Corporate governance report Chair’s letter

Overview of the year This year has seen the Group and all of its stakeholders together dealing with the global outbreak of COVID-19 and its unprecedented effects. During this crisis, the health and welfare of our people has been and continues to be our top priority. I have been extremely impressed by the resilience of our people and their commitment as we have found ever more effective ways of working in these unprecedented times. We also continue to work closely with our customers and suppliers to support them during this GLI¿FXOWSHULRGDVEHVWDVZHDUHDEOH Details of how the business has responded to the challenges of COVID-19 are set out in our Strategic Report on pages 16 and 17.

Dear fellow shareholder, stakeholders in mind, ‘making amazing During the year, the Board considered On behalf of the Board, I am pleased to happen’ for our shareholders, employees, long-term sustainability and climate change present our Corporate Governance Report suppliers, customers and broader matters. The Board has been encouraged for 2020. community sets the backdrop to ensure that by the enhancements to the Group’s the Board and management consider the current ways of working, particularly 7KLV\HDUEULQJVWKH¿UVW5HSRUWXQGHU longer-term value proposition for decision- ZLWKWKHLQWURGXFWLRQRIQRQ¿QDQFLDO the UK Corporate Governance Code 2018 making now. It has been particularly key performance indicators and targets (2018 Code), and you will see throughout important as we deal with the uncertainty (see pages 20 and 21) and continually our Report how we have taken the created by the UK’s exit from the EU and supports the Group’s work towards the Principles of the 2018 Code to the heart of the COVID-19 pandemic. More information reporting requirements of the Task Force all we have done as a Board during the year. about this strategy and our purpose are set on Climate-related Financial Disclosures out on pages 13 to 15. (TCFD) and Sustainability Accounting As a business and as a Board, we have, Standards Board (SASB). for many years, taken pride in ensuring Within the business, our strong corporate our business assesses itself from a broad governance baseline has helped us A new Directors’ Remuneration Policy perspective, considering the various through a period in the year when our was approved at the Annual General stakeholder groups whom we impact upon &KLHI([HFXWLYH2I¿FHU &(2  Meeting (AGM) in July 2019, with 85% or who impact upon us. One of the most Lindsley Ruth, had to take a leave of approval from you, our shareholders. important changes of the 2018 Code is the absence to receive treatment for a medical This has been implemented following its UHTXLUHPHQWIRUXVWRUHSRUWVSHFL¿FDOO\RQ condition. Throughout this period, I was in approval, with the Remuneration Committee KRZWKH%RDUGIXO¿OVLWVGXW\XQGHUVHFWLRQ regular dialogue with Lindsley and kept our continuing to monitor its implementation and 172 of the Companies Act 2006 to take into Board informed of his progress, as well as appropriateness to driving the sustainable account the perspectives of our various communicating with our stakeholders as success of our business. Further details are stakeholders. This has been addressed in appropriate. During this period, the Board set out in the Remuneration Committee this year’s Corporate Governance Report DQG,ZHUHFRQ¿GHQWLQHQWUXVWLQJWKH Report on pages 86 to 101. on pages 68 and 69. responsibilities of the CEO to David Egan, &KLHI)LQDQFLDO2I¿FHU &)2 DVWKHWZR An externally led evaluation of our The importance of corporate governance had worked closely together on both the Board and Committees was carried out, is never greater than in times of development of the strategy and driving WRUHYLHZRXUHIIHFWLYHQHVVDQGHI¿FLHQF\ macroeconomic uncertainty and change performance. Whilst I ensured I was fully in promoting the long-term sustainable as we have seen over the last 12 months. available if required, the Board was able success of the Company, generating value The Board plays a vital role in ensuring the to retain a clear divide in its executive and for shareholders and contributing to wider stability of the business so it can continue non-executive roles. I would like to pay society. Further details are set out on to drive value and achieve its strategy. Our tribute to David for covering the role of CEO pages 74 and 75. I was pleased with the Destination 2025 strategy covers the key as well as his normal role as CFO, and to outcome of the evaluation which showed objectives for the business over the next the Senior Management Team (SMT) for the Board and Committees carrying out ¿YH\HDUVWRJHWKHUZLWKDQHZSXUSRVHIRU continuing to drive the business forward our core governance roles effectively. the Group. Formulated with our during Lindsley’s brief period of absence.

60 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 61 81 76 80

Effectiveness and internal of external auditors Audit, risk and risk and Audit, control internal CommitteeAudit Report management Risk Electrocomponents plc Electrocomponents for our existing Executive Executive existing our for including time, Directors over a reduction this upcoming Furtheryear. details are the of 93 page on given Remuneration Report. 74 83 Our main focus areas for the year ahead, crisis, is COVID-19 the given especially to ensure that the right actions are taken so that we emerge out of the current downturn will stronger. We also continue to embed the strategy and purpose to ensure the culture of the business is aligned to achieve them; and, through the Nomination Committee, search for the managing a successor to myself as Chair. Peter Johnson Chair 2020 June 1 The year ahead year The

Nomination Report Committee Composition, andsuccession evaluation evaluation Board Directors’ pension payments payments pension Directors’ workforce. wider the with Pension payments for new executive director workforce wider the with levels pension reduce will appointments will be aligned be will appointments and it has been agreed we ZZZIUFRUJXN7KHUHDUH¿YHPDLQVHFWLRQVRIWKH&RGH 70

DJDLQIRUKLVVLJQL¿FDQWFRQWULEXWLRQWRWKH Board and the Group the over six years of his tenure. David Sleath joined the Board andin June succeeded 2019, John as SID in September He was also 2019. appointed and a member the of Audit, Remuneration andCommittees, Nomination took on the role Chair of of the Nomination Committee in December upon own my 2019, has He Chair. as years nine completion of already brought a valued fresh perspective from his experience as a CEO and previous experience as a SID, both in well-regarded FTSE companies. 100 The Board has been further strengthened theby addition of Joan Wainwright as Non-Executive Director, who joined in November Most recently 2019. President of Channel & Customer Experience at brings Joan extensive Connectivity, TE distribution experience as well as providing strong insight into the customer dynamic in the US, one markets. of ourkey Joan is a member of the Nomination Committee. set is Joan and More David information on out in the Board biographies pages (see 62 and and 63) in the Nomination Committee Report page (see 84). Division of of Division responsibilities of Division and responsibilities framework governance Compliance with the 2018 Code 7KH%RDUGFRQ¿UPVWKDWLQ its the view, Company has Principles main the applied complied all has with and the relevant Provisions set out in the Code during the Provision than other year 38 in aligning our Executive 93 88 62 66 69 69

dney, Australia, and dney, Remuneration Directors’ Remuneration Policy Directors’ Directors’ Remuneration Report Board leadershipBoard company and purpose Board Our values, Purpose, strategy and culture Engagement with shareholders major Engagement with workforce During the year ended March 31 2020, the Company has been subject to the provisions of the UK Corporate Governance Code SXEOLVKHGLQ-XO\7KH&RGHLVSXEOLFO\DYDLODEOHDW and the following sections within this Annual Report explain how the Principles of the Code been have applied: The Code The Board changes Board As mentioned in Annual the 2019 Report, John Pattullo stood down Non-Executiveas Director and on (SID) Director Independent Senior 1 September I thank 2019. him once Throughout placed we have the year, key our of one on focused increased This employees. our groups: stakeholder of activities the through managed been has Guerra,Karen Non-Executive and Director engagement Board-appointed our employee representative. Karen has visited several of including Sy sites, our Corby and Warrington in the UK. She has with meeting hall town a held also Hong Kong and Shanghai in employees videoconferencing hasvia facilities. She reported back to the Board after each on feedback providing visits, these of employee opinions, and the alignment of our culture and values across the various aspects of our business, strategy and purpose. As set out in the Nomination Committee Report on page 85, Karen will be stepping down as Non-Executive Director at the end at which of the year, to best how consider will Board the time build on the good work started Karen. by Annual Report and Accounts for the year ended March 31 2020 Our Board of Directors

The Board has a wide range and depth of Our Board knowledge drawing from diverse international experience covering the business’s key existing and future markets, with the appropriate balance of skills.

Peter Johnson Lindsley Ruth David Egan David Sleath Bertrand Bodson Chair Chief Executive Chief Financial Senior Independent Independent Joined in Oct 2010 2IÀFHU 2IÀFHU Director Non-Executive Committee Joined in Apr 2015 Joined in Mar 2016 Joined Jun 2019 Director membership Committee Committee Committee Joined in Jun 2015 Nomination membership membership membership Committee Treasury Treasury (Chair) Audit, Nomination membership External roles (Chair), Remuneration Nomination • Chair of the External roles External roles supervisory board • Member of the CBI • Member of the External roles External roles of Wienerberger AG International CBI Economic • &KLHIH[HFXWLYHRI¿FHU • Chief digital Trade Council Growth Board of SEGRO plc RI¿FHUDW1RYDUWLV Past roles • Non-executive director International AG • Chair of DS Smith plc of Ashtead Group plc Past roles Past roles: • Member of the • Non-executive • *URXS¿QDQFHGLUHFWRU • Finance director, supervisory board of director of SSL Past roles at Alent plc SEGRO plc Wolters Kluwer NV International plc • Executive vice • Held a variety • SID and audit • Chief executive of president of the Future RIVHQLRU¿QDQFH committee chair, Past roles George Wimpey Electronics Group positions at ESAB Bunzl plc • Senior executive plc and The Rugby • Held senior positions Holdings and • Board member, positions, including Group plc with TTI Inc and Hanson plc European Public Real chief digital and Solectron Corporation • Non-executive Estate Association PDUNHWLQJRI¿FHU Skills and experience director of Tribal • President, British at Sainsbury’s Argos • Distribution Skills and experience Group plc, and chair Property Federation • Leading global • Sales and marketing • Digital of its audit committee • *URXS¿QDQFH responsibilities at • M&A • Distribution director, Wagon plc Amazon and EMI Music • Emerging markets • Sales and marketing Skills and experience • Co-founder / CEO • Service industry • M&A • Digital Skills and experience: at Bragster, now • International • Emerging markets • Distribution • M&A part of Guinness operations • Supply chain and • &XUUHQW¿QDQFLDO • International World Records • Manufacturing procurement experience operations • Chair • Management • M&A • Service-led Skills and experience • &KLHIH[HFXWLYHRI¿FHU • International • Emerging markets business models • Digital operations • Service industry • Finance • eCommerce • Manufacturing • International • &KLHIH[HFXWLYHRI¿FHU • Sales and marketing • Electronics operations • Supply chain • &KLHIH[HFXWLYHRI¿FHU • Manufacturing and logistics • Management • International operations • Risk Management • Product development • &KLHI¿QDQFLDORI¿FHU

Board composition1 Board tenure1 Number of Board meetings Skills and experience attended during the year1 Peter Johnson 10/10 Digital / eCommerce 5/10 Lindsley Ruth2 7/10 Distribution 4/10 David Egan 10/10 Finance 4/10 David Sleath3 9/9 Sales and marketing 5/10 Bertrand Bodson2 9/10 M&A 7/10 Louisa Burdett 10/10 Emerging markets 5/10 Karen Guerra2 9/10 Service industry 6/10 Bessie Lee 10/10 Supply chain 2/10 Simon Pryce 10/10 Electronics 2/10 Female 4 0–3 yrs 3 Joan Wainwright3 6/6 Male 6 3–6 yrs 5 John Pattullo3 3/3 6+ yrs 2 1. In the period between 1 April 2020 to 1 June 2020, the Board held two Board meeting calls (in addition to scheduled meetings) to closely monitor business performance and respond to challenges due to COVID-19. 2. Lindsley Ruth was unable to join three meetings due to ill health. Karen Guerra and Bertrand Bodson were XQDEOHWRDWWHQGRQHPHHWLQJHDFKGXHWRVFKHGXOHGFRQÀLFWVGXULQJWKH\HDU 3. John Pattullo stepped down from the Board on 1 September 2019. David Sleath joined the Board on 1. As at 31 March 2020. 1 June 2019 and Joan Wainwright joined on 1 November 2019.

62 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 63 Deputy commissioner communications,of Social SecurityU.S. Administration Distribution Electronics Sales and marketing International operations Strategy Vice president, Public Public Vice president, Affairs, Merck & Co Director of NJM NJM of Director Insurance Group & Channel President, Experience,Customer Ltd Connectivity TE • Skills experience and • • • • • • Joan WainwrightJoan Independent Non-Executive Director 2019 Joined Nov Committee membership Nomination roles: External • Past roles: • Electrocomponents plc Electrocomponents Group chief executive executive chief Group at BBA Aviation plc Held a range of LQWHUQDWLRQDO¿QDQFH management and JPGKN plc, at roles LazardsMorgan and 6WUDWHJLF¿QDQFLQJ capitaland markets M&A Emerging markets Service industry Strategy Manufacturing International operations &KLHIH[HFXWLYHRI¿FHU &KLHIH[HFXWLYHRI¿FHU Electronics Ultra of plc Holdings the of Member Council, chair of the Committee Investment and member a of the Finance and Strategy The of Committee Reading University of Other directors who served during the year John Pattullo retired from the Board and as can biography John’s 2019. September in SID be found in our Annual Report 2019. Past roles • • Skills experience and • • • • • • • • Simon Pryce Simon Independent Non-Executive Director 2016 Sep in Joined Committee membership Nomination,Audit, (Chair) Remuneration roles External • •

Advisor to Didi to Advisor Greater and Chuxing 3DFL¿F&DSLWDO &KLHIH[HFXWLYHRI¿FHU Mindshare, at roles GroupM WPP and China in Digital M&A and Marketing advertising Emerging markets International operations &KLHIH[HFXWLYHRI¿FHU &KLHIH[HFXWLYHRI¿FHU Withinlinkof Non-executive director Ecovacs of Robotics and Group United Corporate law Corporate law governance and management Risk Procurement Manufacturing securityInformation M&A Service industry International operations • Past roles • Skills experience and • • • • • • Bessie Lee Bessie Independent Non-Executive Director 2019 Mar in Joined Committee membership Nomination roles External • • • • • • • Skills experience and • • • Member of the CBI CBI the of Member Trade International Advisory Group legal International Viacom at director Outdoor Limited positions Senior at United Biscuits and Limited )UHVK¿HOGV Deringer Bruckhaus Held senior executive executive senior Held Colgate- at positions Palmolive marketing and Sales Service industry International operations Manufacturing Non-executive Non-executive director Amcor of Limited Non-executive director Paysafe of Swedish Group plc, Match AB, Inchcape More Groupplc, Samlerhuset plc, and BV Group Campari-Davide S.p.A.Milano External roles External • Past roles • • • Skills experience and • • • • External roles External • Past roles • KarenGuerra Independent Non-Executive Director 2013 Jan in Joined Committee membership Nomination,Audit, Remuneration Manufacturing Digital &XUUHQW¿QDQFLDO experience M&A Service industry International operations Held roles at Chep Chep at roles Held division a Europe, Bramblesof Ltd, GE Healthcare and GlaxoSmithKline plc &KLHI¿QDQFLDORI¿FHU of Meggitt PLC *URXS¿QDQFHGLUHFWRU at Victrex plc &KLHI¿QDQFLDO RI¿FHUDW2SWRVSOF Financial the and Group Times Ian Haslegrave Ian SecretaryCompany Joined in September 2006 • • • • • Skills experience and • • • Past roles • External roles External • Audit (Chair), (Chair), Audit Nomination, Remuneration Joined in Feb 2017 Feb in Joined Committee membership Louisa Burdett Independent Non-Executive Director Annual Report and Accounts for the year ended March 31 2020 Our Senior Management Team Driving our strategy

1 2 3 4 5

1 3 4 Lindsley Ruth Mike England Ken Bradley &KLHI([HFXWLYH2IÀFHU &KLHI2SHUDWLQJ2IÀFHU President, Allied Electronics Lindsley is responsible for the Group Mike is responsible for leading & Automation on a day-to-day basis, for implementing the performance and alignment of Ken is responsible for the commercial the Group’s strategy, execution of our go-to-market activities worldwide, operation, business transformation, RXU¿YHVWUDWHJLFSULRULWLHVDQGIRU customer experience, product and and strategy and growth initiatives corporate responsibility including supplier-centric activities, digital priorities for the Americas region. climate-related matters. and transformation, and innovation. Mike also oversees the commercial operation, Past roles Past roles business transformation, and strategy • Senior positions in sales, supply Details on page 62. and growth initiatives for the EMEA chain, asset management, and region and the implementation of corporate product and supplier management responsibility across all the regions. • Leadership positions with 2 Ryder Systems, Inc. and Blackmon David Egan Past roles Mooring & BMS CAT Inc. &KLHI)LQDQFLDO2IÀFHU • Sales director at Brammer UK Limited • Held senior commercial and operational David is responsible for the Group’s 5 VWURQJ¿QDQFLDOPDQDJHPHQWDQG roles at Hagemeyer (now Rexel) HIIHFWLYH¿QDQFLDOFRQWUROV Sean Fredericks 3UHVLGHQW$VLD3DFLÀF56&RPSRQHQWV Past roles Sean is responsible for the commercial Details on page 62. operation, business transformation, and strategy and growth initiatives for the $VLD3DFL¿FUHJLRQ

Past roles • VP for Johnson Controls International plc • 5HJLRQDO0'IRU3DUNHU+DQQL¿Q Corporation

64 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 65 10 Electrocomponents plc Electrocomponents Female 2 8 Male Vice president CorporateVice president plc Alent at Development Government UK at positions senior Held Investments and Rexam plc Led a strategic review and ran activityM&A venture at joint and plc Group Technologies Imagination

10 Michael Cramb Michael Corporate President, Vice Senior Development Michael is responsible for the development including corporate strategy, business of management, programme responsibility, and continuous improvement innovation, M&A activity. He has extensive experience M&A. transformation business and in Past roles • • • CompositionSMT 9 8 Held senior positions in distribution distribution in positions senior Held and supply chain Kids, at Tru Inc., NabiscoKraft and Inc. Foods 9 8 Ian Haslegrave Ian SecretaryCompany President, and Group Professional Services and People In addition role to Ian’s as Company the leading for responsible is he Secretary, Services People Professional and Group’s Secretariat, which includes Company team Information Pensions, Compliance, Legal, functions. People Security global and Past roles 63. page on Details Debbie LentzDebbie President, Global SupplyChain supply Group’s the for responsible is Debbie and innovative capabilitychain an for and servicesustainable market-leading for leads also suppliers. She customers and the of implementation and development the Group’s corporate responsibility programme. Past roles • 7 Group CIO at Whitbread Plc Executive positions at The Body Marks and Limited, International Shop Spencer Group plc and Centrica plc Senior international roles, leading leading roles, international Senior transformation, growth change and driveto growth 6 7 6 Annual Reportand Accounts for the year ended March 31 2020 • Past roles • Simon is responsible for shaping and shaping for responsible is Simon world-class a implementing technology a instilling and infrastructure strategy, around continuous improvement of culture delivery, service and innovative ways working.of Simon RamskillSimon &KLHI7HFKQRORJ\2IÀFHU Past roles • President, IESA President, and creating for responsible is Debbie strategy of implementation the leading ZLWKLQ,(6$WRGHOLYHUSUR¿WDEOHDQG growth.sustainable Debbie Bowring Debbie Corporate governance report Corporate governance overview

Board leadership and The Board monitors the culture of the During the year, the Board received Company purpose organisation to ensure that it is aligned to regular updates on corporate Role of the Board the Group’s purpose, values and strategy. responsibility, including environmental, The Board’s primary responsibility is to This included: social and governance activities. promote the long-term sustainable success • Receiving updates from the President, These updates highlighted the positive of the Group, leading in an entrepreneurial Group Professional Services and performance in our environmental metrics manner to ensure value is generated for People at each Board meeting on and opportunities for enhancements. This shareholders. It must balance this with the governance and people team LQFOXGHGWKHLQWURGXFWLRQRIQRQ¿QDQFLDO ensuring the Group contributes to wider approach to supporting the key performance indicators (see pages society considering all of its stakeholders. Group’s culture. 20 and 21) and the ongoing work aligning The Board provides leadership across the • Receiving reports from Karen Guerra on our reporting against the requirements different elements of the Group and applies employee engagement after her visits to of the TCFD and SASB. a governance framework to ensure that this different parts of the organisation in her is delivered effectively with appropriate role as designated Non-Executive Director At each Board meeting, the CEO presents control mechanisms. (discussed in more detail on page 69). a comprehensive update on performance, • Receiving regular information on the challenges, the competitive market and In doing this, the key topics the Board has usage of the Group’s whistleblowing opportunities. There is also an interim focused on this year, as well those it plans facility and outcomes of follow up monthly written update provided by the to assess for the coming year, are set investigations, allowing it to assess CEO to ensure the Board is fully up out below. whether the facility, Speak up, is effective to date with Group performance. This is and matters raised are properly evaluated. complemented by members of the Senior Purpose, values, strategy • Creating a variety of opportunities to Management Team (SMT) and other and culture meet senior employees and those managers providing updates on how their To achieve the long-term value generation LGHQWL¿HGDVKLJKSRWHQWLDODWDQ\ parts of the business are working toward of the Group, the Board has worked closely level of the organisation. the achievement of the strategy, and with management to establish the Group’s opportunities and risks faced within their purpose statement: ‘making amazing Assessing opportunities and risks VSKHUHRILQÀXHQFH7KHVHFRPELQHWR happen’; linked to the approval of the The Board considers the principal risks ensure the Board has insight across the Group strategy set out in Destination and opportunities for the future of the business, allowing the Board’s governance 2025 (see pages 13 to 15). Importantly, business. Details of the risks assessed processes to contribute strongly to the the Board has continued to embed the six are set out in the Strategic Report delivery of the strategy. core values: passion, integrity, innovation, on pages 36 to 42, together with collaboration, accountability and aspiration. consideration of the sustainability of the Group’s business model.

Board focus

Board focus 2020 Board activities Board focus 2021 during the year

• Development and • Transition of new Board members. • Continuing to safeguard implementation of our position and reviewing • Implementation of new Destination 2025 strategy opportunities that will arise out Remuneration Policy. and supporting establishment of the market downturn as a of ‘making amazing happen’ • Contingency planning for the result of the COVID-19 crisis. purpose and culture. UK’s exit from the EU. • Greater focus on corporate • Reviewing our • Review progress of the responsibility, TCFD governance framework. expansion of distribution and SASB. centres in US and Germany. • Further strengthening our • Enhancing our governance supply chain strategy. • Review of centres of expertise practice for the Board and in China and Europe. SMT to ensure that the best Further information relating to the governance framework is activities of the Board during the • Employee engagement. provided for the Board to year is available on our website discharge its responsibilities electrocomponents.com • Updating governance framework in light of the 2018 Code. under section 172.

66 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 67 . QDQFLDO electrocomponents.com Electrocomponents plc Electrocomponents The development, and successful achievement, of Group strategy. and objectives Assessing adequacy of, and executing non-material executing and Assessing of, adequacy changes in, the Group’s management and control structures on an ongoing basis and proposing material changes. Ensuring appropriate internal controls are in place. Ensuring appropriate management development development management appropriate Ensuring and succession planning for SMT (for review the by Committee). Nomination conditions triggered by COVID-19, further details of which can be found in in found be can which further of details COVID-19, conditions triggered by One of the many examples highlighting how the Board deliberately considers its stakeholders is in the way it has addressed the COVID-19 crisis. All Board meetings. Board additional for available themselves made have members The Board also continues to receive weekly updates from management. The Board meetings, held remotely via Microsoft since Teams March 2020, ensure two-way communication between the Board and management to ensure management is appropriately supported in its response to keeping our business viable, our customers supported and, in particular, ensuring we can appropriately support those critical businesses that rely on us. The reports on commenting and receiving considerable time spent has Board from management in relation to COVID-19 matters including the health DQGZHOOEHLQJRIRXUHPSOR\HHVDQGUHJXODWRU\PDWWHUVVXFKDV¿ reporting updates and AGM requirements whilst under lockdown. The Board has also considered, in conjunction with our remuneration advisors, how macroeconomic the given addressed appropriately be should remuneration the Directors’Remuneration Report on pages 93 to 101. • • • •

DQG  WFKRLFHIRU URSULDWHO\ VIRUXSGDWLQJ ard papers so that those individuals those that so papers ard Section 172 stakeholder engagement engagement stakeholder 172 Section Reviewing and approving the Group’s long-term strategic Group’s the approving and Reviewing objectives. and aims Approving material changes to the Group’s management management Group’s the materialApproving changes to and control structure. Approving the Group’s procedures for the detection of fraud and bribery prevention. On advice of the Nomination Committee, reviewing succession plans for the Board and SMT. Matters for the Board• CEO’s responsibilities related to the matter • • • All matters that a material have impact upon the Group are reserved for the Board and are formally set out in a schedule. theThis Board’s year, schedule was reviewed and streamlined, and updated to include the responsibilities CEO’s to clearly set out the separation of responsibilities. Such matters include, but are not limited to: Full detailsFull of the Company’s schedule of matters reserved for the Board are available on our website 7KH%RDUGKDVLGHQWL¿HGZKRLWVNH\VWDNHKROGHUVDUH VHHSDJHV and has considered how it engages with them both now and in the future. matters section 172 takes it how to approach its enhanced has Board The into account more overtly during its deliberations and decision making. This Bo format of the reviewing included has and functions putting forward strategic proposals to the Board set out the relevant section matters 172 that need to be taken into account. One example highlighting how the Board deliberately considers its stakeholders is the discussion the Board had at its Strategy Day in February 2020, when LWIRFXVHGRQKRZWKHVWUDWHJ\ZRXOGHQDEOHWKH*URXSWREH¿UV its customers, suppliers, employees and the community by considering community the the and by customers,its suppliers, employees impact on these stakeholders. Governance-led examples of section 172 compliance include the Board having updated its schedule of matters UHVHUYHGVSHFL¿FDOO\IRUWKH%RDUGWRHQVXUHVHFWLRQLVDSS UHÀHFWHGLQLWVUHVSRQVLELOLWLHVDQGSXWWLQJLQSODFHDSURFHV its code of conduct accordingly. Matters reserved for the Board Annual Report and Accounts for the year ended March 31 2020 Corporate governance report continued

The Board and our stakeholders The voice of our stakeholders is heard by the Board throughout the year by way of reports and data provided by management and also by direct engagement with stakeholders as and when appropriate. Some examples of how the business and the Board discharge their obligations in light of COVID-19 are described in the Strategic Report on pages 16 and 17 and this Report on page 67. 2WKHUH[DPSOHVRIKRZZHKDYHDFWHGIRUWKHEHQH¿WRIRXUVWDNHKROGHUVDUHVHWRXWEHORZ

Our stakeholders How the business interacts with our stakeholders How the Board interacts with our stakeholders Customers Visit trade fairs (customer and supplier interaction) and customer sites Board visits to industry trade fairs Provide and sell value-added solutions Receives regular updates on business projects where understanding the customer is important, e.g. launch of OKdo (new customer market) and potential new acquisitions Customer interaction, including inbound telephony customer contact, Receives customer dashboard as standing live chat support, email support and social media enquiries 24 / 7 / 365 Board agenda item

Board visit to major IESA customer in September 2019 Voice of the Customer survey, Trustpilot, Google customer feedback Various points of engagement including RS local branch network, ¿HOGVDOHVWHDPVDQGFRUSRUDWHDFFRXQWVDOHVWHDPV Customer performance reviews Suppliers Quarterly progress reviews, attended by senior management Presentations about suppliers during Board visits, e.g. the Americas and France Regional supplier events as well as annual events Presentations on the product and supplier management strategy 6XSSOLHUVFRUHFDUGZLWKGH¿QHGWDUJHWV±FRPPHUFLDOUHODWLRQVKLS Receives progress updates on execution of and inventory health strategic initiatives which cover suppliers Voice of the Supplier survey every two years Joan Wainwright’s supplier experience brings the voice of the supplier to the Board’s deliberations Category management is in place, focusing on data insight from suppliers, economic trends as well as customer trends EXPO: biannual event in Allied, inviting over 300 suppliers to showcase their products Partnering with suppliers to engage on showcase opportunities with customers Employees Health and safety initiatives (including Target Zero and All Accident reporting) Quarterly standing Board item Employee engagement – employee engagement surveys twice a year and Reviews results of employee engagement Non-Executive Director initiatives survey, plus Non-Executive Director employee engagement initiative, including Board member visits to operations Learning and development – including online learning resources for all employees Receives People function updates both as main and managers topics and as part of the Company Secretary’s report to the Board Diversity and inclusion – initiatives focused on employees’ wellbeing, Remuneration Committee receives papers on LGBTQ+ community topics such as sharing in the Company’s success, CEO pay ratio and Gender Pay Gap reporting Succession planning – each function reviews succession planning and opportunities Nomination Committee reviews senior with its team management team plans Onboarding – provision of a new online onboarding tool and revised processes +HDOWKDQGZHOOEHLQJDQG¿QDQFLDODZDUHQHVVSURJUDPPHV Community Supplying critical products to the power generation, telecommunications and water Discussion of the corporate responsibility industries to help keep communities operational during the COVID-19 crisis (CR) plan STEM (Science, Technology, Engineering and Mathematics) programme Visits to businesses and receiving – teaming up with STEM Learning, the biggest provider of STEM learning presentations on initiatives, e.g. STEM and careers, including activities such as Imagine-X; First Lego League; Titan II and MAX education visits; and STEMFEST Post-graduate initiative to encourage careers in engineering Various global charitable initiatives Community support: dedicated event to provide Thomas Cook ex-employees VXSSRUWZLWKWDVNVVXFKDV&9ZULWLQJ/LQNHG,QSUR¿OHVDQGLQWHUYLHZWLSV as well as sharing openings at RS, plus detailed follow-up actions Environment Reviewing and developing the CR plan and implementing the TCFD recommendations Receives quarterly environmental updates

DQGVSHFL¿FUHSRUWVRQ&22 emissions Carbon & Energy Management and Reduction Scheme Reviews the CR plan that is being developed *ROG&HUWL¿FDWLRQ$ZDUGHLJKW\HDUVLQDURZ &5& (QHUJ\(I¿FLHQF\ VFKHPHDSSOLHVWRDOORXUIDFLOLWLHVLQWKH8.DQGDOVR $UWLFOHRIWKH(8(QHUJ\(I¿FLHQF\'LUHFWLYH (8 DSSOLHV to our facilities in France, Germany, Italy and the UK *UHHQLQLWLDWLYHVLQWKH$PHULFDVVSHFL¿FDOO\WKHLQVWDOODWLRQRIIRXUHOHFWULFYHKLFOH charging stations in Fort Worth, Texas and at the end of 2019 and switching to 100% compostable paper cups / cutlery products

68 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 69

Electrocomponents plc Electrocomponents Actions fed back to employees management. local by …then by a series of coffee / smaller with sessions drop-in excluding but audiences management. trust structure, members' rights members' structure, trust Reviews and approves policies Reviews and approves policies 5HYLHZVSHQVLRQVGH¿FLWSD\PHQWVUHYLHZV Ensures appropriate capital allocation investment and opportunities investment and Opportunities for individual shareholders AGM at members Board meet to process the undertaken by annually reviews and Committee Audit the Audit Committee receives regular updates on GDPR, information security and PCI DSS Annual strategy days to review and approve being focusing on including strategy ¿UVWFKRLFHIRURXUVWDNHKROGHUV suppliers customers, business, the on updates and the workforce via additional Board calls Fully supportive of executive management in COVID-19 to responses operational its $WWKHHQGRIWKHODVW¿QDQFLDO\HDU.DUHQ / Kong Hong in employees with engaged Shanghai video (via conferencing); and Australia,visited the case Sydney, study of which can be found on page 72 of this 5HSRUW,QWKLV¿QDQFLDO\HDU.DUHQYLVLWHG the Corby distribution centre in the UK; and IESA in the UK. A visit to Beauvais, France and Texas, US had been arranged of outbreak the to due postponed but sets below diagram The COVID-19. process. engagement employee the out LQJ Holds face-to-face meetings with Holds face-to-face employees by way of town halls, with as many employees and management of members present as possible… Actions are taken forward by the Deputy Company Secretary with the relevant member of the SMT and the business owner / country manager. local What it should do less of for its employees What it could do more of for its employees What the Company does well better could do it What • • encouraged to also are Employees suggest new andmore effective practices to business the help would feel they that performance. its continually improve • • This allows her to retain her independence her retain to her allows This as a Non-Executive Director but also freely speak to encourages employees with her about what is important to them, example: for

Industry Organisations: Company and individual members of several different organisations, ERA, NAED, NAW where we engage with suppliers and industry market leaders Code of conduct including whistleblowing policy, Speak Up Receives quarterly updates on Speak Up 'HOLYHULQJUREXVW¿QDQFLDOUHVXOWV Financial Conduct Authority, Information Commissioner, local and overseas overseas local and Information Commissioner, Conduct Authority, Financial tax authorities )LQDQFHEDQNLQJ±86SULYDWHSODFHPHQWORDQQRWHVGHEW¿QDQF ombudsman / regulator Pensions controls cost Effective appropriate consultations institutional as / shareholders Meetings with institutional shareholders with meets Chair (GDPR), Regulation Protection Data General to relation in initiatives and Training information security (policies and procedures) and Payment Card IndustryData DSS) Security (PCI Standard 2025 Destination COVID-19 outbreak Materiality assessment with our stakeholders key to ensure the Group’s CR approach is focused on sustainability issues that matter most to them acquisition of consideration Careful Receives and considers regular management to the Board at its next meeting. agreed. are actions Follow-up .DUHQIHHGVEDFNKHUÀQGLQJV Karen visits a business in person, person, in business a visits Karen this provides as possible, where results. best the Our stakeholders Our interacts with the business stakeholdersour How Others stakeholders our with interacts Board the How All stakeholders All Investors Annual Report and Accounts for the year ended March 31 2020 Board and employee engagement employee and Board As reported the last Board year, revisited engagesithow with a key group of our stakeholders: our revised The employees. DSSURDFKSURYLGHVIRUDWZRZD\ÀRZRI communication between the Board and our global workforce. In order to facilitate this, it was agreed that Karen Guerra Board-appointed become the would Non-Executive Director and make regular globe. the around businesses our to visits Karen acts as a conduit between the Board and the employees and her position when undertaking these visits is therefore neutral. Employee engagement process engagement Employee Corporate governance report continued

Division of responsibilities and governance framework The Board

The Board comprises a majority of independent • Entrepreneurial leadership Non-Executive Directors. As can be seen in the • Framework of controls tables and biographies on pages 62 and 63, the Non-Executive Directors have diverse backgrounds, • Assessment of risk skills and experience to enable appropriate challenge • Strategic aims at Board and committee discussions. None of them • Values and standards KDVDQ\FRQÀLFWVRILQWHUHVWLQJHQHUDOZKHWKHU from relationships with management, the Company or third parties which would compromise their independence. There is a process in place for LGHQWLI\LQJDQGPDQDJLQJDQ\FRQÀLFWVRQSDUWLFXODU topics which may arise.

Chair: Peter Johnson Senior Independent Director: David Sleath • Responsible for leadership of the Board and ensuring • Responsible for evaluating the Chair’s performance. its effectiveness. • Chairing the meeting of Non-Executive Directors when • Promotes adequate discussions and debate. evaluating the Chair. • Facilitates constructive relations between Non-Executive • Available as an alternative communication channel and Executive Directors. for shareholders. • Ensures delivery of accurate, timely and clear information • A sounding board for the Chair. to all Directors.

&KLHI([HFXWLYH2IÀFHU/LQGVOH\5XWK &KLHI)LQDQFLDO2IÀFHU'DYLG(JDQ • Responsible for the Group on a day-to-day basis. • 5HVSRQVLEOHIRUVWURQJ¿QDQFLDOPDQDJHPHQW • Accountable to the Board for operational performance. DQGHIIHFWLYH¿QDQFLDOFRQWUROV • Responsible for development and implementation • 'HYHORSVWKH*URXS¶V¿QDQFLDOSROLFLHVDQGVWUDWHJLHV of strategy. • Ensures a commercial focus across all business • Ensures robust management succession plans activities and appropriateness of risk management. are in place. • Supports and advises the CEO. • Responsible for corporate responsibility, including climate-related matters.

Non-Executive Directors Company Secretary: Ian Haslegrave • Responsible for independent external perspectives. • Supports the Chair in the effectiveness and governance • Contribute an independent view to the of the Board. Board’s deliberations. • Supports and advises the Chair on various matters including • Constructively challenge the strategy and performance succession planning. of management. • Leads the Board evaluation process. • 6DWLVI\WKHPVHOYHVRQWKHLQWHJULW\RI¿QDQFLDOLQIRUPDWLRQ • Keeps the Board informed of corporate governance developments. and controls, and systems of risk management. • Supports the Remuneration Committee Chair in remuneration design and implementation, and consultations. • Actively involved in the recruitment and induction of new Board members.

70 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 71 Read more: Nomination Committee Report on pages 83 to 85 Read more: Remuneration Committee Report on pages 86 to 101 Read more: Senior Management Team on pages 65 to 64 Read more: Audit Committee pages Report on 76 to 82 Electrocomponents plc Electrocomponents Monitors the Group’s Treasury Policy. Proposes and executes strategy. strategy. executes and Proposes performance. business Drives Ensures customer focus. investments. Approves Agrees the Remuneration Policy for Executive Directors and the SMT. Oversees SMT and Group employee pay. Monitorsthe Internal Audit function. external Auditor. the Manages knowledge, structure, skills, the Reviews experience and diversity of the Board. ,GHQWL¿HVDQGQRPLQDWHVIRUWKHDSSURYDORI WKH%RDUGFDQGLGDWHVWR¿OOYDFDQFLHV Executive Succession both for planning and Non-Executive Directors. 0RQLWRUVLQWHJULW\RI¿QDQFLDO announcements. and statements 5HYLHZVWKH*URXS¶VLQWHUQDO¿QDQFLDOFRQWUROVDQG internal control and risk management systems. Approves foreign exchange and option deals. option and exchange foreign Approves capital Group proposed Approves structure changes. investments, authorised to changes Approves counterparties borrowings. and Approves the design and targets for incentive plans. • • • • • • • • • • • • • • • • • • CEO: Audit Audit Team Chair: Chair: Chair: Chair: Senior Treasury Committee Committee Committee Committee David Egan David Nomination Simon Pryce David Sleath Lindsley Ruth Lindsley Management Louisa Burdett Remuneration Annual Reportand Accounts for the year ended March 31 2020 Corporate governance report continued

Composition, succession and evaluation Composition and training As described in greater detail in the Nomination Committee Report on pages 83 to 85, the Board and its committees have been refreshed considerably during 2020, with two new independent Non- Executive Directors joining not only the Board but also the Nomination Committee and one joining the Audit Committee.

These individuals bring strong additional experience and skills to the Board, particularly in electronics and distribution, ensuring there continues to be an appropriate diversity of skills, experience and knowledge.

Members of the Board are assisted with their continuous professional development through a regular update from the Board and employee Company Secretary on available relevant engagement case study training courses. A focus this year has In 2019 the Board appointed Karen Guerra to be its Non-Executive Director been particularly on the changes to the responsible for Board and employee engagement. Karen’s remit in this corporate governance regime brought regard is set out on page 69 of the Corporate Governance Report, together in through the 2018 Code, and how the with the framework for preparation, format of the visit and for follow-up Board ensures it is considering the reporting and actions. interests of all relevant stakeholders in One of the visits Karen made in March 2019, the outcomes of which were its decisions. Presentations from senior DFWLRQHGGXULQJZDVWRRXU$XVWUDOLDDQG1HZ=HDODQG $1= RI¿FH management on particular topics (for MXVWRXWVLGHRI6\GQH\7KLVYLVLWFRLQFLGHGZLWKWKHRI¿FH¶V,QWHUQDWLRQDO example, the impact of the Payment 'D\7KHRI¿FHKDVHPSOR\HHVZKRFRPHIURPPDQ\GLIIHUHQWHWKQLF Services Directive) also increases the backgrounds, and an International Day is organised every Board’s knowledge and familiarity with year to celebrate this cultural diversity. the business. Against this backdrop of inclusion, Karen met with the management team in the morning and then held a town hall meeting with as many employees and The Company Secretary is available to all members of management present as possible. Here, she introduced herself Directors whenever needed, and ensures and the purpose of her visit. The town hall was followed by smaller meetings that both Directors and committees have in the style of drop-ins / coffee meetings, without the presence of access to independent professional advice management, during the rest of the day. (at the Group’s expense) if they deem it Suggestions for enhancement of processes as well as local concerns necessary to carry out their role effectively. were raised by employees and Karen brought these to the following Board meeting. These suggestions included: • The need to clarify roles and points of contact following the move of certain functions to the centre of expertise in Foshan, China. • Continuity of pricing policy. • Enhancing the content of data sheets. These points were raised with the relevant members of the SMT and their direct reports and appropriate actions were taken throughout 2020. For example, an improved method was implemented for RS PRO Shanghai to process customer feedback captured by the ANZ customer service WHFKQLFDOWHDPDQGIRULWWREHDFFXUDWHO\UHÀHFWHGLQWKHWKRXVDQGVRI data sheets that are produced. All actions taken to address their suggestions have been fed back to employees by the Vice President, Australia & New Zealand and his team. We continue to engage with the business if there are actions requiring more involved solutions.

72 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 73

induction induction Electrocomponents plc Electrocomponents %HVVLH/HH·V ³$VP\¿UVWDSSRLQWPHQWWRD8.OLVWHG important to was me it for company, understanding deeper a have only not of the business but to fully comprehend the UK-listed environment in which the Company operates. The induction programme I undertook was thoughtfully with comprehensive, structured and theon particularfocus UK regulatory This landscape. governance and face-to-face a included with session the Company Secretary and his team in-depth with me learningsproviding Companies the Act, Listingaround CorporatePrinciples the and Governance Code. This session essential the with me provided information understand fully to the and Director a as duties my obligations to which I must adhere.” Site visits Site CFO & Group Financial Controller Financial Group & CFO Vice President Group Operational Audit Risk and &KLHI,QIRUPDWLRQ6HFXULW\2I¿FHU President, Group Professional Services People and &(2&)2DQG&KLHI2SHUDWLQJ2I¿FHU 3UHVLGHQWVRI(0($$VLD3DFL¿F IESA and Allied Corporate Vice President, Senior Development Company Secretary and team • Provided by: by: Provided • • • Culture and people and business across the teams Meeting culture. experience understand the to and by: Provided • Strategy marketplace and understandTo our journey to Destination DQGJDLQVSHFL¿FNQRZOHGJHRIWKH marketplace in which we operate. by: Provided • • • Finance and risk 7RXQGHUVWDQGWKH¿QDQFHUHTXLUHPHQW and capital structure ofthe Company and the risks that we face. /HJDODQGFRPSOLDQFH understandTo our Group key policies applies which legislation relevant and business. the to by: Provided • During Bessie the year, Lee, David Sleath each undertook Joan Wainwright a and following programme induction tailored Non-Executive as appointment their involved inductions Their Directors. meeting with the Company Secretary to receive a detailed overview of their role before director a as responsibilities and one-to-onehaving each with meetings member of the SMT managers and key in the business. As Bessieand Joan have UK-listed the to prior exposure any had not environment, as part of their induction further received targeted they programme, training to bring them up to speed with the relevant laws and regulations in the UK. in which which in we operate and the landscape the landscape and Ensuring our Directors Directors our Ensuring understand the business understand the business

Digital team President, Global Supply Chain &KLHI7HFKQRORJ\2I¿FHU Head of Investor Relations External brokers Company Secretary Company team and • Provided by: by: Provided • Supply chain Supply chain supply understand our To driven are we how capabilities and sustainable and innovative an provide to service.market-leading Digital and technology technology and Digital transformation digital understand the To across the business and the technology infrastructure. by: Provided • To understand the make-up of our our make-up of the understand To are we how and institutional investors market. the in perceived Our investors investors Our Governance Overview governance our of understand the to framework and landscape. governance UK Provided by: by: Provided • • Provided by: by: Provided • Annual Report and Accounts for the year ended March 31 2020 Induction Each new Director undertakes an induction programme based on the framework set out The below. framework is then adapted according the to new part As needs. experience and Director’s of the induction, new Directors are given a Directors’ Manual which sets out relevant information on the Company’s approach Group key on information governance, to policies day-to-day and administrative matters. A site visit is also arranged to one of our distribution centres so that each new 'LUHFWRUFDQH[SHULHQFH¿UVWKDQGKRZRXU better and operate facilities distribution understand the culture of the business. Our induction framework induction Our Corporate governance report continued

Evaluation This year we undertook an external evaluation and appointed Constal Limited to carry out this exercise for us. This is the third time Constal has facilitated our external Board evaluation, other than that it has no other connection to the Company or any individual Director. 7KH%RDUGUHFRJQLVHVWKHEHQH¿WRI an external evaluation which it believes provides fresh insight and objectivity to its committees and Directors, enabling it to improve its leadership, effectiveness and focus.

The evaluation process

1

The Chair, the Company Secretary and Constal discussed and agreed the VFRSHRIWKHHYDOXDWLRQUHÀHFWLQJRQ the activities undertaken and the focus of the Board during the year.

2

Constal, with the support of the Company Secretary, prepared a set of predetermined questions. This was sent to each Board member prior to their interviews. A number of questions from the previous year were also included to ensure progress could be monitored. This year’s evaluation was conducted by The interview process gave each Director individual interviews. A set of indicative an opportunity to discuss their thoughts questions were circulated to each Board more candidly: what was being done member to frame the interview process. well and what needed to be improved. 3 These questions were set to obtain views It also allowed the interviewer to assess on certain key corporate governance which areas required further discussion. Constal analysed the responses and areas, address areas of focus from the Views were also sought on the Chair, SUHSDUHGDUHSRUWRIWKH¿QGLQJV previous evaluation, as well as to gauge the Executive Directors, as well as the identifying strengths, challenges the Board’s own effectiveness. workings of the committees of the Board. and priorities. A number of As David Sleath had only been appointed recommendations were also included The indicative questions covered SID for a period of two months at the time for discussion by the Board. the following areas: of the interviews, it was agreed that the • Effectiveness of the Board and views on the SID role be excluded from committee meetings. the evaluation. • Contributions of the Board and its committees. In addition to the interviews, the Chair • Relationships with the SMT around the held one-to-one meetings with each 4 direction and values of the organisation Director covering the themes outlined and the decision-making process. above, the dynamics of the Board, and The Company Secretary presented • Delivery of strategy against the training and development needs of the UHSRUWVRIWKH¿QGLQJVDQG performance measures. Directors, as well as any areas of concern. recommendations to the Board • The Board’s understanding of the and each of the Committees. These Company’s journey and The overall results of this year’s evaluation reports were then discussed and developing culture. were positive and there was a consensus any relevant actions were agreed • Risk management. about the challenges ahead and the areas for the year ahead. • Succession and talent management. of focus for the Board.

74 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 75 Electrocomponents plc Electrocomponents SMT to provide the Board with greater visibility and insight on the 2025 Destination of implementation milestones. measurable against leverage identify opportunities to To expertise and globally. talent 7RHQVXUHVXI¿FLHQWWLPHLV allocated to implement a successful of handover transition and Chair. new the responsibilities to ensure thereTo is robust a succession the place for in plan reports. direct their SMT and the of culture the that ensure To prominently more is Company brought into the Board room. 7RGH¿QHDORQJWHUPVWUDWHJ\ engagement employment the for MyVoice. survey, • • • • • • Actions for 2021 The Board is responsible for assessing for responsible is Board The the Group’s long-term viability and deciding it is appropriate to adopt the concern going preparing the in basis accounts. Company and Group The Audit Committee reviews and Group’s the necessary, where challenges, of assessment process and assumptions, its going concern and viability. Further detail on these activities is set out in the Audit Committee Report on pages 76 to 82. concern going on statements Board’s The and viability can be found in the Strategic 44. and Report 43 pages on Remuneration The Board retains overall responsibility remuneration the that ensuring for practices to aligned are business the of the established purpose and values, and linked to the successful delivery of the Company’s long-term details Full strategy. work in Committee’s Remuneration the of this areais set out on pages 86 to 101. Going concern and viability

Strategy Culture and purpose Succession planningSuccession Outputs for 2020 for Outputs their effectiveness. Further detail on these activities is set out in the Audit Committee 82. and 81 Report pages on The analysis of the principal risks to the Group, the procedures for identifying emerging risks, and how they are managed are they how and risks, emerging and mitigated are set out in the Strategic Report on pages 36 to 42. outputs evaluation 2020 Group’s activities. activities. Group’s The Audit Committee separatelyconsiders controls internal and riskthe management of review annual including an the Group, of Audit, risk and internal risk control and Audit, The Board is responsible for ensuring the risks facing the Group are effectively LGHQWL¿HGDQGFRQWUROOHGWKURXJKWKHZRUN of internal and external audit activities. The Board has continued to monitor the internal and established risk management control procedures to ensure that they continue to be appropriate and effective ZLWKLQWKHVSHFL¿FFRQWH[WRIWKH Re-election Notwithstanding of provisions the Articles Association of Company’s the to Directors required all are (Articles), re-election stand for and retire each at AGM. As illustrated on pages 62 and 63, the Board has a diverse and appropriate works and experience, and skills of range effectively in its role. The Board, following process, also evaluation external the considers performs Director each effectively anddemonstrates their commitment to the role. The Board be they recommends that therefore AGM. re-elected year’s this at Annual Report and Accounts for the year ended March 31 2020 Audit Committee report Audit Committee

KLJKOLJKWV 2021 priorities • (QVXULQJWKHHI¿FLHQW • Ensure the Group conclusion of the maintains robust year-end audit process in processes throughout light of COVID-19 and that the COVID-19 crisis the Group’s risk and • Further drive the internal control Group’s information frameworks remained security strategy appropriately robust to • Continued risk assurance deal with its impacts RQVLJQL¿FDQWSRVW • Assessed the control investment capital environment in shared expenditure reviews business services in China, particularly for the Committee new and expanding use of responsibilities Members and attendance automated processes • Monitoring the integrity DQGDUWL¿FLDOLQWHOOLJHQFH RI¿QDQFLDOVWDWHPHQWV Louisa Burdett (Chair) 5/5 • Accounting changes, and announcements Karen Guerra 5/5 in particular IFRS 16 • Reviewing the Group’s John Pattullo1 2/2 • Continued focus on the LQWHUQDO¿QDQFLDOFRQWUROV Simon Pryce 5/5 Group’s information and internal control and David Sleath2 4/4 security, data protection risk management systems and payment card • Monitoring the Internal 1. John Pattullo stood down from the Audit Committee with effect from 1 September 2019. 2. David Sleath was appointed to the Audit Committee with effect from 1 June 2019. processing compliance Audit function • Managing the external Auditor

Dear shareholder 6SHFLÀFIRFXVGXULQJWKH\HDU As Chair of the Audit Committee, I am pleased to present the A fundamental part of the Committee’s work this year has been Committee’s Report for the year ended 31 March 2020. the focus on ensuring that the Group’s robust internal controls and risk mitigation frameworks have continued to operate effectively in The Committee undertakes a key role in the Company’s light of the COVID-19 pandemic, as well as overseeing the work governance framework. Its purpose is to provide oversight of that management and the external Auditor have undertaken WKH*URXS¶V¿QDQFLDOUHSRUWLQJSURFHVVHVDQGLQWHUQDOFRQWURO together to complete an effective audit of the Group’s year-end framework as well as acting as a source of independent challenge results. This oversight by the Committee has been all the more to management. It also oversees the effectiveness and important in circumstances that have meant the majority of the independence of our external Auditor, PricewaterhouseCoopers statutory audit and recent internal operational audit reviews have LLP (PwC). This Report sets out the role and responsibilities of had to be undertaken remotely. The Committee has taken the the Committee, as well as the work that it has undertaken during utmost care when carrying out detailed reviews of year-end the course of the year. disclosures in relation to COVID-19 throughout the Annual Report and Accounts and, in particular, the additional complex scenarios During the year the composition of the Committee underwent two and stress testing that have had to be put in place to be able to changes. First, David Sleath joined the Committee on 1 June 2019 prepare the viability statement, as set out on pages 43 and 44. following his appointment as a Non-Executive Director. I would like to thank David for his work to date and I look forward to his As well as dealing with the impact of COVID-19, the Committee continued and much-valued contributions to the Committee. also received a number of updates and progress reports to help in its work in supporting the Board. The Committee received Second, John Pattullo stepped down from the Committee on updates on shared business services and automation. These 1 September 2019, having stepped down from the Board on that updates included actions and progress following operational date. I would like to thank John for his valuable contributions to audits of the centre of expertise (COE) in Foshan, China, the the Committee’s work throughout his tenure and wish him the expansion of the EMEA Customer Services COE, and the best for the future. automation programme and strategy together with its associated governance processes.

76 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 77  YH OVDQG Electrocomponents plc Electrocomponents cyclesthe of Company and are generally held prior to Board meetings to ensure effectiveness of the collaboration with the Board. an additional This year, ad hoc Committee meeting was KHOGEULQJLQJWKHWRWDOQXPEHURIPHHWLQJVGXULQJWKH\HDUWR¿ Members and their attendance at meetings during the year are set out on page 76. Attendance of other individuals at the Committee’s meetings is at the invitation of the Committee Chair and does not restrict the decision-making. independent attendees Regular Committee’s include the Chair of the Board, other Non-Executive Directors who are not members of the Committee, the Chief Executive 2I¿FHU &(2 &KLHI)LQDQFLDO2I¿FHU &)2 &RPSDQ\6HFUHWDU\ Group Financial Controller, Vice President Group Operational PwC. the external Risk and Auditor, (VP and Audit Risk) and Audit 7KH&KLHI,QIRUPDWLRQ6HFXULW\2I¿FHUDOVRDWWHQGVWRSURYLGH regular progress updates against the Group’s information VHFXULW\VWUDWHJ\7KHQHZO\DSSRLQWHG'DWD3URWHFWLRQ2I¿FHU started to attend meetings during the year and will continue to give regular updates to the Committee on data protection matters. The Committee has independent access to the internal audit team and to the external The VP Auditor. Audit and Risk and the external direct Auditor have access to the Chair of the Committee outside formal Committee meetings. The Chair provides updates to the Board on the proceedings meeting. each of &RPSRVLWLRQRIWKH&RPPLWWHH The composition of the Committee underwent two changes this year: on when 1 June 2019 David Sleath was appointed as a member of the Committee; and on 1 September when 2019 John Pattullo stood down from the Committee. Further information about David’s roles and commitmentsare set out on page 62 of the Corporate Governance Report and pages 8385 to of the Report. Committee Nomination 7KH%RDUGLVVDWLV¿HGWKDWWKH&KDLURIWKH$XGLW&RPPLWWHH FRQWLQXHVWRKDYHFXUUHQWDQGUHOHYDQW¿QDQFLDODQGDFFRXQWLQJ experience required the by provisions of the UK Corporate Governance and Code) that the Code other (2018 members 2018 RIWKH&RPPLWWHHKDYHDVXI¿FLHQWO\ZLGHUDQJHRIEXVLQHVV experience, expertise and competence such that the Committee FDQHIIHFWLYHO\IXO¿OLWVUHVSRQVLELOLWLHV'HWDLOVRIWKHVNLO experience of the Committee members are given in their 63. and 62 pages on biographies Meetings of the Committee are generally scheduled to take place IRXUWLPHVD\HDULQDFFRUGDQFHZLWKWKH¿QDQFLDODQGUHSRUWLQJ DP Annual Reportand Accounts for the year ended March 31 2020 Louisa Burdett Chair of the Audit Committee 2020 June 1 The Committee was also updated on a crisis management exercise undertaken the by Senior Management (SMT) and Team facilitated an external by The provider. exercise was designed to HQVXUHWKDWWKH&RPSDQ\¶VFULVLVSODQLV¿WIRUSXUSRVHDQG, On behalf of the Committee, I would to thank like everyone for their time and contributions including the over past year, our LQWHUQDODXGLWDQG¿QDQFHWHDPVDQG3Z&LQSDUWLFXODU6DQGHHS Dhillon who took from over Chris Richmond as our new Senior Statutory Audit Partner after the completion of last year’s audit. This has been especially appreciated given the challenges raised by COVID-19. During the the Committee year, continued its focus on the Group’s information security in particular strategy, how the Group was approaching the delivery and prioritisation of complianceand risk-related changes. It discussed payment card processingrisk DQGUHFHLYHGDUHSRUWIURPWKH'DWD3URWHFWLRQ2I¿FHUZKRKDG been appointed during the year. Further details of the Committee’s work during the year can be Report. Committee Audit this within found The Committee was up to date kept on the impact of the new accounting standard ‘Leases’ IFRS 16 and the progress of the project to choose and implement a system to manage and account for leases on an ongoing basis. SOHDVHGWRUHSRUWWKDWWKH¿QGLQJVZHUHSRVLWLYH Asa result of the strategic Group’s investments in electronics inventory, the Committee considered the methodologyused to estimate the net realisable value of inventories and, after careful updated. being methodology the to agreed review, Following British Steel Limited entering compulsory liquidation, the Committee reviewed the impact on the Group’s results and the actions taken IESA by to minimise this impact. It discussed SURSRVHGUH¿QHPHQWVWR,(6$¶VSURFHVVHVWRPDQDJHDQG mitigate the impact of the risk of its clients failing in the future. Audit Committee report continued

$FWLYLWLHVGXULQJWKH\HDU The Committee continued to apply its robust approach While the 2018 Code was refreshed in July 2018, the main when assessing whether it can recommend to the Board functions of the Committee have not especially changed from WKDWLWFDQPDNHWKLVFRQ¿UPDWLRQ7KLVDSSURDFKLQFOXGHG previous years. The following activities remain our key focus: • Ensuring that there was a thorough understanding of the • $VVLVWLQJWKH%RDUGLQHQVXULQJWKHLQWHJULW\RIWKH¿QDQFLDO regulatory requirements for the Annual Report and Accounts. and corporate reporting and auditing processes. • Reviewing draft copies of the Annual Report and Accounts • Ensuring effective internal control and risk management early in the drafting process to assess the broad direction and systems are in place. key messages, with a further draft provided to the Committee • Measuring the Group’s effectiveness in managing risk. and Board prior to sign-off of the Annual Report and Accounts. • Assisting the Board to present a fair, balanced and • Assessing management’s fair, balanced and understandable understandable assessment of the Group’s position and YHUL¿FDWLRQSURFHVVDQGUHYLHZLQJLWVUHVXOWVLQFOXGLQJWKH SURVSHFWVLQWKHIXOO\HDUDQGKDOI\HDU¿QDQFLDOUHSRUWV cascaded sign-off across the Group to determine the accuracy, • Assisting the Board by reviewing and challenging the stress consistency and clarity of the data, information and language. testing performed, based on plausible scenarios arising from • Ensuring that a thorough review of the Annual Report and selected principal risks, in assessing the long-term viability Accounts was undertaken by all appropriate parties including of the Group. external advisors. • Approving the remit of the Internal Audit function and reviewing LWVHIIHFWLYHQHVVDQG¿QGLQJV The use and disclosure of alternative performance measures • Ensuring that an appropriate relationship is maintained were also considered by the Committee as part of this process between the Group and its external Auditor, including the DQGLWFRQ¿UPHGLWVEHOLHIWKDWVHSDUDWHGLVFORVXUHRIWKHVH recommendation to the Board to approve its appointment measures enables readers of the Annual Report and Accounts and fees. WRXQGHUVWDQGPRUHFOHDUO\WKHXQGHUO\LQJ¿QDQFLDODQG • Monitoring progress on the implementation of the information operating performance of the Group. Further details on security strategy to mitigate one of the Group’s major risks. DOWHUQDWLYHSHUIRUPDQFHPHDVXUHVLQFOXGLQJWKHLUGH¿QLWLRQV • Reviewing the scope and effectiveness of the external and reconciliations are set out in Note 3 on pages 119 to 123. audit process. The Committee reviewed the costs associated with the • Reviewing whistleblowing and fraud procedures. conclusion of the second phase of the Performance Improvement Plan and agreed that they continued to amount to substantial The main activities of the Committee during the course of the reorganisation costs which are excluded from adjusted year are set out on the following pages and further information measures and with their disclosure in Note 7 on page 125. can be found in the corporate governance section of our It also reviewed the impact and disclosure in Notes 19 and 23 corporate website. on pages 138 and 144 respectively of the receivables written off due to British Steel Limited entering compulsory liquidation )LQDQFLDOUHSRUWLQJ on 22 May 2019 and agreed that these amounted to 7KHSULPDU\UROHRIWKH&RPPLWWHHLQUHODWLRQWR¿QDQFLDOUHSRUWLQJ substantial one-off asset write-downs which are excluded LVWRPRQLWRUWKHLQWHJULW\RIWKH*URXS¶VSXEOLVKHG¿QDQFLDO from adjusted measures. LQIRUPDWLRQLQFOXGLQJUHYLHZLQJLWVIXOO\HDUDQGKDOI\HDU¿QDQFLDO results. The Committee undertakes this with both management The Committee has reviewed the Annual Report and Accounts and PwC and concentrates on ensuring compliance with the for the year ended 31 March 2020 and has advised the Board UHOHYDQW¿QDQFLDODQGJRYHUQDQFHUHSRUWLQJUHTXLUHPHQWV,W that, in its opinion, the Annual Report and Accounts, taken as considers the principal accounting policies used when preparing a whole, is fair, balanced and understandable and provides WKHVHUHVXOWVDVZHOODVUHYLHZLQJWKHVLJQL¿FDQWDFFRXQWLQJ the information necessary to assess the Group’s position and issues and areas of judgements made as noted on page 79. performance, business model and strategy. It believes the Annual To support the Committee’s work in this regard, it receives 5HSRUWDQG$FFRXQWVLQFOXGHVVXI¿FLHQWGLVFORVXUHRIWKHLPSDFW regular reports from the CFO and the Group Financial Controller. and expected impact of the COVID-19 pandemic.

As part of its role, the Committee provides advice to the Board 6LJQLÀFDQWDFFRXQWLQJLVVXHVDQGDUHDVRIMXGJHPHQW as to whether the Annual Report and Accounts, taken as a whole, When preparing the Group accounts, there are a number is fair, balanced and understandable and whether the assessment of areas which require management to exercise judgement. of the Group’s going concern assumptions and longer-term 7KH&RPPLWWHHIRFXVHVLQSDUWLFXODURQDQ\VLJQL¿FDQWDUHDV viability are reasonable. of judgement that may materially impact reported results, as well as the clarity and transparency of related disclosures. Fair, balanced and understandable The Committee assesses whether these judgements are 7KH%RDUGLVUHTXLUHGWRFRQ¿UPWRWKH&RPSDQ\¶VVWDNHKROGHUV reasonable and appropriate. that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the necessary 7KHVLJQL¿FDQWDFFRXQWLQJLVVXHVDQGDUHDVRIMXGJHPHQW information and key messages to enable shareholders and other considered by the Committee during the year, and how stakeholders to assess the Group and the Company’s position these were addressed, are set out on the next page. and performance, business model and strategy.

78 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 79

WEHQH¿WREOLJDWLRQ WEHQH¿WREOLJDWLRQV HFWFRPPHUFLDOUHDOLW\ HWHVWV¶FRQ¿UPDWLRQWKDW HVDQG HZLOODOVRUHYLHZWKHVH WKHYDOXDWLRQLVUHDVRQDEOH URXS7KHDVVXPSWLRQVSXW DOOHIIHFWRQWKHHVWLPDWLRQ Electrocomponents plc Electrocomponents nt write off of £7.3 million for receivables for million write off £7.3 nt of XVLQJFDVKÀRZVDQGGLVFRXQWUDWHVDVVHWRXWLQ1RWHRQSDJ The Group estimates the net realisable value of inventories in order to determine the value of any provision required. As a result of the Group’s strategic investments in electronics inventory, the methodology used to estimate the net realisable value of inventories was updated during the year in RUGHUIRULWWRFRQWLQXHWRUHÀHFWFRPPHUFLDOUHDOLW\7KHRYHU of net realisable value as a result of these investments and updating the methodology was not material. The Committee reviewed the updated methodology and, after discussion with PDQDJHPHQWDQGWKHH[WHUQDO$XGLWRUDJUHHGLWZRXOGEHWWHUUHÀ In the estimation of net realisable value, judgements key relate to the number of years of sales there are in inventories of each article and the value recoverable from these inventories. These assumptions are based on recent experience and knowledge of the products on hand and are reviewed regularly. The latest review was presented to the Committee and it reviewed and agreed the reasonableness of the assumptions. on the net realisable value of inventories. In order to reach these conclusions, the Committee also discussed with senior managers the inventory management process and the improvements made during the year. 6PDOOFKDQJHVWRWKHDVVXPSWLRQVXVHGWRYDOXHWKH8.UHWLUHPHQ particularly changes in bond yields used to determine the discount rate, can have a VLJQL¿FDQWLPSDFWRQWKH¿QDQFLDOSRVLWLRQDQGUHVXOWVRIWKH* forward by the actuaries and Group Pension Manager were reviewed by the Committee. The Committee also reviewed the external Auditor’s comparisons of the assumptions with those of other similar schemes. After discussion, the Committee agreed the UHDVRQDEOHQHVVRIWKHDVVXPSWLRQVXVHGLQYDOXLQJWKHUHWLUHPHQ The Committee receives regular updates on challenges by local tax authorities and any other areas of potential risk. It reviews the effective tax rate, the balance sheet provision at the half year and the full year and relevant disclosures, and discusses the position with senior managers as wellas the external Auditor. It also reviewed the adoption of IFRIC 23 ‘Uncertainty over Income Treatments’ Tax in the year and its impact on the Group’s taxation provision. The Committee agreed the reasonableness of the tax provision and that the appropriate. and reasonable were disclosures The value of goodwill is reviewed regularly for impairment using value-in-use using impairment regularly for models reviewed goodwill is of value The The Committee reviews these impairment tests every including year, the assumptions. key The Committee also reviewed the updated impairment tests which take into consideration WKHSRVVLEOHLPSDFWRIWKH&29,'SDQGHPLF,WDJUHHVZLWKWK there remains adequate headroom in place and no impairment provision is required. Other assets are regularly reviewed to ensure there are no indicators that they may be LPSDLUHG,IDQ\VLJQL¿FDQWLPSDLUPHQWVDUHIRXQGWKH&RPPLWWH LPSDLUPHQWWHVWVLQFOXGLQJWKHNH\DVVXPSWLRQVFRQ¿UPLQJWKDW The Committee also reviewed and agreed with management’s assessment that there subseque and allowance impairment an be should still outstanding relating to transactions with British Steel Limited before it entered compulsory liquidation. The Committee also reviewed and agreed with the additional trade receivable impairment allowance described in Note 23 on pages to 146 due 142 to the pandemic. COVID-19 It agreed that the COVID-19 pandemic is currently not expected to have a material impact How the Committee addressed these matters and conclusions reached

DV

WKH8.DQGVPDOOHUGH¿QHGEHQH¿WVFKHPHVLQWKH5HSXEOLFRI total the March 2020, 31 At Italy. and France Germany, Ireland, QHWGH¿FLWLQUHODWLRQWRWKHVHUHWLUHPHQWEHQH¿WREOLJDWLRQVZ £55.8 million £83.6 (2019: million), of which the UK was £43.3 million £69.4 (2019: million). Key judgements are made in retirement the valuing when used assumptions the to relation EHQH¿WREOLJDWLRQV6HH1RWHRQSDJHVWR There is £241.1 millionThere is of goodwill £241.1 on the balance sheet at March31 2020 £231.2 (2019: million), the majority of which relates to the acquisition of Allied Electronics, Inc. in July 1999. used assumptions the to relation in made are judgements Key in the value-in-use models which are used to assess impairment of goodwill and other assets when there are indicators that they impaired. be may The Group operates across many different tax jurisdictions and is subject to periodic challenges by local tax authorities on a range of matters during the normal course of business. Thesechallenges in made are judgements pricing.currently transfer include Key assessing the levels of tax contingenciesrequired for current risk potential of areas and losses of recoverability challenges, where the precise impact of tax laws and regulations is unclear. The Group’s taxation provision million was £7.0 as March at 31 million).2020 £7.8 (2019: See on pages Note to 11 134. 132 7KH*URXSKDVDPDWHULDOGH¿QHGEHQH¿WSHQVLRQVFKHPHLQ Inventories represent a material proportion of the Group’s Group’s the proportion of material a represent Inventories net assets. March At 31 2020, the Group million had £419.0 £387.2 million)(2019: of inventories on the balance sheet. realisable net the estimating in made are judgements Key value of inventories. SeeNote on page 18 138. Inventories valuation Inventories Taxation ,PSDLUPHQWRIJRRGZLOODQGRWKHUDVVHWV 5HWLUHPHQWEHQHÀWREOLJDWLRQV 6LJQLÀFDQWDFFRXQWLQJLVVXHV DQGDUHDVRIMXGJHPHQW Annual Report and Accounts for the year ended March 31 2020 Audit Committee report continued

*RLQJFRQFHUQDQGYLDELOLW\VWDWHPHQWV The Committee receives quarterly reports from the VP Audit As part of the Committee’s responsibility to provide advice to and Risk on the performance of the Group’s system of internal the Board, the Committee reviewed the Group’s going concern control and its effectiveness in managing our principal risks and in assumptions and reviewed and challenged the process and identifying control failings or weaknesses. These reports and their assessment of the Group’s longer-term viability. For the viability ¿QGLQJVDUHFDUHIXOO\FRQVLGHUHGE\WKH&RPPLWWHHZLWKVSHFLDO statement, this included reviewing the assessment period attention paid to those reports which cover delivery of the Group’s selected as well as the assumptions used in the stress testing key strategic objectives or that indicate improvement is required performed, which was based on plausible scenarios arising in any given process or control. from selected principal risks. The Committee also reviewed the additional scenarios and reverse stress tests performed to assess The Committee reviews the Group’s risk management process the impact of the COVID-19 pandemic on the viability of the annually, as required by the 2018 Code, the Financial Reporting Group. Details of these statements are noted on pages 43 Council (FRC) Guidance on Audit Committees and the and 44 of the Strategic Report. recommendations of the FRC Guidance on Risk Management, Internal Control and Related Financial and Business Reporting. Other matters 7KHVHUHYLHZVLQFOXGHPDWHULDOFRQWUROVZKLFKFRYHU¿QDQFLDO The Committee also carried out a range of other activities operational and compliance controls and risk management LQUHODWLRQWR¿QDQFLDOUHSRUWLQJLQWKH\HDULQFOXGLQJ systems, and their outcomes are shared with the Board. These, • Receiving reports on the progress of the Group’s together with the regular updates to the Board on the Group’s implementation project for IFRS 16 ‘Leases’ at every meeting principal risks, allowed the Board to assess the systems of from November 2017 to November 2019. It reviewed and internal control and the residual risk for the purposes of making discussed the progress of the project and agreed with the its public statement within this Annual Report and Accounts. impact assessments included in these reports. Further information regarding the Group’s principal risks and • Reviewing the progress of the project to choose and implement uncertainties is given on pages 36 to 44 of the Strategic Report. a system to manage and account for leases under IFRS 16 on an ongoing basis which was completed during the year. The effectiveness of the business’s operational controls in the • Reviewing the impact of other amendments to accounting current COVID-19 trading environment are being reviewed by standards adopted during the year. the Group’s internal audit team. This is on a risk-based approach • Reviewing and agreeing the accounting treatment and (by business function and market) with reporting, as normal, disclosure of any potential post-balance sheet events at to the relevant management teams and to the Committee. both the half-year and full-year. Where weaknesses in the internal control system have been ,QWHUQDOFRQWURODQGULVNPDQDJHPHQW LGHQWL¿HGSODQVIRUVWUHQJWKHQLQJWKHPDUHSXWLQSODFHDQG The Board is responsible for the Group’s systems of internal regularly monitored. The Committee is pleased to report that control and risk management, and their effectiveness is detailed WKHUHZHUHQRVLJQL¿FDQWFRQWUROIDLOLQJVRUZHDNQHVVHVLGHQWL¿HG in the Corporate Governance Report on page 75, together with during the year. the going concern and viability statements on pages 43 and 44.

$XGLW&RPPLWWHHUHYLHZVRILQWHUQDOFRQWURODQGULVNPDQDJHPHQW

Audit Reports Committee to the Board

The Audit Committee provides reports on the outcomes of its reviews, Quarterly and Annual review Other reviews together with updates annual reviews on of internal audit e.g. governance on risk management internal controls and – scope and around robotic risk management resourcing process automation

Group VP Audit CEO / CFO Financial and Risk Controller

80 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 81

Electrocomponents plc Electrocomponents with the provisions of the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Processes and Audit Committee Responsibilities) Order 2014, published the by Competition and Markets Authority on 26 2014. September Auditor (IIHFWLYHQHVVDQGLQGHSHQGHQFH performance the CommitteeThe reviewing for responsible is and effectiveness of the external Auditor. 7KLVUHYLHZLVXQGHUWDNHQDQQXDOO\DQGFRYHUVTXDOL¿FDWLRQ expertise, resources and appointment as well as ensuring that there are no issues which could adversely affect the external considers also It the objectivity. independence and Auditor’s robustness of the audit activity itself, the quality of delivery and feedback received from senior managers across the Group. The Committee assesses how well the external PwC, Auditor, has exercised professional scepticism and whether it has provided an appropriate degree of constructive challenge to management. As part of risk evaluation planning, the Committee also considers the risk of PwC withdrawing from themarket. During the the Senior year, Statutory Audit Partner, Sandeep Dhillon, together with other relevant and appropriate members of the PwC audit team, attended all the Committee meetings. They Committee the provided with information conclusions PwC’s and on accounting the key Group’s judgements, internal control processes, Annual Report and Accounts and half-year report. Having given careful consideration to the above requirements and the performance of PwC, the Committee concluded that it would recommend to the Board that PwC be reappointed as external The BoardAuditor. accepted the Committee’s recommendation reappoint shareholders to to put be resolution a that agreed and PwC at the forthcoming Annual General Meeting. Further details of how the Committee and PwC work together, as well as how PwC’s independence is maintained, can be found in the corporate governance section of our corporate website. 7KH&RPPLWWHHDOVRFRQ¿UPVWKDWDVLQRWKHU\HDUVWKH*URXS does not engage PwC to undertake work any that could threaten independence. this 7KH&RPPLWWHHLVVDWLV¿HGWKDWWKH&RPSDQ\KDVFRPSOLHG During 2020, the Committee was updated on the results of a crisis management exercise which was carried out in the latter half of our by SMT and2019 facilitated an external by This provider. was last the in undertaken has team the that exercise such third the few years, with the objective being to ensure that the Company’s FULVLVSODQZDV¿WIRUSXUSRVH7KHFRQFOXVLRQZDVWKDWWKH exercise did meet its objective and the results were shared Committee. the with Following British Steel Limited entering compulsory liquidation, the Committee received a report management from IESA’s GHWDLOLQJWKHDFWLRQVWDNHQWRPLQLPLVHWKH¿QDQFLDOLPSDFW of this on the results. Group’s The Committee discussed the procedures processes and IESA’s to made being improvements to reduce the impact new of any or existing customers failing future. the in S

g results against forecast 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 the resolution RIDQ\FRQWUROLVVXHVLGHQWL¿HG Whistleblowing procedures allowing individuals to report fraud RU¿QDQFLDOLUUHJXODULWLHVDQGRWKHUPDWWHUVRIFRQFHUQ Weekly, monthlyWeekly, and annualreporting cycles, including targets approved the by Board and regular forecast updates. Local reviewin leadership teams 6SHFL¿FUHSRUWLQJV\VWHPVFRYHULQJWUHDVXU\RSHUDWLRQV Assessments Internal by Audit on the effectiveness of controls. operational Clear terms of reference setting out the duties of the Board and its committees, with delegation to management in all locations. outlining manuals Group Group Finance Treasury and controls. and policies accounting and agreed performance metrics and targets with overall performance reviewed at region and Group levels. major investment projects and legal and insurance activities, and legal projects and investment major which are reviewed the by Board and its committees on a regular basis. The effectiveness of the internal audit function. audit internal the of effectiveness The Annual Reportand Accounts for the year ended March 31 2020 • • The Committee The reviews: Internal audit audit Internal The work of the internal auditfunction spans the whole Group and provides independent and objective assurance the over Group’s systems of internal controls through a risk-based approach. The Committee annually reviews and approves the scope and resourcing of the internal audit plan with the VP Audit and Risk. The scope of the plan is determined reference by to the Group’s operating risks and strategic priorities as well as perceived geographic, functional and external risks. This plan has been recently updated to focus on the changed roles and business practices as a result of COVID-19. • • • • • • • The main elements include: elements main The ,QWHUQDOÀQDQFLDOFRQWUROV ,QWHUQDO¿QDQFLDOFRQWUROVDUHWKHV\VWHPVHPSOR\HGE\WKH*URX supportto for responsibilities Directors their discharging the in ¿QDQFLDOPDWWHUV7KRVHUHVSRQVLELOLWLHVDUHQRWHGRQSDJH 7KH&RPPLWWHHDOVRUHFHLYHGLWV¿UVWUHSRUWRQWKH&RPSDQ\¶V Company’s Compliance the from programme Protection Data QHZO\DSSRLQWHG'DWD3URWHFWLRQ2I¿FHU,WLVDQWLFLSDWHGWKDW these reports willbe presented to the Committee twice a year, reports additional with required. as Other activities Other During the the Committee year, continued its work overseeing the enhancement of the information Group’s security strategy together with updates on data protection and card processing compliance. This included receiving reports on the Group’s Payment Card Industry compliance (PCI) workstream in relation to PCI Data Security Standards, the technical and operational requirements the set by PCI Security Standards Council to data. cardholder protect • The VP Audit and Risk has open regular, access to the Chair of the Committee via various media, including phone, by Microsoft and face-to-faceTeams meetings. Discussions focus on audit planning and matters noted during internal audit assignments. Other members of the Committee are also available as required. The Committee meets with the VP Audit and Risk without the presence management of at least once a year. Audit Committee report continued

Tender and rotation Fraud PwC was appointed as the Group’s external Auditor following an The Committee is also responsible for reviewing the procedures external tender process carried out in 2014. It is our intention to for the prevention and detection of fraud in the Group. Suspected retender the audit at the latest in 2024 in accordance with the EU cases of fraud must be reported to the Company Secretary within Audit Regulation and Directive, and the Companies Act 2006, 48 hours and investigated by operational management or Internal which states that there should be a public tender every 10 years Audit, as appropriate. The outcome of any investigation is and a change of external Auditor at least every 20 years. reported to the Company Secretary and the CFO. A register of all The Committee will keep this under review. Shareholders should suspected fraudulent activity and the outcome of any investigation rest assured that, in their best interests, the tender process is kept and circulated to the Board on a regular basis, with the will be conducted at the most conducive time. There are no Committee also receiving regular updates. The Group takes steps contractual obligations that restrict the Committee’s choice in line with good business practice to detect and prevent of external Auditor. fraudulent activity. The Committee is pleased to report that there were no frauds of a material nature discovered during the year, Sandeep Dhillon took over from Chris Richmond as Senior although the Group is subject to various attempts at external Statutory Audit Partner after the completion of last year’s audit. and low-level credit card and online fraud. Sandeep is due for rotation after the 2024 audit. :KLVWOHEORZLQJ 1RQDXGLWDVVLJQPHQWVXQGHUWDNHQE\WKH$XGLWRU In accordance with the provisions of the Code of Conduct, To safeguard the independence of the external Auditor, the the Committee is responsible for reviewing the arrangements Group operates a policy to ensure that the provision of non-audit ZKHUHE\DOOVWDIIPD\LQFRQ¿GHQFHUDLVHFRQFHUQVDERXW services does not impair the external Auditor’s independence or illegal, unethical or improper behaviour or other matters and for objectivity. In determining the policy, the Committee has taken into ensuring that these concerns are investigated and escalated as account possible threats to the external Auditor’s independence appropriate. An external third party operates the reporting tools, and objectivity. except in Germany where local regulations prohibit this and an in-house alternative has been set up. Whistleblowing is referred The policy on non-audit services includes: to internally as Speak Up and is available to all employees. The • In providing a non-audit service, the external Auditor should not: Committee receives aggregated reports on matters raised – Audit their own work through these services and monitors their resolution. – Make management decisions for the Group – Create a mutuality of interest 7HUPVRI5HIHUHQFH – Find themselves in the role of advocate for the Group The Committee’s Terms of Reference are available in the • 7KHWRWDOQRQDXGLWIHHVIRUDQ\¿QDQFLDO\HDUVKRXOGQRW corporate governance section on the corporate website exceed 70% of the average of the external audit fee over the electrocomponents.com. last three years. In practice the non-audit fees are normally VLJQL¿FDQWO\EHORZWKLVOHYHO

Full details of our policy in relation to non-audit services can be found in the corporate governance section of our corporate website. This policy was reviewed by the Committee during the year and no changes were required.

During the year under review the non-audit fees for PwC were £3,000 compared to audit fees of £1.7 million. Further information on fees payable to PwC are included in Note 5 on page 124.

7KH&RPPLWWHHLVVDWLV¿HGWKDWWKHH[WHUQDO$XGLWRUFRPSOLHVZLWK both the 2018 Code and the FRC’s Ethical and Auditing Standards regarding the scope and level of non-audit work and non-audit fees incurred by the Group.

Committee evaluation This year, in accordance with the 2018 Code, the Board underwent an externally facilitated evaluation. As part of this process, the activities of the Committee were also reviewed. The external evaluation concluded that members were happy with how the Committee works, and that the Chair had continued to perform well in her role, with much praise for her organisation, agenda setting and chairing.

Further details of the evaluation process can be found in the Corporate Governance Report on pages 74 and 75.

82 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 83 Reviewing the structure, knowledge,skills, experience and diversity of the Board and Identifying the for nominating, the of approval candidates Board, WR¿OOYDFDQFLHV Succession planning and Executive both for Directors Non-Executive Committee responsibilities • • • Electrocomponents plc Electrocomponents Board refresh Board Enhanced Director Non-Executive induction process Diversity and inclusion (D&I) Identify suitable a succeed to candidate Peter Johnson as Chair of the Board and Board Internal committee evaluation Embedding and support to continuing on work Group’s the itsD&I policy As well as reviewing candidates and recommending the above appointments to the Board, the Committee’s work during the year considering included receiving and also succession on updates and (SMT) Team Management Senior Group’s the for planning the Group’s Future Shapers programme global (our early career talent development programme). Further details on this work are set out in this Report. 7KH&RPPLWWHH¶VIRFXVIRUQH[W\HDUZLOOFHQWUHRQ¿QGLQJD suitable successor to Peter as Chair of the Board and drawing effectiveup the embedding induction for training plans and candidate. selected I would to thank like fellow my Committee members for their work during what has been a very busy year. David Sleath David Committee Nomination the of Chair 1 June 2020 KLJKOLJKWV • • • priorities 2021 • • • RQ 1/1 3/4 4/4 4/4 4/4 4/4 4/4 4/4 2/2 FRQÀLFW

1

4

2 3

David Sleath was appointed to the Committee on 1 June 2019 and subsequently December 2019. 13 Committee on the of Chair .DUHQ*XHUUDZDVXQDEOHWRMRLQRQHPHHWLQJGXHWRDVFKHGXOHG John Pattullo stood down from the Nomination Committee with effect from 1 September 2019. 2019. November 1 Committee the on to appointed was Wainwright Joan

Simon PryceSimon Joan Wainwright   4. 1. 3. David Sleath (Chair) Sleath David Members and attendance and Members John Pattullo John Peter Johnson Lee Bessie Bertrand Bodson Louisa Burdett GuerraKaren 'HDUIHOORZVKDUHKROGHU ,DPSOHDVHGWRSUHVHQWP\¿UVWUHSRUWDV&KDLURIWKH1RPLQDWL ,QWKH&RPPLWWHHLGHQWL¿HGWKHQHHGWRDSSRLQWWZRQHZ Non-Executive Directors: one who had experience in China, and another who could succeed John as SID. The subsequent searches led to the appointments of Bessie Lee and myself in March and respectively. June 2019 2019 The Committee also a as Joan Wainwright of appointment the managed Non-Executive Director. Joan brings a wealth of experience of the distribution industry. myself, both Like Bessie and Joan became members of the Committee on their appointment. In September John Pattullo 2019, stood down from the Board and therefore also stood down from his role on the Committee. I would to thanklike John for his contribution to the Committee during his tenure and wish him all the best for the future. During we saw the several year, changes to the Committee. Peter Johnson stood down as Chair of the Committee in December as he reached 2019 theninth anniversary of his appointment to the Board. Peter remains a member of the Committee and I look forward to continued collaboration with him. Committee since being appointed to that role in December 2019.

Nomination Committee report Nomination Committee Annual Report and Accounts for the year ended March 31 2020 Nomination Committee report continued

&RPSRVLWLRQRIWKH&RPPLWWHH $QH[WHUQDOVHDUFK¿UPZDVQRWHQJDJHGWR¿QG-RDQDVVKHZDV The Committee is comprised entirely of Non-Executive already well known in the distribution sector given her roles at 'LUHFWRUVDQGWKH%RDUGLVVDWLV¿HGWKDWZLWKWKHH[FHSWLRQ TE Connectivity as President, Channel & Customer Experience, of Peter Johnson, the Non-Executive Directors are completely and at Merck as Vice President of Public Affairs. She was independent. Peter reached his nine-year tenure in October 2019, therefore approached directly to gauge whether she might be but the Board believes Peter should remain a member of both the interested in joining the Board. The Committee recognises that Board and the Committee in order to ensure a smooth transition this is a deviation from its normal practice of engaging external of the role of Chair to a new incumbent once appointed. Details of consultants, which is its usual method for selecting candidates. the skills and experience of the Committee members are given in However, Joan was subject to rigorous interviews and meetings their biographies on pages 62 and 63. with all members of the Committee and the Board as a whole, in order to test her knowledge, skills and overall suitability before $FWLYLWLHVGXULQJWKH\HDU the Committee was prepared to recommend her appointment to the Board. Non-Executive succession In light of the 2018 UK Corporate SODQQLQJDQGGLYHUVLW\ Governance Code’s (2018 Code) Joan’s experience and skill set cover extensive distribution position on chair tenure, the Committee experience as well as strong insight into the customer dynamics in FRQ¿UPHGLWVFXUUHQWDSSURDFKWR succession planning for Peter Johnson the US, having previously worked at TE Connectivity for 13 years. as Chair of the Board. Following During her time there, she built their Global Channel business, consultations with major shareholders, which generates US$2 billion in annual sales through nearly 250 it was agreed for Peter to remain as distributors around the world serving approximately 400,000 TE Chair until around the middle of the customers. Furthermore, Joan created TE’s Customer Experience calendar year 2021 to ensure that David Sleath had time to settle in as SURJUDPPHWKDWUHVXOWHGLQ¿YH\HDUVRIFRQWLQXRXVLPSURYHPHQW the new SID and to oversee a smooth and a 20-point increase in its Net Promoter Score, plus a 25% transition of Peter’s responsibilities improvement in Customer Effort Score in just over a year. These to the new Chair, once appointed. were the type of credentials which the Committee was searching

([HFXWLYHVXFFHVVLRQSODQQLQJ The Committee reviewed executive IRUDQGERWKWKH&RPPLWWHHDQGWKH%RDUGZHUHIXOO\VDWLV¿HGWKDW succession and development plans Joan would be an excellent addition to the Board. for internal successors to the Chief ([HFXWLYH2I¿FHU &(2 DQGWKH Chair tenure &KLHI)LQDQFLDO2I¿FHU &)2  Peter Johnson was appointed to the Board as Chair in October 2010. Since his appointment, Peter has overseen the appointment 6HQLRUPDQDJHPHQW The Committee received updates on VXFFHVVLRQSODQQLQJ the performance of direct reports to the of our current Executive Directors and driven the shape of CEO and other senior hires across the our Board that we see today. The business transformation business as well as progress on the programme is still in progress while we work through our journey Group’s Future Shapers programme. to Destination 2025. We therefore wish for a careful and phased transition between Peter and his successor to help sustain our business momentum. The Committee believes that Peter Board membership continues to act and perform effectively as Chair. For these Following their appointments to the Board, both Bessie Lee reasons, while mindful of the 2018 Code position, the Committee and David Sleath were fully inducted into the business this believes that it is in the best interest of the Company that Peter year. Details of the induction framework are set out on page 73. remain as Chair of the Board for an extended period with a view that Peter steps down in or around mid calendar year 2021. David also took on the role of SID following John Pattullo’s resignation from the Board on 1 September 2019, having been 6XFFHVVLRQSODQQLQJ LGHQWL¿HGDVWKHPRVWDSSURSULDWH1RQ([HFXWLYH'LUHFWRU The Committee continues to keep its focus on size and to do so. composition of the Board and its Committees including whether the increase in size following the recent appointments remains (DUO\LQWKH&RPPLWWHHKDGLGHQWL¿HGWKHQHHGIRUD%RDUG appropriate given the nature and scale of the business. PHPEHUZLWKVLJQL¿FDQWGLVWULEXWLRQH[SHULHQFHDVNLOOPLVVLQJ from the overall Board composition. The Committee pursued ,QWKHQH[W¿QDQFLDO\HDUWKH&RPPLWWHHZLOOEHIRFXVLQJKHDYLO\ its search for such an individual during the year and looked RQ¿QGLQJDVXLWDEOHVXFFHVVRUWR3HWHU-RKQVRQDV&KDLURIWKH for candidates with experience in distribution and customer %RDUG$IWHUDUHYLHZRIVHDUFK¿UPVFDUULHGRXWLQWKH\HDULW dynamics. The search culminated in the recommendation was agreed that Russell Reynolds would be used for the search and appointment of Joan Wainwright, who was appointed process for potential chair candidates. The Committee will also to the Board as a Non-Executive Director in November 2019. ensure a robust and detailed induction process is in place to promote the smooth transition from Peter to his successor.

6HQLRU0DQDJHPHQW7HDP As part of its ongoing work to identify and recommend potential internal successors to the CEO and the CFO, the Committee received updates on the performance and development of emerging talent further along the pipeline. The Committee will continue to review the succession pipeline, including potential successors to Lindsley Ruth, as well as review contingencies for any unexpected departures at the senior management level.

84 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 85 Electrocomponents plc Electrocomponents 7HUPVRI5HIHUHQFH The Committee’s of Reference Terms are available in the website corporate the on section governance corporate electrocomponents.com. Executive Directors one-year have rolling contracts. Non- Executive Directors do not service have contracts but instead a letterhave of appointment which sets out expected time commitments. Such time commitments can involve peaks of activity at particular times. Details of the Company’s policy on Executive Directors’ service contracts and terms of appointment for Non-Executive Directors are set out in the Directors’ Remuneration Report on page 100. Non-Executive Directors are normally expected to serve for can independence, maintain they that proviso the on years six contribute meaningfully commitments to and time their honour the Board’s discussions and its activities. They be may invited to serve with longer, extension any being on an annual basis, but this would be subject to rigorous and the review by, recommendation the of, Committee as well as at the discretion of the Board. Service beyond nine years is considered on a purely exceptional basis and if such extension can be proven to be in the best interests of both the Board and the and to assistCompany, necessary any in succession planning. Karen Guerra has served on the Board for seven years. In light of her continued independence and commitment to the role, the Committee has recommended that her termof service be extended in accordance with her letter of appointment. Karen will therefore be standing for re-election at the 2020 AGM and will step down from the Board at the end the of calendar year. The terms of appointment for the Board members are available IRULQVSHFWLRQDWWKH&RPSDQ\¶VUHJLVWHUHGRI¿FH 7HUPVRIDSSRLQWPHQW N

I the Group’s D&I activity and guide both the approach and how success determined. is would manage the transition well. They werehighly supportive of David Sleath handling the search IRUDQHZ&KDLURIWKH%RDUGH[SUHVVLQJFRQ¿GHQFHWKDWKH The Committee is also responsible for ensuring proper succession planning below Board level, in particular the senior management pipeline. It is therefore important that D&I is the is this ensure actively To Group. the throughout embedded case, the Company has been developing a Group-wide D&I strategy that aligns with its business strategy and is designed to increase momentum and make a step change impact on the Group’s people and culture. This strategy is fully aligned with the corporate responsibility strategy set out on pages 45 to 57, WRJHWKHUZLWKWKH¿YHVWUDWHJLFSULRULWLHVZKLFKXQGHUSLQDOOR The Committee maintains its Policy Statement emphasising emphasising Statement CommitteeThe Policy its maintains its adherence to the Group Diversity Policy in considering succession planning and recruitment at Board level. The Committee believes that it is in the Company’s best interests to maintain and encourage diversity in its broadest sense at Board level. Therefore recruitment consultants are expected to have wide search parameters so that a diverse range of candidates for Board any position be may considered, including with regard ethnicity,to gender, social and educational background. The Committee is pleased to note that, following the appointments of Joan and Bessie to the Board, 40% of its members are female. 'LYHUVLW\DQGLQFOXVLRQ The results of the Committee’s evaluation showed that the Committee needs to keep the size of the Board in mind going IRUZDUGEXWWKDW%RDUGPHPEHUVZHUHYHU\VDWLV¿HGZLWKLWVZRU Committee evaluation externally facilitated by was evaluation Board year’s This Bernice Dunsmuir at Constal Limited. Under Code, the 2018 Board evaluations are owned the by Nomination Committee. Given the changes during the year to the Chair of the Committee, the Committee composition as a whole and the change in SID, the evaluation was carried out underthe remit of the Board and excluded an evaluation of David Sleath. Results of the evaluation are set out in the Corporate Governance Report on pages 74 and 75. The Committeehad previously agreedthat in order to best Karen employees, Group’s the with engagement Board facilitate undertake employees opportunityGuerra with the would meet to DURXQGWKHEXVLQHVVDQGSURYLGHWKH%RDUGZLWKKHU¿QGLQJV These were to include issues raised employees, by what employees would to see like more of and what employees would to seelike changed or further developed. During a the year, framework for how to do this in a manner that was best suited to the business was developed and can be found on page 69 of the Corporate Governance Report. A case study describing one visits of Karen’s can be found on page 72. 6WDNHKROGHUHQJDJHPHQW The Committee also received updates during the year on the programme global This Shapers programme. Future Group’s involves identifying and investing in people who are earlyin their career and who the have potential and the desire to be critical to the business’s future success. Most of those undertaking the career trajectory accelerated an have to expected are programme as a result and to be moving into a bigger role in the Group. Further details on this initiative can be found on page 51. Annual Reportand Accounts for the year ended March 31 2020 Directors’ remuneration report Remuneration Committee

2020 highlights • (QVXUHPDQDJHPHQW • 5HYLHZRI([HFXWLYH continues to be 'LUHFWRUVDQGWKH6HQLRU LQFHQWLYLVHGWRGHOLYHU 0DQDJHPHQW7HDP 607  stretch performance UHPXQHUDWLRQLQOLJKWRI DJDLQVWWKHDJUHHG &29,'SDQGHPLF FRUSRUDWHVWUDWHJ\ LQFOXGLQJGHOLYHULQJWKH 2020 annual bonus Committee in deferred shares responsibilities • ,PSOHPHQWDWLRQRIQHZ • 0DLQWDLQLQJDVWURQJOLQN 5HPXQHUDWLRQ3ROLF\ EHWZHHQVKDUHKROGHU • ,PSOHPHQWDWLRQRIUHYLVHG UHWXUQDQGH[HFXWLYH DSSURDFKWRWKH/RQJ UHZDUG 7HUP,QFHQWLYH3ODQ /7,3 • .HHSLQJWKH'LUHFWRUV¶ • $JUHHGUHGXFWLRQLQ 5HPXQHUDWLRQ3ROLF\¿W Members and attendance ([HFXWLYH'LUHFWRU IRUSXUSRVHDQGDOLJQHG SHQVLRQSURYLVLRQIRU ZLWKEXVLQHVVVWUDWHJ\ 6LPRQ3U\FH &KDLU  4/4 IURPWR • $SSURYLQJUHZDUG /RXLVD%XUGHWW 4/4 RIVDODU\ outcomes for the .DUHQ*XHUUD 4/4 ([HFXWLYH'LUHFWRUV -RKQ3DWWXOOR 2/2 2021 priorities DQGWKH607 'DYLG6OHDWK2 3/3 • Continue to ensure that • 2YHUVLJKWRINH\UHZDUG PDWWHUVLQFOXGLQJ&KLHI  -RKQ3DWWXOORVWRRGGRZQIURPWKH5HPXQHUDWLRQ&RPPLWWHHZLWKHIIHFWIURP WKH&RPSDQ\KDVD 6HSWHPEHU measured response to ([HFXWLYH2I¿FHU &(2   'DYLG6OHDWKMRLQHGWKH5HPXQHUDWLRQ&RPPLWWHHZLWKHIIHFWIURP-XQH UHPXQHUDWLRQLQOLJKWRI SD\UDWLRDQGUHZDUGWR WKH&29,'FULVLV JHQHUDOHPSOR\HHV • Continue to monitor JOREDOO\ JRYHUQDQFHGHYHORSPHQWV LQOLJKWRIWKH8. &RUSRUDWH*RYHUQDQFH &RGH &RGH

Dear fellow shareholder Committee changes On behalf of the Remuneration Committee, I am pleased 7KHUHZHUHWZRFKDQJHVWRWKH&RPPLWWHHGXULQJWKH to present the Remuneration Report for 2020. \HDU-RKQ3DWWXOORVWHSSHGGRZQIURPWKH&RPPLWWHHRQ 6HSWHPEHUKDYLQJVWHSSHGGRZQIURPWKH%RDUGRQ 7KLVLVWKH¿UVW\HDUWKDWZHDUHUHSRUWLQJXQGHUWKH&RGH WKDWGDWH,ZRXOGOLNHWRWKDQN-RKQIRUDOOWKDWKHKDVGRQHIRU ,WZDVDOVRWKH¿UVW\HDURIRSHUDWLRQXQGHUWKH5HPXQHUDWLRQ WKH&RPSDQ\LQKLVSUHYLRXVUROHDV&KDLURIWKLV&RPPLWWHH 3ROLF\DSSURYHGE\VKDUHKROGHUVDWRXU$QQXDO*HQHUDO DQGKLVPRVWYDOXDEOHLQSXWRYHUWKHSDVW\HDU,ZLVKKLPZHOO 0HHWLQJ $*0 $VXPPDU\RIWKH3ROLF\LVVHWRXWRQSDJHV for the future. WR 2Q-XQH'DYLG6OHDWKMRLQHGDVDPHPEHURIWKH ,WKDVEHHQDEXV\\HDUIRUWKH&RPPLWWHHSDUWLFXODUO\WRZDUGV &RPPLWWHHDQGLVDOUHDG\PDNLQJDSRVLWLYHFRQWULEXWLRQ WKHHQGRIDVZHKDYHKDGWRFRQVLGHUUHPXQHUDWLRQ to our deliberations. RXWFRPHVIRUDQGVWUXFWXUHVPHDVXUHVDQGWDUJHWVIRU DJDLQVWWKHYRODWLOHRSDTXHDQGXQSUHFHGHQWHGWUDGLQJ Performance during the year HQYLURQPHQWFUHDWHGE\JRYHUQPHQWPDQGDWHGDFWLRQVWR ,QZHVDZD\HDURIFRQWLQXHGSURJUHVVIRUWKH*URXS DGGUHVVWKH&29,'SDQGHPLF,QRXUGHOLEHUDWLRQVZH LQFUHDVLQJRXUPDUNHWVKDUHDQGUHYHQXHJURZWKZKLOVWDOVR KDYHUHYLHZHGIRUPXODLFLQFHQWLYHVFKHPHRXWFRPHVDJDLQVW PDNLQJVLJQL¿FDQWLQYHVWPHQWLQWKH*URXS¶VVWUDWHJLFLQLWLDWLYHV SHUIRUPDQFHLQLWVEURDGHVWVHQVHDQGKRZDFWLRQVEHLQJ 7KLVPHDQWWKDWZKHQZHHQWHUHGWKHPDFURHFRQRPLFGRZQWXUQ WDNHQWRPDQDJHWKHEXVLQHVVLQWKHVKRUWWHUPDUHLPSDFWLQJ WULJJHUHGE\&29,'ZHGLGVRIURPDVWURQJ¿QDQFLDO RXUZLGHUVWDNHKROGHUV7KHZD\ZHKDYHFKRVHQWRDGGUHVV SRVLWLRQ:KLOVWZHGHOLYHUHGDVWURQJUHODWLYHSHUIRUPDQFH these matters is set out in more detail here and later in WKURXJKRXWWKH\HDU&29,'GLGKDYHDQDGYHUVHLPSDFW this Report. RQWUDGLQJDWWKHHQGRIWKH\HDU)XUWKHULQIRUPDWLRQDERXW SURJUHVVDJDLQVWRXUVWUDWHJLFSULRULWLHVDUHVHWRXWLQWKH 6WUDWHJLF5HSRUWRQSDJHVWR

86 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance  H  V  U 87

G DU U H DQ DLOV KDW

IWKH Electrocomponents plc Electrocomponents ,QWKHFRQWH[WRIWKH&RPSDQ\¶VSUXGHQWDSSURDFKWRFDVK PDQDJHPHQWLQUHVSRQVHWRWKHRQJRLQJ&29,'SDQGHPLF WKH&RPPLWWHHGHWHUPLQHGWKDWLWZRXOGEHSUHIHUDEOHIRUWKLV YDOXHWREHGHOLYHUHGWR'DYLGLQWKHIRUPRIVKDUHVUDWKHUWK DVFDVK)XUWKHULQIRUPDWLRQLVLQFOXGHGLQWKHVLQJOH¿JXUHIR WRWDOUHPXQHUDWLRQUHSRUWHGRQSDJH Simon Pryce Simon Committee Remuneration the of Chair -XQH WKHWDUJHWVVHWDUHVXI¿FLHQWO\UREXVWDQGVWUHWFKLQJ)XOOGHW RIWKHDZDUGVWRWKH([HFXWLYH'LUHFWRUVWRJHWKHUZLWKWKHLU DVVRFLDWHGWDUJHWVZLOOEHGLVFORVHGDWWKHWLPHRIJUDQW pensions Directors’ Executive $VQRWHGLQODVW\HDU¶V'LUHFWRUV¶5HPXQHUDWLRQ5HSRUWWKH &RPPLWWHHUHFRJQLVHVRXUVKDUHKROGHUV¶H[SHFWDWLRQVZLWK UHJDUGVWRDOLJQLQJ([HFXWLYH'LUHFWRUV¶SHQVLRQVZLWKWKHZLGH ZRUNIRUFH:KLOVWQHHGLQJWRUHFRJQLVHWKDWDSHQVLRQ FRQWULEXWLRQLVDFRQWUDFWXDOHQWLWOHPHQWRIWKH&(2DQG&)2 ZLWKWKHLUVXSSRUWLWLVRXULQWHQWLRQWRUHGXFHWKLVWRWKDWR EURDGHUZRUNIRUFHRYHUWLPH:HGRQRWLQWHQGWRVSHFLI\D SHULRGRYHUZKLFKWKLVZLOOEHDFKLHYHGEXWWKH&RPPLWWHHZLOO FRQWLQXHWRPRQLWRUHPHUJLQJSROLF\DQGSUDFWLFHLQWKLVDUHD +RZHYHUIRU([HFXWLYH'LUHFWRUV¶SHQVLRQHQWLWOHPHQWZLOO &RPPLWWHHVXQGHUZHQWDQH[WHUQDOHYDOXDWLRQWKLV\HDU2YHUDOO WKH¿QGLQJVIRUWKH5HPXQHUDWLRQ&RPPLWWHHZHUHYHU\SRVLWLYH DQGIXUWKHUGHWDLOVFDQEHIRXQGZLWKLQWKLV5HSRUW ,QWKHPHDQWLPHWKH&RPPLWWHHZLOOFRQWLQXHWRPDLQWDLQD GLDORJXHZLWKVKDUHKROGHUVDQGNHHSPDUNHWSUDFWLFHDQG JRYHUQDQFHGHYHORSPHQWVXQGHUUHYLHZ Remuneration approach for the year ended 31 March2021 *LYHQWKHVLWXDWLRQZLWK&29,'WKH&RPPLWWHHDJUHHGWKHUH ZLOOEHQRLQFUHDVHVWREDVHSD\IRUWKH([HFXWLYH'LUHFWRUVDQ 607DWWKLVWLPH %HDULQJLQPLQGWKHXQSUHFHGHQWHGPDUNHWDQGWUDGLQJ XQFHUWDLQW\ZKLFKSUHYHQWVVHWWLQJIDLUDQGUREXVWIXOO\HDU WDUJHWVDWWKLVSRLQWWKH&RPPLWWHHKDVGHFLGHGWKDWWKH ERQXVZLOOEHEDVHGRQWDUJHWVIRUHDFKKDOIRIWKH¿QDQFLDO\H WKHRYHUDOOERQXVRXWFRPHWRHQVXUHDOLJQPHQWRISD\ZLWK performance fairness and shareholders participants. to and *LYHQWKHFRPSOH[FKDOOHQJHVRI&29,'ZHZLOOEHGHIHUULQJ WKHJUDQWRIWKH/7,3DZDUGXQWLOODWHULQWKH\HDUWRHQVXUHW EHUHGXFHGE\SHUFHQWDJHSRLQWVWRRIVDODU\ )LQDOO\DQGLQFRPSOLDQFHZLWKWKH&RGHWKH%RDUGDQGLW 7KHSHUIRUPDQFHPHDVXUHVIRUWKH¿UVWKDOIZLOOEHOLNHIRUOLN *URXSUHYHQXHJURZWKDGMXVWHGSUR¿WEHIRUHWD[ 3%7  DGMXVWHGIUHHFDVKÀRZDQG*URXS1HW3URPRWHU6FRUH 136  DOOHTXDOO\ZHLJKWHG  :HZLOOFRQWLQXHWRVHWVWUHWFKLQJSHUIRUPDQFHWDUJHWVZKLFK GULYHSHUIRUPDQFHIRUVKDUHKROGHUVZKLFKZLOOEHDSSURSULDWHO\ GLVFORVHGLQQH[W\HDU¶V'LUHFWRUV¶5HPXQHUDWLRQ5HSRUWDQGWK &RPPLWWHHUHWDLQVWKHGLVFUHWLRQZLWKLQRXU3ROLF\WRDGMXVW O   V HU R K V

WZR LRQ

U 

)XUWKHUGHWDLOVUHJDUGLQJWKHSHUIRUPDQFH

\HDUVWKXVUHGXFLQJFDVKRXWOD\VIRUWKHRUJDQLVDWLRQDQGIXUWK LQFUHDVLQJORQJWHUPDOLJQPHQWZLWKVKDUHKROGHUV6HFRQGLQ UHFRJQLWLRQRIWKHGHIHUUHG¿QDOGLYLGHQGIRUWKH\HDUHQGHG WKDQRQHWKLUGVKDUHVWZRWKLUGVFDVK ZKLFKZLOOYHVWDIWHU 0DUFK GLVFXVVHGIXUWKHURQSDJH WKHYHVWLQJRI WKLVDZDUGZLOOEHFRQGLWLRQDORQWKH&RPSDQ\PDNLQJDVXLWDEO\ *LYHQWKHVWURQJSHUIRUPDQFHE\WKHEXVLQHVVXQGHU/LQGVOH\¶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¶VEDVH UHPXQHUDWLRQ7KHWRWDOXSOLIWLQUHVSHFWRIWKLVSHULRGZDV  7RUHÀHFWWKHSHUIRUPDQFHRIWKHVHDGGLWLRQDO&(2GXWLHV SHULRGFRPPHQFLQJLQ1RYHPEHU'DYLG(JDQ&KLHI )LQDQFLDO2I¿FHU &)2 IXO¿OOHGWKHUROHRILQWHULP&(2LQ DGGLWLRQWRKLVUROHDV&)2'XULQJWKLVSHULRG'DYLGOHGWKH 607WRVXFFHVVIXOO\GULYHWKHEXVLQHVVIRUZDUG Remuneration for interim CEO role during the year $VH[SODLQHGRQSDJHRIWKH&KDLU¶VOHWWHUIRUDWKUHHPRQW 2020 remuneration outcomes remuneration 2020 ,QWHUPVRIUHZDUGWKH&RPPLWWHHDVVHVVHGEXVLQHVV SHUIRUPDQFHLQLWVEURDGHVWVHQVHWKURXJKRXWWKHHQWLUH¿QDQFLD )RUWKHDQQXDOERQXVWKH&RPPLWWHHGHWHUPLQHGWKDW \HDUDJDLQVWWDUJHWVUHODWLYHWRPDUNHWVDQGFRPSHWLWRUVDQGW UHVXOWVGHOLYHUHGIRUDOOWKH&RPSDQ\¶VVWDNHKROGHUV$JDLQVW WKDWEDFNJURXQGLWFRQVLGHUHGLIIRUPXODLFUHZDUGRXWFRPHV ZHUHEDODQFHGHTXLWDEOHDQGSURSRUWLRQDWHDQGZKHWKHURU QRWLWZDVDSSURSULDWHWRH[HUFLVHDQ\GLVFUHWLRQ RIWKHPD[LPXPRSSRUWXQLW\VKRXOGEHDZDUGHGWR([HFXWLYH 'LUHFWRUVEDVHGRQSHUIRUPDQFHDJDLQVWWKHWDUJHWV)XOOGHWDLO RIWKHDQQXDOERQXVWDUJHWVDQGSHUIRUPDQFHDUHGLVFORVHG +RZHYHUWKH&RPPLWWHHPDGHWZRDGGLWLRQDOGHWHUPLQDWLRQVLQ UHVSHFWRIWKHGHOLYHU\RIWKHERQXVIRUWKH([HFXWLYH'LUHFWRU RQSDJH7KH&RPPLWWHHUHÀHFWHGRQWKHERQXVRXWFRPHLQ WKHFRQWH[WRIWKHLPSDFWRI&29,'DQGGHFLGHGWRSURFHHG ZLWKDSSO\LQJWKHERQXVWRHOLJLEOHHPSOR\HHVWKURXJKRXWWKH *URXSWRUHFRJQLVHWKHKDUGZRUNRIWKRVHHPSOR\HHVDQG PDQDJHPHQWWHDPVDFURVVWKHZKROH¿QDQFLDO\HDULQFOXGLQJ WKHPRQWKVSUHFHGLQJ&29,'DQGDFKLHYLQJWKHVWURQJ SRVLWLRQLQZKLFKWKH&RPSDQ\IRXQGLWVHOIDVZHHQWHUHGWKLV XQSUHFHGHQWHGSHULRG3URYLGLQJDERQXVDOVRUHFRJQLVHVWKHLU KXJHHIIRUWVWRNHHSERWKRXUEXVLQHVVDQGRXUFXVWRPHUV supportedsuppliers, critical sector public the and businesses WKURXJKRXWWKHSDQGHPLF )LUVWWKHLUDZDUGZLOOEHSDLGIXOO\LQGHIHUUHGVKDUHV UDWKH Annual Reportand Accounts for the year ended March 31 2020 Directors’ remuneration report continued Directors’ remuneration policy

7KH5HPXQHUDWLRQ3ROLF\ZDVDSSURYHGDWWKH$*0KHOGRQ-XO\DQGKDVDSSOLHGIURPWKDWGDWH+RZZHKDYHDSSOLHG WKH5HPXQHUDWLRQ3ROLF\LVVHWRXWRQSDJHVDQG$VXPPDU\RIFKDQJHVEHWZHHQWKH5HPXQHUDWLRQ3ROLF\DQGWKH 5HPXQHUDWLRQ3ROLF\LVVHWRXWEHORZ

2016 Policy 2019 Policy

LTIP – maximum award &(2RIVDODU\ LQFOXGLQJPXOWLSOLHU &(2RIVDODU\ opportunities &)2RIVDODU\ LQFOXGLQJPXOWLSOLHU &)2RIVDODU\

LTIP – performance measures Base award Multiplier ±(36JURZWK ±(36JURZWK 8SWR[±(36JURZWK ±5HODWLYH765 ±5HODWLYH765 8QGHUSLQ±52&( ±52&(

LTIP – EPS growth targets 2018 award 2019 award 0D[LPXP LQFOXGLQJPXOWLSOLHU S 0D[LPXPS 7KUHVKROGS 7KUHVKROGS

LTIP – relative TSR peer group 8.OLVWHGFRPSDQLHVZLWKLQWKHIROORZLQJOLVWVLQWKH %HVSRNHJURXSRILQWHUQDWLRQDOOLVWHGSHHUVIURP )76($OO6KDUH,QGH[ LQGXVWULDODQGHOHFWURQLFVVHJPHQWV • ,QGXVWULDO6XSSOLHUV,QGXVWULDO0DFKLQHU\ • (OHFWULFDO&RPSRQHQWV (TXLSPHQW • (OHFWURQLF(TXLSPHQW

LTIP – ROCE underpin 1$ 8QGHUSLQVHWDWDQDYHUDJHRIRYHUWKHSHUIRUPDQFH period. If underpin not met, the Remuneration Committee ZLOOUHYLHZWKHIRUPXODLFOHYHORIYHVWLQJDQGKDVGLVFUHWLRQ WRUHGXFHYHVWLQJWRUHÀHFWSHUIRUPDQFHGHOLYHUHG

Share ownership guidelines &(2±RIVDODU\ &(2±RIVDODU\ &)2±RIVDODU\ &)2±RIVDODU\

RIYHVWHGVKDUHVPXVWEHUHWDLQHGXQWLOJXLGHOLQHPHW *XLGHOLQHVDUHLQOLQHZLWKWKHPD[LPXP/7,3DZDUG XQGHUSROLF\

RIYHVWHGVKDUHVPXVWEHUHWDLQHGXQWLOJXLGHOLQHPHW

Post-employment shareholdings 1$ 8QYHVWHG/7,3DZDUGVZLOOFRQWLQXHWRWKHQRUPDOYHVWLQJ GDWH VXEMHFWWROHDYHUVWDWXV

2QFH/7,3DZDUGVYHVWWKHWZR\HDUKROGLQJSHULRGZLOO FRQWLQXHWRDSSO\SRVWHPSOR\PHQW

Pension DOORZDQFH 5HGXFHDOORZDQFHIRUQHZKLUHVWRLQOLQHZLWKWKH 8.ZRUNIRUFH

5HWDLQFXUUHQWDSSURDFKIRULQFXPEHQW([HFXWLYH'LUHFWRUV

88 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 89 H   WKH DUG DO  ODEOH ZKLFK Electrocomponents plc Electrocomponents WHUDSHULRGRIWZR\HDUVVXEMHFWWRFRQWLQXHGHPSOR\PHQW IRUFXUUHQW([HFXWLYH'LUHFWRUV%DVHVDODU\LVWKHRQO\ QLW\LQOLQHZLWKWKHZLGHUZRUNIRUFH7KHFXUUHQWPD[LPXP OOEHGHOLYHUHGLQWKHIRUPRIVKDUHV7KHUHPDLQGHULVSDLG WV HWVUHODWLQJWR&RPSDQ\SHUIRUPDQFH VDODU\ KWKHUXOHVRIWKHSODQ JRDOV RWQRUPDOO\UHFHLYHWRWDOWD[DEOHEHQH¿WVH[FHHGLQJRI OHDQGUHVSRQVLELOLWLHVPDUNHWOHYHOVDQGLQGLYLGXDODQG QHZLWKWKHRXWFRPHRIWKHDQQXDOUHYLHZ)DFWRUVWKDWDUH KHUHDSSURSULDWH IRUH[DPSOHUHORFDWLRQH[SHQVHVRU RHQVXUHWKHEHQH¿WVSDFNDJHLVDSSURSULDWHO\FRPSHWLWLYHDQG DOORZDQFHLQOLHXWKHUHRI IXHODOORZDQFHDQGPHGLFDOLQVXUDQF IRUFRPSDQLHVRIEURDGO\VLPLODUVL]HVHFWRUDQGLQWHUQDWLRQDO WRDOOHOHPHQWVRIWKHDQQXDOERQXV VHHQRWHVWRWKLVWDEOH  IURP-XQH WLQJWKHVFDOHDQGFRPSOH[LW\RIRXUEXVLQHVVHQDEOLQJXVWR HH[WHQWWRZKLFKWKHVHWDUJHWVKDYHEHHQDFKLHYHG GHWKH&RPSDQ\¶VFRQWUROKDYHFKDQJHGPDWHULDOO\ IRUH[DPSOH GHWKHVFDOHDQGFRPSOH[LW\RIWKH*URXSWKHVFRSHDQG DO\HDUWDNLQJLQWRDFFRXQWWKHDQQXDOWDUJHWVDJUHHGE\WKH%R WKH(OHFWURFRPSRQHQWV*URXS3HQVLRQ6FKHPH 6FKHPH  QJHVRFFXUULQJLQWKHIROORZLQJ\HDU DUHGLVFORVHGLQWKH$QQX VGHOLYHUHGLQWKHIRUPRIGHIHUUHGVKDUHVLQWKH&RPSDQ\XQGHU WKHUHOHYDQWPDUNHW KRVHJLYHQWRRWKHUVHQLRUPDQDJHUVLQWKH*URXS H¿WVSURYLGHGZLOOH[FHHGWKLVOHYHOLQWKH¿QDQFLDO\HDUVRYHU LQGLYLGXDODQGWKH&RPPLWWHH¶VDVVHVVPHQWRIWKHFRPSHWLWLYH HFWRUVLVUHSURGXFHGEHORZIRULQIRUPDWLRQRQO\$5HPXQHUDWLRQ UWDQG$FFRXQWVIRUWKH\HDUHQGHG0DUFKZKLFKLVDYDL electrocomponents.com. &RPSDQ\SHUIRUPDQFH 6DODU\LQFUHDVHVZLOOQRWQRUPDOO\EHPDWHULDOO\GLIIHUHQWWRW 5HSRUWRQ5HPXQHUDWLRQ%DVHVDODU\LQFUHDVHVDUHDSSOLHGLQOL FRQVLGHUHGLQFOXGHLQFUHDVHVIRURWKHUHPSOR\HHVFKDQJHVLQUR $IWHUWKHHQGRIWKH¿QDQFLDO\HDUWKH&RPPLWWHHGHWHUPLQHVWK $SURSRUWLRQRIWKHWRWDOERQXVSD\PHQW FXUUHQWO\RQHWKLUG L 2WKHUEHQH¿WVPD\EHSURYLGHGRULQWURGXFHGIURPWLPHWRWLPHW 7RIRFXV([HFXWLYH'LUHFWRUVRQDFKLHYLQJGHPDQGLQJDQQXDOWDUJ 7KHGHIHUUDOHOHPHQWHQVXUHVIRFXVRQRXUORQJHUWHUPEXVLQHVV 3HUIRUPDQFHWDUJHWVDUHQRUPDOO\VHWDWWKHVWDUWRIWKH¿QDQFL 0D[LPXPRSSRUWXQLW\LQUHVSHFWRID¿QDQFLDO\HDURIEDVH RSSRUWXQLW\IRUWKHZLGHUZRUNIRUFHLVRIEDVHVDODU\ 7RSURYLGHEHQH¿WVLQOLQHZLWKWKHUHOHYDQWPDUNHW ([HFXWLYH'LUHFWRUVDUHSURYLGHGZLWKDFRPSDQ\FDU RUDFDVK UHÀHFWVWKHFLUFXPVWDQFHVRIWKHLQGLYLGXDO'LUHFWRU :KLOVWWKHUHLVQRSUHVFULEHGPD[LPXP([HFXWLYH'LUHFWRUVGRQ H[SDWULDWLRQDOORZDQFH RULQFLUFXPVWDQFHVZKHUHIDFWRUVRXWVL PDUNHWLQFUHDVHVLQLQVXUDQFHFRVWV  1RWDSSOLFDEOH 7RSURYLGHDOHYHORIUHWLUHPHQWEHQH¿WWKDWLVFRPSHWLWLYHLQ 'LUHFWRUVPD\SDUWLFLSDWHLQWKHGH¿QHGFRQWULEXWLRQVHFWLRQRI RUUHFHLYHDFDVKVXSSOHPHQWLQOLHX 7KHGH¿QHGEHQH¿WVHFWLRQRIWKH6FKHPHLVFORVHGWRQHZHQWUDQ $PD[LPXPFRQWULEXWLRQRUFDVKVXSSOHPHQWRIRIEDVHVDODU\ pensionable. is that remuneration of element 1HZO\DSSRLQWHG([HFXWLYH'LUHFWRUVZLOOKDYHDPD[LPXPRSSRUWX 1RWDSSOLFDEOH VDODU\DQGLWLVQRWFXUUHQWO\DQWLFLSDWHGWKDWWKHFRVWRIEHQ WKLVSROLF\ZLOODSSO\ 7KH&RPPLWWHHUHWDLQVWKHGLVFUHWLRQWRDSSURYHDKLJKHUFRVWZ *HQHUDOO\UHYLHZHGHDFK\HDUZLWKLQFUHDVHVQRUPDOO\HIIHFWLYH 6DODULHVDUHVHWE\WKH&RPPLWWHHWRUHÀHFWIDFWRUVZKLFKLQFOX UHVSRQVLELOLWLHVRIWKHUROHWKHVNLOOVDQGH[SHULHQFHRIWKH 7KHUHLVQRSUHVFULEHGPD[LPXPVDODU\ 6DODULHVHIIHFWLYHDWWKHHQGRIWKH\HDUXQGHUUHYLHZ DQGFKD 1RWDSSOLFDEOH 7RSURYLGHDEURDGO\PDUNHWFRPSHWLWLYHOHYHORI¿[HGSD\UHÀHF HQYLURQPHQWLQFOXGLQJFRQVLGHUDWLRQRIDSSURSULDWHPDUNHWGDWD DWWUDFWDQGUHWDLQJOREDOWDOHQW VFRSHWR(OHFWURFRPSRQHQWVSOF 'HIHUUHG6KDUH%RQXV3ODQ '6%3 7KHVHVKDUHVQRUPDOO\YHVWDI 'LYLGHQGHTXLYDOHQWVPD\EHSD\DEOHRQVKDUHVZKLFKYHVWDQGZL LQFDVKDIWHUWKH\HDUHQG0DOXVDQGFODZEDFNSURYLVLRQVDSSO\ 7KH&RPPLWWHHZLOORSHUDWHWKHGHIHUUHGERQXVLQDFFRUGDQFHZLW Operation Operation Objective Objective Performance measures Objective Opportunity Operation Performance measures Performance Operation Objective Opportunity Opportunity Performance measures Opportunity Component: Base salary Base Component: Component: Annual bonus Annual Component: &RPSRQHQW%HQHÀWV Component: Pension RQRXUFRUSRUDWHZHEVLWH 3ROLF\UHSRUWLVFRQWDLQHGRQSDJHVWRRIWKH$QQXDO5HSR Directors’ Remuneration Policy Remuneration Directors’ $VXPPDU\RIWKH5HPXQHUDWLRQ3ROLF\IRURXU([HFXWLYH'LU Annual Report and Accounts for the year ended March 31 2020 Directors’ remuneration report continued

Component: Annual bonus continued

Performance measures 3D\PHQWLVGHWHUPLQHGE\UHIHUHQFHWRSHUIRUPDQFHDVVHVVHGRYHURQH¿QDQFLDO\HDUEDVHGRQ¿QDQFLDODQGVWUDWHJLF SHUIRUPDQFHPHDVXUHVZKLFKWKH&RPPLWWHHFRQVLGHUVWREHDOLJQHGWRWKHDQQXDOVWUDWHJ\DQGWKHFUHDWLRQRIVKDUHKROGHU YDOXH6XFKPHDVXUHVPD\LQFOXGH • 5HYHQXHJURZWK • $GMXVWHGSUR¿WEHIRUHWD[ 3%7 • &DVKÀRZ • 1HW3URPRWHU6FRUH 136

7KHZHLJKWLQJVRIWKHVHSHUIRUPDQFHPHDVXUHVDUHQRUPDOO\DJUHHGE\WKH&RPPLWWHHDWWKHVWDUWRIHDFK\HDUDFFRUGLQJ WRDQQXDOEXVLQHVVSULRULWLHV7KHRYHUDOOIUDPHZRUNZLOOQRUPDOO\EHZHLJKWHGWRZDUGV¿QDQFLDOPHDVXUHVRISHUIRUPDQFH 7KH&RPPLWWHHUHWDLQVGLVFUHWLRQWRXVHGLIIHUHQWRUDGGLWLRQDOPHDVXUHVDQGZHLJKWLQJVWRHQVXUHWKDWWKHERQXVIUDPHZRUN DSSURSULDWHO\VXSSRUWVWKHEXVLQHVVVWUDWHJ\DQGREMHFWLYHVIRUWKHUHOHYDQW\HDU

%HIRUHDQ\ERQXVPD\SD\RXWDWKUHVKROGOHYHORIDGMXVWHG3%7PXVWEHDFKLHYHG

7KH&RPPLWWHHKDVGLVFUHWLRQWRDGMXVWWKHIRUPXODLFERQXVRXWFRPHV LQFOXGLQJGRZQWR]HUR WRHQVXUHDOLJQPHQWRISD\ZLWK SHUIRUPDQFHDQGIDLUQHVVWRVKDUHKROGHUVDQGSDUWLFLSDQWV7KH&RPPLWWHHDOVRKDVWKHGLVFUHWLRQWRDGMXVWWDUJHWVIRUDQ\ H[FHSWLRQDOHYHQWVWKDWPD\RFFXUGXULQJWKH\HDU$Q\VXFKGLVFUHWLRQZLOOEHZLWKLQWKHOLPLWVRIWKHSODQDQGZLOOEHIXOO\ GLVFORVHGLQWKHUHOHYDQW$QQXDO5HSRUWRQ5HPXQHUDWLRQ

)RUWKUHVKROGSHUIRUPDQFHWKHERQXVSD\RXWZLOOQRUPDOO\EHQLOEXWLQQRFLUFXPVWDQFHVZLOOLWH[FHHGRIWKHPD[LPXP RSSRUWXQLW\)RUWDUJHWSHUIRUPDQFHWKHERQXVSD\RXWZLOOW\SLFDOO\EHRIWKHPD[LPXPRSSRUWXQLW\

Component: LTIP

Objective 7ROLQNWKHODUJHVWSDUWRI([HFXWLYH'LUHFWRUUHPXQHUDWLRQZLWKORQJWHUPEXVLQHVVSHUIRUPDQFH3HUIRUPDQFHPHWULFVDUH DOLJQHGZLWKVKDUHKROGHUV¶LQWHUHVWVDQGWKHKROGLQJSHULRGHQVXUHVDIRFXVRQVXVWDLQDEOHSHUIRUPDQFH

Operation $FRQGLWLRQDODZDUGRIVKDUHV $ZDUG PD\EHPDGHDQQXDOO\XQGHUWKH&RPSDQ\¶V/7,3

$ZDUGVYHVWDIWHUDSHUIRUPDQFHSHULRGRIDWOHDVWWKUHH\HDUVVXEMHFWWRWKHVDWLVIDFWLRQRIWKHSHUIRUPDQFHPHDVXUHVDQGWR FRQWLQXHGHPSOR\PHQWZLWKWKH*URXS'LYLGHQGHTXLYDOHQWVPD\EHSD\DEOHRQDQ\VKDUHVYHVWLQJDQGZLOOEHGHOLYHUHGLQWKH form of shares.

7KHUHZLOOEHDIXUWKHUKROGLQJSHULRGRIWZR\HDUVIROORZLQJYHVWLQJ0DOXVDQGFODZEDFNSURYLVLRQVDSSO\ VHHQRWHVWRWKLVWDEOH 

7KH&RPPLWWHHZLOORSHUDWHWKH/7,3LQDFFRUGDQFHZLWKWKHUXOHVRIWKHSODQ

Opportunity 7KHPD[LPXPDQQXDODZDUGVL]HXQGHUWKH/7,3LQUHVSHFWRID¿QDQFLDO\HDUZLOOEHRIVDODU\

Performance measures 9HVWLQJLVGHWHUPLQHGE\UHIHUHQFHWRSHUIRUPDQFHDVVHVVHGRYHUDSHULRGRIDWOHDVWWKUHH\HDUVEDVHGRQSHUIRUPDQFH PHDVXUHVZKLFKWKH&RPPLWWHHFRQVLGHUVWREHDOLJQHGZLWKWKHGHOLYHU\RIVWUDWHJ\DQGORQJWHUPVKDUHKROGHUYDOXH

7KHSHUIRUPDQFHPHDVXUHVIRU$ZDUGVDUHGHWHUPLQHGDQQXDOO\DQGZLOOLQFOXGHPHWULFVOLQNHGWRSUR¿WDELOLW\VKDUHKROGHUYDOXH DQGFDSLWDOHI¿FLHQF\

7KHSHUIRUPDQFHPHDVXUHVIRU$ZDUGVLQUHVSHFWRIDUHDVIROORZV • $GMXVWHGHDUQLQJVSHUVKDUH (36 ± • &RPSDUDWLYHWRWDOVKDUHKROGHUUHWXUQ 765 ± • 7KH/7,3ZLOODOVREHVXEMHFWWRDUHWXUQRQFDSLWDOHPSOR\HG 52&( XQGHUSLQ,IWKHXQGHUSLQLVQRWPHWDWWKHHQGRIWKH SHUIRUPDQFHSHULRGWKH&RPPLWWHHUHWDLQVWKHGLVFUHWLRQWRUHYLHZWKHIRUPXODLFOHYHORIYHVWLQJDQGFRQVLGHUZKHWKHUDQ\ reduction should be applied.

$GGLWLRQDOO\IRUWKH$ZDUGWRYHVWWKH&RPPLWWHHPXVWEHVDWLV¿HGWKDWWKHUHKDVEHHQDVXVWDLQHGLPSURYHPHQWLQWKH &RPSDQ\¶VXQGHUO\LQJ¿QDQFLDOSHUIRUPDQFH7KH&RPPLWWHHKDVGLVFUHWLRQWRDGMXVWWKHIRUPXODLF/7,3RXWFRPHVWRHQVXUH WKHRXWFRPHLVDOLJQHGZLWKYDOXHFUHDWLRQIRUVKDUHKROGHUVDQGWKDWLWLVDIDLUUHÀHFWLRQRIWKH&RPSDQ\¶VSHUIRUPDQFH 7KH&RPPLWWHHDOVRKDVGLVFUHWLRQWRDGMXVWWDUJHWVIRUDQ\H[FHSWLRQDOHYHQWVWKDWPD\RFFXUGXULQJWKHSHUIRUPDQFHSHULRG

Component: All employee share plans

Objective 7RHQFRXUDJHWKHRZQHUVKLSRI(OHFWURFRPSRQHQWVSOFVKDUHV

Operation ([HFXWLYH'LUHFWRUVZLOOEHHOLJLEOHWRSDUWLFLSDWHLQDOOHPSOR\HHVKDUHSODQVRQWKHVDPHEDVLVDVRWKHUHPSOR\HHV

Opportunity 0D[LPXPRSSRUWXQLW\ZLOOEHLQOLQHZLWKRWKHUHPSOR\HHVDQG+05&DSSURYHGOLPLWVZKHUHDSSURSULDWH

Performance measures 1RWDSSOLFDEOH

Component: Share ownership

Objective 7RDOLJQ([HFXWLYH'LUHFWRUDQGVKDUHKROGHULQWHUHVWVDQGUHLQIRUFHORQJWHUPGHFLVLRQPDNLQJ

Operation ([HFXWLYH'LUHFWRUVDUHH[SHFWHGWRUHWDLQDWOHDVWRIDQ\VKDUHDZDUGVWKDWYHVW QHWRIWD[ LQRUGHUWRKHOSEXLOGXSWKH IROORZLQJUHTXLUHGSHUVRQDOKROGLQJVRI(OHFWURFRPSRQHQWVSOFVKDUHV • &(2RIVDODU\ • &)2RIVDODU\

Opportunity 1RWDSSOLFDEOH

Performance measures 1RWDSSOLFDEOH

90 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 91 \¶V RU V WR   

Electrocomponents plc Electrocomponents DFFRPPRGDWLRQDQGWUDYHOH[SHQVHVLQRUGHUWRFDUU\RXW YLGHG LRQ&RPPLWWHHVDQGWRWKH6HQLRU,QGHSHQGHQW'LUHFWRU %RDUGRI'LUHFWRUVDVDZKROHDQGWKHIHHSDLGWRWKH&KDLULV RPPLWPHQWDQGUHVSRQVLELOLW\DUHDOVRWDNHQLQWRDFFRXQWZKHQ $GGLWLRQDOIHHVPD\EHSD\DEOHIRUDGGLWLRQDO%RDUGGXWLHV WRDSSO\SRVWHPSOR\PHQW PDGHW\SLFDOO\HIIHFWLYHIURP$SULO)HHVDUHUHYLHZHGE\ DQ\DVVRFLDWHGWD[OLDELOLWLHVLQUHODWLRQWRWKHVHH[SHQVHV VXEMHFWWROHDYHUVWDWXV  XQGHUUHYLHZ DQGIRUWKHIROORZLQJ\HDU DUHGLVFORVHGLQWKH \WKH&RPSDQ\¶V$UWLFOHVRI$VVRFLDWLRQ QFOXGLQJIHHOHYHOVDWRWKHUFRPSDQLHVRIEURDGO\VLPLODUVL]H \KDYHOHIWWKH*URXS OLEUHZLWKEURDGFRPPHUFLDOH[SHULHQFHUHOHYDQWWRWKH*URXS 1RQ([HFXWLYH'LUHFWRUVDUHVHWRXWLQWKHWDEOHEHORZ Chair and Non-Executive Director remuneration policy 1RQ([HFXWLYH'LUHFWRUVGRQRWKDYHVHUYLFHDJUHHPHQWV WKUHH\HDUWHUP7KH&KDLU¶VOHWWHURIHQJDJHPHQWSURYLGHVD VL[PRQWKQRWLFHSHULRGDQGWKH1RQ([HFXWLYH'LUHFWRUV¶OHWWHU KDYHDWKUHHPRQWKQRWLFHSHULRG$OO'LUHFWRUVDUHVXEMHFWWR UHHOHFWLRQDQQXDOO\DWWKH$*0 1HLWKHUWKH&KDLUQRUWKH1RQ([HFXWLYH'LUHFWRUVDUHHOLJLEOH SDUWLFLSDWHLQDQ\RIWKH&RPSDQ\¶VERQXVORQJWHUPLQFHQWLYH EXWLQVWHDGKDYHOHWWHUVRIHQJDJHPHQWSURYLGLQJIRUDQLQLWLDO SHQVLRQSODQV'HWDLOVRIWKHSROLF\RQIHHVSDLGWRWKH&RPSDQ

 PHQW /7,3

VDWDQ\WLPHXSWR VHFWRUDQGLQWHUQDWLRQDOVFRSHWR(OHFWURFRPSRQHQWVSOF7LPHF 2WKHUEHQH¿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peration Objective Objective Opportunity measures Performance Operation Opportunity Performance measures Performance Component: Fees Component: Post-employment shareholdings Post-employment Component: Chair and Non-Executive Directors Notes to the Remuneration 2019 Policy table provisions clawback and Malus $OOHOHPHQWVRIWKHDQQXDOERQXVDQGWKH/7,3DUHVXEMHFWWR PDOXVDQGFODZEDFNSURYLVLRQV,QWKHHYHQWRIPLVFRQGXFW RIWKHSDUWLFLSDQWRUWKHLUWHDPRUPDWHULDOO\DGYHUVHPLVVWDWH RIWKH&RPSDQ\¶V¿QDQFLDOVWDWHPHQWVWKH&RPPLWWHHKDV GLVFUHWLRQWRDSSO\WKHIROORZLQJPDOXVDQGFODZEDFNSURYLVLRQV LQUHVSHFWRIWKHDQQXDOERQXV LQFOXGLQJ'6%3 DQGWKH/7,3 7KH&RPPLWWHHPD\ • • • Annual Reportand Accounts for the year ended March 31 2020 Directors’ remuneration report continued

Compliance with Provision 40 of the 2018 Code ,WLVLPSRUWDQWWRWKH&RPPLWWHHWKDWDOOHPSOR\HHVDUHSDLG 7KH&RPPLWWHHFRQVLGHUVWKDWWKHH[HFXWLYHUHPXQHUDWLRQ DWDIDLUOHYHOUHÀHFWLQJWKHVNLOOVWKH\EULQJWRWKHRUJDQLVDWLRQ IUDPHZRUNDSSURSULDWHO\DGGUHVVHVWKHIROORZLQJIDFWRUVXQGHU :HXVHEHQFKPDUNLQJLQIRUPDWLRQWRHQVXUHZHSD\FRPSHWLWLYHO\ 3URYLVLRQRIWKH&RGH to attract and retain talent.

$VZHOODVDIRFXVRQ([HFXWLYH'LUHFWRUUHPXQHUDWLRQWKH 3DUWRIEXLOGLQJDVXVWDLQDEOHRUJDQLVDWLRQLVDERXWHQVXULQJ &RPPLWWHHKDVRYHUVLJKWIRUWKHUHPXQHUDWLRQSROLFLHVRIWKH HPSOR\HHVKDYHDQRSSRUWXQLW\WRVKDUHLQWKHVXFFHVVWKH\KHOS RUJDQLVDWLRQWRHQVXUHDOLJQPHQWZLWKWKHEXVLQHVVVWUDWHJ\DQG FUHDWH+RZWKLVLVDFKLHYHGLVRXWOLQHGLQWKH&(23D\5DWLR YDOXHVRIWKHRUJDQLVDWLRQ:HYDOXHWKHFRQWULEXWLRQHPSOR\HHV VHFWLRQRQSDJH PDNHWRWKHVXFFHVVRIWKHRUJDQLVDWLRQDQGFKDUJHPDQDJHPHQW ZLWKWKHUHVSRQVLELOLW\IRUHQVXULQJDVXVWDLQDEOHDSSURDFKWR :HHQJDJHUHJXODUO\ZLWKHPSOR\HHVRQUHPXQHUDWLRQ2YHUWKH HPSOR\HHUHPXQHUDWLRQ SDVW\HDUZHKDYHKHOGUHJXODUVHVVLRQVIRUHPSOR\HHVRQWKHLU SHQVLRQV¿QDQFLDOSODQQLQJUDQJLQJIURPEDVLFEXGJHWLQJWR VDYLQJVDQGRXUERQXVSODQ

Factors under Provision 40

Clarity :HSURYLGHRSHQDQGWUDQVSDUHQWGLVFORVXUHVRIRXU([HFXWLYH'LUHFWRUV¶UHPXQHUDWLRQDUUDQJHPHQWVLQFOXGLQJXQGHUWDNLQJ HQJDJHPHQWZLWKNH\VKDUHKROGHUVZKHQFRQVLGHULQJFKDQJHVWRRXU5HPXQHUDWLRQ3ROLF\

Simplicity :HDLPWRHQVXUHWKDWUHPXQHUDWLRQDUUDQJHPHQWVIRUERWKRXU([HFXWLYH'LUHFWRUVDQGWKHZLGHUZRUNIRUFHDUHDVVLPSOHDV SRVVLEOHWRGULYHXQGHUVWDQGLQJDQGHQJDJHPHQWDQGZHWDNHWLPHWRHQJDJHZLWKSDUWLFLSDQWVDQGVKDUHKROGHUV

Predictability 2XU5HPXQHUDWLRQ3ROLF\FRQWDLQVGHWDLOVRIPD[LPXPRSSRUWXQLW\OHYHOVIRUHDFKFRPSRQHQWRISD\ZLWKDFWXDOLQFHQWLYH RXWFRPHVYDU\LQJGHSHQGLQJRQWKHOHYHORISHUIRUPDQFHDFKLHYHGDJDLQVWVSHFL¿FPHDVXUHV

Proportionality, risk and 7KHPHWULFVXVHGWRPHDVXUHSHUIRUPDQFHIRUDQQXDOERQXVDQG/7,3DZDUGVGULYHEHKDYLRXUVWKDWDUHFRQVLVWHQWZLWKWKH alignment to culture EXVLQHVVVWUDWHJ\DQGYDOXHVRIWKHRUJDQLVDWLRQ

7KHDQQXDOERQXVDQG/7,3VWUXFWXUHVGRQRWHQFRXUDJHLQDSSURSULDWHULVNWDNLQJ7KH\DUHVXEMHFWWRWKHDFKLHYHPHQWRI VWUHWFKLQJSHUIRUPDQFHWDUJHWVDQGWKH&RPPLWWHHKDVWKHDELOLW\WRDSSO\GLVFUHWLRQWRWKHIRUPXODLFRXWFRPHV0DOXVDQG FODZEDFNSURYLVLRQVDOVRDSSO\IRUERWKWKHDQQXDOERQXVDQG/7,3$QQXDOERQXVGHIHUUDO/7,3KROGLQJSHULRGVDQGRXU VKDUHKROGLQJJXLGHOLQHVSURYLGHDFOHDUOLQNWRWKHRQJRLQJSHUIRUPDQFHRIWKHEXVLQHVVDQGDUHWKHUHIRUHDOLJQHGZLWK shareholder interests.

92 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance

93

UHYHDO EHORZ 3%7  HDU VHW 'LUHFWRUV UGXQWLO

QG*URXS  VWDQFHV WKLVWRWKDW  ±  ± 1 June 2019 Change Electrocomponents plc Electrocomponents Salary effective £419,709 £642,503 1 June 2020 Salary effective OOUHPDLQXQFKDQJHG DWRIEDVHVDODU\  LWKLQRXU3ROLF\WRDGMXVWWKHRYHUDOOERQXVRXWFRPHWRHQVXUH XVPD\EHSDLGDWKUHVKROGOHYHORIDGMXVWHGSUR¿WEHIRUHWD[ WKH\ZLOOQRWEHGLVFORVHGLQDGYDQFHEXWWRWKHH[WHQWWKH WDUJHWVIRUHDFKKDOIRIWKH¿QDQFLDO\HDU:HZLOOFRQWLQXHWR UHYHQWVVHWWLQJIDLUDQGUREXVWIXOO\HDUWDUJHWVDWWKLVSRLQW HPXQHUDWLRQ3ROLF\ DUJHWVDUHFRQVLGHUHGWREHFRPPHUFLDOO\VHQVLWLYHDVWKH\PD\ HKROGHUVZKLFKZLOOEHDSSURSULDWHO\GLVFORVHGLQQH[W\HDU¶V QJHGDWWKLVWLPH DQGSDUWLFLSDQWV FWLYHO\LQWKH$QQXDO5HSRUWRQ5HPXQHUDWLRQIRUWKHUHOHYDQW\ OHWWHURQSDJH  ZLWKWKHSULRU\HDUFRPSDUDWRUDQGWKHFKDQJH DUHVKRZQ GWRWKHPDUNHWDWWKHWLPHRIJUDQW QJHVRI&29,'ZHZLOOEHGHIHUULQJWKHJUDQWRIWKH/7,3DZD XRISHQVLRQRIRIEDVHVDODU\,WLVRXULQWHQWWRUHGXFH WKDWDUHDSSURSULDWHDQGVXI¿FLHQWO\FKDOOHQJLQJLQWKHFLUFXP R\HHVKDUHVFKHPHVRIIHUHGWRDOOHPSOR\HHVRQLGHQWLFDOWHUPV H*URXSUHYHQXHJURZWKDGMXVWHG3%7DGMXVWHGIUHHFDVKÀRZD

DWWKLVWLPHWR([HFXWLYH'LUHFWRUEDVHVDODULHV

Annual reportremuneration on /LQGVOH\5XWK All employee share plans share employee All ([HFXWLYH'LUHFWRUVZLOOEHDEOHWRSDUWLFLSDWHLQDQ\DOOHPSO Base salaryBase %DVHVDODULHVIRUWKH([HFXWLYH'LUHFWRUVHIIHFWLYHIURP-XQH Implementation of the Remuneration 2019 Policy for the year ending March 31 2021 Implementation of Chair and Non-Executive Remuneration 2019 Policy for the year ending March 31 2021 7KH&KDLU¶VDQG1RQ([HFXWLYH'LUHFWRUV¶IHHVZLOOUHPDLQXQFKD 7KHUHZLOOEHQRLQFUHDVHV %HQHÀWV %HQH¿WVZLOOEHSURYLGHGLQDFFRUGDQFHZLWKWKHDSSURYHG5 1HW3URPRWHU6FRUH 136  DOOHTXDOO\ZHLJKWHG $QQXDOERQXVW FRQVLGHUWKHPWRQRORQJHUEHVHQVLWLYHDUHGLVFORVHGUHWURVSH 'HWDLOVRQOHYHOVRIDZDUGDQGWKHWDUJHWVVHWZLOOEHDQQRXQFH LTIP $VH[SODLQHGLQWKH&KDLU¶VOHWWHURQSDJHJLYHQWKHFKDOOH ODWHULQWKH¿QDQFLDO\HDUWRHQVXUHZHDUHDEOHWRVHWWDUJHWV Pension 7KH([HFXWLYH'LUHFWRUVZLOOUHFHLYHDFDVKFRQWULEXWLRQLQOLH RIWKHEURDGHUZRUNIRUFHRYHUWLPHDVUHIHUHQFHGLQWKH&KDLU¶V Performance-related annual bonus Performance-related annual 7KHPD[LPXPDQQXDOERQXVRSSRUWXQLW\IRU([HFXWLYH'LUHFWRUVZL *LYHQWKHXQSUHFHGHQWHGPDUNHWDQGWUDGLQJXQFHUWDLQW\ZKLFKS VWUHWFKLQJSHUIRUPDQFHWDUJHWVZKLFKGULYHSHUIRUPDQFHIRUVKDU 5HPXQHUDWLRQ5HSRUWDQGWKH&RPPLWWHHUHWDLQVWKHGLVFUHWLRQZ DOLJQPHQWRISD\ZLWKSHUIRUPDQFHDQGIDLUQHVVWRVKDUHKROGHUV LQIRUPDWLRQWKDWGDPDJHVRXUFRPSHWLWLYHDGYDQWDJH$FFRUGLQJO\ ,QDFFRUGDQFHZLWKWKH5HPXQHUDWLRQ3ROLF\EHIRUHDQ\ERQ 7KHSHUIRUPDQFHPHDVXUHVIRUWKH¿UVWKDOIZLOOEHOLNHIRUOLN PXVWEHDFKLHYHG WKH&RPPLWWHHKDVGHFLGHGWKDWWKHERQXVZLOOEHEDVHGRQ Annual Report and Accounts for the year ended March 31 2020 'DYLG(JDQ Directors’ remuneration report continued

Implementation of Executive Director 2019 Remuneration Policy for the year ended 31 March 2020 6LQJOHÀJXUHIRUWRWDOUHPXQHUDWLRQIRU([HFXWLYH'LUHFWRUV DXGLWHG  7KHIROORZLQJWDEOHSURYLGHVDVLQJOH¿JXUHIRUWRWDOUHPXQHUDWLRQRIWKH([HFXWLYH'LUHFWRUVIRUWKH\HDUHQGHG0DUFKDQGWKH SULRU\HDU7KHYDOXHRIWKHDQQXDOERQXVLQFOXGHVWKHHOHPHQWRIERQXVGHIHUUHGXQGHUWKH'6%3ZKHUHUHOHYDQW

2020 2019 Lindsley Ruth %DVHVDODU\ £639,485  7D[DEOHEHQH¿WV £17,649  $QQXDOERQXV2 £208,846  LTIP  £1,448,182  3HQVLRQEHQH¿W £128,501  Total £2,442,663  David Egan %DVHVDODU\ £417,738  7D[DEOHEHQH¿WV £16,139  $QQXDOERQXV2 £136,426  LTIP  £803,647  3HQVLRQEHQH¿W £83,942  $GGLWLRQDODPRXQWIRULQWHULP&(2UROH £60,000 ± Total £1,517,892 

 7D[DEOHEHQH¿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¿JXUHLQFOXGHVDGLYLGHQGHTXLYDOHQWSD\PHQWRI IRU/LQGVOH\5XWKDQG IRU'DYLG(JDQ LQUHVSHFWRIWKHVKDUHVYHVWLQJZKLFKZLOOEHGHOLYHUHGLQWKHIRUPRIVKDUHV RIWKHWRWDOYDOXHIRU/LQGVOH\5XWKDQG RIWKHWRWDOYDOXHIRU'DYLG(JDQLVLQUHVSHFWRI WKHVKDUHSULFHJURZWKDQGGLYLGHQGVRYHUWKHSHULRGVLQFHJUDQWEDVHGRQWKHDVVXPHGVKDUHSULFHRIS  7KH/7,3YDOXHIRUVKRZVWKHYDOXHRI/7,3DZDUGVPDGHLQ-XO\ZKLFKYHVWHGRQ-XO\7KHYDOXHRQYHVWLQJRIWKH/7,3SHUIRUPDQFHDZDUGKDVEHHQUHVWDWHGEDVHG  RQWKHVKDUHSULFHRQWKHGDWHRIYHVWLQJRIS7KH¿JXUHLQFOXGHVGLYLGHQGHTXLYDOHQWSD\PHQWVRI WR/LQGVOH\5XWKDQG WR'DYLG(JDQLQUHVSHFWRIWKH   VKDUHVYHVWLQJ RIWKHWRWDOYDOXHIRU/LQGVOH\5XWKDQG RIWKHWRWDOYDOXHIRU'DYLG(JDQLVLQUHVSHFWRIWKHVKDUHSULFHJURZWKDQGGLYLGHQGVRYHUWKHSHULRG   EHWZHHQJUDQWDQGYHVWLQJ  (DFKRIWKH([HFXWLYH'LUHFWRUVUHFHLYHGWKHDPRXQWVVKRZQDERYH RIEDVHVDODU\ DVDFDVKVXSSOHPHQWLQOLHXRISHQVLRQ1R([HFXWLYH'LUHFWRUKDVSURVSHFWLYHEHQH¿WXQGHU DGH¿QHGEHQH¿WSHQVLRQUHODWLQJWRTXDOLI\LQJVHUYLFH 7KLVUHODWHVWRWKHSHUIRUPDQFHRIDGGLWLRQDOLQWHULP&(2GXWLH  VDQGUHVSRQVLELOLWLHVIRUDSHULRGRIWKUHHPRQWKVGXULQJWKH¿QDQFLDO\HDU7KLVYDOXHZLOOEHGHOLYHUHGLQWKHIRUPRIVKDUHV

6LQJOHÀJXUHIRUWRWDOUHPXQHUDWLRQIRU1RQ([HFXWLYH'LUHFWRUV DXGLWHG  7KHWDEOHEHORZVHWVRXWDVLQJOH¿JXUHIRUWKHWRWDOUHPXQHUDWLRQUHFHLYHGE\HDFK1RQ([HFXWLYH'LUHFWRUIRUWKH\HDUHQGHG 0DUFKDQGWKHSULRU\HDU

Total fee 2020 2019 3HWHU-RKQVRQ £270,000  %HUWUDQG%RGVRQ £60,000  /RXLVD%XUGHWW £70,000  .DUHQ*XHUUD £68,333  %HVVLH/HH £60,000  -RKQ3DWWXOOR £29,166  6LPRQ3U\FH £70,000  'DYLG6OHDWK2 £59,166 ± -RDQ:DLQZULJKW £25,000 ±

 -RKQ3DWWXOORVWHSSHGGRZQIURPWKH%RDUGRQ6HSWHPEHU  'DYLG6OHDWKZDVDSSRLQWHGWRWKH%RDUGRQ-XQHZDVDSSRLQWHG6,'RQ6HSWHPEHUDQGDSSRLQWHG&KDLURIWKH1RPLQDWLRQ&RPPLWWHHRQ'HFHPEHU  -RDQ:DLQZULJKWZDVDSSRLQWHGWRWKH%RDUGRQ1RYHPEHU

)RUWKH\HDUHQGHG0DUFKWKH&KDLU¶VIHHZDV SHUDQQXP7KLVZDVLQFUHDVHGIURP LQ

7KH1RQ([HFXWLYH'LUHFWRUVUHFHLYHGEDVHIHHVRI SHUDQQXPZKLFKZHUHLQFUHDVHGIURP LQ-RKQ3DWWXOOR UHFHLYHGDQDGGLWLRQDOIHHRI SHUDQQXPIRUKLVUHVSRQVLELOLWLHVDV6,'XQWLOKHVWHSSHGGRZQIURPWKH%RDUGRQ6HSWHPEHU DWZKLFKWLPH'DYLG6OHDWKUHFHLYHGDQDGGLWLRQDOIHHRI SHUDQQXPIRUWDNLQJRQWKHUROHRI6,''DYLGDOVRUHFHLYHG DQDGGLWLRQDO SHUDQQXPDV&KDLURIWKH1RPLQDWLRQ&RPPLWWHHZKHQKHWRRNRYHUWKHUROHRQ'HFHPEHUIURP3HWHU -RKQVRQ6XFKIHHVZHUHSDLGRQDSURUDWDEDVLVUHÀHFWLQJOHQJWKRIWLPHLQWKHUROH/RXLVD%XUGHWWUHFHLYHGDQDGGLWLRQDO  DV&KDLURIWKH$XGLW&RPPLWWHHDQG6LPRQ3U\FHUHFHLYHGDQDGGLWLRQDO DV&KDLURIWKH5HPXQHUDWLRQ&RPPLWWHH)URP-XQH .DUHQ*XHUUDUHFHLYHGDQDGGLWLRQDO SHUDQQXPIRUKHUUROHDVWKH%RDUG¶VUHSUHVHQWDWLYHRQHPSOR\HHHQJDJHPHQW

94 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 95

  KH RI 21.7% 91.3% bonus YHQRW

136.9% Earned Earned Vesting QGHG PDQFH IRU RIPD[ PD[LPXP PD[LPXP Q 9HVWLQJ RI GIXUWKHURQ XWLRQLVQRW 2 S  Total Actual achieved achieved Performance Performance performance Electrocomponents plc Electrocomponents EDVH Target YHVWLQJ RI Maximum Maximum [EDVH VLRQRIWKH$OOLHGDQG*HUPDQGLVWULEXWLRQFHQWUHVDVWKH OGLQJSHULRG DVIRUERWKDGMXVWHGIUHHFDVKÀRZDQG*URXS136 8SSHUTXDUWLOH $ERYHWKUHVKROG  Base LTIP targets LTIP Base  P P             P P  EDVH RI Median RI Payout YHVWLQJ  [EDVH Threshold Threshold PD[ERQXV LPXPIRUHDFKRIWKH([HFXWLYH'LUHFWRUV)XOOGHWDLOVRIWKH ZHUHOLNHIRUOLNH*URXSUHYHQXHJURZWK  OLNHIRUOLNH level      DJDLQVWWDUJHWVVHWDWWKHVWDUWRIWKH\HDUIRUHDFKSHUIRU FDVKÀRZ  DQG*URXS136  7DUJHWSHUIRUPDQFH 7DUJHW   7DUJHW  P 7DUJHW   7DUJHW   7DUJHW   P OH\5XWKRYHUVKDUHVDQGWR'DYLG(JDQRYHU Weight YHVWLQJEDVHGRQFXPXODWLYHDGMXVWHG(36RQWKH VOH\5XWKRI DQG IRU'DYLG(JDQ7KHDPRXQWV LOOEHGHIHUUHGLQWKHIRUPRIVKDUHV7KHVHGHIHUUHGVKDUHVKD 7KHQXPEHURIGHIHUUHGVKDUHVDZDUGHGWKHGDWHRIDZDUGDQGW XPPDULVHGLQWKHWDEOHEHORZ 0D[LPXP   0D[LPXP  P 0D[LPXP   0D[LPXP   0D[LPXP  P DVIROORZV Threshold Threshold Threshold Threshold Threshold 5HPXQHUDWLRQ WLPHVWKHEDVHDZDUGEDVHGRQDGGLWLRQDO(36WDUJHWV UHVWZRWKLUGVFDVK DQGGHIHUUHGIRUDSHULRGRIWZR\HDUVL XWLYH'LUHFWRUVZLWKERQXVSD\PHQWVZRUWKXSWRRIVDODU\ VWLQJRIWKHVHGHIHUUHGVKDUHVLIDVXLWDEO\HTXLYDOHQWGLVWULE JURXSDQGRQDYHUDJH52&(RYHUWKHWKUHH¿QDQFLDO\HDUVH Performance HUUHG¿QDOGLYLGHQGIRUWKH\HDUHQGLQJ0DUFK GLVFXVVH OLQHZLWKWKHSUHYLRXV\HDUDQGDVVKRZQRQWKLVSDJH VWHGWRH[FOXGHWKHDGGLWLRQDOFDSLWDOH[SHQGLWXUHRQWKHH[SDQ DQG0XOWLSOLHU 9HVWHGDZDUGVZLOOEHVXEMHFWWRDWZR\HDUKR RQRI,)56µ/HDVHV¶LQ FRUUHFWO\GLVFORVLQJWKHLQWHQGHGZHLJKWLQJIRUWKHERQXV  2 2 1 ,QDGMXVWHGIUHHFDVKÀRZZDV PLOOLRQ7KLVZDVDGMX WDUJHWVDOVRH[FOXGHGWKLVH[SHQGLWXUH 1RWHWKDWODVW\HDU¶VUHSRUWFRQWDLQHGDW\SRJUDSKLFDOHUURULQ 7KHZHLJKWLQJZDVLQWHQGHGWREHDQGUHVSHFWLYHO\LQ 52&( DYHUDJHRYHU $GMXVWHG(36 FXPXODWLYH   S S S  765 YVLQGXVWULDOHOHFWURQLFSHHUJURXS  Total base vesting LTIP Annual Report and Accounts for the year ended March 31 2020 *URXS136 ZHLJKWLQJ 0DUFK7KHDZDUGVDOVRLQFOXGHGDPXOWLSOLHURIXSWR 3HUIRUPDQFHWDUJHWVDQGDFWXDOSHUIRUPDQFHDJDLQVWWKHVHLVV VKDUHV7KHVHDZDUGVLQFOXGHGDEDVHDZDUGZKLFKZDVVXEMHFWWR &RPSDQ\¶VUHODWLYH765YHUVXVWKHLQGXVWULDOHOHFWURQLFVSHHU 2017 LTIP awards vesting vesting awards LTIP 2017 $QDZDUGRIVKDUHVZDVPDGHXQGHUWKH/7,3LQ0D\WR/LQGV SDJH WKH&RPPLWWHHZLOOUHWDLQGLVFUHWLRQWRFDQFHOWKHYH future. the shareholders in to made  52&(WDUJHWVKDYHEHHQDGMXVWHGIRUWKHLPSDFWRIWKHDGRSWL  6WUDLJKWOLQHYHVWLQJEHWZHHQPHDVXUHPHQWSRLQWV %DVH/7,3 Measure ZLOOEHSDLGLQGHIHUUHGVKDUHV UDWKHUWKDQRQHWKLUGVKD DFFRUGDQFHZLWKWKH5HPXQHUDWLRQ3ROLF\'LYLGHQGHTXLYDOHQWVZ 7KH¿QDOERQXVRXWFRPHZDVUHVXOWLQJLQSD\PHQWVIRU/LQG   EHHQDZDUGHGDWWKHGDWHRIWKLV$QQXDO5HSRUWRQ5HPXQHUDWLRQ VKDUHSULFHXVHGZLOOEHGLVFORVHGLQWKH$QQXDO5HSRUWRQ $VUHIHUUHGWRLQWKH&KDLU¶VOHWWHULQUHFRJQLWLRQRIWKHGHI ,QFHQWLYHRXWFRPHVIRUWKH\HDUHQGHG0DUFK DXGLWHG Annual bonus in respect of performance for theyear ended March 31 2020 7KHSHUIRUPDQFHPHDVXUHVDWWDFKHGWRWKHDQQXDOERQXVSODQ %DVHGRQWKH*URXS¶VSHUIRUPDQFHLQWKH\HDUHQGHG0DUFK 56352UHYHQXHJURZWK  DGMXVWHG3%7  DGMXVWHGIUHH ZDVFDOLEUDWHGWRGHOLYHUDERQXVRIRIVDODU\IRUWKH([HF DFKLHYLQJVWUHWFKSHUIRUPDQFHWDUJHWV Measure and weighting   PHDVXUHWKH&RPPLWWHHFRQ¿UPHGDERQXVRXWFRPHRIRIPD[ WDUJHWUDQJHVDQGSHUIRUPDQFHDJDLQVWHDFKRIWKHPHWULFVDUH $GMXVWHG(360XOWLSOLHU FXPXODWLYH  S S  Total vesting /LNHIRUOLNH*URXSUHYHQXHJURZWK ZHLJKWLQJ  56352UHYHQXHJURZWK ZHLJKWLQJ $GMXVWHG3%7 ZHLJKWLQJ  $GMXVWHGIUHHFDVKÀRZ ZHLJKWLQJ Directors’ remuneration report continued

)ROORZLQJWKHHQGRIWKHSHUIRUPDQFHSHULRGWKH&RPPLWWHHFRQVLGHUHGWKHOHYHORIYHVWLQJLQWKHFRQWH[WRIWKHYDOXHFUHDWLRQIRU VKDUHKROGHUVWKHXQGHUO\LQJ¿QDQFLDOSHUIRUPDQFHRIWKH&RPSDQ\RYHUWKHSHUIRUPDQFHSHULRGDQGFRQVLGHUHGZKHWKHUDQ\ GLVFUHWLRQVKRXOGEHDSSOLHG7KH&RPPLWWHHFRQVLGHUHGWKHOHYHORIYHVWLQJWREHDSSURSULDWH

6FKHPHLQWHUHVWVDZDUGHGGXULQJWKH\HDUHQGHG0DUFK DXGLWHG DSBP 'XULQJWKH\HDUXQGHUUHYLHZWKHIROORZLQJ'6%3DZDUGVZKLFKKDYHDWZR\HDUYHVWLQJSHULRGZHUHPDGHWRWKH([HFXWLYH'LUHFWRUV UHODWLQJWRWKHDQQXDOERQXVHDUQHGIRUSHUIRUPDQFHRYHUWKH¿QDQFLDO\HDUHQGHG0DUFK 

Lindsley Ruth David Egan %DVLVRIDZDUG One-third of earned bonus One-third of earned bonus 1XPEHURIVKDUHVDZDUGHG   $ZDUGGDWHIDFHYDOXH SSHUVKDUH    Performance conditions 1RQH 1RQH

 7KHDZDUGVZHUHPDGHXVLQJWKHDYHUDJHRIWKHVKDUHSULFHVIRUWKHWKUHHGHDOLQJGD\VLPPHGLDWHO\SUHFHGLQJ-XQHWKHGDWHWKHVKDUHVZHUHDZDUGHG

LTIP 'XULQJWKH\HDUXQGHUUHYLHZWKHIROORZLQJ/7,3DZDUGVZHUHPDGHWRWKH([HFXWLYH'LUHFWRUV

Lindsley Ruth David Egan %DVLVRIDZDUG RIEDVHVDODU\   1XPEHURIVKDUHVDZDUGHG   $ZDUGGDWHIDFHYDOXH SSHUVKDUH    Performance period $SULO±0DUFK 7KUHVKROGYHVWLQJRXWFRPH  3RVWYHVWLQJKROGLQJSHULRG 7ZR\HDUV

 7KHDZDUGVZHUHPDGHXVLQJWKHDYHUDJHRIWKHVKDUHSULFHVIRUWKHWKUHHGHDOLQJGD\VLPPHGLDWHO\SUHFHGLQJ-XO\WKHGDWHWKHVKDUHVZHUHDZDUGHG

7KHSHUIRUPDQFHFRQGLWLRQVZHUHDVIROORZV

LTIP targets Threshold Maximum Measure Weight RIEDVH RIEDVH $GMXVWHG(36 FXPXODWLYH   S S 765 YV,QGXVWULDO(OHFWURQLFSHHUJURXS   Median 8SSHUTXDUWLOH 52&( DYHUDJHRYHU 8QGHUSLQ 6HWDW,IWKHXQGHUSLQLVQRWPHWWKH5HPXQHUDWLRQ &RPPLWWHHZLOOUHYLHZWKHIRUPXODLFOHYHORIYHVWLQJDQG FRQVLGHUZKHWKHULWZRXOGEHDSSURSULDWHWRXVHLWVGLVFUHWLRQ WRUHGXFHWKHOHYHORIYHVWLQJ

 6WUDLJKWOLQHYHVWLQJEHWZHHQPHDVXUHPHQWSRLQWV EDVH/7,3DQGPXOWLSOLHU   6HHSDJHRIWKH$QQXDO5HSRUWIRUGHWDLOVRIWKHFRPSDUDWRUJURXS

SAYE 'XULQJWKH\HDUXQGHUUHYLHZQR6$<(DZDUGVZHUHJUDQWHGWRWKH([HFXWLYH'LUHFWRUV

7RWDOSHQVLRQHQWLWOHPHQWV DXGLWHG /LQGVOH\5XWKDQG'DYLG(JDQDUHDEOHWRSDUWLFLSDWHLQWKHGH¿QHGFRQWULEXWLRQVHFWLRQRIWKH6FKHPH8QGHUFRQWUDFWXDODJUHHPHQWV ERWK/LQGVOH\DQG'DYLGKDYHFKRVHQWRWDNHDFDVKDOORZDQFHRIRIEDVHVDODU\LQVWHDGWKHYDOXHRIZKLFKLVFDSWXUHGLQWKH VLQJOH¿JXUHIRUWRWDOUHPXQHUDWLRQ WDEOHRQSDJH ,WUHPDLQVRXUSRVLWLRQWRUHFRJQLVHWKHFRQWUDFWXDODJUHHPHQWVLQSODFHZLWKRXU FXUUHQW([HFXWLYH'LUHFWRUVLQUHJDUGWRWKHLUSHQVLRQDUUDQJHPHQWVKRZHYHUIRU([HFXWLYH'LUHFWRUV¶SHQVLRQHQWLWOHPHQWZLOOEH UHGXFHGE\SHUFHQWDJHSRLQWVWRRIEDVHVDODU\,WLVRXULQWHQWLRQWRUHGXFHWKLVWRWKDWRIWKHEURDGHUZRUNIRUFHRYHUWLPHDVVHW RXWLQWKH&KDLU¶VOHWWHURQSDJH

3D\PHQWVWRSDVW'LUHFWRUV DXGLWHG 7KHUHZHUHQRSD\PHQWVWRSDVW'LUHFWRUVGXULQJWKH\HDU

External appointments in the year $VDQQRXQFHGRQ0D\/LQGVOH\5XWKZDVDSSRLQWHGQRQH[HFXWLYHGLUHFWRURI$VKWHDG*URXSSOFRQ0D\+LVIHHVIRU WKLVUROHLQZHUH 

96 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 97

LR WLQJ QR Global Global WOHG V pay ratio pay SULRU FDOO\ KHWK DFKLHYH GWR 75th percentile management team management CEO 3.2% 6.0% (68.1)% (44.0)% Median Median (15.2)% 4.0% pay ratio pay Electrocomponents plc Electrocomponents XEOLVKHGLQWKH'LUHFWRUV¶5HPXQHUDWLRQ5HSRUW Change 2019 – 2020 – 2019 Change 2020 – 2019 Change pay ratio pay 25th percentile percentile 25th RZQHUV DSGXULQJWKH\HDU$VWKLVLVWKH&RPSDQ\¶V¿UVW\HDURIUHSRU VRIRXUJOREDOPDQDJHPHQWWHDP7KLVJURXSFRQVLVWVRIRXU DOOOHYHOVRIWKHRUJDQLVDWLRQWRSDUWLFLSDWHLQDQDQQXDOERQX UHPXQHUDWLRQRIWKH&(2 FRPSULVLQJEDVHVDODU\WKHYDOXHRI WKH8.ZKHUHLWLVOHJDOO\SRVVLEOHWRGRVR ZKLFKLVFDVKVHW PRYHPHQWVRYHUWKHORQJHUWHUP,QRIWKH&(2¶VUDW ISD\KDYHEHHQRPLWWHGIURPWKHFDOFXODWLRQDQGWKHUHKDVEHHQ VEHHQFDOFXODWHGRQDIXOOWLPHHTXLYDOHQWEDVLVWRLGHQWLI\W HSD\UDWLRVEHFDXVHWKLVLVFRQVLGHUHGWREHWKHPRVWVWDWLVWL UWKHUDWLRLVOLNHO\WREH LQJOH¿JXUHIRUWRWDOUHPXQHUDWLRQ WDEOHRQSDJH IURPWKH $    OR\HHV DQGPD\ÀXFWXDWHIURPRQH\HDUWRWKHQH[W7KHJUHDWHUWKH UHYLRXV\HDUV DVLVPDQDJHUVKDYHEHHQLQFOXGHGLQWKLVFDOFXODWLRQ HOLYHUHGYLDWKH/7,3WKHYDOXHRIZKLFKLVYDULDEOHDQGOLQNH VKDUHLQWKHVXFFHVVRIWKHEXVLQHVVWKDWWKH\KHOSFUHDWH:H DWDZDVWDNHQIURPWKHVLQJOH¿JXUHIRUWRWDOUHPXQHUDWLRQDVS  IRUSDUWLFLSDQWV  3URYLGLQJDQ6$<(SODQWRKHOSRXU8.HPSOR\HHVEHFRPHEXVLQHVV 3URYLGLQJWKHRSSRUWXQLW\WRPRUHWKDQRIRXUHPSOR\HHVDW 3URYLGLQJDSKDQWRPVKDUHVDYHSODQLQWKRVHFRXQWULHVRXWVLGH SURJUDPPH Year Method $QQXDOERQXV 7D[DEOHEHQH¿WV  Annual Report and Accounts for the year ended March31 2020 UREXVWPHWKRGRORJ\8QGHU2SWLRQ$WKHWRWDOSD\DQGEHQH¿WVKD WD[DEOHEHQH¿WVDQGHDUQHGDQQXDOERQXV DVGLVFORVHGLQWKHV %DVHVDODU\ • • • SHUIRUPDQFHWKHEXVLQHVVGHOLYHUVWRRXUVKDUHKROGHUVWKHKLJKH ,WLVLPSRUWDQWWKDWRXUHPSOR\HHVDOVRKDYHWKHRSSRUWXQLW\WR SHUFHQWLOHPHGLDQDQGWKSHUFHQWLOHHPSOR\HHV1RHOHPHQWVR 7KH&RPSDQ\DGRSWHG2SWLRQ$LQWKHUHJXODWLRQVWRFDOFXODWHWK  8.EDVHGHPSOR\HHGDWDZDVWDNHQIURP-DQXDU\&(2G CEORatio Pay reporting Percentage change in remuneration for the CEO 7KHWDEOHEHORZVKRZVWKHSHUFHQWDJHFKDQJHLQWKHDQQXDOFDVK \HDUFRPSDUHGZLWKWKHDYHUDJHSHUFHQWDJHFKDQJHIRUWKHPHPEHU ([HFXWLYH'LUHFWRUV607DQGWKHLUGLUHFWUHSRUWVRQDJOREDOE :HSURYLGHGEULH¿QJVHVVLRQVWRHPSOR\HHVFRYHULQJ*HQGHU3D\* WKH&(2SD\UDWLRWKHUHDUHQRFKDQJHVWRUHSRUWDJDLQVWWKHS 7KHUDWLRVZLOOGHSHQGVLJQL¿FDQWO\RQWKHRXWFRPHVRIWKH/7,3 ZDVEDVHGRQ/7,3DVLWYHVWHGLQIXOO 7KHPHGLDQSD\UDWLRLVFRQVLVWHQWZLWKSD\SROLFLHVIRU8.HPS GHYLDWLRQIURPWKHVLQJOH¿JXUHPHWKRGRORJ\ ,WVKRXOGEHQRWHGWKDWDVLJQL¿FDQWSURSRUWLRQRI&(2SD\LVG ORQJWHUPSHUIRUPDQFHWDUJHWVDQGWRWKH&RPSDQ\¶VVKDUHSULFH WKLVWKURXJK Directors’ remuneration report continued

Relative importance of spend on pay 7KHJUDSKVEHORZVKRZWKH&RPSDQ\¶VVKDUHKROGHUGLVWULEXWLRQV LHGLYLGHQGV DQGH[SHQGLWXUHRQWRWDOHPSOR\HHSD\IRUWKH\HDU DQGWKHSULRU\HDUDQGWKHSHUFHQWDJHFKDQJH\HDURQ\HDU

'LYLGHQG P 7RWDOHPSOR\HHSD\H[SHQGLWXUH P 

68.5 322.0 16.3% 58.9 (6.4)% 301.5

2019 2020 2019 2020

7KHWRWDOHPSOR\HHSD\H[SHQGLWXUH¿JXUHVDERYHLQFOXGHODERXUH[LWFRVWVVHWRXWLQ1RWHRQSDJH

Performance graph and table 7KHIROORZLQJJUDSKVKRZVWKH\HDU765SHUIRUPDQFHRIWKH&RPSDQ\UHODWLYHWRWKH)76(DQG$OO6KDUH,QGLFHV7KH)76( $OO6KDUHDQG)76(DUHEURDGHTXLW\PDUNHWLQGLFHVRIZKLFK(OHFWURFRPSRQHQWVSOFLVDPHPEHU7KHWDEOHEHORZGHWDLOVWKH &(2¶VVLQJOH¿JXUHRIUHPXQHUDWLRQIRUWKHVDPHSHULRG

Total shareholder return 9DOXHRI LQYHVWHGRQ0DUFK 

450

400

350

300

250

200

150

100 2010 2011 2012 2013 2014 2015 2016 2017 20182019 2020

Electrocomponents FTSE 250 FTSE All Share

Year Year Year Year Year Year Year Year Year Year ended ended ended ended ended ended ended ended ended ended &(2VLQJOHÀJXUHRI 31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March UHPXQHUDWLRQ  2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Ian Ian Ian Ian Ian /LQGVOH\ /LQGVOH\ /LQGVOH\ /LQGVOH\ Lindsley Mason Mason Mason Mason Mason Ruth Ruth Ruth Ruth Ruth &(2WRWDOUHPXQHUDWLRQ          2,443 $QQXDOERQXVDZDUG DVDRIPD[LPXP RSSRUWXQLW\          21.7% /7,3YHVWLQJ DVDRI PD[LPXPRSSRUWXQLW\      1$ 1$   91.3%

 /LQGVOH\5XWKMRLQHGWKH&RPSDQ\LQDQGWKHUHIRUHGLGQRWUHFHLYHDQ\YHVWHG/7,3DZDUGVLQDQG

98 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance   99

 & V¶ K 2020 SAYE date QWV under under option Shares Shares vesting Normal Normal RYHUWKH DOVKDUH 31 March performance unvested, but unvested, not subject to at at 2020 during Lapsed Shares Shares the year the % awarded awarded 31 March DSBP unvested, during performance not subject to subject not during the year the Lapsed Exercised Exercised Electrocomponents plc Electrocomponents the year the $ LTIP UPDOYHVWLQJGDWHIRUWKH/7,3LVWKHWKLUGDQQLYHUVDU\ during unvested, during subject to subject the year the Granted Granted Vested the year the performance 2019 under under 13,100 – – – 13,100 1 April 15,706 – – – 15,706 Shares Shares option during met? the year the Awarded Guideline price 2019 Exercise Exercise Shares HRIWKLV$QQXDO5HSRUWWKHUHKDVEHHQQRPRYHPHQWLQ'LUHFWRU 987,088 304,811 515,030 – 776,869 568,552 170,900 304,516 – 434,936 YH'LUHFWRUVKDGPHWWKHLUVKDUHKROGLQJUHTXLUHPHQWVDW0DUF LQUHODWLRQWRERWKVKDUHRZQHUVKLSDQGVKDUHKROGLQJUHTXLUHPH at 1 April 1 at awarded awarded LQJJXLGHOLQHLVPHWLVSEHLQJWKHDYHUDJHVKDUHSULFH XPQV$±&DUHSURYLGHGLQWKHWDEOHEHORZ KH&RPSDQ\¶VRUGLQDU\VKDUHVDUHVKRZQEHORZWRJHWKHUZLWKWRW Current holding date VDODU\ Expiration Expiration award Date of of Date -XQ  ± ± ±  -XQ -XQ  ± ± ±  -XQ -XQ  ± ± ±  -XQ -XQ ±  ± ±  -XQ -XQ  ± ± ±  -XQ -XQ ±  ± ±  -XQ -XO\ ±  ± ±  -XO -XO\ ±  ± ±  -XO 0D\  ± ± ±  0D\ 0D\  ±  ± ± -XQ 0D\  ±  ± ± -XQ 0D\  ± ± ±  0D\ Shares heldShares held awards Share held Options XEMHFWWRWKHSHUIRUPDQFHFRQGLWLRQVVHWRXWRQSDJH7KHQR date GHWHUPLQHG salary 2 2  -XO  ±  ± ± -XO  -XO  ±  ± ± -XO EDVH Vesting guideline Shareholding grant Date of of Date 20,000 LTIP LTIP Owned outright '6%3 '6%3 Scheme Notes Scheme RIJUDQWRUVXFKHDUOLHUGDWHDVWKHSHUIRUPDQFHFRQGLWLRQVDUH $OODZDUGVPDGHWRWKH([HFXWLYH'LUHFWRUVXQGHUWKH/7,3DUHV 'DYLG(JDQ 6$<( -XQ 6HS )HE S  ± ± ±  Annual Report and Accounts for the year ended March 31 2020 WKUHHPRQWKVWR0DUFK%HWZHHQWKH\HDUHQGDQGWKHGDW VKDUHKROGLQJV'HWDLOVRIWKHVFKHPHLQWHUHVWVFRQWDLQHGLQFRO 'LUHFWRUV·VKDUHVFKHPHLQWHUHVWV DXGLWHG  awards Share 7KHYDOXHRIWKHVKDUHVXVHGWRFDOFXODWHZKHWKHUWKHVKDUHKROG 'LUHFWRUVKDUHKROGLQJV DXGLWHG  7KHLQWHUHVWVRIWKH'LUHFWRUVDQGWKHLUFRQQHFWHGSHUVRQVLQW DZDUGVDQGVKDUHRSWLRQVDQGLQIRUPDWLRQRQZKHWKHUWKH([HFXWL :HKDYHLQWURGXFHGQHZJXLGHOLQHVIRU([HFXWLYH'LUHFWRUV  '6%3DZDUGVDUHVXEMHFWWRWKHWHUPVVHWRXWRQSDJH  7KHDFWXDOYHVWLQJGDWHIRUWKH/7,3ZLOOEH-XQH Share optionsShare   /LQGVOH\5XWK 6$<( -XQ 6HS )HE S  ± ± ±  Total Total /LQGVOH\5XWK 'DYLG(JDQ Total /LQGVOH\5XWK'DYLG(JDQ%HUWUDQG%RGVRQ      

Remuneration Committee 7KHWDVNRIWKH&RPPLWWHHLVWRFRQVLGHUWKHUHPXQHUDWLRQSDFNDJHVGHVLJQHGWRSURPRWHWKHORQJWHUPVXFFHVVRIWKH&RPSDQ\ DQGWRHQVXUHWKDW([HFXWLYH'LUHFWRUVDQGRWKHUVHQLRUHPSOR\HHVDUHFRPSHQVDWHGDSSURSULDWHO\IRUWKHLUFRQWULEXWLRQVWRWKH *URXS¶VSHUIRUPDQFH7KH&RPPLWWHHDOVRFRQVLGHUVWKHUHPXQHUDWLRQRIWKH&RPSDQ\&KDLU7KH%RDUGDVDZKROHFRQVLGHUVDQG GHWHUPLQHVWKHUHPXQHUDWLRQRIWKH1RQ([HFXWLYH'LUHFWRUV1RLQGLYLGXDOZDVSUHVHQWZKLOHGHFLVLRQVZHUHPDGHUHJDUGLQJWKHLURZQ UHPXQHUDWLRQ'XULQJWKH\HDUXQGHUUHYLHZWKHIROORZLQJ1RQ([HFXWLYH'LUHFWRUVZHUHPHPEHUVRIWKH5HPXQHUDWLRQ&RPPLWWHH • 6LPRQ3U\FH &KDLU • /RXLVD%XUGHWW • .DUHQ*XHUUD • -RKQ3DWWXOOR XQWLO6HSWHPEHU • 'DYLG6OHDWK IURP-XQH

'HWDLOVRIWKHVNLOOVDQGH[SHULHQFHRIWKH&RPPLWWHHPHPEHUVDUHJLYHQLQWKHLUELRJUDSKLHVRQSDJHVDQG,QDGGLWLRQ WKH&RPSDQ\&KDLU&(2&)2RWKHU%RDUGPHPEHUVDQG3UHVLGHQWRI*URXS3URIHVVLRQDO6HUYLFHVDQG3HRSOHZHUHLQYLWHGWR DWWHQG&RPPLWWHHPHHWLQJVWRDGYLVHRQVSHFL¿FTXHVWLRQVUDLVHGE\WKH&RPPLWWHHDQGRQPDWWHUVUHODWLQJWRWKHSHUIRUPDQFH DQGUHPXQHUDWLRQRIVHQLRUPDQDJHUVRWKHUWKDQLQUHODWLRQWRWKHLURZQUHPXQHUDWLRQ7KH&RPSDQ\6HFUHWDU\DFWVDV6HFUHWDU\ to the Committee.

)XUWKHUGHWDLOVRIPDWWHUVGLVFXVVHGDW&RPPLWWHHPHHWLQJVZKLFKWRRNSODFHGXULQJWKH\HDUDUHDYDLODEOHLQWKHFRUSRUDWHJRYHUQDQFH VHFWLRQRIRXUFRUSRUDWHZHEVLWHDQGDWWHQGDQFHE\LQGLYLGXDO&RPPLWWHHPHPEHUVDWPHHWLQJVLVGHWDLOHGRQSDJH

Advisors 'HORLWWH//3ZDVDSSRLQWHGE\WKH&RPPLWWHHIROORZLQJDWHQGHUSURFHVVDQGKDVSURYLGHGLQGHSHQGHQWDGYLFHWRLWVLQFH 'HORLWWHLVDIRXQGLQJPHPEHURIWKH5HPXQHUDWLRQ&RQVXOWDQWV*URXSDQGYROXQWDULO\RSHUDWHVXQGHUWKH&RGHRI&RQGXFWLQUHODWLRQ WRH[HFXWLYHUHPXQHUDWLRQFRQVXOWDQF\LQWKH8. GHWDLOVRIZKLFKFDQEHIRXQGDWZZZUHPXQHUDWLRQFRQVXOWDQWVJURXSFRP 

'XULQJWKH\HDU'HORLWWHSURYLGHGWKHIROORZLQJVHUYLFHV • &RQWLQXHGLQGHSHQGHQWDGYLFHWRVXSSRUWWKH&RPPLWWHHLQGHYHORSLQJWKH'LUHFWRUV¶5HPXQHUDWLRQ3ROLF\SXWWRVKDUHKROGHUV DWWKH&RPSDQ\¶V$*0RQ-XO\DVZHOODVVXSSRUWDURXQGHQJDJHPHQWZLWKPDMRULQYHVWRUV • ,QGHSHQGHQWDGYLFHWRVXSSRUWWKH&RPPLWWHHLQVHWWLQJSHUIRUPDQFHWDUJHWV • 6XSSRUWLQGUDIWLQJWKH'LUHFWRUV¶5HPXQHUDWLRQ5HSRUWVIRUWKH\HDUVHQGHG0DUFKDQG • 8SGDWHVWRWKH&RPPLWWHHRQUHJXODWRU\FKDQJHVDQGWKHLQYHVWRUHQYLURQPHQW

'HORLWWHSURYLGHVDGYLFHWRWKH&RPSDQ\UHJDUGLQJJOREDOO\PRELOHHPSOR\HHVEXWWKH&RPPLWWHHGRHVQRWFRQVLGHUWKDWWKLV MHRSDUGLVHVWKHLQGHSHQGHQFHRI'HORLWWHZKLFKRSHUDWHVLQOLQHZLWKWKH&RGHGHVFULEHGDERYH'HORLWWH¶VIHHVIRUWKHSURYLVLRQRI H[HFXWLYHUHPXQHUDWLRQFRQVXOWDQF\VHUYLFHVWRWKH&RPPLWWHHGXULQJWKH\HDUFKDUJHGRQDWLPHDQGPDWHULDOVEDVLVWRWDOOHG 

Directors’ service contracts ([HFXWLYH'LUHFWRUV¶VHUYLFHFRQWUDFWVFRQWDLQDPRQWKQRWLFHSHULRGDVVHWRXWLQWKH'LUHFWRUV¶5HPXQHUDWLRQ3ROLF\7KHGDWH RIDSSRLQWPHQWWRWKH%RDUGIRU/LQGVOH\5XWKZDV$SULODQGIRU'DYLG(JDQZDV0DUFK

1RQ([HFXWLYH'LUHFWRUVKDYHOHWWHUVRIHQJDJHPHQWZKLFKVHWRXWWKHLUGXWLHVDQGWLPHFRPPLWPHQWH[SHFWHG'HWDLOVDUHVHWRXWEHORZ

Length of service as at 31 March 2020 Date of Name appointment Years Months 3HWHU-RKQVRQ 2FW 96 %HUWUDQG%RGVRQ -XQ 410 /RXLVD%XUGHWW )HE 32 .DUHQ*XHUUD -DQ 73 %HVVLH/HH 0DU 11 6LPRQ3U\FH 6HS 36 'DYLG6OHDWK -XQ –10 -RDQ:DLQZULJKW 1RY –5

External evaluation ,QFRPSOLDQFHZLWKWKH&RGHWKH%RDUGXQGHUZHQWDQH[WHUQDOHYDOXDWLRQWKLV\HDU$VSDUWRIWKLVWKHSURFHVVWKHDFWLYLWLHV RIWKH&RPPLWWHHZHUHDOVRUHYLHZHG7KH¿QGLQJVIRUWKH&RPPLWWHHZHUHYHU\SRVLWLYHZLWKPHPEHUVDJUHHLQJWKDW6LPRQ3U\FH KDVVWHSSHGVHDPOHVVO\LQWRKLVUROH7KHUHZDVDTXHVWLRQUDLVHGDVWRZKHWKHUWKH&RPPLWWHHKDGVWUXFNWKHULJKWVWUHWFKUHZDUG EDODQFHLQHQVXULQJWKDWWKHDFKLHYHPHQWVRIWKH*URXSDUHUHFRJQLVHGZKLOHWDNLQJLQWRDFFRXQWFRUSRUDWHJRYHUQDQFHUHTXLUHPHQWV 7KH&RPPLWWHHZLOOGLVFXVVWKLVIXUWKHUDQGUHÀHFWRQKRZWKLVPLJKWLPSDFWIXWXUHGHFLVLRQPDNLQJ

100 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 101 WKH cast cast QFH % of votes % of votes Total Total   of votes of votes of number number         380,565,087 380,565,087   Electrocomponents plc . WWKH$*0IRUUHPXQHUDWLRQDW(OHFWURFRPSRQHQWVSOF WKH'LUHFWRUV¶5HPXQHUDWLRQ3ROLF\DQGDWWKH$*0RI 7HUPVRI5HIHUHQFHZKLFKFDQEHIRXQGLQWKHFRUSRUDWHJRYHUQD electrocomponents.com Annual Reportand Accounts for the year ended March 31 2020 )RU LQFOXGLQJGLVFUHWLRQDU\ )RU LQFOXGLQJGLVFUHWLRQDU\ $JDLQVW 7RWDOYRWHVFDVW H[FOXGLQJZLWKKHOGYRWHV 9RWHVZLWKKHOG Total votes (including withheld votes) Terms of Reference 7KH5HPXQHUDWLRQ&RPPLWWHHUHVSRQVLELOLWLHVDUHVHWRXWLQLWV 7KH&RPPLWWHHZHOFRPHVWKHVXSSRUWUHFHLYHGIURPVKDUHKROGHUVD 2019 vote on Annual Report on Remuneration 2019 vote on Directors’ Remuneration Policy Summary of shareholder voting 6XPPDULVHGEHORZDUHWKHUHVXOWVDWWKH$*0RIWKHYRWHRQ YRWHRQWKH$QQXDO5HSRUWRQ5HPXQHUDWLRQ $JDLQVW VHFWLRQRIWKH&RPSDQ\¶VFRUSRUDWHZHEVLWH 7RWDOYRWHVFDVW H[FOXGLQJZLWKKHOGYRWHV 9RWHVZLWKKHOG Total votes (including withheld votes) Directors’ report

The Directors present their report and Additional WKHDXGLWHGÀQDQFLDOVWDWHPHQWVRI Electrocomponents plc (Company) disclosures together with its subsidiary undertakings (Group) for the year ended 31 March 2020.

This section (together with the information on pages 60 to 101 Share capital and other information cross-referenced by this section which is As at 31 March 2020, the Company’s issued share capital incorporated by reference) constitutes the Directors’ Report for comprised a single class of 446,308,426 ordinary shares of the purposes of the Companies Act 2006 (Companies Act). 10p each, totalling £44,630,843.

The Directors’ Report together with the Strategic Report on pages Full details of share options, awards and shares issued under 2 to 59 form the management report for the purposes of Rule the terms of the Company’s share incentive plans can be found 4.1.8R of the Disclosure Guidance and Transparency Rules. The in Note 9 on pages 125 to 128. Company has chosen, in accordance with the Companies Act section 414C(11), to include the disclosure of likely future The Company was authorised by shareholders at the Annual developments in the Strategic Report. General Meeting (AGM) held on 17 July 2019 to purchase up to 5% of its ordinary share capital in the market. The Company did A summary of general disclosures (incorporated not make use of this authority during the year. This authority will in this Directors’ Report) expire at the end of the 2020 AGM and the Company is proposing The following information required to be disclosed in this a resolution to renew it for another year. Directors’ Report (in accordance with Listing Rule (LR) 9.8.4R and otherwise) is set out on the page numbers below: Directors’ indemnities In accordance with the relevant provisions of the Companies Page Act and the Company’s Articles of Association (Articles), the numbers Company entered into a deed in 2007 to indemnify the Directors Likely future developments 5, 10 to 12 DQG2I¿FHUV IURPWLPHWRWLPH RIWKH&RPSDQ\WRWKHH[WHQW Policy on disability1 50 and 51 permitted by law. A copy of this indemnity (which remains in force Employee engagement1 50, 69 and 72 as of the date on which this Directors’ Report was approved) Other stakeholder engagement 16, 17, 45 to 55, LVDYDLODEOHDWWKHUHJLVWHUHGRI¿FHRIWKH&RPSDQ\ 68 and 69 Greenhouse gas emissions1 49 7KH&RPSDQ\SXUFKDVHGDQGPDLQWDLQHG'LUHFWRUV¶DQG2I¿FHUV¶ Names of Directors who served during the year 62 and 63 liability insurance throughout 2019, which was renewed for 2020. Details of employee share schemes 90, 125 to 128 Neither the indemnity nor insurance provides cover in the event Subsidiary and associated undertakings and branches 148 to 150 WKDWD'LUHFWRURU2I¿FHULVSURYHGWRKDYHDFWHGIUDXGXOHQWO\ 139 to 146 5LVNPDQDJHPHQW LQFOXGLQJKHGJLQJ DQG¿QDQFLDOLQVWUXPHQWV Political contributions Activity on Company culture 66 In the year ended 31 March 2020 the Group made no political Interest capitalised by the Group 136 donations or contributions. Long-term incentive schemes 90, 126 and 127

1. Information required by the Large and Medium-sized Companies and Groups AGM (Accounts and Reports) Regulations 2008 and included in the Strategic Report. The Notice of AGM is set out in a separate circular. The AGM will be held at 11.00am on Thursday, 16 July 2020. Results and dividends In light of the COVID-19 pandemic and in the interest of Results for the year are set out in the Group income statement the health and safety of our employees, shareholders and on page 111. The Directors have declared dividends as follows: other stakeholders, this year’s AGM will be a closed meeting and shareholders should therefore not attend the AGM in person. Ordinary shares Shareholders are encouraged to vote by proxy and submit Paid interim dividend of 5.9p per share 2019: 5.3p per share questions relating to the business of the meeting in advance (paid on 8 January 2020) to [email protected]. Further Final dividend deferred 2019: 9.5p per share information is set out in the Notice of AGM. Total ordinary dividend of 5.9p per share 2019: 14.8p per share for year ended 31 March 2020 Disclosure of information to Auditor 7KH'LUHFWRUVZKRKHOGRI¿FHDWWKHGDWHRIDSSURYDORIWKLV As a result of the COVID-19 pandemic, and the uncertain external 'LUHFWRUV¶5HSRUWHDFKFRQ¿UPWKDWVRIDUDVWKH\DUHDZDUH environment, the Board believes it is prudent to defer the decision there is no relevant audit information of which the Auditor is RQWKH¿QDOGLYLGHQGIRUWKH\HDUHQGHG0DUFKXQWLOLWKDV unaware and that each Director has taken all the steps that greater visibility. See page 33 for further details. they ought to have taken as Directors to make themselves aware of any relevant audit information and to establish 7KHWUXVWHHVRIWKH(OHFWURFRPSRQHQWVSOF(PSOR\HH%HQH¿W that the Auditor is aware of that information. Trust have waived their right to receive dividends over their total holding of 140,963 ordinary shares as at 31 March 2020.

102 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020 Corporate governance 103 WKH Electrocomponents plc Electrocomponents Ian Haslegrave Ian SecretaryCompany Powers of the Directors Subject the to Articles, the Companies Act and directions any given specialby resolution, the business of the Company will be managed theby Board, who exercise may all the powers of the Company. The Board exercise may all the powers of the Company to borrow undertaking, its property of mortgage any charge to or and money and uncalled capital and to issue debentures and other securities, whether outright or as collateral security for debt, any liability or party. third any of or Company the of obligation 6LJQLÀFDQWDJUHHPHQWVFKDQJHRIFRQWURO contain plans relating share provisions All Company’s the of to a change of control. Outstanding awards and options would normally vest and become exercisable on a change of control, subject to the satisfaction performance of any conditions at that WLPH7KHUHDUHQRRWKHUVLJQL¿FDQWDJUHHPHQWVWKDWDOWHURU terminate upon a change of control. Amendment of Articles of Association Any amendments to the Articles of the Company be may made in accordance with the provisions of the Companies Act way by of special resolution. The Directors’ Report was approved the by Board on 1 June 2020 by: behalf its on signed and Appointment and replacement of Directors Directors shall be no less than three and no more in number. than 12 A Director is not required to hold shares any of the Company by ZD\RITXDOL¿FDWLRQ7KH&RPSDQ\PD\E\RUGLQDU\UHVROXWLRQ increase or reduce the maximum or minimum number of Directors. Each Director (other than the Chair and Director any holding an H[HFXWLYHRI¿FH VKDOOUHWLUHDWHDFK$*0IROORZLQJWKHQLQWK anniversary of the date on whichthey were elected. A retiring re-election. for eligible is Director The Board appoint may person any to be a Director long (so as the total number of Directors does not exceed the limit prescribed LQWKH$UWLFOHV $Q\VXFK'LUHFWRUVKDOOKROGRI¿FHRQO\XQWLO The Directors also may refuse to register an allotment or transfer of shares (whether fully paid in or favour not) of more than four persons in jointly, which case notice of the refusal must be sent to the allottee or transferee within two months after the date on which the letter of allotment or transfer was lodged with the Company. A shareholder does not need to obtain the approval of the Company, or of other shareholders in the for Company, a transfer of shares to take place. next AGM and shall then be eligible for re-election. for eligible be then shall and AGM next  QV

held DUG Percentage shares Number of Number Shareholder Wellington ManagementWellington IncBlackRock The Vanguard Group, IncM&G Investments Management 21,356,854 16,436,478 18,555,147 4.79% 20,149,966 3.68% 4.16% 4.51% Annual Reportand Accounts for the year ended March 31 2020 The Company had been advised under the Financial Conduct Financial the under advised been had Company The Authority’s Listing Rules and Disclosure Guidelines and ascertained had or Rules, from analysis, own its Transparency rights voting the in interests shareholders held following the capital: share issued Company’s the of Substantial shareholdersSubstantial Important events since March 31 2020 Outside of the Group having to deal with the impact of COVID-19, in the period between 1 April 2020 to 1 June 2020, no important takenevents have place that materially impact theGroup. The Company’sArticles give the Board power to authorise situations WKDWPLJKWJLYHULVHWR'LUHFWRUV¶FRQÀLFWVRILQWHUHVW7KH%R &RQÁLFWVRILQWHUHVW KDVLQSODFHDIRUPDOFRQÀLFWVRILQWHUHVWPDQDJHPHQWSURFHGXUH The Board is responsible for considering whether authorisation is required, and if it can be given, in relation to new situations as WKH\DULVH7KH%RDUGUHYLHZVDQQXDOO\DQ\FRQÀLFWDXWKRULVDWLR it has given and limitations any that been have applied. Restrictions on transfer of shares 7KH'LUHFWRUVPD\LQWKHFDVHRIVKDUHVLQFHUWL¿FDWHGIRUP Voting rightsVoting be may exercised in person, proxy in relation by or, to corporate members, a corporate by representative. Proxy forms must be submitted not less than 48 hours beforethe time of the meeting or adjourned meeting. Restrictions on voting rights voting on Restrictions A member is not entitled to vote (in person or proxy) by at any general meeting or class meeting if either: call any (i) or other sum then payable that by member in respect of that share remains unpaid; or that (ii) member has been served with a notice after failure to provide the Company with information provided be to concerning required shares those in interests under the Companies Act. In the period from 1 April 2020 to 1 June 2020, there been have no changes advised to the A full Company. breakdown of our major shareholders ascertained our by own analysis is available on our corporate website. Columbia Threadneedle Investments Threadneedle Columbia Management Asset Majedie Merian Global Investors 74,648,626 16.73% 43,383,489 23,103,280 9.72% 5.18% in their absolute discretion and without assigning any reason, reason, any without assigning discretion and absolute their in refuse to register transfer any of shares being (not fully paid providedshares) that such discretion not may be exercised in such as to prevent a way dealings in the shares of that class from taking place on an open and proper basis. Statement of Directors’ responsibilities Directors responsibility statement

Responsibility of Directors for annual report Each of the Directors, whose names and functions are listed on and accounts SDJHVDQGFRQ¿UPWKDWWRWKHEHVWRIWKHLUNQRZOHGJH The Directors are responsible for preparing the Annual Report • The Company accounts, which have been prepared in and Accounts in accordance with applicable law and regulation. DFFRUGDQFHZLWK8QLWHG.LQJGRP*HQHUDOO\$FFHSWHG $FFRXQWLQJ3UDFWLFH 8QLWHG.LQJGRP$FFRXQWLQJ6WDQGDUGV Company law requires the Directors to prepare accounts for comprising FRS 102 ‘The Financial Reporting Standard HDFK¿QDQFLDO\HDU8QGHUWKDWODZWKH'LUHFWRUVKDYHSUHSDUHG DSSOLFDEOHLQWKH8.DQG5HSXEOLFRI,UHODQG¶DQGDSSOLFDEOH the Group accounts in accordance with International Financial ODZ JLYHDWUXHDQGIDLUYLHZRIWKHDVVHWVOLDELOLWLHV¿QDQFLDO 5HSRUWLQJ6WDQGDUGV ,)56 DVDGRSWHGE\WKH(XURSHDQ8QLRQ SRVLWLRQDQGSUR¿WRIWKH&RPSDQ\ DQG&RPSDQ\DFFRXQWVLQDFFRUGDQFHZLWK8QLWHG.LQJGRP • The Group accounts, which have been prepared in accordance *HQHUDOO\$FFHSWHG$FFRXQWLQJ3UDFWLFH 8QLWHG.LQJGRP ZLWK,)56DVDGRSWHGE\WKH(XURSHDQ8QLRQJLYHDWUXHDQG Accounting Standards, comprising FRS 102 ‘The Financial IDLUYLHZRIWKHDVVHWVOLDELOLWLHV¿QDQFLDOSRVLWLRQDQGSUR¿WRI 5HSRUWLQJ6WDQGDUGDSSOLFDEOHLQWKH8.DQG5HSXEOLFRI,UHODQG¶ the Group; and DQGDSSOLFDEOHODZ 8QGHUFRPSDQ\ODZWKH'LUHFWRUVPXVWQRW • The Strategic Report includes a fair review of the development DSSURYHWKHDFFRXQWVXQOHVVWKH\DUHVDWLV¿HGWKDWWKH\JLYHD and performance of the business and the position of the Group true and fair view of the state of affairs of the Group and Company and Company, together with a description of the principal risks DQGRIWKHSUR¿WRUORVVRIWKH*URXSDQG&RPSDQ\IRUWKDWSHULRG and uncertainties that it faces. In preparing the accounts, the Directors are required to: • Select suitable accounting policies and then apply ,QWKHFDVHRIHDFK'LUHFWRULQRI¿FHDWWKHGDWHWKH'LUHFWRUV¶ them consistently; Report is approved: • State whether applicable IFRS as adopted by the European • So far as the Director is aware, there is no relevant audit 8QLRQKDYHEHHQIROORZHGIRUWKH*URXSDFFRXQWVDQG8QLWHG information of which the Group and Company’s Auditors are .LQJGRP$FFRXQWLQJ6WDQGDUGVFRPSULVLQJ)56KDYH unaware; and been followed for the Company accounts, subject to any • They have taken all the steps that they ought to have taken material departures disclosed and explained in the accounts; as a Director in order to make themselves aware of any • Make judgements and accounting estimates that are relevant audit information and to establish that the Group reasonable and prudent; and and Company’s Auditors are aware of that information. • Prepare the accounts on the going concern basis unless it is inappropriate to presume that the Group and Company By order of the Board: will continue in business. Lindsley Ruth The Directors are responsible for keeping adequate accounting &KLHI([HFXWLYH2I¿FHU UHFRUGVWKDWDUHVXI¿FLHQWWRVKRZDQGH[SODLQWKH*URXSDQG Company’s transactions and disclose with reasonable accuracy David Egan DWDQ\WLPHWKH¿QDQFLDOSRVLWLRQRIWKH*URXSDQG&RPSDQ\ &KLHI)LQDQFLDO2I¿FHU and enable them to ensure that the accounts and the Directors’ Remuneration Report comply with the Companies Act 2006 and, as regards the Group accounts, Article 4 of the IAS Regulation.

The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity RIWKH&RPSDQ\¶VZHEVLWH/HJLVODWLRQLQWKH8QLWHG.LQJGRP governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.

The Directors consider that the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group and Company’s position and performance, business model and strategy.

104 Electrocomponents plc Annual Report and Accounts for the year ended 31 March 2020