<<

Directors’ Report

The Directors present their Annual Report and audited Financial Statements of plc (the “Company”) and its subsidiaries (together, the “Group”) for the financial year ended 31 December 2016. References to the Company may also include references to the Group. Information required to be part of the Directors’ Report can be found elsewhere in the Annual Report and is incorporated into this report by reference.

Ascential plc is a public company limited by shares, incorporated in and . It has a premium listing on the Stock Exchange. The Group is an international business-to-business media company with a focused portfolio of market-leading events and information services products.

Results and dividends The Group’s and Company’s audited financial statements for the year ended 31 December 2016 are set out on pages 87 to 134.

The Directors recommend the payment of a final dividend of 3.2p per Ordinary Share. Subject to shareholders’ approval at the 2017 AGM, the final dividend is expected to be paid on 15 June 2017 to Ordinary Shareholders registered as at the close of business on 19 May 2017.

Together with the interim dividend of 1.5p per Ordinary Share paid on 4 November 2016, this makes a total for the year of 4.7p per Ordinary Share.

Directors and Directors’ interests The following individuals were Directors of the Company for the year ended 31 December 2016, and to the date of approving this report unless otherwise stated:

Appointed Resigned Scott Forbes Chairman 11 Jan 2016 – Duncan Painter Chief Executive Officer 4 Jan 2016 – Mandy Gradden Chief Financial Officer 4 Jan 2016 – Paul Harrison Independent Non-Executive Director 21 Jan 2016 – Judy Vezmar Independent Non-Executive Director 21 Jan 2016 – Gillian Kent Independent Non-Executive Director 21 Jan 2016 – Rita Clifton Senior Independent Non-Executive Director 12 May 2016 – Tom Hall Non-Executive Director 11 Jan 2016 5 Sept 2016 David Pemsel Non-Executive Director 11 Jan 2016 5 Sept 2016

All current Directors will stand for election at the 2017 AGM.

At each AGM, each Director then in office shall retire from office with effect from the conclusion of the meeting. When a Director retires at an AGM in accordance with the Articles of Association of the Company, the Company may, by ordinary resolution at the meeting, fill the office being vacated by re-electing the retiring Director. In the absence of such a resolution, the Directors shall have power at any time to appoint any person to be a Director either to fill a casual vacancy or as an additional Director but not so that the total number of Directors shall exceed the maximum number fixed by or in accordance with the Articles.

The remuneration and share interests of the Directors who held office at 31 December 2016 are set out in the Annual Report on Remuneration on pages 77 to 82. The Directors’ Remuneration Report contains details of the terms of employment of the Executive Directors, and the terms of appointment of the Chairman and the Non-Executive Directors.

On 1 December 2016, the Apax Shareholders and GMG disposed of 66,000,000 ordinary shares in Ascential through a private placing, such that each of their holdings were subsequently reduced and such that the Apax Shareholders hold 14.5% and GMG Shareholders hold 8.7% of the issued share of the Company.

Changes to the Company’s Articles The Company’s Articles of Association may only be amended by a special resolution at a general meeting of shareholders. No amendments are proposed to be made to the existing Articles of Association at the forthcoming AGM.

Authority to allot shares Under the Companies Act 2006, the Directors may only allot shares if authorised to do so by shareholders in a general meeting. The authority conferred on the Directors at a general meeting of shareholders held on 8 February 2016 under section 551 of the 2006 Act expires on the date of the forthcoming AGM, and ordinary resolution 14 seeks a new authority to allow the Directors to allot ordinary shares up to a maximum nominal amount of £2,670,283 (267,028,333 shares, representing approximately two-thirds of the Company’s existing share capital at 25 February 2017), of which 1,335,141 shares (representing approximately one-third of the Company’s issued ordinary share capital) can only be allotted pursuant to a rights issue. The Directors have no present intention of exercising this authority which will expire at the conclusion of the AGM in 2018 or 11 August 2018 if earlier. 60

Ascential plc Annual Report 2016 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

Authority to purchase own shares Rights attaching to shares By a resolution passed at the meeting of shareholders held on All ordinary shares (this being the only share class of the 8 February 2016, the Company was authorised to make market Company) have the same rights (including voting and dividend purchases of up to 40,000,000 of its ordinary shares, subject rights and rights on a return of capital) and restrictions as set to minimum and maximum price restrictions. This authority will out in the Articles. expire at the conclusion of the forthcoming AGM. As at the date of this report, the Company has not exercised any powers Without prejudice to any rights attached to any existing shares to purchase the Company’s ordinary shares. and subject to relevant legislation, the Company may issue shares with such rights or restrictions as determined by either The Directors will seek authority from shareholders at the the Company by ordinary resolution or, if the Company passes forthcoming AGM for the Company to purchase, in the market, a resolution to so authorise them, the Directors. up to a maximum of 40,054,250 of its own ordinary shares either to be cancelled or retained as treasury shares. The Subject to legislation, the Articles and any resolution of the Directors have no present intention of exercising this authority Company, the Directors may offer, allot (with or without which will expire at the conclusion of the AGM in 2018 or conferring a right of renunciation), grant options over or 11 August 2018 if earlier. otherwise deal with or dispose of any shares to such persons, at such times and generally on such terms as the Directors may Share capital decide. The Company may issue any shares which are to be The Company’s issued share capital at 31 December 2016 and redeemed, or are liable to be redeemed, at the option of the 24 February 2017 comprises 400,542,500 ordinary shares of Company or the holder, on such terms and in such manner as £0.01 each which are listed on the the Company may determine by ordinary resolution and the (LSE: ASCL.L). The ISIN of the shares is GB00BYM8GJ06. Directors may determine the terms, conditions and manner of redemption of any such shares. No such resolutions are Further information regarding the Company’s issued share currently in effect. capital and details of the movements in issued share capital during the year are provided in Note 31 to the Group’s financial Subject to recommendation of the Board, shareholders may statements. All the information detailed in Note 31 forms part receive a dividend. Shareholders may share in the assets of the of this report and is incorporated into it by reference. Company on liquidation.

Details of employee share schemes are provided in Note 10 Voting rights to the financial statements. Each ordinary share entitles the holder to attend, speak and vote at general meetings of the Company. A resolution put to Capital reduction the vote of the meeting shall be decided on a poll rather than During the year, the Company completed a reduction of share a show of hands in line with recommended best practice. capital whereby the entire amount standing to the credit of the Company’s share premium account was cancelled; 876,266,690 On a poll, every member who is present in person or by proxy deferred shares (which were issued by way of a bonus issue for shall have one vote for every share of which they are a holder. the purpose of capitalising the Company’s capital reserve) were The Articles provide a deadline for submission of proxy forms cancelled; and the nominal value of each issued ordinary share of not than less than 48 hours before the time appointed for in the capital of the Company was reduced from £0.10 to £0.01 the holding of the meeting or adjourned meeting. No member (the “Capital Reduction”). The Capital Reduction was necessary shall be entitled to vote at any general meeting either in person in order to provide the Company with the distributable or by proxy, in of any share held by him, unless all reserves required to support the dividend policy. amounts presently payable by him in respect of that share have been paid. Save as noted, there are no restrictions on voting The Capital Reduction was approved by a special resolution rights nor any agreement that may result in such restrictions. passed at a general meeting of the Company on 8 February 2016, and was formally approved by the High Court of Justice, Shares held by the Employee Benefit Trust (“EBT”) Chancery Division, on 8 June 2016. Following registration of The Group has an Employee Benefit Trust which can hold the order of the High Court with Companies House, the shares to satisfy awards under employee share schemes. Capital Reduction became effective on 8 June 2016. At 31 December 2016, the EBT held 538,890 shares. Voting rights in relation to any shares held in the EBT are exercisable Following the Capital Reduction, as at 8 June 2016, the issued by the trustee; however, in accordance with best practice share capital of the Company consists of 400,542,500 ordinary guidance, the trustee abstains from voting. shares of £0.01 each. The distributable reserves created by the Capital Reduction amount to £476.2m.

61

Ascential plc Annual Report 2016 Directors’ Report continued

Restrictions on transfer of securities The Articles do not contain any restrictions on the transfer of ordinary shares in the Company other than the restrictions imposed by laws and regulations.

On 9 February 2016, the Company entered into an underwriting agreement with the Executive Directors, the Apax and GMG shareholders, Merrill Lynch International, Goldman Sachs International (the “Joint Global Coordinators”), BNP Paribas, Deutsche Bank AG London Branch, and Numis Securities Limited (the “Underwriters”) in accordance with which the Apax and GMG shareholders agreed not to dispose of any ordinary shares in Ascential for a period of 180 days following Admission; and each of the Executive Directors agreed not to dispose of any ordinary shares in Ascential for a period of 360 days following Admission. Each member of the management team also agreed with the Company not to dispose of any ordinary shares in the Company for a period of 360 days following Admission.

Following the disposal of part of their shareholding on each of 1 September 2016 and 1 December 2016, Apax and GMG were subject to a lock-up for a period of 90 days for the remaining ordinary shares held by them.

All of the above arrangements are, or were, subject to certain customary exceptions.

Interests in voting rights Details of the share capital of the Company are set out in Note 31 to the financial statements.

As at 31 December 2016 and 24 February 2017, notifications of interests at or above 3% in the issued ordinary share capital of the Company had been received from the following:

At 31 December 2016 At 24 February 2017 Percentage of voting rights Percentage of voting rights Number of ordinary shares/ over ordinary shares of Number of ordinary shares/ over ordinary shares of Shareholder voting rights notified £0.01 each voting rights notified £0.01 each Old Mutual plc 74,898,846 18.70 76,254,618 19.04 Eden Debtco 2 S.a.r.l (a fund advised by Apax) 48,615,477 12.14 48,615,477 12.14 plc 34,866,087 8.70 34,866,087 8.70 BlackRock Inc. 22,999,099 5.74 24,412,566 6.09 AXA Investment Managers 24,218,035 6.05 24,218,035 6.05

Indemnities and insurance The Company maintained appropriate insurance to cover Directors’ and officers’ liability for itself and its subsidiaries and such insurance was in force for the whole of the financial year ending 31 December 2016.

The Company also indemnifies the Directors under deeds of indemnity for the purposes of section 236 of the Companies Act 2006. Such indemnities contain provisions that are permitted by the director liability provisions of the Companies Act 2006 and the Company’s Articles.

Environmental/carbon emissions Details of the Company’s and the Group’s greenhouse gas emissions are set out in the Corporate and Social Responsibility section on pages 48 to 49 and form part of this report by reference.

Political donations During the year no political donations were made.

Significant contracts The only significant agreements to which the Company is a party that take effect, alter or terminate upon a change of control of the Company are the Senior Facility Agreement dated 12 February 2016, which contains customary prepayment, cancellation and default provisions including mandatory repayment of all loans provided on a change of control.

In addition, the Company’s subsidiaries have venue agreements with The City of Cannes and the NEC Birmingham for the provision of a venue which requires a notification requirement only in the former and notification and best endeavours to ensure terms are maintained in the latter on a change of control.

62

Ascential plc Annual Report 2016 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS

Employee engagement and employment practices In February 2017, the Group announced that it had agreed The Board strives to instil a high performance culture with to acquire 100% of US-based media advisory and business strong ethical values. All employment decisions are made services provider Media Link for an initial cash consideration irrespective of colour, race, age, nationality, ethnic or national of $69m plus future earnouts expected to total between origin, sex, mental or physical disabilities, marital status or $42m and $62m. sexual orientation. For employees who may have a disability, the Group ensures proper procedures and equipment are in Going concern place to aid them. When it comes to training, career The going concern statement is set out on page 33 and is development and promotion, all employees are treated equally incorporated by reference and deemed to form part of this and job applications are always judged on aptitude. Further report. details on the Group’s policies on equal opportunities, employee engagement, employment policies, succession Annual General Meeting planning and women in senior management roles are set out in The AGM of the Company will take place at 11.00 am on the People and values section on pages 46 to 47 and form part 11 May 2017 at Coworth Park Hotel, Blacknest Road, Ascot, of this report by reference. Berkshire SL5 7SE, . All shareholders have the opportunity to attend and vote, in person or by proxy, Corporate Governance Code at the AGM. Further details on the Group’s Corporate Governance Code are set out in the Corporate Governance Statement on pages 54 to The Notice of the AGM can be found in a separate booklet 59 and form part of this report by reference. which is being mailed out at the same time as this report. It is also available at ascential.com. The Notice sets out the External branches resolutions to be proposed at the AGM and an explanation of The Group operated branches in Australia, Belgium, France, each resolution. The Directors consider that all of the Germany, Hong Kong, Italy, Japan and Singapore during the resolutions set out in the Notice of AGM are in the best year ended 31 December 2016. interests of the Company and its shareholders as a whole. To that end, the Directors unanimously recommend that Financial instruments shareholders vote in favour of each of them. Details of the financial risk management objectives and policies of the Group are given on pages 100 to 101 in Note 3 to the Directors’ Responsibilities Statement consolidated financial statements and form part of this report The Directors are responsible for preparing the Annual Report by reference. and the Group and Parent Company financial statements in accordance with applicable law and regulations. Auditor Each of the Directors has confirmed that: Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. a) so far as the Director is aware, there is no relevant audit Under that law they are required to prepare the Group information of which the Company’s auditor is unaware; and financial statements in accordance with IFRSs as adopted by b) the Director has taken all reasonable steps that he or she the EU and applicable law and have elected to prepare the ought to have taken as a Director to make himself or herself Parent Company financial statements in accordance with aware of any relevant audit information and to establish that UK Accounting Standards, including FRS 102 The Financial the Company’s auditor is aware of that information. Reporting Standard applicable in the UK and Republic of Ireland. This confirmation is given and should be interpreted in accordance with section 418 of the Companies Act 2006. Under company law the Directors must not approve the financial statements unless they are satisfied that they give KPMG LLP (“KPMG”) was appointed as the auditor to the a true and fair view of the state of affairs of the Group and Company and the Group by the Board during the year. KPMG Parent Company and of their profit or loss for that period. has expressed willingness to continue in office and a resolution In preparing each of the Group and Parent Company financial to re-appoint KPMG will be proposed at the forthcoming AGM. statements, the Directors are required to:

Post balance sheet events • select suitable accounting policies and then apply The Group announced in January 2017 that it had separated them consistently; 13 Heritage Brands into a separate operating entity that is held • make judgements and estimates that are reasonable for sale. As a result of ongoing discussions, the Board now and prudent; considers a sale of this operating entity to be highly probable • for the Group financial statements, state whether they and has therefore reclassified it as a discontinued operation. have been prepared in accordance with IFRSs as adopted by the EU; Also in January 2017, the Group announced the sale of the first • for the Parent Company financial statements, state whether of the Heritage Brands, Health Services Journal, to Wilmington applicable UK Accounting Standards have been followed, plc for a consideration of £19m, payable in cash subject to subject to any material departures disclosed and explained normal working capital adjustments on completion. in the Parent Company financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Parent Company will continue in business. 63

Ascential plc Annual Report 2016 Directors’ Report continued

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006.

They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility Statement of the Directors in respect of the annual financial report We confirm that to the best of our knowledge:

• the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and • the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

We consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy.

The Directors’ Report of Ascential plc was approved by the Board and signed on its behalf by

Louise Meads Company Secretary 24 February 2017

64

Ascential plc Annual Report 2016