Knights Professional Services Limited S172 (1) Statement

Constructive engagement with our shareholders supports the future success of our business. The Group Board is committed to an open dialogue and fair and equal treatment of all shareholders to ensure that shareholders are kept up to date with strategy and business performance. The Group Board receives regular updates on shareholder engagement and analyst commentary, and receives presentations from corporate brokers on investor perception. The Group Board also takes advice and guidance from its advisers on what is important to shareholders in planning all communications. This ensures that all communication addresses any emerging key topics and provides sufficient information about the Company to reassure our shareholders that the Company continues to be in a strong position and remains a good investment opportunity. Knights’ CEO and CFO have a full programme of engagement with shareholders and presents to the Holding Company’s largest shareholders, as well as market analysts, following the release of the full and half year results. The CEO and CFO also meet regularly with individual shareholders throughout the year.

Our Annual General Meeting (AGM) is an important part of effective shareholder communication, with all shareholders having the opportunity to hear from the Company and ask questions. The Group Board welcomes the opportunity to engage with shareholders, typically providing a brief update presentation at each AGM, with all Directors being available to answer questions.

As a people business, our employees are at the heart of everything that we do and every decision that we make. The Board recognises that delivery of the Company’s strategy requires strong employee engagement, and we pride ourselves on having an open and honest relationship with our workforce, empowering them to have their say, whilst ensuring they remain supported. The Board continuously monitors our culture to ensure that it is a positive environment which allows our employees to develop and grow. To achieve continuous engagement:

• the Company holds regular visits and meetings across all offices where our CEO and leadership team meet colleagues to discuss key drivers for the business;
• the Company holds regular CEO update webinars to present the results, vision and plans and at which employees are encouraged to have an open Q&A with the CEO with nothing being off limits;
• with the new training facilities available from the refurbishment of the Stoke office, the company has increased its focus on providing regular in person training and collaboration sessions with all colleagues; and
• the Board meets with various members of the leadership team throughout the year, through presentations at Board and Committee meetings and visits to offices to discuss the challenges and opportunities affecting the stakeholders and strategy of the business.

The Company continues to work hand in hand with its regulator, the Solicitors Regulation Authority (‘SRA’) and its complaints handling body, the Legal Ombudsman, to ensure that it abides by its professional and regulatory duties and obligations in an open and transparent manner. The Board conducts regular regulatory compliance reviews, with a dedicated compliance section in every board pack to analyse client risks. Through the CEO and CFO, the Group Board is in contact with the SRA and, as an AIM listed group, is in regular contact with our nominated advisor and the Financial Conduct Authority.

Our clients’ needs are considered at every level of the business, from the Board to our office hosts. Knights takes a proactive approach to communicating with clients, with the CEO and members of the leadership team meeting existing and potential clients regularly, to maintain our strong collaborative working relationships. Regular feedback is given to the Board on the outcome of those client reviews to ensure that the business consistently considers opportunities to improve the client experience whilst maintaining its excellent responsive standards of advice. Nurturing existing client relationships and new client opportunities is central to one of the Company’s strategic priorities, organic growth.

The Company’s procurement policy includes a commitment to sustainable procurement and mitigation against the risk of modern slavery, bribery or corruption anywhere in our supply chain. The Company also aims to conduct itself to the highest standards and pay all invoices promptly. Our collaborative approach ensures all parties have a shared long-term objective of working together, reducing risk, maintaining high standards of business conduct and delivering to specific time and cost parameters. The Board plays a key oversight role in these policies.

Knights’ Environmental, Sustainability and Governance strategy is focused on adding value to the communities in which we operate. Detailed updates on this strategy and associated programmes of work are regularly provided to the Board of the ultimate parent company and discussed on its Audit Committee.

Acquisitions and disposals
The Company acquired two law firms during the year, providing additional scale, practice areas and presence in the Midlands and South East of England continuing its strategy to build the leading premium, fully collaborative legal and professional services business in the UK. The acquisitions provide enhanced revenue generation and new platforms for organic growth which in turn provide returns to shareholders in the longer term and enhanced employment opportunities as part of a wider Group. Prior to completing the acquisitions, the Group Board considered the effects that the acquisitions would have on the Company’s gearing and creditors to ensure that executing the acquisitions would not adversely impact creditors’ interests. The Group Board, in conducting its due diligence, also considered how each acquisition would fit with the culture of the business and the long-term value creation strategy of the wider Group.

Approval of the budget
The Company’s business plan is to drive sustainable growth in the long term, which is in the interest of all of its stakeholders. The Board has paid close consideration to this objective in establishing and approving the annual budget and taking measures to continue to maintain excellent levels of cash collection and lock-up days, and to obtain the best interest rates achievable considering the wider economic environment. Given the current macro-economic climate, the Board has considered the impact of external factors on the Company’s financial performance and ability to deliver for its stakeholders. The Company has no over reliance on any practice area, professional or individual client; has significant headroom in its banking facilities and therefore the Board considers the Company is well placed to continue to deliver a high standard of client service, maintain strong relationships with our suppliers whilst continuing to focus on minimising the environmental impact of the Company.