH analysis are shown in the table on the right, with WKHUHVLGXDOࢉQDQFLDOLPSDFWRI&552VSRVW mitigation. Opportunities indicate a positive net LPSDFWRQRSHUDWLQJSURࢉWVKDGHGJUHHQDQG risks indicate a negative net impact (shaded red). Our analysis indicates that physical risks are expected to be greater under a higher warming scenario, whereas transition opportunities and risks are greater under lower temperature VFHQDULRVGXHWRIDVWHUDQGPRUHVLJQLࢉFDQW policy and market changes to deliver the low-carbon transition. The main update to our analysis, compared to 2022/23, is that we have reassessed the physical risk from extreme weather on our DC in Fort Worth, US, to be ‘Very Low’ (post mitigation) under RCP 8.5 scenario (>4 o C) compared to previously assessing it to be ‘Low’. We conducted a more detailed, externally-facilitated recovery assessment that increased the speed and magnitude of the mitigating activities, which we have included in our analysis. We have also re-categorised our product demand CRRO as an opportunity (previously reported as an opportunity and a risk), as our updated analysis indicates that the downside risk of lost revenue is minimal. Our exposure to the fossil fuel sector is very low, relative to the potential opportunity to expand and further develop our sustainable product and service solutions and support low-carbon industries. )RUIXUWKHUGHWDLORQRXUTXDQWLWDWLYHࢉQDQFLDO scenario analysis methods, please refer to our basis of reporting document at: rsgroup.com/sustainability &552 Financial impact Timeframe 1 Annual net impact on Group DGMXVWHGRSHUDWLQJSURࢉW )LQDQFLDOPDWHULDOLW\NH\ Transition Temperature rise 1.5°C 2°C >2°C 1. Opp Products, solutions and customers: changes in customer segments and product demand Annual revenue impact 2030 Very Low Very Low Very Low 2050 Medium Low Very Low 2. Risk Logistics: technology transition and rising fuel costs Increased operating costs, fully RࢆVHWWKURXJKHPEHGGLQJLQ pricing margin 2030 No impact No impact No impact 2050 No impact No impact No impact 3. Opp Distribution sites: reduced emissions and energy costs through solar generation Annual operating costs impact (including depreciation) 2030 Very Low Very Low Very Low 2050 Very Low Very Low Very Low Physical 2°C >2°C >4°C 4. Risk Distribution sites: impact RIH[WUHPHKHDW Capital and operating costs to mitigate risk, expected to fully mitigate impact on productivity 2030 Very Low Very Low Very Low 2050 Very Low Very Low Very Low 5. Risk Distribution sites: impact RIH[WUHPHZHDWKHU Annual revenue impact and RSHUDWLQJFRVWRࢆVHWE\ recovery via insurance policies 2030 No impact Very Low Very Low 2050 No impact Very Low Very Low )LQDQFLDOPDWHULDOLW\NH\ 2 $QQXDOLPSDFWRQ\*URXSDGMXVWHGRSHUDWLQJSURࢉW Very high >32% High 24 to 32% Medium 16 to 24% Low 8 to 16% Very low 0 to 8% No impact 0% Temperature scenarios 3 Temperature Scenario Transition 1.5°C NZE – 1.4°C 2°C APS – 2.1°C >2°C STEPS – 2.6°C Temperature Scenario Physical 2°C RCP 2.6 – 2.0°C >2°C RCP 4.5 – 2.4°C >4°C RCP8.5 – 4.3°C 1. 2030 – medium term, 2050 – long term. Time horizons for the climate scenario analysis were selected according to the time periods for which data was consistently available for both IEA and RCP scenarios within the range of RS’s medium and long-term risk time horizons outlined on page 63.  $OLJQHGWR56HQWHUSULVHULVNPDQDJHPHQWJXLGDQFHD&552LVFRQVLGHUHGWREHPDWHULDOZKHUHWKHDQQXDOQHWLPSDFWRQDGMXVWHGRSHUDWLQJSURࢉWLVJUHDWHUWKDQ&5523URGXFWVVROXWLRQVDQG customers: changes in customer segments and product demand is the only CRRO deemed to be material aligned to this threshold. 3. NZE – The Net Zero Emissions scenario by 2050, APS – The Announced Pledges Scenario, STEPS – The Stated Policies Scenario (Source: IEA), RCPs 2.6, 4.5 and 8.5 (Source: IPCC). 1HWࢉQDQFLDOLPSDFW Overall, we have low exposure to physical climate risks, with our operations generally in low-risk ORFDWLRQV)XUWKHUPRUHRXUGLYHUVLࢉHGEXVLQHVV model and global customer base, strong supplier partnerships and capital strength mean we are well placed to mitigate potential future risks. We are also well positioned to support the transition to a low-carbon industrial sector by leading in sustainable products, solutions and industry sectors. Our analysis suggests that if we are able to deliver upon our strategic growth ambitions relating to low-carbon products, service solutions and industry sectors, we ZLOOVHHDQHWSRVLWLYHࢉQDQFLDOLPSDFWIURPWKH&552V This demonstrates the overall resilience of our business model to manage our risks and maximise our opportunities under various future climate pathways. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 66 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### ESG continued 5LVNPDQDJHPHQW Our CRROs are managed via our risk management process to ensure a robust and consistent approach across the Group. We have a high-level CRRO risk register and mitigation plans, which are refreshed periodically in consultation with market and functional leaders. We also have strategies and controls in place to mitigate physical climate-related risks on our operations and wider supply chain (see page 36). CRROs are integrated into our risk management process for ongoing management. Each CRRO has an owner, mitigating controls and a series of metrics and targets that are monitored and reported on. The internal audit and risk team monitor the controls associated with our CRROs and review these frameworks when conducting audit inspections. A review of ESG impacts is incorporated at the due diligence stage of acquisitions and investment will be added to future integration plans. Updates and key risks are provided to the Risk Committee, ExCo, Audit Committee and the Board during their bi-annual risk reviews to ensure a clear line of sight and integration into our strategy, business planning and decision making. For more information on our principal risks, including climate change, see pages 34 to 37. Metrics and targets To understand and manage our climate impacts, we monitor key metrics for our CRROs and have set performance targets related to the most material CRROs (aligned to the materiality of their ࢉQDQFLDOLPSDFWDVRXWOLQHGRQSDJH(DFKRI our CRROs has a business owner to oversee the approach with relevant leadership teams, see SDJHVDQG7KH\*URXSȆVQRQࢉQDQFLDO.3,V contain four climate-related metrics and targets (Scope 1 and 2 carbon emissions, carbon intensity, packaging intensity and waste recycled) and we have set four SBTs covering our most material Scope 1, 2 and 3 emissions categories, which were validated by the SBTi in 2023/24. These are reviewed by the ExCo quarterly and by the Board twice a year (see page 59). Our science-based Scope 1 and 2 carbon reduction target is included in the annual performance incentive for 45% of all RS employees, including the annual incentive for Executive Directors, and is also included within our SLL, see page 60. We monitor a set of key climate metrics to ensure our net zero action plan is on track, refer to the Advancing sustainability section pages 42 to 49 for a full update on our progress and performance against our climate-related metrics and targets, as well as our online data centre for the total list of all ESG metrics we monitor. We will continue to develop our climate-related metrics and targets further through our climate transition plan, which we will publish in line with developing compliance timelines. #### Our CRROs are managed via our risk management process #### to ensure a robust and consistent approach across the Group RS Group plc STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION 67Annual Report and Accounts for the year ended 31 March 2024 ![]() ### ESG ### ASSURANCE Independent limited assurance report to RS Group plc (50&HUWLࢉFDWLRQDQG9HULࢉFDWLRQ6HUYLFHV/LPLWHG(50&96ZDVHQJDJHGE\56\*URXSSOFWKH\*URXSWRSURYLGHOLPLWHGDVVXUDQFHLQUHODWLRQWRWKHVHOHFWHGLQIRUPDWLRQVHWRXWEHORZDQGSUHVHQWHGLQ56\*URXSȆV Annual Report and Accounts 2024 (the Report). Engagement summary Scope of our assurance engagement Whether the 2023/24 data for the following ESG KPIs on pages 41 to 47 and 54 of the Report are fairly presented, in all material respects, in accordance with the reporting criteria: – Total Scope 1 and Scope 2 GHG emissions (tonnes CO 2 e) – Carbon intensity (total Scope 1 and Scope 2 (market-based) GHG emissions in tonnes CO 2 e per £ million revenue) – Total Scope 3 GHG emissions from the following categories (tonnes CO 2 e): ੳ Category 1 – Purchased goods and services ੳ Category 4 – Upstream transportation and distribution ੳ Category 11 – Use of sold products (RS PRO products only) – Product transportation emissions intensity (tonnes CO 2 e per tonne of product sold) – In-use carbon intensity (RS PRO products only) (tonnes CO 2 e per tonne of product sold) – Packaging intensity (tonnes packaging per £ million revenue) – Percentage of management that are women (percentage) Our assurance engagement does not extend to information in respect of earlier periods or to any other information included in the Report. Reporting period – 2023/24 (1 April 2023 – 31 March 2024) Reporting criteria – WBCSD/WRI GHG Protocol Corporate Accounting and Reporting Standard (2004, as updated in 2015 with the Scope 2 Guidance) for the Scope 1 and Scope 2 GHG emissions – WBCSD/WRI GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard for the Scope 3 GHG emissions – 7KH\*URXSȆVLQWHUQDOGHࢉQLWLRQVEDVLVRIUHSRUWLQJIRUWKH.3,VDVGHVFULEHGLQWKH\*URXSȆV(6\*EDVLVRIUHSRUWLQJVHHUVJURXSFRPVXVWDLQDELOLW\ Assurance standard and level of assurance We performed a limited assurance engagement, in accordance with the International Standard on Assurance Engagements ISAE 3000 (Revised) ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’ issued by the International Auditing and Assurance Standards Board. The procedures performed in a limited assurance engagement vary in nature and timing from and are less in extent than for a reasonable assurance engagement and consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. Respective responsibilities The Group is responsible for preparing the Report and for the collection and presentation of the information within it and for the designing, implementing and maintaining of internal controls relevant to the preparation and presentation of the selected performance data. ERM CVS’ responsibility is to provide a conclusion to the Group on the agreed scope based on our engagement terms with the Group, the assurance activities performed and exercising our professional judgement. #### ESG continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 68 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Our conclusion Based on our activities, as described below, nothing has come to our attention to indicate that the 2023/24 data for the ESG KPIs listed under Scope of our assurance engagement on page 68 are not fairly presented on pages 41 to 47 and 54 of the Report, in all material respects, in accordance with the reporting criteria. Our assurance activities Considering the level of assurance and our assessment of the risk of material misstatement of the 2023/24 data and information for the selected disclosures a multi-disciplinary team of sustainability and assurance specialists performed a range of procedures that included, but was not restricted to, the following: – Evaluating the appropriateness of the reporting criteria for the selected disclosures – Interviews with RS Group management personnel and external consultants responsible for the management of the ESG KPI data to understand and evaluate the data management systems and processes (including internal review processes) used for measuring, collecting and reporting the ESG KPI data – In-person site visits to RS Group facilities in Mexico, Italy and the UK to review the data measurement, collection and reporting For the carbon and packaging intensity KPIs, we reviewed the accuracy of the calculations based on WKHࢉQDODVVXUHG\*+\*HPLVVLRQVDQGSDFNDJLQJ GDWDIRUDQGWKHDXGLWHGUHYHQXHࢉJXUH for 2023/24 provided by the Group; we have not VHSDUDWHO\DXGLWHGWKHUHYHQXHࢉJXUHXVHGLQWKH calculation of these KPIs. For the Scope 3 GHG emissions from categories 1 and 11 and the in-use carbon intensity for RS PRO products, our work consisted of reviewing the calculations of the GHG emissions and the carbon intensity based on purchase and sales WUDQVDFWLRQVH[WUDFWHGIURPWKH\*URXSȆVࢉQDQFLDO systems and applying the methodology developed by the Group; we have not separately audited the purchase and sales transactions underlying these GHG emissions and carbon intensity. Our observations We have provided the Group with a separate Management Report with our detailed REVHUYDWLRQV:LWKRXWDࢆHFWLQJRXUDVVXUDQFH conclusion, we make the following observation: – As disclosed on page 47 of the Report and in the ESG basis of reporting 2023/24, the Group accounts for product transportation (Scope 3 Category 4) GHG emissions from inbound, outbound and inter-site deliveries where these are controlled by RS Group processes at the facility level and to test the consistency of reported 2023/24 data for the energy and fuel use underlying the Scope 1 and Scope 2 GHG emissions and for packaging with underlying source data and related documentation – An analytical review of the 2023/24 data for all the Group locations included in the reporting boundary, including a review of the completeness of the data and of the mathematical accuracy of the consolidation of the data – A review of the unit conversion and emission factors used in the calculation of the GHG emissions data and the alignment of these factors with the relevant sources – $UHYLHZRIWKHGHࢉQLWLRQRIPDQDJHPHQWUROHV applied by the Group in the calculation of the percentage of management that are women and a review of employee data by gender and grade – A review of the presentation of information relevant to the scope of our work in the Report WRHQVXUHFRQVLVWHQF\ZLWKRXUࢉQGLQJV The limitations of our engagement The reliability of the assured information is subject to inherent uncertainties, given the available methods for determining, calculating or estimating the underlying information. It is important to understand our assurance conclusions in this context. Our independence, integrity and quality control (50&96LVDQLQGHSHQGHQWFHUWLࢉFDWLRQ DQGYHULࢉFDWLRQERG\DFFUHGLWHGE\WKH8QLWHG Kingdom Accreditation Service to ISO 17021:2015. Accordingly we maintain a comprehensive system of quality control, including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Our quality management system is at least as demanding as the relevant sections of ISQM-1 and ISQM-2 (2022). ERM CVS applies a Code of Conduct and related policies to ensure that its employees maintain integrity, objectivity, professional competence and high ethical standards in their work. Our processes are designed and implemented to ensure that the work we undertake is objective, impartial and free IURPELDVDQGFRQࢊLFWRILQWHUHVW2XUFHUWLࢉHG management system covers independence and ethical requirements that are at least as demanding as the relevant sections of the IESBA Code relating to assurance engagements. ERM CVS has extensive experience in conducting assurance on environmental, social, ethical and health and safety information, systems and processes and provides no consultancy related services to the Group in any respect. Gareth Manning 3DUWQHU&RUSRUDWH$VVXUDQFH UK, London 22 May 2024 (50&HUWLࢉFDWLRQDQG9HULࢉFDWLRQ6HUYLFHV/LPLWHG www.ermcvs.com Email: post@ermcvs.com #### ESG continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 69 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Regulatory statements ### NON-FINANCIAL ### AND SUSTAINABILITY ### INFORMATION STATEMENT Reporting requirement and policy position Relevant policies and standards Due diligence and further information Environmental matters Our environmental policies set out our commitment to continuously improving our environmental performance to ensure sustainable growth in line with global goals. Global Environmental Policy Group Energy Management Policy Supplier Ethical Trading Declaration – Advancing sustainability: pages 42 to 47 – TCFD report: pages 62 to 67 – Sustainability section of website: rsgroup.com/sustainability People Our people policies support our people plan and ambition to create an inclusive and engaging environment where everyone is proud and excited to come to work and can perform at their best, develop and thrive. Group Health & Safety Policy Diversity and Inclusion Policy Gender Pay Gap Report Equal Opportunity Policy Speak Up Policy – Empowering our people: pages 52 to 57 – Governance report: pages 72 to 119 – Nomination Committee report: pages 88 to 91 – Sustainability section of website: rsgroup.com/sustainability Social matters We have strict standards of behaviour that we expect of our employees and supply chain partners, which are set out in our Code of Conduct and Ethical Trading Declaration. This includes respecting and safeguarding our people and wider community. Supplier Code of Conduct Ethical Trading Declaration Information Security Policy Volunteering Policy – Empowering our people: pages 52 to 57 – Doing business responsibly: pages 58 to 61 – Sustainability section of website: rsgroup.com/sustainability Respect for human rights We recognise and respect the Universal Declaration of Human Rights, ensuring that all people have freedom, dignity and equality. We uphold the highest ethical and legal standards within our business and supply chain. Modern Slavery Policy Modern Slavery Statement UNGC Communication on Progress (COP) &RQࢊLFW0LQHUDOVDQG&KHPLFDOVRI&RQFHUQ3ROLF\ – Doing business responsibly: pages 58 to 61 – Sustainability section of website: rsgroup.com/sustainability Anti-bribery and corruption We have a zero-tolerance stance on all forms of bribery and corruption and are committed to conducting our activities in line with UNGC Principle 10. Our Group Anti-Bribery Policy covers our stance on these matters in detail. Anti-Bribery Policy Commitment to Compliance and Quality Policy Competition Law Compliance Policy Tax Strategy &RUSRUDWH&ULPLQDO2ࢆHQFH3ROLF\ – ESG governance: pages 59 to 60 – Governance report: pages 72 to 119 – Audit Committee report: pages 92 to 98 – Sustainability section of website: rsgroup.com/sustainability Business model – Business model and strategy: page 13 1RQࢉQDQFLDO.3,V – 1RQࢉQDQFLDO.3,VSDJHVDQG Principal risks – +RZZHPDQDJHRXUULVNVHࢆHFWLYHO\SDJHVDQG – Our principal risks and uncertainties: pages 34 to 39 Climate-related ࢉQDQFLDOGLVFORVXUHV – Disclosures aligned to clauses (a) to (h) of The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022 detailed in the TCFD report: pages 62 to 67 7KLVVHFWLRQFRQVWLWXWHVWKH\*URXSȆVQRQࢉQDQFLDOLQIRUPDWLRQVWDWHPHQW1),6SURGXFHG to comply with sections 414CA and 414CB of the Companies Act 2006. The information presented below is incorporated by cross-reference and most of the policies listed can be found on our website: rsgroup.com/sustainability/codes-policies-and-standards. Our Code of Conduct underpins the Group’s business activities while providing our stakeholders ZLWKFOHDUJXLGDQFHRQH[SHFWHGEHKDYLRXUVDFWLRQVDQGFRPSOLDQFHUHTXLUHPHQWVFRYHULQJ each of the below areas. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 70 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() ### SECTION 172 ### STATEMENT The Companies Act 2006 and section 172 Under the Companies Act 2006, our Directors are required to act in a way that they consider, in all good faith, would most likely promote the success of RS Group plc and its stakeholders. Throughout 2023/24, we have strived to continue to demonstrate how, as a considerate, sustainable, responsible and solutions-driven business, our Board of Directors and the ExCo have achieved this. Throughout this report, there are many examples of how we have taken into account our key stakeholders: our people, customers, suppliers, communities and shareholders. Details of how the Board in particular has considered these stakeholders’ interests can be found in the Corporate Governance Report on pages 80 to 82. Forward-looking statements 7KLVࢉQDQFLDOUHSRUWFRQWDLQVFHUWDLQVWDWHPHQWV statistics and projections that are or may be forward looking. The accuracy and completeness of all such statements, including, without limitation, statements UHJDUGLQJWKHIXWXUHࢉQDQFLDOSRVLWLRQVWUDWHJ\SURMHFWHGFRVWVSODQVDQG objectives for the management of future operations of RS Group plc and its subsidiaries is not warranted or guaranteed. These statements typically contain words such as ‘intends’, ‘expects’, ‘anticipates’, ‘estimates’ and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the IXWXUH$OWKRXJK56\*URXSSOFEHOLHYHVWKDWWKHH[SHFWDWLRQVUHࢊHFWHGLQVXFK statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors, which may be beyond the control of RS Group plc, which could cause actual results and developments to GLࢆHUPDWHULDOO\IURPWKRVHH[SUHVVHGRULPSOLHGE\VXFKIRUZDUGORRNLQJ statements. Other than as required by applicable law or the applicable rules of any exchange on which our securities may be listed, RS Group plc has no intention or obligation to update forward-looking statements contained herein. 7KHORQJWHUPFRQVHTXHQFHVRIGHFLVLRQVWKDWDUHWDNHQ Board oversight of our strategy and ongoing monitoring of performance against agreed metrics Pages 13, 20 to 23 and 80 to 82 Ensuring we have the right foundations to support the Group’s growth opportunity Pages 11 and 12 $FTXLVLWLRQDQGLQWHJUDWLRQRI5LVRXODQG'LVWUHOHFLQWRWKH\*URXSȆVEXVLQHVVWRFUHDWHHࢆHFWLYHV\QHUJLHV Pages 12 and 17 Accelerating our growth ambitions organically and inorganically Page 17 5HࢉQLQJRXUVWUDWHJ\WRSURYLGHJUHDWHUIRFXVPRUHDOLJQPHQWEHWWHUSULRULWLVDWLRQDQGLPSURYHGH[HFXWLRQ Pages 13 to 16 The interests of our employees Strengthening our commitment to our people and culture through the development of our new set of values Pages 18 and 19 Creating an inclusive and engaging environment where everyone is proud and excited to come to work and can perform at their best, develop and thrive Pages 53 to 55 Prioritising the health, safety and wellbeing of our workforce and providing career development and learning opportunities Pages 56 and 57 Continuing our programme of Board employee engagement Pages 73, 77, 80 and 81 7KHQHHGWRIRVWHURXUEXVLQHVVUHODWLRQVKLSVZLWKRXUFXVWRPHUVVXSSOLHUVDQGUHJXODWRUV Our competitive advantage and strategy in action Pages 13 to 16 Aligning our operating plans to build organisational capabilities and a scalable market strategy Pages 8 and 9 (QJDJLQJZLWKRXUVXSSOLHUVWRKHOSHDVHVLJQLࢉFDQWVXSSO\FKDLQFKDOOHQJHV Pages 7, 9 and 49 The impact of the Group’s operations on the environment and community Enhancing a purpose-led culture, driving our environmental, social and governance goals in our commitment for a better world Pages 40 to 69 Driving to be a sustainable and responsible leader in our sector Pages 58 to 61 Supporting suppliers to provide more sustainable and clean products Page 61 Our reputation for having high standards and sound ethical conduct Code of conduct: for our people (Speak Up) and our suppliers Pages 59 and 60 Ensuring anti-bribery training is regularly rolled out to our employees Page 60 Ensuring we apply a zero-tolerance approach to modern slavery Page 60 The need to act fairly between members of the Company Continuing to pursue a progressive dividend policy Page 28 ,QFUHDVLQJRSHUDWLRQDOHࢆHFWLYHQHVV Page 16 The Strategic Report was approved by the Board on 22 May 2024 and is signed on its behalf by: Simon Pryce &KLHI([HFXWLYH2ࢇFHU #### Regulatory statements continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 71 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Governance report Chair’s letter 73 Our Board of Directors 74 Governance at a glance 76 Board leadership and governance framework 77 Board activities during the year 80 Board evaluation 84 Governance code compliance 86 Nomination Committee report 88 Audit Committee report 92 Directors’ Remuneration report 99 Directors’ report 116 Statement of Directors’ responsibilities 119 Our governance framework has been refreshed during the year with a view to streamlining and clarifying responsibilities and simplifying decision making processes. # CORPORATE # GOVERNANCE STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION RS Group plc Annual Report and Accounts for the year ended 31 March 2024 72 ![]() #### Dear shareholder The Board’s priority during the year has been to ensure the Group is set up for long-term, sustainable success, while navigating through headwinds created by the wider macroeconomic environment. To help enable and support this we have adopted a more robust governance structure ZKLFKSURYLGHVFODULࢉHGUHVSRQVLELOLWLHVZKLOH simplifying approval processes and decision making across the Group. Further details can be found on page 79. Board changes As reported in the Annual Report and Accounts 2023, Simon Pryce was appointed as Chief ([HFXWLYH2ࢇFHU&(2ZLWKHࢆHFWIURP 3 April 2023. Simon has provided exceptional OHDGHUVKLSGXULQJKLVࢉUVW\HDUDV&(2HQKDQFLQJ the governance framework by streamlining the senior management team to an empowered ExCo, improving our performance management framework and aligning the strategy across the Group to become more focused with an action orientated and aligned plan to deliver our goals. As announced during the year, David Egan stepped GRZQDV&)2ZLWKHࢆHFWIURP0D\.DWH 5LQJURVHZDVDSSRLQWHGDV&)2ZLWKHࢆHFWIURP 2FWREHU.DWHLVDKLJKO\H[SHULHQFHG CFO with a strong track record of successfully OHDGLQJࢉQDQFHIXQFWLRQVGULYLQJRSHUDWLRQDO excellence and delivering accelerated strategic growth. I would like to take this opportunity to thank Jane Titchener, who was appointed as interim CFO between David stepping down and .DWHȆVDSSRLQWPHQW-DQHPDGHDVLJQLࢉFDQW contribution during the interim period, ensuring WKDWZHPDLQWDLQHGRXUࢉQDQFLDOGLVFLSOLQHDQG provided valuable support to the Board. Enhancing our governance framework During the year, the Board oversaw the streamlining of the senior management team into an empowered ExCo led by Simon. Alongside this, the new operating model has been developed with our three regions supported by Group-wide enabling functions to ensure we deliver all of our performance, governance and reporting requirements. Our accelerator functions have been created to help drive scale and accelerate growth across the Group. This new structure brings more focused attention to the strategic actions of the Group, allows greater oversight and brings the voice of customers, suppliers, solutions and technology to the heart of everything we do. Strategy A dedicated strategy Board session was held in January 2024, where the ExCo presented their strategic plan to capitalise on the market opportunity and maximise stakeholder value. 7KHUHࢉQHGVWUDWHJ\ZLOOKHOSGULYHEHWWHU execution and accelerate value creation through increased revenue and returns, expanding automated logistics and closer relationships with strategic suppliers, all underpinned by our continued commitment to industry-leading ESG. An overview of the industrial distribution landscape and markets provided the Board with a detailed backdrop for the macro-environment in which the Group operates. Each regional president presented the individual strategic plan for their region and key initiatives which would deliver the strategy. Culture The success of the Group depends on our people and our culture. During the year, the Board approved the adoption of our people plan and new set of values. For more information on our people plan and new values, see pages 53 and 18 and 19, respectively. Stakeholder engagement Our two designated employee engagement Directors met with employee representatives from WKHRࢇFHLQ)UDQNIXUWDQGUHJLRQDOGLVWULEXWLRQ FHQWUH'&LQ%DG+HUVIHOG\*HUPDQ\LQ September 2023 and employees based in our /RQGRQ8.RࢇFHLQ'HFHPEHU'XULQJ these sessions opinions and feedback were collected and reported back to the Board and relevant senior leaders and action plans put in place to address issues raised. $VDUHVXOWRI6LPRQDQG.DWHMRLQLQJGXULQJ WKH\HDUWKH\PHWZLWKDQXPEHURIPDMRU shareholders, together representing 50% of our share register. Our top 30 shareholders were also invited to engage with Joan Wainwright, the Chair of our Remuneration Committee, during the year to discuss the Directors’ Remuneration Report and overall remuneration structure. Further information regarding employee and shareholder engagement can be found on pages 81 and 100, respectively. Board evaluation An internal evaluation of the Board was conducted during the year. The outcome of this, along with an update following the previous year’s externally- facilitated evaluation, can be found on pages 84 and 85. Corporate Governance Code The Company’s statement of compliance with the 8.&RUSRUDWH\*RYHUQDQFH&RGHWKH&RGH can be found on page 87. Rona Fairhead Chair 22 May 2024 #### Chair’s letter ### CHAIR’S ### LETTER Activities for 2023/24 – 2YHUVHHLQJWKHUHࢉQHPHQWRIWKH\*URXSȆV strategy and values – Reviewing the enhanced governance framework and operating model, including the streamlining of the senior management to an empowered ([HFXWLYH&RPPLWWHH([&R – $SSRLQWPHQWRI.DWH5LQJURVHDVWKH\*URXSȆV &KLHI)LQDQFLDO2ࢇFHU&)2 Priorities for 2024/25 – 0RQLWRULQJWKHHPEHGGLQJRIRXURSHUDWLRQDO model and values – Continued focus on environmental, social DQGJRYHUQDQFH(6\*PDWWHUVDQGIXUWKHU enhancement of ESG reporting – Continued development of the mergers and DFTXLVLWLRQV0$SLSHOLQH – 0RQLWRULQJRISHUIRUPDQFHDJDLQVWRXU strategic actions RONA FAIRHEAD CHAIR Annual Report and Accounts for the year ended 31 March 2024 73 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION RS Group plc ![]() Rona Fairhead Chair Committee membership C Date of appointment Nov 2020 Skills, experience and contribution Rona brings a tremendous range of commercial and strategic H[SHULHQFHWRWKH&RPSDQ\5RQDȆVVWURQJXQGHUVWDQGLQJRI8. corporate governance and her extensive experience in digital transformation and international expansion provide the Board with strong and valuable leadership to deliver long-term sustainable value for all our stakeholders. Previous roles have included chair of WKH%%&7UXVW0LQLVWHURI6WDWHLQWKH8.'HSDUWPHQWIRU,QWHUQDWLRQDO 7UDGHQRQH[HFXWLYHGLUHFWRURI+6%&+ROGLQJVSOFDQG3HSVL&R ,QFDQGFKDLUDQGFKLHIH[HFXWLYHRࢇFHURI)LQDQFLDO7LPHV\*URXS Current external roles – Non-executive director of Oracle Corporation – 0HPEHURIWKH+RXVHRI/RUGV – 0HPEHURIWKHDGYLVRU\ERDUGRI+RQJ.RQJ([FKDQJHV Clearing Limited – Senior independent director of CVC Capital Partners plc Simon Pryce &KLHI([HFXWLYH2ࢇFHU 1 Committee membership C Date of appointment Sep 2016 1 Skills, experience and contribution Simon is a highly experienced leader of customer-focused, global LQGXVWULDOPDQXIDFWXULQJDQGVHUYLFHEXVLQHVVHV+HKDVDVWURQJ track record of driving results and delivering excellent stakeholder RXWFRPHVWKURXJKHQKDQFHGSHUIRUPDQFHDQGWKHHࢆHFWLYH execution of organic and inorganic growth strategies. Previous UROHVLQFOXGHFKLHIH[HFXWLYHRࢇFHURI8OWUD(OHFWURQLFV+ROGLQJV plc, group chief executive at BBA Aviation plc and a range of LQWHUQDWLRQDOࢉQDQFHDQGPDQDJHPHQWUROHVDW\*.1SOF-3 0RUJDQDQG/D]DUGV Current external roles – None David Sleath Senior Independent Director Committee membership Date of appointment Jun 2019 Skills, experience and contribution David brings a wealth of experience to the Board, including valuable insight into the dynamics of service-led business models, having EHHQWKHVHQLRULQGHSHQGHQWGLUHFWRUDW%XQ]OSOF$VVHUYLQJFKLHI H[HFXWLYHRࢇFHUDQGSUHYLRXVO\FKLHIࢉQDQFLDORࢇFHURI6(\*52SOF 'DYLGKDVVWURQJࢉQDQFLDOUHDOHVWDWHPDQXIDFWXULQJDQG GLVWULEXWLRQH[SHULHQFH+HDOVREULQJVWRWKH%RDUGLQGHSWK ࢉQDQFLDOVWUDWHJLFDQGJRYHUQDQFHH[SHULHQFHZKLFKDUHHVVHQWLDO to his role as Senior Independent Director. David has also previously served as president of the British Property Federation and group ࢉQDQFHGLUHFWRURI:DJRQSOF Current external roles – &KLHIH[HFXWLYHRࢇFHURI6(\*52SOF – Board member, European Public Real Estate Association Alex Baldock Independent Non-Executive Director Committee membership Date of appointment Sep 2021 Skills, experience and contribution Alex has extensive experience in digital transformation, accelerating omni-channel growth and embedding customer focus, evidenced through his successful transformation of Currys SOF$OH[ZDVSUHYLRXVO\FKLHIH[HFXWLYHRࢇFHURI6KRS'LUHFWQRZ the Very Group, where he led the business’s digital transformation IURPDFDWDORJXHUHWDLOHUWRWKH8.ȆVVHFRQGODUJHVWHFRPPHUFH pureplay and through four consecutive years of record growth in VDOHVSURࢉWVFXVWRPHUVDWLVIDFWLRQDQGFROOHDJXHHQJDJHPHQW Current external roles – Group chief executive of Currys plc Kate Ringrose &KLHI)LQDQFLDO2ࢇFHU Committee membership Date of appointment Oct 2023 Skills, experience and contribution .DWHKDVH[WHQVLYHH[SHULHQFHRIVXFFHVVIXOO\OHDGLQJWKHࢉQDQFH function in a FTSE 100 company. She has a proven track record in driving business transformation, improving business resilience, leading operational excellence and accelerating strategic growth. .DWHLVDFKDUWHUHGDFFRXQWDQWDQGWUDLQHGZLWK.30\*LQ6RXWK $IULFD3UHYLRXVO\.DWHKDGDVXFFHVVIXO\HDUFDUHHUDW&HQWULFD plc where she held various senior roles in energy supply, service VROXWLRQVWUDGLQJDQGࢉQDQFLDORSHUDWLRQV+HUPRVWUHFHQWUROH was group CFO. Current external roles – None #### Our Board of Directors ### THE RIGHT ### BLEND OF ### SKILLS AND ### EXPERIENCE Members as at 22 May 2024 Nomination Committee Audit Committee Remuneration Committee Disclosure Committee C Committee Chair RS Group plc Annual Report and Accounts for the year ended 31 March 2024 74 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Bessie Lee Independent Non-Executive Director Committee membership Date of appointment 0DU Skills, experience and contribution Bessie has extensive strategic experience in digital marketing technology and media knowledge, principally in Greater China. She has in-depth experience in the world of eCommerce and digital media. She is a frequent media commentator, blogger and international speaker. Bessie has more than 30 years’ experience LQWKHPHGLDFRPPXQLFDWLRQVLQGXVWU\LQ\*UHDWHU&KLQD+HU SUHYLRXVUROHVLQFOXGHFKLHIH[HFXWLYHRࢇFHUDW0LQGVKDUH \*URXS0DQG:33LQ&KLQD Current external roles – &KLHIH[HFXWLYHRࢇFHURI:LWKLQOLQN – &KLHIH[HFXWLYHRࢇFHURI-//\*UHDWHU&KLQD Clare Underwood Chief of Corporate Services and Company Secretary Date of appointment 0DU Skills, experience and contribution Clare brings a wealth of FTSE 100 governance experience WRVXSSRUWWKH%RDUGLQHࢆHFWLYHJRYHUQDQFH7KHVNLOOVDQG knowledge from her previous roles at John Laing Group plc and Cable and Wireless Communications plc enable her to provide ࢉUVWFODVVFRPSDQ\VHFUHWDULDODGYLFHDQGVXSSRUW&ODUHLVD member of the ExCo and leads the Corporate Services team, one of our enabling functions which serves the Group as centres of excellence in shared business services, automation, ESG, health and safety, legal, governance and compliance. Clare is also executive sponsor for our employee resource group, Elevate. Louisa Burdett Independent Non-Executive Director Committee membership C Date of appointment Feb 2017 Skills, experience and contribution /RXLVDEULQJVDZHDOWKRIࢉQDQFLDOFRPPHUFLDO0$DQGULVN management experience to the role of Non-Executive Director and Chair of the Audit Committee. Louisa is a chartered DFFRXQWDQWDQGKDVKHOGVHQLRUࢉQDQFLDOSRVLWLRQVLQLQGXVWULDO manufacturing, publishing and pharmaceutical companies. Louisa ZDVSUHYLRXVO\WKHFKLHIࢉQDQFLDORࢇFHURI0HJJLWWSOFJURXS ࢉQDQFHGLUHFWRUDW9LFWUH[SOFDQGFKLHIࢉQDQFLDORࢇFHUDW2SWRV plc and the Financial Times Group. Current external roles – &KLHIࢉQDQFLDORࢇFHURI&URGD,QWHUQDWLRQDOSOF 2 – &KLHIࢉQDQFLDORࢇFHURI6SLUD[6DUFR(QJLQHHULQJSOF 2 Navneet Kapoor Independent Non-Executive Director Committee membership Date of appointment Jun 2022 Skills, experience and contribution Navneet brings great international experience, in particular in WKHWUDQVIRUPDWLRQDQGGLJLWDOࢉHOGVDQGFKDQJHIURPSURGXFW WRVHUYLFHGULYHQDSSURDFKHV,QKLVFXUUHQWUROHDW$30ºOOHUȁ 0¨UVNKHLVUHVSRQVLEOHIRUGULYLQJFKDQJHVDFURVVFXOWXUHDQG leadership, modernising processes and technology landscapes, and developing digital platforms and ways of working. Prior to this, Navneet held various senior leadership roles at Target India, part of Target Corporation, and was vice president, marketing at General Electric in Asia. Current external roles – Executive vice president and chief technology and information RࢇFHURI$30ºOOHUȁ0¨UVN$6 Joan Wainwright Independent Non-Executive Director Committee membership C Date of appointment Nov 2019 Skills, experience and contribution Joan has extensive experience in distribution, transforming digital platforms to generate revenue growth and leading customer experience programmes that drive measurable improvements. +HUH[WHQVLYHNQRZOHGJHRIFXVWRPHUH[SHULHQFHDOLJQVZLWK the Company’s vision and she provides a strong insight into the customer dynamic in the US. Joan’s previous roles include SUHVLGHQWFKDQQHOFXVWRPHUH[SHULHQFHDW7(&RQQHFWLYLW\/WG YLFHSUHVLGHQWSXEOLFDࢆDLUVDW0HUFN&RDQGGHSXW\FRPPLVVLRQHU of communications at the US Social Security Administration. Current external roles – 'LUHFWRURI1-0,QVXUDQFH\*URXS – 0HPEHURIWKHJOREDODGYLVRU\FRXQFLORI6HUYLFH1RZ 1. Joined in September 2016 as Non-Executive Director. Appointed as CEO on 3 April 2023.  /RXLVDZLOOOHDYH&URGD,QWHUQDWLRQDOSOFLQ-XQHDQGMRLQ6SLUD[6DUFR Engineering plc in July 2024. #### Our Board of Directors continued Other Directors who served during the year 'DYLG(JDQVWHSSHGGRZQIURPWKH%RDUGRQ0D\ Members as at 22 May 2024 Nomination Committee Audit Committee Remuneration Committee Disclosure Committee C Committee Chair RS Group plc Annual Report and Accounts for the year ended 31 March 2024 75 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### SKILLS, EXPERIENCE AND KNOWLEDGE OF OUR BOARD Summary of the skills, experience and knowledge held by our Directors Digital 89% Emerging Markets 44% M&A 67% Service Industry 78% ESG 67% Finance 56% Strategy 78% Technology 56% International Operations 100% Supply Chain 44% Distribution 33% Customers 78% ### GOVERNANCE ### AT A GLANCE #### Governance at a glance #### BOARD COMPOSITION $VDW0DUFK Gender 1 Female 5 Male 4 Ethnicity 1 Ethnic minority 2 Non ethnic minority 7 Age of Directors Years 45–54 3 55–64 6 Independence Independent 5 Executive 2 Independent Non-Executive Chair 1 Senior Independent Director 1 Nationality British 5 Chinese 1 Indian 1 American 1 British and South African 1  'LYHUVLW\GDWDRIWKHZLGHUVHQLRUOHDGHUSRSXODWLRQLQDFFRUGDQFHZLWKWKHUHTXLUHPHQWVRIWKH)LQDQFLDO&RQGXFW$XWKRULW\)&$/LVWLQJ Rules, is included in the Nomination Committee report on page 91. We are incredibly proud to be recognised in the FTSE Women Leaders Top Ten %HVW3HUIRUPHUVLQUHVSHFWRIWKHQXPEHURIZRPHQRQRXU%RDUGFRPLQJMRLQW fourth in the FTSE 100. By having such a diverse Board, we’ve seen the real EHQHࢉWVIURPKDUQHVVLQJWKHIXOOSRWHQWLDORIGLYHUVHWDOHQWVSHUVSHFWLYHVDQG experiences to drive innovation, sound decision making and sustainable success.” Board tenure Years 0–3 years 3 3–6 years 4 6+ years 2 #### BOARD AND COMMITTEE MEETING ATTENDANCE Director Board Nomination Audit Remuneration Rona Fairhead   –– Simon Pryce  ––– .DWH5LQJURVH 1  ––– Alex Baldock  –   Louisa Burdett 2     1DYQHHW.DSRRU    – Bessie Lee   –– David Sleath 3     Joan Wainwright   –   .DWH5LQJURVHMRLQHGWKH%RDUGRQ2FWREHU  /RXLVD%XUGHWWZDVXQDEOHWRMRLQDQXQVFKHGXOHG%RDUGDQG5HPXQHUDWLRQ&RPPLWWHHPHHWLQJGXHWRSULRUHQJDJHPHQWV  'DYLG6OHDWKZDVXQDEOHWRMRLQDQXQVFKHGXOHG%RDUGPHHWLQJGXHWRDSULRUHQJDJHPHQW RS Group plc Annual Report and Accounts for the year ended 31 March 2024 76 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Board leadership and governance framework ### BOARD LEADERSHIP AND ### GOVERNANCEFRAMEWORK #### REVIEW OF OUR PURPOSE, VISION, VALUES, CULTURE AND STRATEGY Board leadership The Board’s principal responsibility is to promote and assess the long-term sustainable success of the Group as a whole, generating value for shareholders and contributing to the wider society. The Board is accountable to stakeholders for the \*URXSȆVࢉQDQFLDODQGRSHUDWLRQDOSHUIRUPDQFH and is responsible for taking material strategic decisions and providing oversight across the Group. The Board aims to lead with integrity and in a sustainable commercial manner to ensure value is created for all the Group’s stakeholders. The Board also provides guidance and challenge to Executive Directors and senior leaders and applies a robust governance framework to ensure WKDWWKLVOHDGHUVKLSLVGHOLYHUHGHࢆHFWLYHO\ The Board is responsible for ensuring that the VWUDWHJLFREMHFWLYHVDUHDGHTXDWHO\UHVRXUFHG and supported to help ensure the long-term success of the Group, realisation of its strategy, DQGWRPRQLWRUWKHHࢆHFWLYHGHSOR\PHQWRI those resources. The Group’s risk management framework supports the strategic actions of the \*URXSZLWKFRQWUROVWRKHOSPLWLJDWHLGHQWLࢉHG risks. The Board regularly reviews the internal controls and overall risk management framework, with support from the Audit Committee. Full details of the risk management framework can be found on pages 32 to 37. The Board is supported by its Committees, which make decisions and recommendations on matters delegated to them by the Board. This enables the Board to spend time on key strategic matters. Each Committee comprises Non-Executive Directors only and has an experienced Chair. Regular updates are provided to the Board by the Committee Chairs as well as by the Chair of the Board, the CEO and CFO. Each Committee of the Board has provided reports on how they have discharged their responsibilities and details of their activities during the year, which can be found on pages 88 to 115. The key topics the Board has focused on this year, as well as those it plans to assess for the coming year, are set out on page 73. In addition to the Committees of the Board, the ([&RLVUHVSRQVLEOHIRUPDNLQJHࢆHFWLYHGHFLVLRQV that keep the Group focused on the right priorities, accelerate realisation of our strategy, drive performance and ensure we develop and maintain a diverse, supportive and inclusive culture where our people are empowered within a clear framework. The ExCo supports the CEO in exercising his authority in relation to material matters having strategic, cross-business or Group-wide implications and oversight of the day-to-day management of the Company’s EXVLQHVV:LWKHࢆHFWIURP$SULOWKH members of the ExCo are the CEO, CFO, the 3UHVLGHQWVIRU(0($$PHULFDVDQG$VLD3DFLࢉF Chief of Solutions and Services, Chief of Product and Supply Chain, Chief of Customer Experience, Chief of Corporate Services and Company 6HFUHWDU\&KLHI3HRSOH2ࢇFHU&32DQG &KLHI,QIRUPDWLRQ2ࢇFHU7KH([&RKDV representation from each of the regions, both accelerating and enabling functions and brings the voice of customers, suppliers, solutions and technology to the decision making process. To achieve the long-term sustainable value generation of the Group, the Board has continued to work closely with the ExCo on the \*URXSȆVSXUSRVHRIPDNLQJDPD]LQJKDSSHQIRU a better world. During the strategy session held in January 2024, the Board was provided with an overview of the current Group strategy, where focus will be going forward, areas of prioritisation and the challenges to be addressed to drive better execution and accelerate value creation. Our overall Group strategy remains the same, with clear focus on customers, products, solutions, customer experience and operational H[FHOOHQFH,WKDVEHHQUHࢉQHGGXULQJWKH\HDUWR provide greater alignment, better prioritisation and improved execution. During the strategy session, the Board considered and discussed details in respect of the industrial distribution landscape and markets along with the Group strategy to capitalise on the market opportunity and maximise stakeholder value. The Board recognises the importance of ensuring alignment between purpose, vision, values and strategy to accelerate successful delivery. As part of the strategic review that took place during the year, our purpose and new set of Group-wide values have also been considered in detail by the Board. This one set of Group-wide values will support delivery of our strategy by uniting and aligning the Group and providing direction for the culture and behaviours across WKHRUJDQLVDWLRQ+DYLQJEHHQUHYLHZHGRXU purpose remains the same. See page 18 for details of our values. Other activities undertaken by the Board during the year to monitor the Group’s culture have included: – A review of the proposed people plan which highlighted the key initiatives which will support our strategic actions. See page 53 for further information. – %HVVLH/HHDQG-RDQ:DLQZULJKWDVRXU designated Directors for employee HQJDJHPHQWFRQGXFWHGWZRHPSOR\HH engagement sessions during the year. In-depth feedback was then provided to the Board following these engagements, with outcomes being shared with relevant management. – In September 2023, the Board visited our RࢇFHVLQ)UDQNIXUWDQGUHJLRQDO'&LQ%DG +HUVIHOG\*HUPDQ\7KLVLQFOXGHGWKH opportunity for members of the Board to meet employees of the regional DC and have informal discussions with regional leadership. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 77 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Position Responsibilities Chair Rona Fairhead – Leading the Board and ensuring its oversight of strategy, performance, value creation, culture, stakeholders and accountability – Promoting open, trusting, challenging discussions and debate and constructive relations between Executive and Non-Executive Directors – /HDGLQJWKH%RDUGVXFFHVVLRQSODQQLQJDQGVHHNLQJWRHQVXUHHࢆHFWLYHFRPPXQLFDWLRQZLWKVKDUHKROGHUV Executive Directors Simon Pryce (CEO) – 0DQDJLQJDQGOHDGLQJWKH\*URXSRQDGD\WRGD\EDVLVPDNLQJGHFLVLRQVRQPDWWHUVDࢆHFWLQJWKHRSHUDWLRQDQGSHUIRUPDQFH of the Group’s business – Designing, developing and implementing the strategic plans – Ensuring robust management succession plans are in place Kate Ringrose (CFO) – )LQDQFLDOPDQDJHPHQWDQGLPSOHPHQWDWLRQDQGPRQLWRULQJRIࢉQDQFLDOFRQWUROV – 'HYHORSLQJWKH\*URXSȆVࢉQDQFLDOSROLFLHVDQGVWUDWHJLHV – Ensuring a commercial focus across the business activities and appropriateness of risk management Senior Independent Director David Sleath – Acting as a sounding board to both the Chair and the CEO – Acting as a conduit for the views of other Non-Executive Directors and conducting the Chair’s annual performance appraisal – Being available to shareholders to help resolve concerns Non-Executive Directors Alex Baldock Louisa Burdett Navneet Kapoor Bessie Lee Joan Wainwright – Overseeing and constructively challenging executive management regarding the performance of management against agreed SHUIRUPDQFHREMHFWLYHVDQGKHOSLQJWRUHYLHZDQGPRQLWRUWKH\*URXSȆVVWUDWHJ\ – 6DWLVI\WKHPVHOYHVRQWKHLQWHJULW\RIࢉQDQFLDOLQIRUPDWLRQDQGUHYLHZLQJWKH\*URXSȆVULVNH[SRVXUHDQGFRQWUROV Company Secretary Clare Underwood – 6XSSRUWLQJDQGDGYLVLQJWKH%RDUGRQPDWWHUVUHODWLQJWRJRYHUQDQFHHQVXULQJJRRGLQIRUPDWLRQࢊRZVDQGSURYLGLQJSUDFWLFDO support to the Directors – Organising Directors’ induction and training #### Board leadership and governance framework continued Division of responsibilities There is a clear division of responsibilities between the leadership of the Board and the executive leadership of the Group. The responsibilities of the Chair, CEO, CFO, Senior Independent Director, Board and Committees are agreed by the Board. See page 79 for the overall governance framework and below for a summary of the division of responsibilities. Full details can be found at rsgroup.com Meetings during the year The Board held a combination of in-person and YLUWXDOPHHWLQJVLQDQGDEUHDNGRZQRI attendance is shown in the table on page 76. In addition to the seven scheduled Board meetings, a further two ad hoc meetings were held. There may be instances during the year where a Director is unable to attend a meeting. If this is the case, they are provided with all the meeting information and have the opportunity to discuss their feedback with the Chair or Company Secretary to ensure their contributions are raised at the meeting. During the year, the Chair held a number of meetings with the Non-Executive Directors without the Executive Directors being present. The Non-Executive Directors also met without the Chair to discuss the Chair’s performance. The Chair and the Committee Chairs ensure Board and Committee meetings are structured to facilitate open discussion, debate and challenge. As part of the annual Board evaluation process, the functioning of the Board and each of its Committees are reviewed and considered by the %RDUGDVDZKROH7KHࢉQGLQJVRIWKHUHYLHZDUH used to establish an ongoing programme of DFWLRQVWRLPSURYHHࢆHFWLYHQHVVRIERWKWKH%RDUG and the Committees. Further information on this can be found on pages 84 and 85. Matters reserved for the Board All matters that have a material impact upon the Group are reserved for the Board and are formally set out in a schedule which can be found on our website at: rsgroup.com/investors/ governance/governance-framework RS Group plc Annual Report and Accounts for the year ended 31 March 2024 78 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### GOVERNANCE FRAMEWORK 2XUJRYHUQDQFHIUDPHZRUNXQGHUSLQVDQGVXSSRUWVUREXVWJRYHUQDQFHDFURVVWKH\*URXSWRKHOSHQVXUHHࢇFLHQWGHFLVLRQPDNLQJDQGFOHDUGLYLVLRQRIUHVSRQVLELOLWLHV #### Board leadership and governance framework continued The Board Chair: Rona Fairhead The Board is responsible for the oversight of the purpose, vision, strategy and values for the Group, ensuring the culture is aligned, and promoting the long-term sustainable success RIWKH&RPSDQ\IRUWKHEHQHࢉWRIRXUPHPEHUV and stakeholders. The Board discharges some of its responsibilities directly or has delegated authority to its Committees. Disclosure Committee Chair: Simon Pryce – Reviews procedures, systems and controls for LGHQWLࢉFDWLRQDQGWUHDWPHQWRILQVLGHLQIRUPDWLRQ – Reviews regulatory announcements, shareholder circulars, prospectuses etc. before release – Considers materiality of variances between performance and forecasts Nomination Committee + See pages 88 to 91 for further details Chair: Rona Fairhead – Reviews the structure, skills, knowledge, experience and diversity of the Board – ,GHQWLࢉHVDQGQRPLQDWHVIRUDSSURYDOE\WKH%RDUGFDQGLGDWHVWRࢉOO'LUHFWRUSRVLWLRQV – Leads succession planning for Non-Executive, Executive Directors and has oversight of succession planning for the ExCo Audit Committee + See pages 92 to 98 for further details Chair: Louisa Burdett – 0RQLWRUVLQWHJULW\RIࢉQDQFLDOVWDWHPHQWVDQGDQQRXQFHPHQWV – 5HYLHZVWKH\*URXSȆVLQWHUQDOࢉQDQFLDOFRQWUROVDQGLQWHUQDOFRQWURODQGULVN management systems – 0RQLWRUVWKHLQWHUQDODXGLWIXQFWLRQ – 0DQDJHVWKHH[WHUQDO$XGLWRUV Remuneration Committee + See pages 99 to 115 for further details Chair: Joan Wainwright – Agrees the Remuneration Policy for Executive Directors and remuneration structure for the ExCo – Oversees ExCo and Group workforce remuneration – Approves the design and targets for incentive plans During the year, the Group’s governance framework has been refreshed with a view to streamlining responsibilities and accountabilities, simplifying approval SURFHVVHVDQGFUHDWLQJDFOHDUHUࢊRZRI information to enable swifter, more robust decision making. As part of this, the following actions have been taken: – Streamlined the senior management team to an empowered ExCo – Reviewed and enhanced the Schedule of 0DWWHUV5HVHUYHGIRUWKH%RDUG)ORZLQJ from this, a revised Group Delegation of Authority has been approved by the Board which provides the Group with clear guidance regarding the decision making and approval processes throughout the Group, balancing authority with responsibility and accountability – &OHDUO\GHࢉQHGWKHGLYLVLRQRIUHVSRQVLELOLWLHV between the Board, its Committees, individual members of the Board and the ExCo, with a dedicated session held at an ExCo meeting whereby the Company Secretary presented the details to the ExCo members – The Disclosure Committee Terms of Reference have been refreshed and adopted As part of our ESG governance, the Board has close oversight of our ESG action plan and is provided with frequent updates on its performance. For further details on ESG governance see pages 59 and 60. ,QRUGHUWRIDFLOLWDWHDQHࢆHFWLYHZRUNLQJUHODWLRQVKLSEHWZHHQWKH%RDUGDQG([&RWKH%RDUGUHFHLYHVUHJXODUXSGDWHVDQGGHWDLOHGUHYLHZVIURPWKH([&RWKURXJKRXWWKH\HDU Executive Committee (ExCo) Chair: Simon Pryce – $VVLVWLQJWKH&(2LQH[HUFLVLQJKLVDXWKRULW\LQUHODWLRQWRDOOPDWWHUVDࢆHFWLQJWKHRSHUDWLRQVSHUIRUPDQFHDQGVWUDWHJ\ZLWK input from regional, accelerating and enabling functions – Oversight of day-to-day management of the Group RS Group plc Annual Report and Accounts for the year ended 31 March 2024 79 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Board activities during the year ### BOARD ACTIVITIES ### DURING THE YEAR The following pages outline some of the key topics reviewed, monitored, considered and discussed by the Board during the year. Before the start of each year, the Board and each of its Committees consider and review a calendar of events and agenda items for the year ahead. As part of our governance framework and in response to feedback received as part of the Board evaluation SURFHVVNH\VWUDWHJLFLWHPVDUHLGHQWLࢉHGDQG scheduled throughout the year. The Chair, with assistance from the CEO, CFO and Company Secretary, agrees the agenda for each Board PHHWLQJ7KLVSURFHVVHQVXUHVWKDWVXࢇFLHQWWLPH is being set aside for strategic discussions and business critical items, while including regular standing items, such as reports on trading and ࢉQDQFLDOSHUIRUPDQFHDQGURXWLQHUHSRUWLQJRU compliance requirements. Our Strategic Report on pages 1 to 71 demonstrates how the business considers and engages with the Company’s key stakeholders: our people, customers, suppliers, communities and shareholders. This section of the Governance Report sets out the areas of focus for the Board during the year, how these relate to our strategic aims and, where appropriate, how our stakeholders have been considered. The Board delegates the day-to-day operational decision making of the business to the CEO and CFO with support from the ExCo and their teams. The Board recognises, however, that doing so does not absolve it of its accountabilities to the Group’s stakeholders and the need to reinforce and support the ExCo’s decisions by setting the Activity Stakeholders Strategy 6WUDWHJLFXSGDWHIURPWKH$VLD3DFLࢉFWHDPKLJKOLJKWLQJ performance, regional market trends and strategic plans. The Board was provided with an update on the integration of Distrelec, including progress to date and key milestones. As part of both the acquisition and integration process, various stakeholders were considered, such as the impact on employees, customers and suppliers of both the acquired entity and the existing RS business WRKHOSHQVXUHWKHDFTXLVLWLRQZLOOSURYLGHORQJWHUPEHQHࢉWVWRDOO Culture / people $SSURYDORIWKHDSSRLQWPHQWRI.DWH5LQJURVHDV&)2ZLWKHࢆHFW from 2 October 2023. For further details of the recruitment and approval process, see page 89. Governance 7KH$QQXDO\*HQHUDO0HHWLQJ$\*0LVKHOG6KDUHKROGHUVKDYHWKH opportunity to attend, vote and raise any questions directly to the Board. tone from the top. The Board must consider the needs of, and impacts of its decisions on, all stakeholders as well as the consequences of its decisions in the long term. The Board recognises that when making decisions it will sometimes have to consider the competing interests of stakeholders and that it may not always be possible to deliver an outcome that is welcomed by all stakeholders. In these situations, the Board is guided by the need to consider the long-term sustainability of the business. A timeline is provided over the following pages detailing the key activities of the Board during the year. Throughout the year, the Board and its Committees received regular updates on various aspects of the business. Such updates included ࢉQDQFLDOUHSRUWLQJRISHUIRUPDQFHGHWDLOVRIRXU acquisition pipeline, feedback from employee engagement surveys and updates on shareholder engagement and activities. Regular reports were also provided in respect of health and safety performance and actions, whistleblowing activity, data protection and cyber security and any legal or regulatory matters which arose from time to time. 1HW]HURDQGFOLPDWHWUDQVLWLRQSODQVHVVLRQVZHUH delivered to the Board and the ExCo, highlighting strategic planning, performance monitoring and climate education and skills development. See the case study on page 83 for further details. .H\WKHPHVDQGREVHUYDWLRQVIURPHPSOR\HH HQJDJHPHQWVHVVLRQVKHOGLQWKH8.DQG\*HUPDQ\ during the year were around working conditions, IT infrastructure, strategy, culture and clarity of communications and processes. Stakeholder key Our people Customers Suppliers Communities Shareholders #### APR23 #### MAY #### 23JUL23JUN23 Activity Stakeholders Finance Approval of the year end results, including consideration of viability and going concern. Approval of WKHSD\PHQWRIWKHࢉQDOGLYLGHQGVXEMHFWWRVKDUHKROGHUDSSURYDOLQ-XO\0XOWLSOHVWDNHKROGHUVZHUH considered when deciding to pay the dividend, including impact on employees and their remuneration and working conditions, customer and supplier propositions, acquisitions and our shareholder base. ESG The Audit Committee approved, and recommended to the Board, the ESG-related disclosures around an ESG double materiality assessment, Scope 3 carbon emissions reporting and results of the quantitative FOLPDWHVFHQDULRDQDO\VLVIRU7DVN)RUFHRQ&OLPDWHUHODWHG)LQDQFLDO'LVFORVXUHV7&)'DQGWKHDGRSWLRQ of the TCFD report. The Board also approved the production of a dedicated ESG report to meet our full ESG reporting requirements. See pages 40 to 69 for further details. Governance $SSURYDORIWKH(6\*JRYHUQDQFHIUDPHZRUNZKLFKLQFOXGHVFRQࢉUPLQJWKH([&RȆVUHVSRQVLELOLW\IRU climate strategy, development and execution of policies, initiatives and disclosures. The Board continues WRPDLQWDLQRYHUVLJKWWKURXJKUDWLࢉFDWLRQRISROLFLHVVWUDWHJ\NH\LQYHVWPHQWLQLWLDWLYHVDQGSHUIRUPDQFH monitoring. Bessie Lee was appointed as the Non-Executive Director ESG lead to create a clear and robust governance link between the Board and ExCo. Operational management of our 2030 ESG action plan and climate-related risks and opportunities are embedded within relevant central functions and the three UHJLRQVVHHSDJHVDQGIRUIXUWKHUGHWDLOVUHODWLQJWR(6\*JRYHUQDQFH (YDOXDWLRQRIDOOSURYLVLRQVRIWKH&RGHWRUHYLHZFRPSOLDQFHIRUWKH\HDUHQGHG0DUFK Reviewed the results of the externally-facilitated Board evaluation and agreed the actions arising from the evaluation. See pages 84 and 85 for further details. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 80 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Board activities during the year continued Activity Stakeholders Strategy 7KH%RDUGUHFHLYHGDGHHSGLYHVHVVLRQRQ$UWLࢉFLDO,QWHOOLJHQFH$,LQFOXGLQJ the wider view on AI, opportunities for RS, risks and mitigations and our approach to governance. Strategic update from the Americas team provided a strategic regional update to the Board, including details of performance, current initiatives, strategic priorities and an overview of the external market. Culture / people $SSURYDORIWKH&)2ȆVREMHFWLYHVWRHQVXUHDOLJQPHQWWRWKH\*URXSȆV VWUDWHJLFREMHFWLYHV A pensions funding update was provided to the Board. Regular updates RQIXQGLQJSRVLWLRQRIWKH8.GHࢉQHGEHQHࢉWVFKHPHKHOSWRHQVXUHWKH pension fund is appropriately funded for our current and former employees. Further details regarding the pension scheme can be found on page 28. Stakeholder key Our people Customers Suppliers Communities Shareholders #### SEP23NOV23AUG23 Activity Stakeholders Strategy The Board considered the strategic planning process. This included an overview of the planning process, the strategic development, long-term planning cycle and key discussion points for the Board to build in feedback ahead of the workshop in January. The Investor Relations team presented its strategy and action plan to the Board, providing an overview of the Group’s proposed shareholder-related reporting and engagement, along with outlining the alignment between internal and external reporting cadence. Culture / people Bessie Lee and Joan Wainwright met with representatives from WKH/RQGRQ8.RࢇFHIRUDQHPSOR\HHHQJDJHPHQWVHVVLRQ Feedback was provided to the Board and actions taken by management to address any issues raised. 5HYLHZRIWKH([&RPHPEHUVȆREMHFWLYHVWRHQVXUHWKH([&R members are aligned to the Group’s strategic actions. #### OCT #### 23DEC23 Activity Stakeholders Strategy 7KH%RDUGYLVLWHGRXURࢇFHLQ)UDQNIXUWDQGUHJLRQDO'&DW%DG +HUVIHOG\*HUPDQ\$QXSGDWHRQWKH\*HUPDQ$XVWULDQDQG Swiss region was provided by the leadership team, including an overview of current performance, regional market trends, VWUDWHJLFREMHFWLYHVFXOWXUHDQGLQWHJUDWLRQRI'LVWUHOHF Presentations were also given to the Board in respect of supply chain and technology which provided an update on performance and oversight of strategic actions within the teams. Risk The Board reviewed the principal risks of the Group and considered the half-year risk statement. Further information regarding the management of the Group’s principal and emerging risks can be found on pages 34 to 37. Culture / people Bessie Lee and Joan Wainwright held an employee engagement VHVVLRQZLWKUHSUHVHQWDWLYHVIURPERWKWKH)UDQNIXUWRࢇFHDQG UHJLRQDO'&DW%DG+HUVIHOG\*HUPDQ\)XUWKHULQIRUPDWLRQFDQEH found on pages 73 and 80. 7KH%RDUGDSSURYHGWKHREMHFWLYHVRIWKH&(27KHREMHFWLYHV provide stretching targets and are clearly linked to the successful delivery of our strategic actions. Activity Stakeholders Finance $SSURYDORIWKHKDOI\HDUDFFRXQWVLQFOXGLQJ FRQVLGHUDWLRQRIJRLQJFRQFHUQDORQJZLWK interim dividend payment to be made to shareholders in January. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 81 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Board activities during the year continued Activity Stakeholders Finance An update on the tax strategy and an overview of the key tax-related governance controls was provided to the Board. The Board approved the tax strategy. ESG The Board received an update on ESG performance against our 2030 ESG action plan, along with an RYHUYLHZRIQHW]HURSURJUHVVWRGDWHLPSDFWRIUHFHQWDFTXLVLWLRQVDQGLQLWLDWLYHVDORQJZLWKFOLPDWH HGXFDWLRQDQGVNLOOVGHYHORSPHQWVHHWKHFDVHVWXG\RQSDJHIRUIXUWKHULQIRUPDWLRQ Culture / people The new Group values were presented to the Board providing oversight of the engagement programme XQGHUWDNHQWRHQVXUHWKHYDOXHVUHࢊHFWHGWKH56FXOWXUHDQGZRXOGUHVRQDWHDFURVVWKH\*URXS7KH%RDUG endorsed the values and were supportive of the rollout plan. Further details of our values can be found on pages 18 and 19. Governance An update on the new Corporate Governance Code was provided to the Board, outlining new requirements and key timeframes. The Audit Committee has also received regular updates over the last year in respect RIWKHQHZUHTXLUHPHQWVUHODWLQJWRLQWHUQDOFRQWUROVRYHUࢉQDQFLDOUHSRUWLQJSURYLGLQJRYHUVLJKWDVWRWKH measures and processes implemented by the Group to help ensure compliance. Activity Stakeholders Culture / people The CPO provided the Board with an overview of the proposed people plan and people strategy. This underpins our strategic priorities, and helps to ensure clear focus on the key initiatives proposed under each strategic action. Governance The Board reviewed the division of responsibilities for the Board and certain individuals, including the Chair, CEO and Senior Independent Director, as part of its governance framework structure. Activity Stakeholders Strategy The Board held a strategy session with members of the ExCo where the proposed strategic plan was presented and discussed in detail. The Board DSSURYHGWKHUHࢉQHGVWUDWHJ\DQGWKHࢉYH\HDU plan. See pages 73 and 77 for further details. #### JAN24MAR24FEB24 Stakeholder key Our people Customers Suppliers Communities Shareholders The Board must consider the needs of, and impacts of its decisions on, all stakeholders as well as the consequences of its decisions in the long term.” RS Group plc Annual Report and Accounts for the year ended 31 March 2024 82 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() GOVERNANCE IN ACTION #### RESPONDING TO #### CLIMATE CHANGE Enabling our Board and ExCo to #### UHVSRQGHࢆHFWLYHO\WRFOLPDWHFKDQJH As a global business enabling the technology, manufacturing and engineering sectors, our long-term success and value creation potential is inextricably linked to how we respond to the challenges and opportunities posed by climate change. The decisions and actions we take now will have an impact on our ability to mitigate our longer-term risks, while fully leveraging the clear opportunity we see to be a key enabler of a lower-carbon global industrial sector. To support this agenda, it is essential our ExCo and Board are fully informed and enabled to lead our climate response. In 2023/24, we delivered climate sessions for our ExCo and Board on the key areas of our climate agenda: – 2XUQHW]HURWUDMHFWRU\ȁLQFOXGLQJVWUDWHJ\SHUIRUPDQFH LQLWLDWLYHGHYHORSPHQWDQGLQYHVWPHQWSODQQLQJVHHSDJH – ESG products and solutions strategy, initiative development DQG LQYHVWPHQWSODQQLQJVHHSDJHVDQG – Updates on our climate-related risks and opportunities SURJUHVV DQGVFHQDULRPRGHOOLQJVHHSDJH These sessions ensure the ExCo and Board have a solid understanding of the latest climate science, best practice in climate risk mitigation, a view of the rapidly evolving stakeholder expectations and a clear line of sight of our FXUUHQW SHUIRUPDQFHDQGIXWXUHWUDMHFWRU\7KLVEXLOGV capability and ensures they can make the informed key decisions that will leverage our climate opportunities and mitigate our risks, as part of wider corporate governance and delivery of our strategy. #### Board activities during the year continued + For more information on our net zero strategy and how we are advancing sustainability across the business, see page 43. + For more information on our commitment to doing business responsibly, see page 58. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 83 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Board evaluation ### BOARD ### EVALUATION Board evaluations provide invaluable insight and REMHFWLYLW\WRWKH'LUHFWRUVDQGWKH&RPPLWWHHV which in turn enables the Board to improve its OHDGHUVKLSHࢆHFWLYHQHVVDQGIRFXV([DPLQLQJ each Director’s role and their corresponding responsibilities within the overall Board dynamic encourages collaborative decision making and strategic clarity. The outcomes from the 2023/24 Board evaluation are as follows: Key recommendations Actions agreed Succession planning and talent management – Succession planning was a key topic raised by the Board in the review. It was acknowledged that focus was required over the coming year to ensure that the Group has the right pipeline of future leaders. This has renewed focus with the appointment of the new CPO during the year – Succession planning would be scheduled for review twice a year by the Nomination Committee – The Nomination Committee considered and discussed an update on VXFFHVVLRQSODQQLQJLQ0DUFK7KLVSURYLGHGDFOHDUGLUHFWLRQRIIRFXV and plans for the coming year. The Committee will monitor progress by receiving biannual updates Strategy – 0RUHLQIRUPDWLRQDQGDQDO\VLVRQFRPSHWLWLRQLQNH\PDUNHWVKRZWKH \*URXSGLࢆHUHQWLDWHVLWVHOIDQGLQFUHDVHGFODULW\RQSHUIRUPDQFHFRPSDUHG to the market to be included in Board discussions – Regular updates to be provided in respect of trends, investments and further development regarding the opportunities and threats in digital and AI – Following the strategy session in January 2024, the forward agenda of strategic items has been developed and was considered by the Board in 0DUFK7KLVZLOOEHEXLOWLQWR%RDUGDJHQGDVIRUWKHFRPLQJ\HDUWR help ensure appropriate market and strategic information is included within the regional performance discussions Board process – Rebalance of agenda items to provide greater focus on key strategic items in order to allow more time for deep dives and discussions and gain strategic input and insight from the Non-Executive Directors on key issues – To ensure items have the appropriate amount of time for discussion, papers circulated in advance of meetings would be taken as read to enable presentation time to be reduced and discussion time increased – A more strategically focused, forward looking agenda has now been adopted and this will be kept under review by the Chair, Executive Directors and the Company Secretary 7KH%RDUGUHࢊHFWVRQLWVSHUIRUPDQFHDQG HࢆHFWLYHQHVVDQQXDOO\'XULQJWKH%RDUG conducted an internal evaluation following the H[WHUQDOHYDOXDWLRQLQ7KHVFRSHRIWKH evaluation covered the Board and its Committees, along with performance of the Chair, Senior Independent Director and Company Secretary. The Chair worked with the Company Secretary to devise the questionnaires, which were circulated to the Board members, the external Auditors and Remuneration Committee advisor. The questionnaires were supplemented with interviews between the Chair and each member of the Board and the Company Secretary. The Senior Independent Director met with each of the Non-Executive Directors to review the Chair’s performance and the feedback was subsequently shared with the Chair. The results of the evaluation ZHUHDVVHVVHGDQGGLVFXVVHGDWWKH0DUFK Board meeting, following which the Board FRQࢉUPHGLWVYLHZWKDWWKH%RDUGFRQWLQXHV WRRSHUDWHHࢆHFWLYHO\ZLWKLQDQLQFOXVLYHDQG transparent environment. Overall, there were positive improvements in the quality of discussions and papers, in particular, the strategy session in January 2024 provided a clear articulation of the Group’s strategic direction. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 84 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() 3URJUHVVDJDLQVWWKH%RDUGHࢆHFWLYHQHVVHYDOXDWLRQ $VXPPDU\RIWKH%RDUGȆVSURJUHVVDJDLQVWWKHDFWLRQVIURPWKHHYDOXDWLRQLVVHWRXWEHORZ Key recommendations Actions agreed Progress against actions Succession planning and talent management – Consideration to be given in respect of skills gaps and maintaining the right balance of experience and background for new Board appointments – Continued focus on talent, development and succession of the PHPEHUVRIWKHVHQLRUPDQDJHPHQWWHDPQRZWKH([&R – Recruitment to take into consideration aspects such as existing appointments, time commitments and locality – Further agenda items to be included in the forward looking agenda regarding key people topics and succession planning – $UROHSURࢉOHKDVEHHQGHYHORSHGKLJKOLJKWLQJNH\DWWULEXWHV required for future Non-Executive Director appointments – As a result of the appointment of a new CPO, renewed focus has been given to the people plan, succession planning and development which will evolve over the coming year – An update on the ExCo succession plan was discussed by the 1RPLQDWLRQ&RPPLWWHHLQ0DUFK Strategy – Increased information to be provided to the Board regarding exploration of opportunities in global markets, with the continued prioritisation of technology and digital. Information provided on the market and competitors to be further enhanced – 5HࢉQHKRZSURJUHVVLVWUDFNHGDJDLQVWWKHVWUDWHJ\ZLWK.3,V underpinned by deep dives and regular focus on critical areas such as technology and new products – Annual forward looking calendar for strategic discussions to be reviewed – 3HUIRUPDQFHUHSRUWLQJDQG.3,VWREHUHYLHZHGE\PDQDJHPHQW Deep dives to be aligned – :LWKWKHDSSRLQWPHQWRIERWK6LPRQDQG.DWHDV([HFXWLYH Directors during the year, there has been a thorough review of our strategy. To align with this, the forward looking agenda was considered by the Board and the strategic aspects to be presented during the year were agreed to ensure a suitable cadence of topics – A deep dive in respect of AI was held in December 2023, with further sessions to be scheduled %RDUGHࢆHFWLYHQHVVDQGSURFHVV – Agendas to have a sharper focus around priority topics and UHGXFHWKHQXPEHURIVWDQGLQJUHSRUWVDQGXSGDWHV.H\WRSLFV to be presented as deep dives at regular intervals to help further enhance discussion – Continued consideration to be given on how to keep Board and Committee papers concise and easy to navigate – A review of agendas and standing reports will be built into the above review of the forward looking calendar – The Board paper template will be updated with clear guidance to users on what information to include and level of detail required – Board papers and presentations have been evolving over the year under new executive leadership. Templates and guidance have been updated however, to address any concerns or requirements RIWKH%RDUGDVSHFLࢉFTXHVWLRQZDVLQFOXGHGLQWKLV\HDUȆV%RDUG evaluation to seek further feedback – Board paper templates have been reviewed, with best practice being shared amongst presenters. This will help ensure consistency of content, highlighting key messages to the Board and providing a clear indication of what is required of the Board during the meeting #### Board evaluation continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 85 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Governance code compliance Training and induction As part of the Board’s continuous development, the Directors receive regular updates from the Company Secretary as well as a schedule of H[WHUQDOO\DYDLODEOHEULHࢉQJVDQGWUDLQLQJVHVVLRQV External training includes facilitated events, forum discussions and seminars related to the listed company environment, many of which were RࢆHUHGYLUWXDOO\,QWKH%RDUGXQGHUWRRN deep dives which included the following: – AI, which provided an overview of opportunities for the Group, risks and mitigations and the Group’s approach to AI-related governance – Emerging ESG-related reporting regulations, focusing on climate transition planning for the 8.ȆV7UDQVLWLRQ3ODQ7DVNIRUFHDQGWKH&RUSRUDWH Sustainability Reporting Directive – The Board held a session in October 2023 regarding the strategic planning process which outlined the longer-term cycle of strategic thinking, implementation and refresh. Finally, to enhance operational awareness, the %RDUGWUDYHOOHGWR\*HUPDQ\WRYLVLWRXURࢇFHLQ )UDQNIXUWDQGUHJLRQDO'&LQ%DG+HUVIHOGLQ September 2023. This provided an opportunity IRU 'LUHFWRUVWRPHHWZLWKHPSOR\HHVDQGVHHࢉUVW hand the operations at the regional DC. As part of this site visit, the Board was given an in-depth business overview and strategy update for RS LQ \*HUPDQ\$XVWULDDQG6ZLW]HUODQG The Company Secretary is available to all Directors whenever needed and ensures that both Directors and Committees have access to independent SURIHVVLRQDODGYLFHDWWKH\*URXSȆVH[SHQVHLIWKH\ GHHPLWQHFHVVDU\WRFDUU\RXWWKHLUUROHHࢆHFWLYHO\ Following the appointment of any new Director, the Chair and Company Secretary ensure that a customised induction to the Company and the role of the Board is made available. The induction programme is tailored to the individual Director, based on their skills, experience and needs. New Directors are provided with a pack which sets out the relevant information on the Company’s approach to governance, information on key Group policies and day-to-day administrative matters, as well as historical Board and Committee papers if applicable. .DWH5LQJURVHMRLQHGWKH%RDUGLQ2FWREHU and has undertaken a thorough induction plan since her appointment, details of which can be found to the right. Simon Pryce also received an LQGXFWLRQSURJUDPPHZKLFKZDVWDLORUHGWRUHࢊHFW the time he served as a Non-Executive Director VLQFH6LPRQVSHQWWKHࢉUVWIRXUPRQWKVRI his appointment as CEO with a programme of meetings with key stakeholders. In addition to this he immersed himself in the business and travelled to all the regions to build his knowledge of our culture, operations and requirements across the Group. Appointment and time commitments The Chair, Senior Independent Director and other Non-Executive Directors each have letters of appointment with RS Group plc and do not serve, or are employed in any capacity by, the Group. Non-Executive Directors are generally appointed IRUWKUHH\HDUࢉ[HGWHUPVKRZHYHULQOLQHZLWK what is considered good governance practice, all Directors are proposed for annual re-election RU HOHFWLRQLIQHZO\DSSRLQWHGE\VKDUHKROGHUVDW WKH $\*0ZKHUHOHWWHUVRIDSSRLQWPHQWIRUHDFK Non-Executive Director are available for inspection. As illustrated on pages 74 and 75, the Board has a diverse and appropriate range of skills and H[SHULHQFHDQGZRUNVHࢆHFWLYHO\LQLWVUROH The expectation regarding time commitment for %RDUGPHPEHUVWRHࢆHFWLYHO\GLVFKDUJHWKHLU duties is set out in the Directors’ letters of appointment. The external commitments of our Directors are kept under review to ensure they KDYHWKHWLPHWRFRQWULEXWHHࢆHFWLYHO\WRWKH activities of the Board and its Committees throughout the year. Any additional external appointment taken on by a Director must be approved by the Chair prior to appointment, to ensure that the Director’s ability to meet the required time commitments to the Group is maintained. During the year, Louisa Burdett informed the Board of her intention to step down from her position as CFO at Croda International plc from June 2024 and her appointment as CFO of Spirax-Sarco Engineering plc from July 2024. The Board considered the time FRPPLWPHQWDQGSRWHQWLDOFRQࢊLFWVRILQWHUHVW LQYROYHGDQGZDVVDWLVࢉHGWKDWVKHZRXOGFRQWLQXH WRKDYHVXࢇFLHQWWLPHWRFRPPLWWRWKH56%RDUG and her committee appointments. The Board, following the annual evaluation process, also considers whether each Director SHUIRUPVHࢆHFWLYHO\DQGGHPRQVWUDWHVWKHLU commitment to the role. The Board recommends WKDWDOO'LUHFWRUVEHUHHOHFWHGDQG.DWH5LQJURVH WREHHOHFWHGDWWKLV\HDUȆV$\*0 As recommended by the Code, the Executive Directors who held roles during the year did not hold more than one non-executive directorship LQ D)76(FRPSDQ\RUDQ\RWKHUVLJQLࢉFDQW appointments. $VSDUWRI.DWHȆVRQERDUGLQJKHULQGXFWLRQKDVEHHQ split into two aspects with the aim of providing an HࢆHFWLYHLQWURGXFWLRQWR56ERWKWRWKHEXVLQHVVDV a whole and to the boardroom. 7KHࢉUVWRIWKHVHLVDQRQJRLQJSURJUDPPHRI meetings with key people in various regions and functions, along with key advisors. She met with each of the three regional presidents and those responsible for the accelerating and enabling functions, providing an invaluable introduction into each region and area of business specialism. 'XULQJ.DWHȆVࢉUVWVL[PRQWKVVKHKDVWUDYHOOHGWR $PHULFDVLQFOXGLQJ56LQWKH86DQG5LVRXOLQ 0H[LFR%HDXYDLV)UDQFH%DG+HUVIHOG\*HUPDQ\ Johannesburg, South Africa and both our global DCs LQ&RUE\DQG1XQHDWRQ8.6KHZLOOYLVLWDQXPEHU RI IXUWKHUPDUNHWVLQFOXGLQJ,WDO\6SDLQ0DOD\VLD Singapore, Australia, Denmark and Poland, along with meeting our colleagues from Distrelec during WKHFRXUVHRI.DWHKDVDOVRPHWZLWKRXU PDMRUVKDUHKROGHUVDQGFRPSOHWHGDQLQYHVWRU roadshow with Simon. The second aspect consisted of an induction pack of key corporate documents and information relating to the Group, such as the latest Annual 5HSRUWDQG$FFRXQWVVWUDWHJ\SDSHUVWKHࢉYH\HDU plan, mergers and acquisitions pipeline, the internal audit plan and governance documents such as the Articles of Association, Terms of Reference of the &RPPLWWHHVDQGD'LUHFWRUVȆUHVSRQVLELOLWLHVEULHࢉQJ #### KATE’S #### INDUCTION GOVERNANCE IN ACTION KATE RINGROSE CFO RS Group plc Annual Report and Accounts for the year ended 31 March 2024 86 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Governance code compliance continued Compliance statement 7KH8.&RUSRUDWH\*RYHUQDQFH&RGH WKH&RGHDSSOLHGWRWKHࢉQDQFLDO\HDUHQGHG 0DUFK7KH&RGHLVSXEOLFO\DYDLODEOH at www.frc.org.uk. 7KH&RPSDQ\FRQࢉUPVWKDWLWDSSOLHGWKH principles and has complied with the Provisions of the Code during 2023/24. Application of the Code The Directors’ Report is set out in a way that helps shareholders and investors to evaluate how the Company has applied the principles and complied with the Provisions of the Code during the year. The table to the right signposts the most relevant parts of the Annual Report and Accounts, in particular where supporting information is not in the Directors’ Report. Principles of the Code Page(s) 1. Board leadership and Company purpose Chair’s introduction 4, 5 and 73 Our Board 74 and 75 Purpose, values and strategy 8 to 19 Culture 6, 18, 21 and 53 to 55 Board stakeholder engagement and decision making 80 to 82 .H\SHUIRUPDQFHLQGLFDWRUVDQGVWUDWHJLFSHUIRUPDQFH 20 to 23 Risk assessment 32 Risk management 32 to 37 Rewarding our people 57 Whistleblowing 60 and 98 2. Division of responsibilities Our Board 74 and 75 Board leadership and governance framework 77 to 79 Board independence and time commitments 76 and 86 Committee reports 88 to 115 Board and Committee meeting attendance 76 Principles of the Code Page(s) 3. Composition, succession and evaluation Our Board 74 and 75 Board leadership and governance framework 77 to 79 Board evaluation 84 and 85 Nomination Committee report 88 to 91 4. Audit, risk and internal controls Audit Committee report 92 to 98 Statement of Directors’ responsibilities 119 Risk management 32 to 37 Principal risks and emerging risks 34 to 37 Going concern 39 Viability statement 38 and 39 5. Remuneration Directors’ Remuneration report 99 to 115 Other remuneration disclosures 114 and 115 ### UK CORPORATE ### GOVERNANCE CODE RS Group plc Annual Report and Accounts for the year ended 31 March 2024 87 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Nomination Committee report ### NOMINATION ### COMMITTEE ### REPORT #### Dear shareholder I am pleased to present the Nomination Committee’s (the Committee) report for the year ended 31 March 2024. This section of the Annual Report and Accounts details how the Committee discharged its duties during the year, along with its key activities. 'XULQJWKHࢉUVWSDUWRIWKH\HDUWKH&RPPLWWHH focused its attention on the CFO recruitment after David Egan stepped down from the Board. After a rigorous selection process, Kate Ringrose was DSSRLQWHG&)2ZLWKHࢆHFWIURP2FWREHU Kate is a highly experienced CFO with a strong WUDFNUHFRUGRIVXFFHVVIXOO\OHDGLQJࢉQDQFH functions. In her role as CFO, Kate was instrumental in the transformation of Centrica plc. The Committee, along with the rest of the Board, LVYHU\FRQࢉGHQWWKDW.DWHKDVWKHVNLOOVWRVXSSRUW strongly the acceleration of the next stage of the Group’s strategy. Full details of the CFO selection SURFHVVFDQEHIRXQGLQWKHIROORZLQJSDJHV I would like to thank Jane Titchener, who took up the position of Interim CFO when David stepped down and who has helped ensure a smooth RQERDUGLQJIRU.DWH Throughout the year, the Committee further enhanced its work to strengthen talent mapping, GHYHORSPHQWDQGVXFFHVVLRQSODQQLQJIRUERWK the Executive Directors and senior leaders. This has included consideration of shortlisted individuals for appointment to the ExCo. ,QDGGLWLRQWRWKLVIXUWKHUZRUNKDVEHHQ carried out in respect of Non-Executive Director succession planning. Further details on this can EHIRXQGRQSDJH The Board places great emphasis on ensuring LWVPHPEHUVKLSUHࢊHFWVGLYHUVLW\LQLWVEURDGHVW sense. During the year, the Committee recommended an updated Board D&I Policy, ZKLFKZDVVXEVHTXHQWO\DGRSWHGE\WKH%RDUG 7KLVVHWVRXWWKHREMHFWLYHVIRU%RDUGPHPEHUVKLS LQUHVSHFWRIGLYHUVLW\DORQJZLWKVSHFLࢉFWDUJHWV IRUWKHVHQLRUPDQDJHPHQWDVUHࢊHFWHGLQWKH Group’s D&I Policy. Further details on the Board ',3ROLF\FDQEHIRXQGRQSDJH An internal Board evaluation was conducted GXULQJWKH\HDUZLWKWKHSURFHVVEHLQJRYHUVHHQ E\WKH&RPPLWWHH7KHࢉQGLQJVIURPWKH HYDOXDWLRQZHUHEURDGO\SRVLWLYHZLWKVRPH DUHDVRILPSURYHPHQWEHLQJLGHQWLࢉHG7KHVHZLOO IRUPWKHEDVLVRIDQDFWLRQSODQZKLFKZLOOEH implemented during the course of the year, with oversight from the Committee. The Committee DOVRFRQVLGHUHGWKHDFWLRQVLGHQWLࢉHGIURPWKH 2022/23 external evaluation and monitored progress against these. Full details of the Board evaluation process, outcomes and previous actions FDQEHIRXQGRQSDJHVDQG Rona Fairhead Chair of the Nomination Committee 22 May 2024 #### KEY ACTIVITIES DURING THE YEAR #### MAY – Talent mapping and succession planning for the CFO role #### JUL – Succession planning for key senior leadership roles – Recommendation of the appointment of Kate Ringrose as &)2DQGDPHPEHURIWKH%RDUG – Non-Executive Director succession planning #### DEC – Non-Executive Director succession planning #### MAR – Internal Board evaluation outcome – Executive and Non-Executive Director succession planning – Review of Committee Terms of Reference Key highlights Membership as at 22 May 2024 Rona Fairhead (Chair) Louisa Burdett Navneet Kapoor Bessie Lee David Sleath Joan Wainwright RONA FAIRHEAD CHAIR OF THE NOMINATION COMMITTEE Activities for 2023/24 – Oversight of CFO selection process – Consideration of candidates for ExCo roles – Enhancement of talent mapping, development and succession planning – Oversight of the Board evaluation process Priorities for 2024/25 – Continued focus on improving the succession planning process – Continued focus on diversity and inclusion (D&I) RS Group plc Annual Report and Accounts for the year ended 31 March 2024 88 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Nomination Committee report continued Board changes As detailed in last year’s Annual Report and Accounts, following the departure of Lindsley Ruth as CEO, a rigorous selection process was conducted for the role, which led ultimately to WKHDSSRLQWPHQWRI6LPRQ3U\FHDV&(2HࢆHFWLYH 3 April 2023. For details of Simon’s selection process, refer to page 101 of the Annual Report and Accounts for the year ended 31 March 2023. David Egan stepped down from the Board and his UROHRI&)2ZLWKHࢆHFWIURP0D\DQG.DWH 5LQJURVHZDVDSSRLQWHGDV&)2IURP2FWREHU .DWHȆVIXOOELRJUDSKLFDOGHWDLOVFDQEHIRXQG on page 74. Succession planning 1XUWXULQJWDOHQWLVDNH\HQDEOHUWRGHOLYHULQJRXU EXVLQHVVVWUDWHJ\DQGFUHDWLQJDKLJKSHUIRUPDQFH purpose-led culture. With the appointment of Simon and Kate, along ZLWKDQHZ&32UHQHZHGIRFXVKDVEHHQJLYHQ to succession planning and talent development within the Group. This has included a review of work carried out in the last couple of years and identifying areas for improvement. Our succession planning process will evolve to strengthen DFFRXQWDELOLW\IRUGHYHORSLQJNH\WDOHQWGULYHDQG monitor more action-orientated outcomes and develop a stronger and more diverse internal pipeline of talent through accelerated development and hiring. Ensuring a clear connection between our operating model and succession planning A strategic review was conducted during the year ZKLFKUHVXOWHGLQRXUQHZRSHUDWLQJPRGHOEHLQJ adopted. This also includes three new roles on the ExCo for the accelerator functions. A rigorous process was undertaken to identify the leaders for each of these new functions and we are proud that HDFKKDVEHHQࢉOOHGE\LQWHUQDOWDOHQW7KHQHZ PRGHOZDVHࢆHFWLYHIURP$SULO)XUWKHU information regarding the operating model can EHIRXQGRQSDJH #### CFO SELECTION PROCESS 7KH&)2LVDWUXVWHGDQGVWUDWHJLFSDUWQHUWRWKH&(2DQGDNH\PHPEHURIWKH([&RDQGWKH%RDUG :LWKWKLVLQPLQGWKH&RPPLWWHHGHYHORSHGDUROHSURࢉOHZKLFKZDVXVHGE\5XVVHOO5H\QROGV Associates 1 (Russell Reynolds) to conduct the search. The essential skills and experience that the &RPPLWWHHVSHFLࢉHGIRUWKHUROHRI&)2LQFOXGHGEULQJLQJࢉUVWFODVVEXVLQHVVDQGࢉQDQFLDOLQVLJKWV FRPPHUFLDOLW\FRPPRQVHQVHDQGFUHDWLYLW\WRHQVXUHWKDWZKLOHWKHEXVLQHVVKDVVRXQGFRQWUROV DQGUHSRUWLQJSURFHVVHVLWPD[LPLVHVYDOXHERWKIURPLWVRSHUDWLRQVDQGEDODQFHVKHHW,WZDVDOVR HVVHQWLDOIRUWKHFDQGLGDWHWRKDYHWKHDELOLW\WRSDUWQHUZLWKWKH&(2DQG&32DVDFXOWXUDOHYROXWLRQ OHDGHU$GLYHUVHORQJOLVWRIFDQGLGDWHVZHUHSURGXFHGEDVHGRQDJOREDOVHDUFKDQGXWLOLVLQJWKH internal talent mapping already in place. Simon Pryce and Rona Fairhead worked with Russell Reynolds WRUHGXFHWKHORQJOLVWGRZQWRDVKRUWOLVWLQFOXGLQJERWKLQWHUQDODQGH[WHUQDOFDQGLGDWHVEDVHGRQ WKHLUVWURQJH[SHULHQFHDQGUHOHYDQWEDFNJURXQGV 7KHVKRUWOLVWHGFDQGLGDWHVZKRZHUHLGHQWLࢉHGDVWKHVWURQJHVWZHUHVXEMHFWWRIXOOSV\FKRPHWULF DVVHVVPHQWVZLWK5XVVHOO5H\QROGVLQWHUYLHZHGE\WKH&(2DQG&KDLUDQGPHWZLWKRWKHUPHPEHUVRI the Board and ExCo. Based on the outcome of the rigorous assessment and referencing process, Kate ZDVLGHQWLࢉHGDVEHLQJWKHVWURQJHVWFDQGLGDWHIRUWKHUROHZLWKWKHVNLOOVWRZRUNZLWK6LPRQDQGWKH ExCo to continue the Group’s strategic growth. 7KH5HPXQHUDWLRQ&RPPLWWHHPHWWRGHWHUPLQHWKHUHPXQHUDWLRQSDFNDJHWREHRࢆHUHGDQGKDYLQJ EHHQDJUHHGWKH&RPPLWWHHPDGHWKHUHFRPPHQGDWLRQWRWKH%RDUGWRDSSRLQW.DWHDV&)2ZLWK HࢆHFWIURP2FWREHU 1. Russell Reynolds has provided recruitment services for senior management positions during the year. There are no other connections with it or the individual Directors. Nurturing talent is a key enabler to delivering our business strategy and creating a high-performance, purpose-led culture. ,QRUGHUWRKHOSDFFHOHUDWHWKHHࢆHFWLYH functioning of the executive team, each of WKH([&RPHPEHUVKDYHXQGHUWDNHQ externally-facilitated psychometric assessments to improve their understanding of themselves and HDFKRWKHU7KLVKDVKHOSHGWKH([&REXLOGDVWURQJ team dynamic, with a clear understanding of their SXUSRVHUHTXLUHGPDQDJHPHQWEHKDYLRXUV and ways of working. Our succession planning process 7KHUHLVDQDQQXDOSURFHVVZKHUHE\DOOLQGLYLGXDOV throughout the Group undergo regular SHUIRUPDQFHUHYLHZVDQGDUHUHVSRQVLEOHIRU their own development plans, with oversight and VXSSRUWSURYLGHGE\OLQHPDQDJHUV,QDGGLWLRQWR this, an ongoing succession planning process is in place to identify talent and successors to senior leadership roles, and to highlight any potential retention risks. For details of our talent SURJUDPPHVHHSDJH 2XUVXFFHVVLRQSODQQLQJFDQEHVSOLWLQWRWZRWLHUV WKHࢉUVWIRUWKH([HFXWLYH'LUHFWRUSRVLWLRQVDQG the second for key senior management roles. 7KHVXFFHVVLRQSODQVDUHVSOLWEHWZHHQVKRUWWHUP DQGORQJWHUPUHTXLUHPHQWV – 6KRUWWHUPUHTXLUHPHQWVIRUXVHLQXQSODQQHG RUHPHUJHQF\VLWXDWLRQVZKHUHE\LQWHULPFRYHU RQDVKRUWWHUPEDVLVLVLPSOHPHQWHG – /RQJHUWHUPUHTXLUHPHQWVIRUFUHDWLQJDGLYHUVH SLSHOLQHRIWDOHQWZLWKLQWKHRUJDQLVDWLRQE\ identifying individuals who have potential to VWHSLQWRWKHUROHLQWKHQH[WRQHWRࢉYH\HDUV Any gaps in experience and knowledge are LGHQWLࢉHGDQGDGHYHORSPHQWSODQGHYLVHGDQG implemented to upskill potential candidates. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 89 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Over the coming months, we will continue to align the senior leadership teams to the new operating model, and succession planning into the new roles ZLOOEHUHYLHZHG7KLVZLOOEHFDUULHGRXWZLWKLQSXW alignment and ownership from the ExCo. The Committee will continue to review and monitor the succession planning process to ensure it is HࢆHFWLYHDQGDSSURSULDWHIRUWKH\*URXS Non-Executive Director succession planning Throughout the year, the Committee continually FRQVLGHUHGWKH%RDUGȆVEDODQFHRIVNLOOVDQG experience to ensure the overall composition of the Board remains appropriate. This approach also HQDEOHVWKH&RPPLWWHHWRLGHQWLI\DQ\VNLOOVJDSV DQGWREXLOGTXLFNO\UROHSURࢉOHVZKHQQHHGHG Diversity and inclusion The Committee has approved an updated Board D&I Policy. This provides a high-level overview of the Board’s approach to driving D&I in our succession planning, selection, nomination, operation and evaluation of the Board. This policy ZRUNVLQFRQMXQFWLRQZLWKRXUZLGHU\*URXS', 3ROLF\DQGUHࢊHFWVWKHRYHUDOO\*URXSWDUJHWUDQJHV for our senior leaders. For further details of SHUIRUPDQFHDJDLQVWWDUJHWVVHHSDJH Policy statement :HEHOLHYHLQFUHDWLQJDQLQFOXVLYHDQGHQJDJLQJ environment where everyone is proud and excited WRFRPHWRZRUNDQGFDQSHUIRUPDWWKHLUEHVW develop and thrive. We are proud to support our SHRSOHWREHWKHLUEHVWE\EXLOGLQJDQLQFOXVLYH workplace that supports everyone, irrespective of HWKQLFLW\GLVDELOLW\VRFLRHFRQRPLFEDFNJURXQGV mental health conditions, neurological divergence, age, religion, sexual orientation or gender identity. 7KH&RPPLWWHHLVUHVSRQVLEOHIRUHQVXULQJWKDWWKH %RDUGKDVWKHULJKWEDODQFHRIVNLOOVH[SHULHQFH and knowledge and, in accordance with its Terms RI5HIHUHQFHVKDOO – Regularly review Board composition – Monitor and drive succession planning, talent GHYHORSPHQWDQGWKHEURDGHUDVSHFWVRI', IRUERWK([HFXWLYH'LUHFWRUVDQGWKH([&R – For any Director appointments, work with H[HFXWLYHVHDUFKࢉUPVWKDWUHࢊHFWDQG understand the Group’s values and approach to diversity, including this Policy, and will honour those values and approach in identifying and SURSRVLQJVXLWDEOHFDQGLGDWHVIRUDSSRLQWPHQW to the Board and its Committees – ,GHQWLI\VXLWDEOHFDQGLGDWHVIRUDSSRLQWPHQW WRWKH%RDUGRQPHULWDJDLQVWREMHFWLYHFULWHULD KDYLQJUHJDUGWR ੳ WKHEHQHࢉWVRIGLYHUVLW\LQSURPRWLQJWKHVXFFHVV RIWKH\*URXSIRUWKHEHQHࢉWRILWVVKDUHKROGHUVDV a whole ੳ WKHVNLOOVH[SHULHQFHEDFNJURXQGLQGHSHQGHQFH DQGH[SHUWLVHRIFXUUHQWPHPEHUVRIWKH%RDUG and its Committees – Report annually in the Governance Report of the Annual Report and Accounts on the implementation of the Board D&I Policy and RWKHUPDWWHUVDVUHTXLUHGE\WKH&RGHDQG RWKHUUHJXODWRU\DQGVWDWXWRU\UHTXLUHPHQWV – Review the Board D&I Policy at least annually and recommend any revisions to the Board #### Nomination Committee report continued 5HࢊHFWLQJWKHVHDVSLUDWLRQVWKH%RDUGZLOODLPWR PHHWDQ\UHFRPPHQGDWLRQVVHWRXWE\WKH)76( Women Leaders review (formerly Hampton- Alexander Review) and the Parker Review. The Board places high emphasis on ensuring the development of diversity in the senior leadership roles across the Group and supports and oversees WKH\*URXSȆVDPELWLRQRIZRUNLQJWRZDUGVWR RIVHQLRUOHDGHUVEHLQJZRPHQDQGWR EHLQJHWKQLFDOO\GLYHUVHE\ Currently, this Policy is not applied to Board Committees individually, although we strive to apply similar representation across the &RPPLWWHHV7KH%RDUGLVFRPIRUWDEOHWKDW WKHGLYHUVLW\RIWKH%RDUGLVUHࢊHFWHGDFURVVWKH &RPPLWWHHPHPEHUVKLSVDQGWKDWWKLVUHPDLQV an ongoing consideration. Responsibilities, monitoring and reporting The Chair of the Board will lead the Board’s GLYHUVLW\DJHQGDDQGVHWPHDVXUDEOHREMHFWLYHV with the aim of continuously improving D&I JHQHUDOO\XOWLPDWHO\OHDGLQJWREHWWHUGHEDWHDQG decision making. 7KH%RDUGZLOOEHH[SHFWHGWRUROHPRGHO LQFOXVLYHODQJXDJHEHKDYLRXUVDQGSUDFWLFHLQ DOOXQGHUWDNLQJVIRUDQGRQEHKDOIRIWKH\*URXS setting a clear tone from the top. The Board places great emphasis on ensuring that LWVPHPEHUVKLSUHࢊHFWVGLYHUVLW\LQLWVEURDGHVW VHQVH:HEHOLHYHDNH\GULYHULQGHOLYHULQJRXU organisational diversity commitments is through D%RDUGZKLFKKDVDEDODQFHRIVNLOOVSHUVRQDO and cognitive strengths, experience, diversity, independence and knowledge. Consideration LVJLYHQWRWKHFRPELQDWLRQRIGHPRJUDSKLFV skills, experience, ethnicity, age, gender and RWKHUUHOHYDQWSHUVRQDODWWULEXWHVRQWKH%RDUG to provide the range of perspectives, insights and challenge needed to support good decision making. New appointments are made on merit, taking DFFRXQWRIWKHVSHFLࢉFVNLOOVDQGH[SHULHQFH independence and knowledge needed to ensure a GLYHUVHDQGURXQGHG%RDUGDQGWKHEHQHࢉWVHDFK FDQGLGDWHFDQEULQJWRWKHRYHUDOOFRPSRVLWLRQRI the Board and its Committees. Objectives 2EMHFWLYHVIRUDFKLHYLQJ%RDUGGLYHUVLW\DUH periodically reviewed. The Board aspires to EHFRPSULVHGRI – $WOHDVWZRPHQ – At least one of the senior Board positions (Chair, CEO, CFO or Senior Independent Director) is a woman – At least one Director from an ethnically diverse EDFNJURXQGZLWKDWDUJHWRIE\WR UHࢊHFWWKHRYHUDOO\*URXSWDUJHWIRUVHQLRUUROHV KHOGE\HWKQLFDOO\GLYHUVHH[HFXWLYHV The Board acknowledges that in periods of Board FKDQJHWKHUHPD\EHWLPHVZKHQWKLVEDODQFHLV not maintained. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 90 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Nomination Committee report continued #### The findings of the Committee’s #### evaluation demonstrated that itoperated effectively and #### continues to discharge its duties. Diversity statistics as at 31 March 2024 Reporting table on gender representation Number of Board members Percentage of the Board Number of senior positions on the Board (CEO, CFO, SID and Chair) Number of senior leaders Percentage of senior leaders Men 4  2   Women  243 1RWVSHFLࢉHGSUHIHUQRWWRVD\ 00 00 Reporting table on ethnicity representation Number of Board members Percentage of the Board Number of senior positions on the Board (CEO, CFO, SID and Chair) Number of senior leaders Percentage of senior leaders White British or other White (including minority-white groups) 7  4   Mixed / Multiple Ethnic Groups 0 0 0 3  Asian / Asian British 2  07 %ODFN$IULFDQ&DULEEHDQ Black British 0 0 0 0  2WKHUHWKQLFJURXSLQFOXGLQJ$UDE 00 01 1RWVSHFLࢉHGSUHIHUQRWWRVD\ 00 0  Methodology of data collection Data in respect of our senior leaders is compiled WKURXJKRXUHPSOR\HHGDWDEDVHDQGFROOHFWHGRQ DVHOIUHSRUWLQJEDVLVRIVHQLRUOHDGHUV VHOIUHSRUWHGHWKQLFLW\YLDWKLVGDWDEDVHLQFOXGLQJ QRWVSHFLࢉHGSUHIHUQRWWRVD\DQGLGHQWLࢉHG as non-white. Data in respect of the Board is FROOHFWHGRQDVHOIUHSRUWLQJEDVLVDQGDJUHHG GLUHFWO\ZLWKWKH%RDUGPHPEHUV Board evaluation 7KH&RPPLWWHHOHGE\WKH&KDLURIWKH%RDUGLV UHVSRQVLEOHIRURYHUVHHLQJWKH%RDUGHYDOXDWLRQ process. This year the Board underwent an internal evaluation. The Committee also considered the remaining DFWLRQVWDNHQLQUHVSRQVHWRIHHGEDFNIURPWKH previous external review undertaken in 2022/23 and monitored progress against the agreed DFWLRQV)XOOGHWDLOVRIERWKWKHHYDOXDWLRQDQG actions against the previous year’s evaluation DUHSURYLGHGRQSDJHVDQG Committee governance Committee structure and meetings The Committee is comprised of independent PHPEHUV7KHUHZHUHQRFKDQJHVWRWKH &RPPLWWHHPHPEHUVKLSGXULQJWKH\HDU The Committee held four scheduled meetings during the year and held a further one unscheduled meeting to consider the CFO selection process and appointment. Details of DWWHQGDQFHDWPHHWLQJVFDQEHIRXQGRQSDJH ,QDGGLWLRQWRWKHPHPEHUVWKHUHJXODUDWWHQGHHV at the meetings of the Committee have included the CEO, CFO, CPO and the Company Secretary. The Committee Chair attends the Company’s AGM DQGLVKDSS\WRDQVZHUDQ\TXHVWLRQVIURP shareholders on matters falling within the &RPPLWWHHȆVUHVSRQVLELOLWLHV Meetings of the Committee generally take place VKRUWO\EHIRUH%RDUGPHHWLQJVDQGDFWLYLWLHVRIWKH &RPPLWWHHDUHUHSRUWHGE\WKH&KDLUWRWKH%RDUG as a separate agenda item. Committee responsibilities 7KH&RPPLWWHHȆVFKLHIUHVSRQVLELOLWLHVKDYHQRW changed during the year. The Committee’s Terms of Reference are reviewed formally and approved annually and set out its principal duties in full, including its authority to carry out its duties. 7KHVHDUHDYDLODEOHDWrsgroup.com. Committee evaluation As part of the internal evaluation, the Committee examined its own performance and operational HࢆHFWLYHQHVV7KH&RPPLWWHHPHPEHUVDJUHHG WKDWWKHPHHWLQJVFRQWLQXHGWREHZHOOUXQ with appropriate levels of detail presented. All respondents felt well informed and involved LQWKHVSHFLࢉFDWLRQDQGDSSURDFKWRWKH recruitment activity which occurred during the \HDU$VUHSRUWHGRQSDJHWKHUHZDVVWURQJ IHHGEDFNLQUHVSHFWRIWKHQHHGWRSURYLGHJUHDWHU focus on succession planning in the coming year. 7KHRYHUDOOࢉQGLQJVRIWKHHYDOXDWLRQ demonstrated that the Committee operated HࢆHFWLYHO\DQGFRQWLQXHVWRGLVFKDUJHLWVGXWLHV in line with its Terms of Reference. Gender and ethnicity representation The FCA, in its capacity as the UK Listing Authority, LQWURGXFHGQHZUXOHVGXULQJWKDWUHTXLUH OLVWHGFRPSDQLHVWRSXEOLVKLQIRUPDWLRQRQJHQGHU and ethnic representation on the Board and in H[HFXWLYHPDQDJHPHQWUROHV/57KLV LVRXUࢉUVW\HDUUHSRUWLQJLQIXOODJDLQVWWKHVH UHTXLUHPHQWV7KHWDEOHVEHORZRXWOLQHWKHFXUUHQW gender and ethnic diversity of the Board and our senior leaders. Definition of senior leader Permanent and temporary employees who operate at a senior level in the Group and typically, DOWKRXJKQRWH[FOXVLYHO\DUHWKHPHPEHUVRI ExCo and their direct reports (including directors RIVXEVLGLDU\HQWLWLHV&RQWUDFWRUVDQGDJHQF\ VWDࢆDUHQRWLQFOXGHG,QIRXUWHPSRUDU\ employees (three female and one male) were also H[FOXGHG,QREMHFWLYHWHUPVWKLVLVDQ\RQHLQDUROH VL]HGDVD:LOOLV7RZHUV:DWVRQJOREDOJUDGHRI RUDERYHRUHTXLYDOHQWLQQHZDFTXLVLWLRQV RS Group plc Annual Report and Accounts for the year ended 31 March 2024 91 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Audit Committee report ### AUDIT ### COMMITTEE ### REPORT #### Dear shareholder As Chair of the Audit Committee (the Committee), I am pleased to present the Committee’s Report for the year ended 31 March 2024. The purpose of WKLV5HSRUWLVWRGHVFULEHWKHZRUNXQGHUWDNHQE\ the Committee and explain how it has discharged LWVUHVSRQVLELOLWLHVWKURXJKRXWWKH\HDU The Committee’s main role is to monitor and UHYLHZWKHLQWHJULW\RIWKH&RPSDQ\ȆVࢉQDQFLDO information. This includes recommending to the Board whether the Company’s Annual Report and $FFRXQWVWDNHQDVDZKROHLVIDLUEDODQFHGDQG XQGHUVWDQGDEOHDQGZKHWKHUWKHDVVHVVPHQWRI the Group’s going concern assumptions and ORQJHUWHUPYLDELOLW\DUHUHDVRQDEOH7KH &RPPLWWHHLVDOVRUHVSRQVLEOHIRUSURYLGLQJ assurance to the Board that the Group’s internal FRQWUROVDQGULVNPDQDJHPHQWV\VWHPVDUHࢉW for purpose and regularly reviewed, as well as RYHUVHHLQJWKHHࢆHFWLYHQHVVDQGLQGHSHQGHQFH of the external Auditors, including recommending to the Board the approval of their fees and DSSRLQWPHQWRQDQDQQXDOEDVLV3Z&ZHUHWKH Company’s external Auditors for 2023/24 and 'HORLWWHZLOOEHWKH&RPSDQ\ȆVQHZH[WHUQDO $XGLWRUVIRU We continued to see professional, comprehensive DQGUREXVWZRUNLQDOODUHDVZKLFKKDVPHDQWWKDW WKH&RPPLWWHHKDVEHHQDEOHWRGLVFKDUJHLWV REOLJDWLRQVVHDPOHVVO\WKURXJKRXWWKH\HDU The Committee has continued to focus on the \*URXSȆVࢉQDQFLDOUHSRUWLQJLQFOXGLQJDSSURYLQJ the disclosures in relation to geopolitical uncertainties and climate change, impacts of LQࢊDWLRQWKH\*URXSȆVJRLQJFRQFHUQDQGYLDELOLW\ VWDWHPHQWVDQGWKH\*URXSȆVXVHDQGGHࢉQLWLRQV of alternative performance measures. The Committee has continued to focus on the key DFFRXQWLQJPDWWHUVVHWRXWRQSDJHVDQG All of these matters were conducted to the satisfaction of the Committee. We continue to monitor the Group’s progress on its ICFR programme to strengthen and formalise LWVࢉQDQFLDOSURFHVVHVDQGFRQWUROVIUDPHZRUN This will stand it in good stead for complying with the regulations coming out of the updated Code. The Committee has spent some time understanding all emerging ESG legislation and the related disclosures and reviewed the Group’s reporting approach to it, including the third year of reporting the climate-related risks and RSSRUWXQLWLHVLQUHODWLRQWRWKH\*URXSȆVREOLJDWLRQV XQGHU7&)'VHHSDJHVWR As part of its duties, the Committee has continued to review the Group’s information security and data protection controls, further details of which FDQEHIRXQGRQSDJH 2QEHKDOIRIWKH&RPPLWWHH,ZRXOGOLNHWRWKDQN RXULQWHUQDODXGLWDQGࢉQDQFHWHDPVIRUWKHLU FRQWULEXWLRQRYHUWKHSDVW\HDU,ZRXOGDOVROLNH to add thanks to PwC for their role as the Group’s $XGLWRUVVLQFHDQGVXEMHFWWRWKH$\*0 vote, to welcome Deloitte. ,ZLOOEHDYDLODEOHDVXVXDODWWKLV\HDUȆV$\*0WR DQVZHUDQ\VKDUHKROGHUTXHVWLRQVLQUHODWLRQWR audit matters. Louisa Burdett Chair of the Audit Committee 22 May 2024 We continue to monitor the Group’s progress on its internal controls over financial reporting programme to strengthen and formalise its financial processes and controls framework.” Key highlights Membership as at 22 May 2024 Louisa Burdett (Chair) Alex Baldock Navneet Kapoor David Sleath LOUISA BURDETT CHAIR OF THE AUDIT COMMITTEE Activities for 2023/24 – Oversight of the transition from PricewaterhouseCoopers LLP (PwC) to Deloitte LLP (Deloitte) as new external $XGLWRUVIURP – Reviewed and monitored the Group’s approach to risk, the risk management process and its internal control system – Evaluation of the performance of the internal audit function – Continued its focus on development of the Group’s information security strategy – Reviewed the progress of the second phase of the Group’s review of internal controls over ࢉQDQFLDOUHSRUWLQJ,&)5 – Reviewed the fair value determination of the DFTXLVLWLRQRI'LVWUHOHFFRPSOHWHGLQWKH\HDUDQG WKHLQLWLDOLQWHJUDWLRQDQGHࢆHFWLYHQHVVRIUHFHQW DFTXLVLWLRQVȆLQWHUQDOFRQWUROV\VWHPV – Reviewed the Group’s ESG reporting approach, including the update on its climate-related risks and opportunities in relation to TCFD Priorities for 2024/25 – Review the Group’s assessment of the impact of the Financial Reporting Council’s (FRC) updated UK Corporate Governance Code 2024 (the updated Code) in relation to internal controls and any necessary changes to the Group’s ICFR review and the extension to all material controls. Continue to monitor the Group’s progress in this review – Continue to review risks and opportunities for ongoing ESG reporting, including TCFD – 5HYLHZWKHLQWHJUDWLRQRIWKHDFTXLVLWLRQ DQGDVVHVVWKHLPSURYHPHQWLQWKHHࢆHFWLYHQHVV of its internal control systems – Monitor the transition to Deloitte as external Auditors Annual Report and Accounts for the year ended 31 March 2024 92 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION RS Group plc ![]() #### Audit Committee report continued #### KEY ACTIVITIES DURING THE YEAR #### MAY – 5HYLHZHGWKH\HDUHQGNH\DFFRXQWLQJMXGJHPHQWVDQGLVVXHVLQFOXGLQJWD[DQGDSSURYHGWKHLU DFFRXQWLQJWUHDWPHQWYLDELOLW\DQGJRLQJFRQFHUQDQGIDLUEDODQFHGDQGXQGHUVWDQGDEOHFULWHULD for recommendation to the Board – Reviewed the TCFD report for its recommendation to the Board – Recommended to the Board for approval the adoption of the Annual Report and Accounts for the year ended 31 March 2023 and the full-year results announcement – Reviewed non-audit fees and the Non-Audit Services Policy – Recommended to the Board for approval the re-appointment of PwC as Auditors for 2023/24 – 5HYLHZHGXSGDWHVUHJDUGLQJRSHUDWLRQDODXGLWUHSRUWVLQIRUPDWLRQVHFXULW\DQGTXDUWHUO\ZKLVWOHEORZLQJ #### JUL – Reviewed Group Operational Audit remit and performance – 5HYLHZHGWKHNH\DFFRXQWLQJMXGJHPHQWVDQGLVVXHV – Quarterly review of non-audit fees completed – Approved PwC’s audit plan for 2023/24 – 5HFHLYHGUHSRUWVIURPWKH'DWD3URWHFWLRQ2ࢇFHUDQGTXDUWHUO\ZKLVWOHEORZLQJUHSRUW – Review of operational audit reports – New external Auditors’ transition update received – Reviewed the external Auditors’ performance – Received an update on the ICFR programme #### OCT – 5HFHLYHGWKHKDOI\HDUNH\DFFRXQWLQJMXGJHPHQWVDQGLVVXHVLQFOXGLQJWD[DQGDSSURYHGWKHLU DFFRXQWLQJWUHDWPHQWJRLQJFRQFHUQDQGIDLUEDODQFHGDQGXQGHUVWDQGDEOHFULWHULDIRUUHFRPPHQGDWLRQ to the Board – Reviewed the draft interim results for recommendation to the Board – Quarterly review of non-audit fees completed – 5HYLHZRIWKHRQERDUGLQJSODQIRUWKHQHZH[WHUQDO$XGLWRUV – Reviewed PwC’s audit fees for 2023/24 and recommended their approval to the Board – 5HYLHZHGXSGDWHVUHJDUGLQJRSHUDWLRQDODXGLWUHSRUWVLQIRUPDWLRQVHFXULW\DQGTXDUWHUO\ZKLVWOHEORZLQJ #### FEB – Received the Group Operational Audit update, reviewed the Group’s risk and control assessment and DSSURYHGWKHRSHUDWLRQDODXGLWSODQ – 5HYLHZHGWKHNH\DFFRXQWLQJMXGJHPHQWVDQGLVVXHV – 2023/24 ESG reporting approach agreed, including TCFD actions and disclosure – Received an update on emerging ESG reporting regulations – ICFR update received, including a summary of the changes made to the updated Code in relation to internal controls – Quarterly review of non-audit fees completed – 5HYLHZHGWKH$QWL%ULEHU\&RUUXSWLRQ3ROLF\DQGSURFHGXUHV – 5HFHLYHGDUHSRUWIURPWKH'DWD3URWHFWLRQ2ࢇFHU – 5HYLHZHGWKHDQQXDOZKLVWOHEORZLQJDUUDQJHPHQWVDQGWKHTXDUWHUO\ZKLVWOHEORZLQJUHSRUW – New external Auditors’ transition update received #### FAIR, BALANCED AND UNDERSTANDABLE 7KH%RDUGLVUHTXLUHGWRFRQࢉUPWR the Company’s shareholders that the Annual Report and Accounts, taken DVDZKROHLVIDLUEDODQFHGDQG XQGHUVWDQGDEOHDQGSURYLGHVWKH necessary information and key PHVVDJHVWRHQDEOHVKDUHKROGHUV and other stakeholders to assess the Group and the Company’s position, SHUIRUPDQFHEXVLQHVVPRGHODQG strategy. The Committee advises the %RDUGRQZKHWKHUWKLVFRQࢉUPDWLRQ FDQEHPDGHDQGWKH&RPPLWWHH assesses whether it can make this UHFRPPHQGDWLRQWRWKH%RDUGE\ IROORZLQJLWVUHJXODUUREXVWDSSURDFK ZKLFKLV – (QVXULQJUHJXODWRU\UHTXLUHPHQWV for the Annual Report and Accounts were thoroughly understood. – Reviewing draft copies of the Annual Report and Accounts to assess and advise on direction and key PHVVDJHVZLWKDQHDUࢉQDOYHUVLRQ provided to the Committee and Board SULRUWRVLJQRࢆRIWKH$QQXDO5HSRUW and Accounts. – Assessing management’s fair, EDODQFHGDQGXQGHUVWDQGDEOH YHULࢉFDWLRQSURFHVVDQGUHYLHZLQJ its results. This included a cascaded VLJQRࢆDFURVVWKH\*URXSWR determine the accuracy, consistency and clarity of the data, information and language. – Reviewing the use and disclosure of alternative performance measures DQGFRQࢉUPLQJLWVEHOLHIWKDWVHSDUDWH GLVFORVXUHRIWKHVHPHDVXUHVHQDEOHV readers of the Annual Report and $FFRXQWVWRXQGHUVWDQGEHWWHUWKH XQGHUO\LQJࢉQDQFLDODQGRSHUDWLQJ performance of the Group. The alternative performance measures are consistent with prior years. The GHࢉQLWLRQVDQGUHFRQFLOLDWLRQVRI alternative performance measures DUHVHWRXWLQ1RWHRQSDJHV WR – Ensuring that a thorough review of the Annual Report and Accounts was XQGHUWDNHQE\DOODSSURSULDWHSDUWLHV including external advisors. The Committee has reviewed the Annual Report and Accounts for the year ended 31 March 2024 and has advised the Board that, in its opinion, the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary to assess the Group’s position and performance, business model and strategy. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 93 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Financial reporting The primary role of the Committee in relation to ࢉQDQFLDOUHSRUWLQJLVWRPRQLWRUWKHLQWHJULW\RIWKH \*URXSȆVSXEOLVKHGࢉQDQFLDOLQIRUPDWLRQLQFOXGLQJ UHYLHZLQJLWVIXOO\HDUDQGKDOI\HDUࢉQDQFLDO results. The Committee undertakes this with ERWKPDQDJHPHQWDQG3Z&DQGFRQFHQWUDWHV RQHQVXULQJFRPSOLDQFHZLWKWKHUHOHYDQWࢉQDQFLDO DQGJRYHUQDQFHUHSRUWLQJUHTXLUHPHQWV7KH Committee considers the principal accounting policies that are used when preparing these UHVXOWVDVZHOODVUHYLHZLQJWKHVLJQLࢉFDQW DFFRXQWLQJLVVXHVDQGDUHDVRIMXGJHPHQWPDGH DVQRWHGEHORZDQGRWKHUNH\DUHDVRIIRFXVDV QRWHGRQSDJH$OVRWKLVLQFOXGHVWKHIDLU EDODQFHGDQGXQGHUVWDQGDEOHUHYLHZDVGHVFULEHG LQPRUHGHWDLORQSDJH7KH&RPPLWWHHUHFHLYHV regular reports from the CFO and Group Financial Controller to support this work. Significant accounting issues and areas of judgement 0DQDJHPHQWLVUHTXLUHGWRH[HUFLVHMXGJHPHQW LQDQXPEHURIDUHDVZKHQSUHSDULQJWKH\*URXS accounts and the Company accounts. The &RPPLWWHHIRFXVHVRQDQ\VLJQLࢉFDQWDUHDVRI MXGJHPHQWWKDWPD\PDWHULDOO\LPSDFWWKH\*URXSȆV and Company’s reported results and assesses and challenges, if necessary, whether these MXGJHPHQWVDUHUHDVRQDEOHDQGDSSURSULDWH The Committee also reviews the clarity and transparency of the related disclosures. 7KHVLJQLࢉFDQWDFFRXQWLQJLVVXHVDQGDUHDVRI MXGJHPHQWFRQVLGHUHGE\WKH&RPPLWWHHGXULQJ the year, and how these were addressed, are set out to the right. #### Audit Committee report continued 6LJQLࢉFDQWDFFRXQWLQJLVVXHVDQGDUHDVRIMXGJHPHQW How the Committee addressed these matters and conclusions reached 5HWLUHPHQWEHQHࢉWREOLJDWLRQV 7KH\*URXSKDVDPDWHULDOGHࢉQHGEHQHࢉWSHQVLRQVFKHPHLQWKH 8.DQGVPDOOHUGHࢉQHGEHQHࢉWVFKHPHVLQWKH5HSXEOLFRI,UHODQG \*HUPDQ\)UDQFHDQG,WDO\DQGDFRQWULEXWLRQEDVHGSHQVLRQVFKHPH in Switzerland that guarantees a minimum rate of investment return DQGVRLVDFFRXQWHGIRUDVDGHࢉQHGEHQHࢉWSHQVLRQVFKHPH$W 0DUFKWKHWRWDOQHWGHࢉFLWLQUHODWLRQWRWKHVHUHWLUHPHQW EHQHࢉWREOLJDWLRQVZDVePLOOLRQePLOOLRQRI ZKLFKWKH8.ZDVePLOOLRQePLOOLRQ.H\ MXGJHPHQWVDUHPDGHLQUHODWLRQWRWKHDVVXPSWLRQVXVHGZKHQ YDOXLQJWKHUHWLUHPHQWEHQHࢉWREOLJDWLRQV6HH1RWHRQSDJHV WR 6PDOOFKDQJHVWRWKHDVVXPSWLRQVXVHGWRYDOXHWKH8.UHWLUHPHQWEHQHࢉW REOLJDWLRQSDUWLFXODUO\FKDQJHVLQERQG\LHOGVXVHGWRGHWHUPLQHWKHGLVFRXQWUDWH FDQKDYHDVLJQLࢉFDQWLPSDFWRQWKHࢉQDQFLDOSRVLWLRQDQGUHVXOWVRIWKH\*URXS 7KHDVVXPSWLRQVSXWIRUZDUGE\WKHDFWXDULHV+HDGRI\*URXS3HQVLRQVDQG\*URXS )LQDQFLDO&RQWUROOHUZHUHUHYLHZHGE\WKH&RPPLWWHH7KH&RPPLWWHHDOVRUHYLHZHG the external Auditors’ comparisons of the assumptions with those of other similar VFKHPHV$IWHUGLVFXVVLRQWKH&RPPLWWHHDJUHHGWKHUHDVRQDEOHQHVVRIWKH DVVXPSWLRQVXVHGLQYDOXLQJWKHUHWLUHPHQWEHQHࢉWREOLJDWLRQVDWWKHKDOI\HDU and year end. At the year end, the Audit Committee agreed with management’s decision to update WKHLQࢊDWLRQUDWHVHQVLWLYLW\DQDO\VLVWRVKRZWKHLPSDFWRIDPRYHPHQWDVWKLV LVFRQVLGHUHGWREHFXUUHQWO\DUHDVRQDEOHSRVVLEOHFKDQJH Inventories valuation Inventories represent a material proportion of the Group’s net DVVHWV$W0DUFKWKH\*URXSKDGePLOOLRQ ePLOOLRQRILQYHQWRULHVRQWKHEDODQFHVKHHW-XGJHPHQWV DUHPDGHLQHVWLPDWLQJWKHQHWUHDOLVDEOHYDOXHRILQYHQWRULHV $W0DUFKLQYHQWRU\SURYLVLRQVZHUHePLOOLRQ ePLOOLRQ6HQVLWLYLW\DQDO\VLVRQWKHDVVXPSWLRQVZDV SHUIRUPHGZKLFKLQGLFDWHVWKDWDQ\UHDVRQDEO\OLNHO\FKDQJHLQ DVVXPSWLRQVLQFOXGLQJWKHFXUUHQWJOREDOHFRQRPLFXQFHUWDLQW\DQG longer-term impacts of climate change and environmental regulations, is not expected to have a material impact on the current QHWUHDOLVDEOHYDOXHRILQYHQWRULHV6HH1RWHRQSDJH From an International Accounting Standard (IAS) 1 ‘Presentation of )LQDQFLDO6WDWHPHQWVȆSHUVSHFWLYHWKHMXGJHPHQWVLQYROYHGLQ HVWLPDWLQJWKHQHWUHDOLVDEOHYDOXHRILQYHQWRULHVGRQRWKDYHD VLJQLࢉFDQWULVNRIUHVXOWLQJLQDPDWHULDODGMXVWPHQWWRWKHFDUU\LQJ amount of inventories within the next year. However, the Committee EHOLHYHVWKDWLQYHQWRULHVDQGWKHLUPDQDJHPHQWDUHVRFULWLFDOWRWKH \*URXSȆVRSHUDWLQJPRGHOWKDWDUHDVRIMXGJHPHQWLQLQYHQWRULHV YDOXDWLRQDUHVLJQLࢉFDQWDQGUHTXLUHLWVSDUWLFXODUIRFXV 7KH\*URXSHVWLPDWHVWKHQHWUHDOLVDEOHYDOXHRILQYHQWRULHVLQRUGHUWRGHWHUPLQH WKHYDOXHRIDQ\SURYLVLRQUHTXLUHG7KHMXGJHPHQWVPDGHLQWKHPHWKRGRORJ\XVHG WRHVWLPDWHWKHQHWUHDOLVDEOHYDOXHUHODWHWRWKHQXPEHURI\HDUVRIVDOHVWKHUHDUH LQLQYHQWRULHVRIHDFKSURGXFWDQGWKHYDOXHUHFRYHUDEOHIURPWKHVHLQYHQWRULHV 7KHVHDVVXPSWLRQVDUHEDVHGRQUHFHQWH[SHULHQFHDQGNQRZOHGJHRIWKHSURGXFWV RQKDQGDQGDUHUHYLHZHGUHJXODUO\7KHLPSDFWRIWKHFXUUHQWJOREDOHFRQRPLF uncertainty and the longer-term impacts of climate change and environmental regulations on these assumptions were considered and the assumptions were DGMXVWHGZKHUHQHFHVVDU\WRHQVXUHWKH\UHPDLQDSSURSULDWH$OVRDGMXVWPHQWV were made to take account of the continued slowdown in sales of electronics SURGXFWVDQGVORZPRYLQJVLQJOHERDUGFRPSXWLQJSURGXFWVDQGWKHLULPSDFWRQ WKHQHWUHDOLVDEOHYDOXH7KHODWHVWUHYLHZZDVSUHVHQWHGWRWKH&RPPLWWHHDQGLW UHYLHZHGDQGDJUHHGWKHUHDVRQDEOHQHVVRIWKHDVVXPSWLRQV With the increase in the inventory provision due to the continued slowdown in the EXVLQHVVSXVKLQJLQYHQWRU\LQWRH[FHVVWKH&RPPLWWHHDJUHHGZLWKPDQDJHPHQWȆV GHFLVLRQWRXSGDWHWKHVHQVLWLYLW\DQDO\VLVWRFRQVLGHUWKHLPSDFWRIUHDVRQDEO\OLNHO\ decreases as well as increases to provisions. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 94 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Going concern and viability statements $VSDUWRIWKH&RPPLWWHHȆVUHVSRQVLELOLW\WR provide advice to the Board, the Committee reviewed and challenged the Group’s going concern assumptions at the half year and full year and reviewed and challenged the process and DVVHVVPHQWRIWKH\*URXSȆVORQJHUWHUPYLDELOLW\ at the full year. Management included a going concern statement in the Group’s half-year report. The Committee reviewed the process conducted to prepare this statement, including the assumptions used in the reverse stress tests. It recommended to the Board that it was appropriate to continue to adopt the JRLQJFRQFHUQEDVLVLQWKHKDOI\HDUUHVXOWV The Committee also reviewed and agreed the wording of the going concern statement and recommended its approval to the Board. )RUWKHYLDELOLW\VWDWHPHQWDQGJRLQJFRQFHUQ statement in the Annual Report and Accounts, the Committee reviewed the assessment period and reviewed and challenged the scenarios considered for each principal risk and the determination RIVHYHUHEXWSODXVLEOHVWUHVVWHVWVDQGUHYHUVH stress tests. The Committee reviewed the outcomes of these stress tests and, as a result, UHFRPPHQGHGWRWKH%RDUGWKDWLWLVDEOHWR FRQࢉUPWKH\*URXSȆVYLDELOLW\VWDWHPHQWDQGWKH going concern statement. Details of these VWDWHPHQWVFDQEHIRXQGRQSDJHVDQG of the Strategic Report. Other key areas of focus 7KH&RPPLWWHHDOVRUHYLHZVDQXPEHURIRWKHU NH\DUHDVWKDWUHTXLUHPDQDJHPHQWWRH[HUFLVH MXGJHPHQW7KHVHMXGJHPHQWVKDYHQRWKDGD VLJQLࢉFDQWHࢆHFWRQWKHDPRXQWVUHFRJQLVHGLQWKH accounts in the year ended 31 March 2024 nor are WKH\VLJQLࢉFDQWHVWLPDWHVZKLFKKDYHDVLJQLࢉFDQW ULVNRIUHVXOWLQJLQDPDWHULDODGMXVWPHQWWRWKH carrying amounts of the Group’s assets and OLDELOLWLHVZLWKLQWKHQH[W\HDU+RZHYHUWKH Committee focuses on these areas to ensure these MXGJHPHQWVDUHDOVRUHDVRQDEOHDQGDSSURSULDWH DQGWRHQVXUHWKH\KDYHQRWEHFRPHVLJQLࢉFDQW #### Audit Committee report continued Other key area of focus How the Committee addressed these matters and conclusions reached Fair values and goodwill on acquisition of businesses 7KH\*URXSFRPSOHWHGWKHDFTXLVLWLRQRI'LVWUHOHFRQ-XQH IRUFRQVLGHUDWLRQRIePLOOLRQ7KHSXUFKDVHSULFHDOORFDWLRQ UHVXOWHGLQJRRGZLOORIePLOOLRQDQGRWKHULQWDQJLEOHDVVHWV RIePLOOLRQ Judgements are made in relation to the assumptions and data used LQGHWHUPLQLQJWKHIDLUYDOXHVRIWKHLQWDQJLEOHDVVHWVDFTXLUHGDQG WKHJRRGZLOODULVLQJ6HH1RWHRQSDJHVDQG 7KH\*URXSUHYLHZHGWKHQHWDVVHWVDFTXLUHGLGHQWLI\LQJDQGIDLUYDOXLQJDOO WKHDVVHWVDQGOLDELOLWLHV)RUODUJHUDFTXLVLWLRQVWKH\*URXSHQJDJHVH[WHUQDO SURIHVVLRQDODGYLVRUVIRUWKHLGHQWLࢉFDWLRQDQGFDOFXODWLRQRIIDLUYDOXHVRILQWDQJLEOH DVVHWVZKLOHHQVXULQJWKDWWKHDVVXPSWLRQVDQGIRUHFDVWFDVKࢊRZVXVHGLQWKH YDOXDWLRQPRGHOVDUHUHDVRQDEOH The Committee reviewed the process, discussed it with management and the external Auditors and assessed the results of the work undertaken. The Committee FRQFOXGHGWKDWLWLVVDWLVࢉHGZLWKWKHIDLUYDOXHVDQGJRRGZLOODULVLQJRQDFTXLVLWLRQ RIEXVLQHVVHV Impairment of goodwill and other assets 7KHUHLVePLOOLRQRIJRRGZLOORQWKHEDODQFHVKHHWDW 0DUFKePLOOLRQ-XGJHPHQWVDUHPDGHLQ relation to the assumptions used in the value-in-use models which are used to assess impairment of goodwill and other assets when WKHUHDUHLQGLFDWRUVWKDWWKH\PD\EHLPSDLUHG The value of goodwill is reviewed regularly for impairment using value-in-use PRGHOVXVLQJFDVKࢊRZVDQGGLVFRXQWUDWHVDVVHWRXWLQ1RWHRQSDJHVWR 7KH&RPPLWWHHUHYLHZVWKHVHLPSDLUPHQWWHVWVHYHU\\HDULQFOXGLQJWKHPDLQ assumptions. These assumptions also include consideration of the impact of climate FKDQJH7KH&RPPLWWHHDJUHHVZLWKWKHWHVWVȆFRQࢉUPDWLRQWKDWWKHUHUHPDLQV DGHTXDWHKHDGURRPLQSODFHDQGQRLPSDLUPHQWSURYLVLRQLVUHTXLUHG Other assets are regularly reviewed to ensure there are no indicators that they may EHLPSDLUHG,IDQ\VLJQLࢉFDQWLPSDLUPHQWVDUHIRXQGWKH&RPPLWWHHZLOODOVRUHYLHZ WKHVHLPSDLUPHQWWHVWVLQFOXGLQJWKHPDLQDVVXPSWLRQVFRQࢉUPLQJWKDWWKH YDOXDWLRQLVUHDVRQDEOH 7KH&RPPLWWHHDOVRUHYLHZHGDQGDJUHHGZLWKWKHWUDGHUHFHLYDEOHLPSDLUPHQW allowance and disclosure in Note 23 on pages 162 and 163. 7KHVHRWKHUNH\DUHDVRIIRFXVLQWKH\HDUZHUH RS Group plc Annual Report and Accounts for the year ended 31 March 2024 95 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Other matters The Committee also carried out a range of other DFWLYLWLHVLQUHODWLRQWRࢉQDQFLDOUHSRUWLQJGXULQJ WKH\HDUZKLFKLQFOXGHG – Reviewing the impact of amendments to accounting standards adopted during the year – 5HYLHZLQJWKHHࢆHFWLYHWD[UDWHMXGJHPHQWV made in relation to the levels of tax contingencies IRUSRWHQWLDOFKDOOHQJHVE\ORFDOWD[DXWKRULWLHV DQGUHFRYHUDELOLW\RIORVVHVDQGUHOHYDQWGLVFORVXUHV – Approving the restatement of the service solutions disaggregation of revenue following management’s review of what it classes as service solutions – Reviewing and agreeing the accounting treatment and disclosure of any potential SRVWEDODQFHVKHHWHYHQWVDWERWKWKHKDOI\HDU and full year – Agreeing with management’s assessment that there are no indicators of impairment for the LQYHVWPHQWVWKH&RPSDQ\KROGVLQLWVVXEVLGLDULHV Internal control and risk management The Vice President Group Operational Audit and 5LVN93$XGLWDQG5LVNSURYLGHVTXDUWHUO\UHSRUWV to the Committee which cover the performance of the Group’s system of internal controls and its HࢆHFWLYHQHVVLQPDQDJLQJWKH\*URXSȆVSULQFLSDO risks and identifying any control failings or weaknesses. These reports highlight matters which might impact the delivery of the Group’s NH\VWUDWHJLFREMHFWLYHVRUZKLFKLQGLFDWH LPSURYHPHQWLVUHTXLUHGLQDQ\RIWKH\*URXSȆV processes or controls. The Committee carefully FRQVLGHUVWKHVHࢉQGLQJVDQGGLVFXVVHV appropriate actions where necessary. An annual review of the Group’s risk management SURFHVVHVLVXQGHUWDNHQE\WKH&RPPLWWHHDV UHTXLUHGE\WKH&RGHWKH)5&\*XLGDQFHRQ$XGLW Committees and the recommendations of the FRC Guidance on Risk Management, Internal Control and Related Financial and Business Reporting. These processes include material controls which FRYHUࢉQDQFLDORSHUDWLRQDODQGFRPSOLDQFH controls and risk management systems. The outcomes of these reviews are shared with the Board. 7KHVHLQFRPELQDWLRQZLWKRWKHUXSGDWHVWRWKH Board on the Group’s principal risks, allowed the %RDUGWRDVVHVVWKHHࢆHFWLYHQHVVRIWKH\*URXSȆV systems of internal control and residual risk prior to making its statement in this Annual Report and Accounts. Further information regarding the \*URXSȆVSULQFLSDOULVNVFDQEHIRXQGRQSDJHV to 37 of the Strategic Report. The internal control system and risk management SURFHVVKDYHEHHQLQSODFHGXULQJWKH\HDUDQGXS to the date of this Annual Report and Accounts. In WKHHYHQWZHDNQHVVHVDUHLGHQWLࢉHGLQWKHLQWHUQDO control system, plans for strengthening them are put in place and then regularly monitored. All the PRUHVLJQLࢉFDQWFRQWUROZHDNQHVVREVHUYDWLRQV where noted, have actions and agreed timelines assigned against them. ,QWHUQDOࢉQDQFLDOFRQWUROV ,QWHUQDOࢉQDQFLDOFRQWUROVDUHWKHV\VWHPVWKDW the Group employs to support the Board in GLVFKDUJLQJLWVUHVSRQVLELOLWLHVIRUࢉQDQFLDOPDWWHUV DQGWKHࢉQDQFLDOUHSRUWLQJSURFHVVDVGHVFULEHG RQSDJH 7KHPDLQHOHPHQWVLQFOXGH – $VVHVVPHQWVE\LQWHUQDODXGLWRQWKH HࢆHFWLYHQHVVRIRSHUDWLRQDOFRQWUROV – Clear terms of reference setting out the duties of the Board and its Committees, with delegation to management in all locations – Group Finance and Group Treasury manuals outlining accounting policies, processes and controls – :HHNO\PRQWKO\TXDUWHUO\DQGDQQXDOUHSRUWLQJ F\FOHVLQFOXGLQJWDUJHWVDSSURYHGE\WKH%RDUG and regular forecast updates – /RFDOOHDGHUVKLSWHDPVUHYLHZLQJࢉQDQFLDOUHVXOWV against forecast and agreed performance metrics and targets with overall performance UHYLHZHGDWUHJLRQEXVLQHVVDQG\*URXSOHYHOV – 6SHFLࢉFUHSRUWLQJV\VWHPVFRYHULQJWUHDVXU\ RSHUDWLRQVPDMRULQYHVWPHQWSURMHFWVDQGOHJDO DQGLQVXUDQFHDFWLYLWLHVZKLFKDUHUHYLHZHGE\ WKH%RDUGDQGLWV&RPPLWWHHVRQDUHJXODUEDVLV – :KLVWOHEORZLQJSURFHGXUHVDOORZLQJLQGLYLGXDOV WRUHSRUWIUDXGRUࢉQDQFLDOLUUHJXODULWLHVDQG other matters of concern In 2021/22, in advance of the regulations arising from the then Department of Business, Energy & Industrial Strategy’s corporate reform, the Group FRPPHQFHGDUHYLHZRILWV,&)57KHࢉUVWSKDVH completed during 2022/23, was to assess the \*URXSȆVࢉQDQFLDOUHSRUWLQJFRQWUROVDQGLGHQWLI\ ZKDWLPSURYHPHQWVVKRXOGEHPDGH7KHVHFRQG SKDVHWRDFWLRQWKHLPSURYHPHQWVUHTXLUHGWKHQ started and continued into 2023/24, although at DVORZHUSDFHGXHWRZDLWLQJIRUWKHSXEOLFDWLRQ of the updated Code in January 2024 and the Group’s review of its operating model. The goal LVWRLPSURYHDQGEXLOGRQRXUH[LVWLQJࢉQDQFLDO reporting controls focused on key areas. This will EHH[WHQGHGWRRWKHUUHOHYDQWLQWHUQDOFRQWURO DUHDVLPSDFWHGE\WKHXSGDWHG&RGHZKLFKZLOO apply to the Group’s year ending 31 March 2027. The Committee will continue to monitor the Group’s progress. Internal audit The work of the internal audit function spans the whole Group, including, as and when relevant, DFTXLUHGEXVLQHVVHVDQGSURYLGHVLQGHSHQGHQW DQGREMHFWLYHDVVXUDQFHRYHUWKH\*URXSȆVV\VWHPV RILQWHUQDOFRQWUROVWKURXJKDULVNEDVHGDSSURDFK The Committee reviews and approves the scope and resourcing of the internal audit plan annually with the VP Audit and Risk. The scope of the plan is GHWHUPLQHGE\UHIHUHQFHWRWKH\*URXSȆVRSHUDWLQJ risks and strategy as well as geographic, functional DQGH[WHUQDOULVNV7KH&RPPLWWHHUHYLHZV – The level and skills of resources allocated to the internal audit function to conduct this programme of work – The summary of the results of each audit and WKHEXVLQHVVWHDPȆVUHVROXWLRQRIDQ\FRQWURO LVVXHVLGHQWLࢉHG – 7KHHࢆHFWLYHQHVVRIWKHLQWHUQDODXGLWIXQFWLRQ The VP Audit and Risk has regular, open access to the Committee Chair. Discussions focus on audit planning and matters noted during internal audit DVVLJQPHQWV2WKHUPHPEHUVRIWKH&RPPLWWHH DUHDOVRDYDLODEOHDVUHTXLUHG7KH&RPPLWWHH meets with the VP Audit and Risk without the presence of management at least once a year. Other activities During the year, the Committee continued its focus on enhancing the Group’s information security strategy via regular updates from the Chief ,QIRUPDWLRQ6HFXULW\DQG&RPSOLDQFH2ࢇFHU (CISO). These included updates on information security risk assessments relating to our industrial control systems, including improvement actions ERWKXQGHUZD\DQGSODQQHG7HVWLQJRIDOORXU SULPDU\GLVWULEXWLRQVLWHVKDVQRZEHHQFRPSOHWHG DQGWKHSURMHFWZLOOVKRUWO\EHHQWHULQJLWVVHFRQG SKDVHZKLFKLQFOXGHVGHࢉQLQJIXWXUHPRQLWRULQJ solutions. Throughout the year, the Committee DOVRUHFHLYHGXSGDWHVRQRWKHUVSHFLࢉFLQIRUPDWLRQ security risks, upcoming regulatory changes and improvement actions, including strengthening IT access controls. The Committee continued with its reviews of the data protection compliance programme through UHSRUWVIURPWKH'DWD3URWHFWLRQ2ࢇFHU7KH Committee continued to provide oversight of the Group’s compliance with laws regarding the protection of personal data across its operations, including the General Data Protection Regulation and the UK’s Data Protection Act. The Committee received regular reports from the 'DWD3URWHFWLRQ2ࢇFHUKLJKOLJKWLQJRQJRLQJ compliance work such as training, targeted training for high risk teams and awareness campaigns to HPEHGDFXOWXUHRISULYDF\E\GHVLJQDVZHOODV assessments of the impact of material changes to the Group’s operations on its handling of personal GDWDVXFKDVVLJQLࢉFDQWFKDQJHVWRV\VWHPVDQG LQWHJUDWLRQRIDFTXLVLWLRQVDQGPRQLWRULQJRI changes in the regulatory environment. The Committee received updates on current and emerging ESG legislation during the year. It discussed and agreed the ESG reporting UHTXLUHPHQWVIRUDQGIXWXUH\HDUV including Scope 3 emissions and additional disclosures in the Group’s third TCFD report included in this Annual Report and Accounts. 7KH&RPPLWWHHZDVFRPIRUWDEOHWKDWWKH #### Audit Committee report continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 96 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() disclosures contain appropriate and accurate data and information and recommended to the Board that it approve the ESG disclosures in this Annual Report and Accounts, including the TCFD report. External Auditors Effectiveness, independence, tender and rotation 7KH&RPPLWWHHLVUHVSRQVLEOHIRUUHYLHZLQJWKH SHUIRUPDQFHDQGHࢆHFWLYHQHVVRIWKHH[WHUQDO Auditors, as well as their appointment and remuneration. A review of the external Auditors’ performance DQGHࢆHFWLYHQHVVLVXQGHUWDNHQE\WKH&RPPLWWHH each year. The review includes looking at TXDOLࢉFDWLRQH[SHUWLVHUHVRXUFHVDQG reappointment (where relevant) of the external Auditors, as well as ensuring that no issues have DULVHQZKLFKPLJKWDGYHUVHO\DࢆHFWWKHLU LQGHSHQGHQFHDQGREMHFWLYLW\ 7KHUHYLHZDOVRFRQVLGHUVKRZUREXVWWKH H[WHUQDODXGLWKDVEHHQDVZHOODVWKHTXDOLW\RI delivery. It also addresses the FRC’s Audit Quality Inspection Report on PwC and Deloitte as well DVDQ\IHHGEDFNUHFHLYHGIURPWKH\*URXSȆV senior managers. The Committee assessed how well the external Auditors have exercised professional scepticism and whether they have provided an appropriate degree of constructive challenge to management. The Committee also considers the risk of the external Auditors withdrawing from the market. PwC demonstrated professional scepticism and challenge on the valuation of inventories, WKHDFTXLVLWLRQIDLUYDOXHVRI'LVWUHOHFWKH UHFRYHUDELOLW\RIUHFHLYDEOHVDQGDVVXPSWLRQV LQWKHJRLQJFRQFHUQDQGYLDELOLW\DVVHVVPHQWV During the year, the Senior Statutory Audit Partner, Sandeep Dhillon, or the Audit Director, together ZLWKRWKHUUHOHYDQWDQGDSSURSULDWHPHPEHUV of the PwC audit team, attended all of the Committee’s meetings. In addition to PwC’s DWWHQGDQFH-RQ7KRPVRQZKRZLOOEHWKH\*URXSȆV Senior Statutory Audit Partner from Deloitte also DWWHQGHGPHHWLQJVIURP2FWREHURQZDUGVDV part of the external Auditors’ transition planning process. PwC provided reports and conclusions RQWKH\*URXSȆVNH\DFFRXQWLQJMXGJHPHQWV internal control processes, Annual Report and Accounts and half-year report. Following an external tender process in 2014, PwC was appointed as the Group’s external Auditors ZLWKWKHLUࢉUVWDXGLWEHLQJWKH$QQXDO Report and Accounts. In line with the Companies Act 2006 and as detailed in the Annual Report and $FFRXQWVWKH&RPSDQ\XQGHUWRRNDUREXVW SXEOLFWHQGHUSURFHVVIRUWKHDXGLWRIWKH$QQXDO Report and Accounts for the year ending 0DUFK$VDUHVXOWRIWKLVWKH&RPPLWWHH recommended to the Board that either PwC or 'HORLWWHZLWKDSUHIHUHQFHIRU'HORLWWHEH DSSRLQWHGDVWKHH[WHUQDO$XGLWRUVIRU The Board accepted this recommendation and SUHIHUHQFHDQGDUHVROXWLRQZLOOWKHUHIRUHEHSXW to shareholders at the forthcoming AGM to appoint Deloitte. Further details of how the Committee and the external Auditors work together, as well as how the external Auditors’ independence is maintained, FDQEHIRXQGLQWKHJRYHUQDQFHVHFWLRQRIRXU ZHEVLWH$VLQSUHYLRXV\HDUVȆUHSRUWVWKH &RPPLWWHHFDQFRQࢉUPWKDWWKH\*URXSGRHVQRW engage PwC to undertake any work that could DࢆHFWWKHLULQGHSHQGHQFH$VDUHVXOWRI'HORLWWHȆV transition to external Auditors, Deloitte resigned during the year from all non-audit work it provided to the Group and so no longer undertakes any ZRUNWKDWFRXOGDࢆHFWWKHLULQGHSHQGHQFH 7KH&RPPLWWHHKDVVDWLVࢉHGLWVHOIWKDWWKH Company has complied with the provisions of the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Processes and Audit Committee 5HVSRQVLELOLWLHV2UGHUSXEOLVKHGE\ the Competition and Markets Authority on 6HSWHPEHU Non-audit assignments undertaken by the Auditors The Group operates a policy to ensure that the provision of non-audit services does not impair the H[WHUQDO$XGLWRUVȆLQGHSHQGHQFHRUREMHFWLYLW\DQG that only permitted services are provided. In determining this policy, the Committee took into DFFRXQWSRVVLEOHWKUHDWVWRWKHH[WHUQDO$XGLWRUVȆ LQGHSHQGHQFHDQGREMHFWLYLW\ 7KHSROLF\RQQRQDXGLWVHUYLFHVLQFOXGHV – In providing a non-audit service, the external $XGLWRUVVKRXOGQRW ੳ Audit their own work ੳ Make management decisions for the Group ੳ Create a mutuality of interest ੳ Find themselves in the role of advocate for the Group – 7KHWRWDOQRQDXGLWIHHVIRUDQ\ࢉQDQFLDO\HDU VKRXOGQRWH[FHHGRIWKHDYHUDJHRIWKH external audit fee over the last three years. In practice, the non-audit fees are normally VLJQLࢉFDQWO\EHORZWKLVOHYHO The policy also states that the Committee has pre-approved the CFO to have authority to commission the external Auditors to undertake QRQDXGLWZRUNQRWFRYHUHGDERYHZKHUHWKHUH LVDVSHFLࢉFSURMHFWZLWKDFRVWWKDWLVQRWH[SHFWHG WRH[FHHGe Full details of our policy in relation to non-audit VHUYLFHVFDQEHIRXQGRQWKHJRYHUQDQFHVHFWLRQ RIRXUZHEVLWH7KLVSROLF\ZDVUHYLHZHGE\WKH Committee during the year and no changes ZHUHUHTXLUHG During the year under review there were DXGLWUHODWHGDVVXUDQFHVHUYLFHVRIePLOOLRQ and no other non-audit fees for PwC compared to DXGLWIHHVRIePLOOLRQ)XUWKHULQIRUPDWLRQRQ IHHVSD\DEOHWR3Z&DUHLQFOXGHGLQ1RWHRQ page 140. 7KH&RPPLWWHHKDVVDWLVࢉHGLWVHOIWKDWLWVXVHRI WKHH[WHUQDO$XGLWRUVFRPSOLHVZLWKERWKWKH&RGH and the FRC’s Ethical and Auditing Standards regarding the scope and level of non-audit work DQGQRQDXGLWIHHVLQFXUUHGE\WKH\*URXS Fraud 7KH&RPPLWWHHLVUHVSRQVLEOHIRUUHYLHZLQJWKH Group’s procedures for the prevention and detection of fraud. Suspected cases of fraud must EHUHSRUWHGWRWKH&RPSDQ\6HFUHWDU\RU\*HQHUDO &RXQVHOZLWKLQKRXUVDQGLQYHVWLJDWHGE\ operational management, Group Compliance or internal audit, as appropriate. The outcome of any investigation is reported to the Company Secretary, General Counsel and the CFO. A register of all suspected fraudulent activity and the outcome of any investigation is maintained and FLUFXODWHGWRWKH%RDUGRQDUHJXODUEDVLVZLWK the Committee also receiving regular updates. 7KH\*URXSWDNHVVWHSVLQOLQHZLWKJRRGEXVLQHVV practice to detect and prevent fraudulent activity, DQGLVSUHSDULQJIRUWKHQHZUHTXLUHPHQWVRIWKH Economic Crime and Corporate Transparency Act related to fraud prevention. The Committee is pleased to report that there were no frauds of a material nature discovered during the year, DOWKRXJKWKH\*URXSLVVXEMHFWWRYDULRXV attempts at external and low-level credit card and online fraud. #### Audit Committee report continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 97 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Whistleblowing In accordance with the provisions of the Committee’s Terms of Reference, the Committee LVUHVSRQVLEOHIRUUHYLHZLQJWKHDUUDQJHPHQWV ZKHUHE\DOORIWKH\*URXSȆVHPSOR\HHVPD\LQ FRQࢉGHQFHUDLVHFRQFHUQVDERXWLOOHJDOXQHWKLFDO RULPSURSHUEHKDYLRXURURWKHUPDWWHUVDQGIRU ensuring that these concerns are investigated and HVFDODWHGDVDSSURSULDWH5HSRUWVPD\EHUDLVHG directly to senior management or through an H[WHUQDOWKLUGSDUW\UHSRUWLQJWRRO:KLVWOHEORZLQJ LVUHIHUUHGWRLQWHUQDOO\DV6SHDN8SDQGLVDYDLODEOH to all of the Group’s employees. The Committee receives aggregated reports on matters raised through these services and monitors their resolution. The Group’s existing policies and SURFHGXUHVDGRSWHGJOREDOO\KDYHEHHQ XSGDWHGWRUHࢊHFWWKHRQJRLQJLPSOHPHQWDWLRQ DFURVV(80HPEHU6WDWHVRIWKH(XURSHDQ :KLVWOHEORZLQJ'LUHFWLYH7KH\*URXSZLOOFRQWLQXH to monitor any national laws that implement DGGLWLRQDOUHOHYDQWUHTXLUHPHQWVDQGPDNHDQ\ UHTXLUHGFKDQJHVWRSROLFLHVDQGSURFHGXUHV where appropriate. For further information see page 60. Committee governance Committee structure and meetings The Committee acts independently of management to ensure the interests of our shareholders are protected properly in relation WRࢉQDQFLDOUHSRUWLQJULVNDQGLQWHUQDOFRQWURO $OOPHPEHUVRIWKH&RPPLWWHHDUHLQGHSHQGHQW 1RQ([HFXWLYH'LUHFWRUVZLWKVXࢇFLHQWO\ ZLGHUDQJLQJEXVLQHVVH[SHULHQFHH[SHUWLVHDQG FRPSHWHQFHWRHQDEOHWKH&RPPLWWHHWRIXOࢉOLWV UHVSRQVLELOLWLHVHࢆHFWLYHO\7KHUHZHUHQRFKDQJHV WRWKHPHPEHUVKLSRIWKH&RPPLWWHHGXULQJWKH year. Louisa Burdett is a chartered accountant DQGKDYLQJKHOGVHQLRUࢉQDQFLDOPDQDJHPHQW positions, has extensive knowledge and H[SHULHQFHRIࢉQDQFLDOPDUNHWVWUHDVXU\ULVN PDQDJHPHQWDQGࢉQDQFLDODFFRXQWLQJVWDQGDUGV %LRJUDSKLHVIRUWKH&RPPLWWHHPHPEHUVDUHVHW RXWRQSDJHVDQG The Committee held four scheduled meetings during the year. Meetings were held in line with WKHࢉQDQFLDODQGUHSRUWLQJF\FOHVRIWKH&RPSDQ\ Meetings are generally held prior to Board PHHWLQJVVRWKDWRSWLPXPFROODERUDWLRQZLWK the Board is maintained. The Committee Chair provides updates to the Board on the proceedings, FRQVLGHUDWLRQVDQGࢉQGLQJVRIHDFKPHHWLQJ The Committee Chair extends invitations to certain other key individuals to attend meetings, including the Chair of the Board, other Non-Executive 'LUHFWRUVZKRDUHQRWPHPEHUVRIWKH&RPPLWWHH the CEO, CFO, the Company Secretary, Group Financial Controller, VP Audit and Risk and the external Auditors. The CISO also attends to provide regular updates on the Group’s Information 6HFXULW\VWUDWHJ\7KH'DWD3URWHFWLRQ2ࢇFHU attends meetings twice a year to give updates on data protection matters. During the year, the Committee held separate sessions with the VP Audit and Risk and the external Auditors without the presence of management. The VP Audit and Risk and the external Auditors have direct access to the Committee Chair outside of formal Committee meetings. Committee responsibilities 7KH&RPPLWWHHȆVFKLHIUHVSRQVLELOLWLHVKDYHQRW changed during the year. The Committee’s Terms of Reference are reviewed formally and approved annually and set out its principal duties in full, including its authority to carry out its duties, and DUHDYDLODEOHLQWKHJRYHUQDQFHVHFWLRQRIRXU ZHEVLWHrsgroup.com. 7KHFRUHIXQFWLRQVRIWKH&RPPLWWHHLQFOXGH – Supporting the Board in ensuring the integrity RIWKHࢉQDQFLDODQGFRUSRUDWHUHSRUWLQJDQG auditing processes – Assisting the Board in assessing the long-term YLDELOLW\RIWKH\*URXSE\UHYLHZLQJDQG challenging the scenarios considered and severe EXWSODXVLEOHVWUHVVWHVWLQJSHUIRUPHGRQWKH principal risks – Advising the Board on whether the half-year and IXOO\HDUࢉQDQFLDOUHSRUWVSUHVHQWDIDLUEDODQFHG DQGXQGHUVWDQGDEOHDVVHVVPHQWRIWKH\*URXSȆV position and prospects – (QVXULQJHࢆHFWLYHLQWHUQDOFRQWURODQGULVN management systems are in place – 0HDVXULQJWKH\*URXSȆVHࢆHFWLYHQHVVLQ managing risk and reviewing the risk LGHQWLࢉFDWLRQSURFHVV – Approving the remit of the internal audit function DQGUHYLHZLQJLWVHࢆHFWLYHQHVVDQGࢉQGLQJV – Ensuring that an appropriate relationship is PDLQWDLQHGEHWZHHQWKH\*URXSDQGLWVH[WHUQDO Auditors, including the recommendation to the Board to approve their appointment and fees – Monitoring progress of the Group’s information VHFXULW\VWUDWHJ\WRPLWLJDWHLWVPDMRUULVNV – 5HYLHZLQJWKHVFRSHDQGHࢆHFWLYHQHVVRIWKH external audit process – 5HYLHZLQJZKLVWOHEORZLQJIUDXGDQWLEULEHU\DQG corruption and data protection procedures Committee evaluation This year, the Board underwent an internal evaluation of its performance and the activities of the Committee were reviewed as part of this process. The results of the evaluation demonstrated that the Committee continued WRRSHUDWHHࢆHFWLYHO\DQGSURYLGHGVXࢇFLHQW challenge, and that the composition worked ZHOOZLWKDJRRGEDODQFHRIH[SHULHQFH.H\ recommendations arising include launching a FDPSDLJQWRUDLVHDZDUHQHVVRIWKHZKLVWOHEORZLQJ hotline and its purpose and further enhancements WR&RPPLWWHHSDSHUVWRLPSURYHWKHTXDOLW\DQG shorten the length. )XUWKHUGHWDLOVRIWKHHYDOXDWLRQSURFHVVFDQEH IRXQGLQWKH\*RYHUQDQFH5HSRUWRQSDJHV DQG #### Audit Committee report continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 98 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Simon Pryce Target: 400% of base salary Owned Outright: 141% Kate Ringrose Target: 400% of base salary Owned Outright: 0% Adjusted PBT Target: £359.1m Maximum: £374.1m Threshold: £339.1m Actual: £280.5m Outcome as % of maximum Like-for-like revenue change Target: 1.0% Maximum: 3.0% Threshold: (2.0)% Actual: (8)% Adjusted free cash flow Actual: £151.2m Target: £197.4m M ax i mum: £207 . 4 m Threshold: £177.4m CO 2 e reduction Actual: 10% Target: 5.5% Maximum: 8.0% Threshold: 4.2% #### Directors’ Remuneration report ### REMUNERATION ### AT A GLANCE #### 2023/24 PERFORMANCE Like-for-like revenue change (8)% 2022/23: 10% $GMXVWHGSURࢉWEHIRUHWD[3%7 £281m 2022/23: £391m $GMXVWHGHDUQLQJVSHUVKDUH(36 43.8p 2022/23: 63.6p CO 2 HUHGXFWLRQ6FRSHDQGHPLVVLRQV 10% 2022/23: 21% 5HWXUQRQFDSLWDOHPSOR\HG52&( 17.4% 2022/23: 30.8% 3HUIRUPDQFHPHDVXUHV Simon Pryce Target: 10% Actual: 10% Kate Ringrose Target: 10% Actual: 7.5% Individual strategic targets #### ALIGNMENT WITH BROADER EMPLOYEE REWARDS 100% of employees are eligible to participate in an incentive plan 10% at least 10% of employees own RS Group shares Final annual incentive outcome Simon Pryce Kate Ringrose 25% 22.5% Underpin adjustment Underpin adjustment 0% 0% #### 2024 SALARY INCREASES 3% Executive Director salaries will increase by 3% HࢆHFWLYH-XQH 3% UK employees will receive an average pay increase of HࢆHFWLYH-XQH 3.1% employees globally will receive an average pay LQFUHDVHRILQ #### 2023/24 ANNUAL INCENTIVE OUTCOME #### SHARE OWNERSHIP REQUIREMENTS Owned outright Target Simon Pryce and Kate Ringrose joined the Company on 3 April 2023 and 2 October 2023 respectively RS Group plc Annual Report and Accounts for the year ended 31 March 2024 99 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() ### REMUNERATION ### COMMITTEE ### REPORT JOAN WAINWRIGHT CHAIR OF THE REMUNERATION COMMITTEE #### Directors’ Remuneration report continued #### Dear shareholder On behalf of the Remuneration Committee (the Committee), I am pleased to present the Directors’ Remuneration Report for the year ended 0DUFK ZDVDFKDOOHQJLQJ\HDUIRUWKH\*URXSZLWK continued external headwinds and the unwinding of the post-pandemic trading tailwinds. A summary RIWKHࢉQDQFLDOSHUIRUPDQFHRIWKH\*URXSLVVHW RXWRQSDJHVWR:KLOHWKHࢉQDQFLDOUHVXOWV were disappointing, we have strengthened and empowered our ExCo to position the Company for future success. Full details of the remuneration outcomes are detailed on pages 106 and 107. Consideration of the wider workforce experience :HFRQWLQXHWRHQVXUHUHPXQHUDWLRQRXWFRPHV align with wider Company performance to drive positive experiences for all our stakeholders. The wellbeing of our people remains an ongoing priority for the Group. Throughout the year we helped support our people in various ways including: – $FRPSHWLWLYHEDVHSD\LQFUHDVHLQ-XQH (with an average UK increase of 5% for management and 5.9% for non-management); in countries where it was permitted, a higher proportion of the available budget was awarded to non-management employees to support those impacted most heavily by the continued KLJKLQࢊDWLRQDU\HQYLURQPHQW – :HLQFUHDVHGWKHQXPEHURIHPSOR\HHV participating in an incentive plan globally from 87% to 100% including extending the Group Annual Incentive Plan to RS Integrated Supply employees in the US, to align with their colleagues in other geographies – Granted RS YAY! Awards to all Risoul employees employed on the date the Group acquired Risoul – Enhanced our UK medical plan to include support for menopause, fertility treatment and neurodivergent conditions – ([WHQGHGOLIHDQGDFFLGHQWLQVXUDQFHEHQHࢉWVWR our employees in Australia and New Zealand, DOLJQLQJZLWKWKHLU$VLD3DFLࢉFEDVHGFROOHDJXHV There was a continued focus on promoting VXVWDLQDEOHEHQHࢉWVLQFOXGLQJDࢊHHWRSHQGD\ in Corby, UK, demonstrating the range of vehicle RࢆHULQJVDYDLODEOHDQGWKHEHQHࢉWVRIK\EULGDQG electric vehicles over traditional fuel vehicles. :HFRQWLQXHWROLVWHQWRRXUSHRSOHWRXQGHUVWDQG KRZZHFDQLPSURYHRXUEHQHࢉWRࢆHULQJVWRUHࢊHFW RXUGLYHUVHZRUNIRUFHDWGLࢆHUHQWOLIHVWDJHV Our proposed base pay increases for our UK HPSOR\HHSRSXODWLRQIRU-XQHLVH[SHFWHG to be an average of 3%. Sharing success Giving our people a chance to share in our collective success remains a priority through the provision of incentive plans and all employee share plans. Our senior leaders participate in Long Term Incentive Plan (LTIP) programmes, with many also EHLQJSDUWRIRXU-RXUQH\WR\*UHDWQHVV/7,3$ZDUG -\*/7,3$ZDUGDQGWKHPDMRULW\RIRXUSHRSOH continue to participate in the RS YAY! share award. :HZLOOFRQWLQXHWRFRQVLGHURWKHUZD\VWRKHOS our people share in our overall success including reviewing the design of the Group Annual Incentive and equity plans below executive level and extending share purchase plans more broadly. Consideration of shareholder feedback The Committee noted that the 2023 Directors’ Remuneration Report (2023 DRR) received a vote of more than 20% against at the 2023 AGM. For many years, the Company has been committed to an ongoing dialogue with shareholders on the issue of executive remuneration. Prior to the 2022 AGM, at which the current Policy was approved, we conducted an extensive multi-phased shareholder consultation process, which helped to shape the ࢉQDOSURSRVDOV:HDFNQRZOHGJHGDWWKDWWLPH that some had concerns around the potential PD[LPXPTXDQWXPDYDLODEOHXQGHUWKH-\*/7,3 Award, but concluded that implementation was supported by the majority of major shareholders and was in the best interests of the Company and its stakeholders. Activities for 2023/24 – 5HYLHZHGDQGDOLJQHGUHPXQHUDWLRQ outcomes with Company performance – Approved remuneration structure for the CFO, Kate Ringrose, and ExCo members – Consideration of future reward framework – Appointed a new remuneration advisor, Alvarez & Marsal (A&M) – Continued commitment to shareholder engagement and review of shareholder feedback 3ULRULWLHVIRU – Review of the Remuneration Policy (Policy) in readiness for implementation of new Policy in 2025; early engagement with key stakeholders on proposed changes – Ensuring that both short and long-term incentive GHVLJQDQGRXWFRPHVFRQWLQXHWRUHࢊHFWWKH performance of the Company, the experience of all our stakeholders and support delivery of the strategy – Refresh the Company reward philosophy to underpin the Company strategy and values – Aligning the employee global recognition programme with the new Company values – Maintaining an active and open dialogue with shareholders and ensuring their views are sought and considered when determining executive remuneration Key highlights 0HPEHUVKLSDVDW0D\ -RDQ:DLQZULJKW&KDLU Alex Baldock Louisa Burdett David Sleath RS Group plc Annual Report and Accounts for the year ended 31 March 2024 100 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Directors’ Remuneration report continued In order to align our incoming CEO, Simon Pryce, with the remuneration structure in place for the rest of the management team (and also the wider HPSOR\HHSRSXODWLRQ6LPRQZDVJUDQWHGD-\* LTIP Award on appointment in April 2023. This was reduced on a pro-rata basis and based on the same exceptionally stretching performance WDUJHWV:HHQJDJHGZLWKRYHURIRXU shareholder register in advance of the 2023 AGM and, while most of our largest shareholders were supportive, we recognise and acknowledge WKDWVRPHVKDUHKROGHUVDQGDQLQࢊXHQWLDOYRWLQJ advisory body, were not supportive of this approach. The Committee also acknowledges that certain votes against the 2023 DRR were based on concerns around the exit arrangements for the former CFO, David Egan. Since the 2023 AGM, we have conducted a further round of engagement, writing to our largest 30 shareholders, representing over 81% of the UHJLVWHU:HUHFHLYHGDVPDOOQXPEHURIUHVSRQVHV LQHDFKFDVHZHOFRPLQJWKHRࢆHUWRHQJDJHEXW noting that it was not felt to be necessary given the extensive prior consultation referred to on page 100. It should also be noted that our new &)2.DWH5LQJURVHGRHVQRWSDUWLFLSDWHLQWKH-\* LTIP Award, as she joined after the agreed deadline IRUSDUWLFLSDWLRQDQGWKDW-\*/7,3$ZDUGVWRRXU former CEO and CFO lapsed in full on cessation of their employment. The Committee would like to thank our shareholders who have engaged with us during the year. The perspectives of our shareholders form an important part of the Committee’s deliberations and we reiterate our commitment to this open dialogue, particularly as we develop our 2025 Remuneration Policy where our intention is to continue to seek to drive strategic performance and sustainable shareholder value through our incentive programmes. #### KEY ACTIVITIES DURING THE YEAR #### MAY – Approved the 2022/23 Annual Incentive and 2020 LTIP Award outcomes – Set objectives for the coming year for the CEO – Reviewed senior management pay outcomes – Approved the remuneration package for the interim CFO – Approved CEO and senior management 2023 share awards and approved the proposed awards for the ExCo – Approved the grant of RS YAY! Awards to Risoul employees – $SSURYHGWKH'55WREHSXWWRVKDUHKROGHUVDWWKH-XO\$\*0 – Reviewed approach to the wider workforce remuneration for the year #### JUL – Approved the remuneration package for the new CFO #### NOV – Approved the appointment of A&M as the new independent advisor to the Committee #### DEC – Approved LTIP grants to eligible people who joined the Company in the period May to December 2023 – Considered the approach to reward for the wider workforce – Reviewed the current status of share ownership of senior leaders #### FEB – Discussed the proposed refresh of the Group pay philosophy – &RQVLGHUHGWKHSURSRVHG$QQXDO,QFHQWLYHDQG/7,3GHVLJQ – Reviewed shareholder consultation during the year and considered further action – 'LVFXVVHGWKH\*HQGHU3D\\*DSUHSRUW – Received a market update from A&M #### MAR – 5HYLHZHGWKHLQLWLDOYLHZRIWKHRXWFRPHVIRUWKH$QQXDO,QFHQWLYHDQG/7,3DJDLQVWWKHSHUIRUPDQFHWDUJHWV – $SSURYHGWKHSD\UHYLHZIRUWKH([HFXWLYH'LUHFWRUVDQG([&R – $SSURYHGLQSULQFLSOH([HFXWLYH'LUHFWRU$QQXDO,QFHQWLYHDQG/7,3GHVLJQ – Approved fees for the Chair of the Board – 5HYLHZHGWKHࢉQDOGHVLJQRIWKH$QQXDO,QFHQWLYHDQGHTXLW\SODQVGHVLJQEHORZWKHH[HFXWLYHOHYHO – Reviewed the proposed actions to address the Gender Pay Gap – Reviewed the Terms of Reference for the Committee and the All Employee Share Plan Committee – Reviewed the Committee evaluation outcome RS Group plc Annual Report and Accounts for the year ended 31 March 2024 101 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Directors’ Remuneration report continued Incentive outcomes for the year ended 31 March 2024 7KHDQQXDOLQFHQWLYHPHDVXUHVZHUH adjusted PBT, like-for-like revenue change, DGMXVWHGIUHHFDVKࢊRZDQG&2 2 e reduction (Scope 1 and 2 emissions). Additionally, for the ࢉUVWWLPH([HFXWLYH'LUHFWRUVKDGLQGLYLGXDO VWUDWHJLFPHDVXUHVZLWKWDUJHWVVHWIRU The formulaic incentive outcome for the year was 25% of maximum for Simon and 22.5% for Kate, driven by the strong performance of the CO 2 e reduction (Scope 1 and 2 emissions) and achievement of their individual objectives, ZKLFKDUHGHWDLOHGRQSDJH5HࢊHFWLQJRXU established commitment to a high performance culture, the incentive is subject to a robust adjusted PBT underpin. As a result of the challenging trading and market conditions, the adjusted PBT underpin was not achieved and therefore no incentive is payable to either of the ([HFXWLYH'LUHFWRUV)XUWKHUGHWDLORIWKHVSHFLࢉF targets and the performance delivered are set out on page 107. Additionally, neither Simon nor Kate participated in the 2021 LTIP Award and did not have an LTIP award vest during the year. For reference, the 2021 LTIP Award which was based on performance over WKHWKUHH\HDUVHQGHG0DUFKZLOOYHVWDW 50% of maximum. Full details are set on page 107. The Committee believes in creating a remuneration structure that incentivises and rewards sustainable performance and that allows us to attract and retain senior leaders globally WRGHOLYHUWKH\*URXSVWUDWHJ\HࢆHFWLYHO\7KH Committee recognises that the zero-incentive outcome for both of the Executive Directors GRHVQRWUHࢊHFWWKHLUHࢆRUWVQRUWKHVLJQLࢉFDQW underlying progress they have made in very challenging market conditions. Therefore, while the Committee has followed the Policy without exercising discretion, it does not feel the remuneration outcomes for the Executive 'LUHFWRUVUHࢊHFWWKHLUDFFRPSOLVKPHQWV Remuneration arrangements for Kate Ringrose I would like to take this opportunity to welcome Kate to the Group as CFO and an Executive Director of the Board. Kate was appointed on 2 October 2023 and her remuneration package was determined by the Committee in line with our Policy, taking into account her experience and background, the external environment and appropriate market data. Kate’s base salary on appointment, of £500,000, UHࢊHFWHGKHUSUHYLRXVH[SHULHQFHDVD)76( CFO, and her experience in helping to lead high performance organisations that improve business resilience, drive operational excellence and deliver accelerated strategic growth. Additionally, the Committee considered benchmarking data and the remuneration of the prior CFO. Other aspects of the package were in line with our Policy (as VXPPDULVHGRQSDJHVDQGZLWKWKH DQQXDOLQFHQWLYHRSSRUWXQLW\IRUWLPH pro-rated from Kate’s start date. The Committee carefully considered the approach to compensating Kate for the forfeiture of equity awards from her previous employment with Centrica plc. It was determined that two replacement awards would be granted and that these would remain subject to performance conditions where appropriate and would mirror the vesting and release schedule of the forfeited awards. The full details of these replacement share awards can be found on page 109. Kate is a great asset to the Group and the Board and has the right leadership style and experience to support Simon in leading the Group to future VXFFHVVDVGHVFULEHGRQSDJH'HWDLOVRIWKH CFO recruitment and selection process are set out on page 89. Remuneration approach for the year ending 31 March 2025 Consistent with prior practice when reviewing base pay for the Executive Directors, a combination of performance, market position and relativity to the wider workforce was considered. After careful consideration it was agreed to award both Simon and Kate a 3% increase to base salary in alignment with the average expected for the UK wider workforce. Other aspects of the package for Executive Directors will be in accordance with the Policy. The Annual Incentive will be based on DEDODQFHGVHWRINH\ࢉQDQFLDODQGVWUDWHJLFWDUJHWV for the year. The only change to the incentive structure from last year is a minor re-balance to the performance measures to increase the ZHLJKWLQJRIWKHFDVKPHDVXUHUHࢊHFWLQJWKH strategic prioritisation of cash management in the current environment and reducing the weighting on revenue. The LTIP structure will be consistent ZLWKSULRU\HDUV:HZLOOFRQWLQXHWRVHWVWUHWFKLQJ targets to reward sustainable, long-term growth. Further details are set out on pages 105 and 106. In addition, we will be transitioning from a performance share to a restricted share LTIP below the ExCo to incentivise performance and drive retention in future policies. Consistent with the approach taken for the Executive Directors, the Committee also determined that the Chair’s fees should be increased by 2%. Full details are set out page 106. Appointment of new Remuneration Advisor Deloitte LLP stepped down as the independent remuneration advisor to the Committee in October 2023, following their appointment as the Group’s new external Auditors. Following a robust tender process, the Committee was pleased to appoint A&M as the new advisor from November 2023. Full details of the selection process can be found RQSDJH Looking forward Later this year, we will commence the review of our Remuneration Policy ahead of seeking shareholder DSSURYDODWWKH$\*0:HZLOOEHORRNLQJWR ensure that the incentive structure allows us to appropriately reward our Executive Directors for the delivery of sustainable performance and continued strategic execution in a challenging H[WHUQDOPDUNHW:HZLOODOVRUHYLHZWKHTXDQWXP of executive packages against evolving market practice, to ensure we can secure the talent we need to deliver our strategy, and address any potential retention risks, in a highly competitive global talent market. As ever, we plan to engage widely with our shareholders and I look forward to that consultation process later this calendar year. I would like to thank our shareholders for the time taken to engage with us during the year and their continued support at the last AGM, as well as all Committee members for their contribution during the year. I hope that you will join the Board in VXSSRUWLQJWKHUHVROXWLRQWRDSSURYHWKH Remuneration Report to be put to shareholders at WKH$\*0 Joan Wainwright Chair of the Remuneration Committee 22 May 2024 RS Group plc Annual Report and Accounts for the year ended 31 March 2024 102 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Directors’ Remuneration report continued ### SUMMARY OF THE ### 2022 REMUNERATION POLICY 2022 Remuneration Policy 7KH3ROLF\ZDVDSSURYHGE\VKDUHKROGHUVDWWKH$\*0KHOGRQ-XO\DQGEHFDPHHࢆHFWLYHIURPWKDWGDWH$VXPPDU\RINH\WHUPVLQWKH3ROLF\LVVHWRXWEHORZDQGWKHIXOO3ROLF\DVDSSURYHGE\VKDUHKROGHUV is available in the Corporate Governance section of our website at: rsgroup.com. Details of how the Policy has been applied during the year can be found throughout the Annual Report on Remuneration on pages 105 to 115. (OHPHQW Details Salary Established by considering scope and responsibilities of the role, skills and experience, scale and complexity of the Group, overall total compensation opportunity and competitive environment including consideration of appropriate market data for companies of broadly similar size, sector and international scope to RS Group plc. Salary increases will normally be based on the same framework which applies across the UK employee population. Pension and benefits Pension allowance aligned with the prevailing rate for the majority of the wider UK employee population (currently 10.5% of base salary). 2WKHUEHQHࢉWVLQFOXGHDFRPSDQ\FDURUFDVKDOORZDQFHLQOLHXDQGPHGLFDOLQVXUDQFH ([HFXWLYH'LUHFWRUVGRQRWQRUPDOO\UHFHLYHWRWDOWD[DEOHEHQHࢉWVH[FHHGLQJRIEDVHVDODU\ Annual incentive Maximum opportunity is 150% of base salary. %DVHGRQࢉQDQFLDODQGVWUDWHJLFSHUIRUPDQFHPHDVXUHVZKLFKWKH&RPPLWWHHFRQVLGHUVWREHDOLJQHGWRWKHVWUDWHJ\DQGWKHFUHDWLRQRIVKDUHKROGHUYDOXH6XFKPHDVXUHVLQFOXGHUHYHQXHSURࢉWFDVK ࢊRZ136DQG(6\*UHODWHGPDWWHUV Before any incentive may pay out, a threshold level of adjusted PBT must be achieved. For threshold performance, the incentive pay out will normally be nil, but in no circumstances will it exceed 10% of the maximum opportunity. For target performance, the incentive pay out will be no higher than 50% of the maximum opportunity. The Committee has discretion to adjust the formulaic incentive outcomes (including down to zero) to ensure alignment of pay with performance and fairness to shareholders and participants. One third of total incentive payment will be deferred as shares, which vest after two years. Dividend equivalents may be payable on shares which vest and will be delivered in the form of shares. Malus and clawback provisions apply. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 103 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Summary of the 2022 Remuneration Policy continued (OHPHQW Details LTIP award 7KHPD[LPXP/7,3DZDUGLQUHVSHFWRIDࢉQDQFLDO\HDUZLOOEHRIVDODU\ Awards vest after a performance period of three years, subject to the satisfaction of performance measures. The performance measures for awards are determined annually and will include metrics OLQNHGWRSURࢉWDELOLW\VKDUHKROGHUYDOXHDQGFDSLWDOHࢇFLHQF\ A further holding period of two years will apply post vesting. The level of vesting for threshold performance will be no higher than 25% of maximum. $GGLWLRQDOO\IRUWKHDZDUGWRYHVWWKH&RPPLWWHHPXVWEHVDWLVࢉHGWKDWWKHUHKDVEHHQDVXVWDLQHGLPSURYHPHQWLQWKH&RPSDQ\ȆVXQGHUO\LQJࢉQDQFLDOSHUIRUPDQFH7KH&RPPLWWHHKDVGLVFUHWLRQWR DGMXVWWKHIRUPXODLF/7,3RXWFRPHVLILWGRHVQRWUHࢊHFWDSSURSULDWHO\WKHXQGHUO\LQJSHUIRUPDQFHRYHUWKHSHULRGRULVQRWDSSURSULDWHLQWKHFRQWH[WRIFLUFXPVWDQFHVWKDWZHUHXQH[SHFWHGRU unforeseen when awards were made. Dividend equivalents may be payable on any shares vesting and will be delivered in the form of shares. Malus and clawback provisions apply. J2G LTIP Award 7KHPD[LPXP-\*/7,3$ZDUGZKLFKPD\EHJUDQWHGRYHUWKHOLIHRIWKH3ROLF\LVRIVDODU\IRUHDFKRIWKH([HFXWLYH'LUHFWRUVRQDRQHRࢆEDVLV 7KH-\*/7,3$ZDUGZLOOYHVWEDVHGRQWKHDFKLHYHPHQWRIH[FHSWLRQDOO\VWUHWFKLQJSHUIRUPDQFHWDUJHWVPHDVXUHGRYHUDSHUIRUPDQFHSHULRGRIWKUHH\HDUVWR0DUFK$IXUWKHUKROGLQJSHULRGRI two years will apply post vesting. The level of vesting for threshold performance is nil. $GGLWLRQDOO\IRUWKHDZDUGWRYHVWWKH&RPPLWWHHPXVWEHVDWLVࢉHGWKDWWKHUHKDVEHHQDVXVWDLQHGLPSURYHPHQWLQWKH&RPSDQ\ȆVXQGHUO\LQJࢉQDQFLDOSHUIRUPDQFH7KH&RPPLWWHHKDVGLVFUHWLRQWR DGMXVWWKHIRUPXODLF-\*/7,3$ZDUGRXWFRPHVLILWGRHVQRWDSSURSULDWHO\UHࢊHFWXQGHUO\LQJSHUIRUPDQFHRYHUWKHSHULRGRULVQRWDSSURSULDWHLQWKHFRQWH[WRIFLUFXPVWDQFHVWKDWZHUHXQH[SHFWHGRU unforeseen when awards were made. Dividend equivalents may be payable on any shares vesting and will be delivered in the form of shares. Malus and clawback provisions apply. $Q([HFXWLYH'LUHFWRUDSSRLQWHGGXULQJWKLV3ROLF\SHULRGPD\UHFHLYHD-\*/7,3$ZDUGWRDOLJQZLWKRWKHUPHPEHUVRIWKH([&R7KH&RPPLWWHHZRXOGVHWDQ\DZDUGOHYHOZLWKGXHUHJDUGWRWKH SURSRUWLRQRIWKH-\*/7,3$ZDUGSHUIRUPDQFHSHULRGZKLFKKDGHODSVHGDWWKHWLPHRIDSSRLQWPHQW Shareholding guidelines ([HFXWLYH'LUHFWRUVDUHH[SHFWHGWREXLOGXSDQGUHWDLQDSHUVRQDOKROGLQJLQ56\*URXSSOFVKDUHVRIRIVDODU\7KHUHLVDQH[SHFWDWLRQWKDW([HFXWLYH'LUHFWRUVUHWDLQDWOHDVWRIDQ\YHVWHG share awards until this guideline is met. Post-employment shareholding requirement ([HFXWLYH'LUHFWRUVPXVWUHWDLQDSHUVRQDOKROGLQJLQ56\*URXSSOFVKDUHVIRUDWZR\HDUSHULRGSRVWFHVVDWLRQRIHPSOR\PHQW7KLVPXVWEHHLWKHUHTXDOWRWKHLQHPSOR\PHQWJXLGHOLQHRULI lower, the actual shareholding at the date of cessation of employment. 7KHDFWXDOVKDUHKROGLQJDWFHVVDWLRQLQFOXGHVRQO\VKDUHVZKLFKKDYHYHVWHGRUDUHLQDGHIHUUDORUKROGLQJSHULRGRQDQHWRIWD[EDVLVIURPDVKDUHDZDUGZKLFKZDVJUDQWHGDIWHUWKHHࢆHFWLYHGDWHRI the 2022 Remuneration Policy. #### Directors’ Remuneration report continued RS Group plc Annual Report and Accounts for the year ended 31 March 2024 104 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() #### Directors’ Remuneration report continued Remuneration Policy implementation for the year ending 31 March 2025 Executive Directors Base salary %DVHVDODU\IRUWKH([HFXWLYH'LUHFWRUVHࢆHFWLYHIURP-XQHDUHVKRZQEHORZ Base salary effective 1 June 2024 Base salary on appointment 1 Change Simon Pryce £772,697 £750,191 3% Kate Ringrose £515,000 £500,000 3%  7KHVDODULHVIRU6LPRQ3U\FHDQG.DWH5LQJURVHZHUHHࢆHFWLYHIURPWKHLUUHVSHFWLYHVWDUWGDWHV$SULODQG2FWREHU :KHQXQGHUWDNLQJLWVUHYLHZRIWKH([HFXWLYH'LUHFWRUVȆEDVHVDODULHVWKLV\HDUWKH&RPPLWWHHFRQVLGHUHG a combination of performance, market position and relativity to the wider workforce. After careful consideration it was agreed to award both Simon and Kate a 3% increase to base salary in recognition of their strong performance and in alignment with the average expected for the wider UK workforce. Benefits %HQHࢉWVZLOOEHSURYLGHGLQDFFRUGDQFHZLWKWKH3ROLF\7KHUHDUHQRFKDQJHVLQEHQHࢉWVFRPSDUHGWRWKH prior year. Pension The pension rate for Executive Directors is 10.5% of base salary, which aligns with the rate for the majority of the wider UK employee population. Performance-related annual incentive The maximum annual incentive opportunity for Executive Directors will remain unchanged at 150% of base salary. 7KHDQQXDOLQFHQWLYHZLOOEHEDVHGRQDEDODQFHGVHWRINH\ࢉQDQFLDODQGVWUDWHJLFWDUJHWVIRUWKH\HDUDV set out below: Performance measure Weighting Adjusted PBT 30% $GMXVWHGIUHHFDVKࢊRZ 30% Like-for-like Group revenue change 15% CO 2 e reduction (Scope 1 and 2 emissions) 15% Individual strategic targets 10% The measures remain consistent with prior years, with an adjustment to weightings to increase focus on FDVKWRUHࢊHFWWKHVWUDWHJLFSULRULWLVDWLRQRIFDVKPDQDJHPHQWLQRXUFXUUHQWHQYLURQPHQWDQGUHGXFLQJ WKHZHLJKWLQJRQUHYHQXH7KHVSHFLࢉFWDUJHWVDUHFRQVLGHUHGFRPPHUFLDOO\VHQVLWLYHDVWKH\PD\UHYHDO information that damages our competitive advantage. Accordingly, they will not be disclosed in advance but, to the extent the Directors consider them to be no longer sensitive, will be disclosed retrospectively in the annual report on remuneration for the relevant year. The Committee retains the discretion within the Policy to adjust the overall incentive outcome to ensure alignment of pay with performance and fairness to shareholders and participants. Before any incentive may be paid, a threshold level of adjusted PBT must be achieved. One-third of any incentive earned by Executive Directors will be deferred into shares for a further two years under the Deferred Share Bonus Plan (DSBP). 2024 LTIP Award %RWK6LPRQ3U\FHDQG.DWH5LQJURVHZLOOEHJUDQWHGD/7,3$ZDUGRIRIVDODU\LQDFFRUGDQFH with the Policy. The performance measures of adjusted EPS and total shareholder return (TSR) are consistent with the prior year. The bespoke TSR peer group of 16 of the Group’s global peers (as set out below) will remain unchanged. Vesting of these awards will be determined in accordance with the following performance targets measured over the three years ending 31 March 2027. Measure Weight Threshold (25% of max) Maximum (100% of max) Adjusted EPS CAGR (three-year CAGR of the 2026/27 DGMXVWHG(36FRPSDUHGZLWKWKHDGMXVWHG(36 1 50% 5% 10% TSR (vs industrial / electronic peer group) 1,2 50% Median Upper Quartile 52&(DYHUDJHRI 3 Underpin 15% If the underpin is not met, the Committee will review the formulaic level of vesting and consider whether it would be appropriate to use its discretion to adjust the level of vesting. 1. Straight-line vesting between measurement points. 2. TSR peer group comprises ABB, Arrow Electronics, Avnet, Bunzl, Datwyler, Essentra, Fastenal, Ferguson, MSC Industrial Direct, Rexel, 5RFNZHOO6FKQHLGHU6LHPHQV7(&RQQHFWLYLW\:(6&2,QWHUQDWLRQDODQG::\*UDLQJHU 3. The ROCE underpin has been set at a reduced level from prior years to adjust for the impact of the Risoul and Distrelec acquisitions. ### ANNUAL REPORT ### ONREMUNERATION This part of the Remuneration Report has been prepared in accordance with Part 3 of the revised Schedule 8 set out in The Large and Medium-sized Companies and Groups (Account and Reports) (Amendment) Regulations 2013 and Listing Rule 9.8.6R. The Annual Report on Remuneration will be put to an advisory shareholder vote at the forthcoming AGM. RS Group plc Annual Report and Accounts for the year ended 31 March 2024 105 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS OTHER INFORMATION ![]() Taking account of internal forecasts of performance over the performance period, the challenging market conditions in which the Group operates, our long-term growth ambitions and the expectations of the investment community of the Group’s future potential performance, the adjusted EPS targets are considered to be appropriately stretching. The ROCE underpin has been set at a lower level than the prior year award, to adjust for the impact of recent acquisitions. The award will be subject to a post-vesting holding period of two years. All employee share plans ([HFXWLYH'LUHFWRUVFDQSDUWLFLSDWHLQDQ\DOOHPSOR\HHVKDUHVFKHPHVRࢆHUHGWRDOOHPSOR\HHVRQ identical terms, with the exception that they are not able to participate in the all employee RS YAY! Award. Chair and Non-Executive Directors Following a review, the fees for the Chair and Non-Executive Directors will be increased by 2%. The pay LQFUHDVHVIRU8.HPSOR\HHVDUHH[SHFWHGWREHDQDYHUDJHRI:LWKHࢆHFWIURP$SULOWKH&KDLUȆV IHHVLQFUHDVHGIURPeWReDQGWKH1RQ([HFXWLYH'LUHFWRUVȆIHHVZHUHLQFUHDVHGIURP £66,601 to £67,935. The additional fees for the Audit and Remuneration Committee Chairs and Senior Independent Director (£15,000) and roles in respect of employee engagement (£5,000) remain unchanged. Implementation of Executive Director 2022 Remuneration Policy for the year ended 31 March 2024 Single figure for total remuneration for Executive Directors (audited) 7KHIROORZLQJWDEOHSURYLGHVDVLQJOHࢉJXUHIRUWRWDOUHPXQHUDWLRQRIWKH([HFXWLYH'LUHFWRUVIRUWKH \HDUHQGHG0DUFKDQGWKHSULRU\HDU7KHYDOXHRIWKHDQQXDOLQFHQWLYHLQFOXGHVWKHHOHPHQW of incentive deferred under the DSBP, where relevant. Simon Pryce Kate Ringrose David Egan 2024 1 2023 2024 1 2023 2024 1 2023 Base salary £749,383 – £250,000 – £45,138 £469,235 Double hatting allowance 2 ––– ––£82,051 7D[DEOHEHQHࢉWV 3 £17,169 – £7,323 – £1,538 £15,970 3HQVLRQEHQHࢉW  £78,770 – £26,250 – £4,740 £60,673 7RWDOࢉ[HG £845,322 – £283,573 – £51,416 £627,929 Annual incentive 5 ––– ––£300,694 LTIP 6, 8 ––£89,397 ––£544,806 SAYE award discount 7 £4,606 – £4,606 ––– Total variable £4,606 – £94,003 ––£845,500 Total £849,928 – £377,576 – £51,416 £1,473,429  7KHWRWDOUHPXQHUDWLRQIRU'DYLG(JDQLQGHWDLOVKLVDFWXDOHDUQLQJVXSWR0D\ZKHQKHVWHSSHGGRZQDV&)2DQG DVD'LUHFWRURIWKH%RDUG7KHWRWDOUHPXQHUDWLRQIRU6LPRQ3U\FHDQG.DWH5LQJURVHUHࢊHFWVWKHLUUHVSHFWLYHDSSRLQWPHQWGDWHV of 3 April 2023 and 2 October 2023 and excludes Simon’s fees for the period of the year he was a Non-Executive Director, which are detailed on page 110. 2. David Egan was paid a double hatting allowance of £200,000 per annum, pro rata for the period 3 November 2022 to 2 April 2023 for acting in the role of CEO.  7D[DEOHEHQHࢉWVFRQVLVWVRIPHGLFDOLQVXUDQFHFDUDOORZDQFHDQGSHUVRQDOIXHODOORZDQFHZKHUHUHFHLYHG  6LPRQUHFHLYHGWKHDPRXQWVVKRZQDERYHDVDFDVKVXSSOHPHQWLQOLHXRISHQVLRQ.DWH5LQJURVHUHFHLYHGDFRQWULEXWLRQRIeWR WKHGHࢉQHGFRQWULEXWLRQSHQVLRQSODQDQGUHFHLYHGDIXUWKHUeDVDFDVKVXSSOHPHQWLQOLHXRISHQVLRQ1R([HFXWLYH'LUHFWRU KDVSURVSHFWLYHEHQHࢉWVXQGHUDGHࢉQHGEHQHࢉWSHQVLRQUHODWLQJWRTXDOLI\LQJVHUYLFH 5. Annual incentive shows the full value of the annual incentive in respect of each year. The incentive is subject to service conditions set out in the Policy, which is available in the Corporate Governance section of our website at rsgroup.com)RUWKHIRUPXODLF RXWFRPHRIWKHLQFHQWLYHKDVUHVXOWHGLQQRLQFHQWLYHEHLQJSDLGWR([HFXWLYH'LUHFWRUV)XUWKHUGHWDLORIWKHIRUPXODLF outcome can be found on page 107. For 2022/23 David’s incentive was delivered without the share deferral element, the full detail RIWKLVDZDUGFDQEHIRXQGRQSDJHRIODVW\HDUȆVUHSRUW  7KH/7,3$ZDUGYDOXHIRUVKRZVWKHYDOXHRI'DYLG(JDQȆVDZDUGZKLFKYHVWHGRQ-XQH7KHYDOXHRIWKH/7,3 $ZDUGKDVEHHQUHVWDWHGEDVHGRQWKHVKDUHSULFHRQWKHGDWHRIYHVWLQJRIS7KHࢉJXUHLQFOXGHVGLYLGHQGHTXLYDOHQWVKDUHVRI £26,620 to David Egan in respect of the shares vesting. The value of David’s award declined over the period between grant and vest by eGXHWRVKDUHSULFHGHSUHFLDWLRQ  7KH6DYH$V